Junex inc.

Recent activities

14 December 2016


Long-term oil production testing of Galt No. 4 Horizontal well continued over the third quarter and the cumulative oil recovered from production testing since the well was drilled, as of September 19th, stands at approximately 14,100 barrels, which firmly places Junex's Galt No. 4 Horizontal well as having the largest oil recovery ever seen in Quebec's history.

The oil produced from the Galt no. 4 Horizontal well is of excellent quality. With the goal of providing the highest financial returns to Junex when marketing its oil to refiners, the oil will also be further sampled and analyzed with the goal of ascertaining the best yield of refined products, including lubricants, petrochemical feedstock, fuel additives, fuels and other products.

The excellent results obtained in our Galt No. 4 Horizontal well have strongly motivated Junex to apply for a 20 km2 (7.7 mi2 or 4,942 acres) Petroleum and Natural Gas Production Lease ("Production Lease") on its Galt Oil Property. The area being applied for is the central portion of the Galt structure as mapped on data from the 37 km2 sized 3D seismic survey completed in 2015.

In Quebec, a Production Lease is required in order to produce hydrocarbons beyond those volumes recovered under production testing. Provided that certain conditions are met, a production lease is valid for 20 years and is renewable. Over the near term, such a Production Lease will permit Junex to continue its efforts in the Galt No. 4 Horizontal well beyond 240 days of time per government regulations, while drilling additional exploration wells which, if successful, can be commercially produced.

If issued, this will be the second Production Lease obtained by Junex on the Galt Property, with the other being a 200 hectare (2 km2 or 0.8 mi2 or 494 acres) Production Lease held by Junex since 2003 that surrounds the Galt No. 1 well, for which Junex operated a natural gas pilot project using Compressed Natural Gas ("CNG") technology to transport natural gas to local customers by truck in the early 2000's.

Junex Galt No. 5 Horizontal Well

The first stage of field operations in the Galt No. 5 well was performed in June then the well was shut-in to record the build-up in formation pressure in the reservoir. These data will provide important details as to the reservoir characteristics in this well, including the potential productivity of this horizontal wellbore. The well remains shut-in for pressure build-up, which will also continue for some time. Once the shut-in period is ended, the downhole pressure gauges will be retrieved and the data analyzed. This will be the basis for determining the next steps for the Galt No. 5 well. These operations are designed to further evaluate the horizontal leg where abundant natural fractures and oil shows were recorded in the lower portion of the Forillon Limestone and the upper portion of the Indian Point Formation.

If the results from this indicate that the horizontal leg drilled in the lower portion of the Forillon Limestone and the upper portion of the Indian Point Formation in the Galt No. 5 well can be commercially produced, then extended production testing operations of up to 8 months in duration are planned. If the results indicate the contrary, other options include, but are not limited to, drilling a second horizontal leg into the upper portion of the Forillon Limestone reservoir from the vertical portion of the well.

3D Seismic Program and Future Wells

During the Quarter Junex's team, in collaboration with a renowned third-party expert, finalized analysis and interpretation of the 37 km2 3D seismic survey completed in Fall 20015.

The data are of very good quality and provide invaluable information as to the nature of the Galt Structure and the optimal siting of future horizontal wells to be drilled on the structure.

A number of drilling locations have been identified from these data.

Source: http://galt