Monday, January 17, 2011

Anderson Energy Ltd Update

CALGARY, ALBERTA--(Marketwire - Jan. 17, 2011) - Anderson Energy Ltd. ("Anderson Energy" or the "Company") (TSX:AXL) is pleased to provide an update of its Cardium drilling operations and its 2011 capital budget.
As of January 16, 2011, the Company has drilled 24 gross (17.2 net) Cardium horizontal oil wells with a 100% success rate. Of these wells, twenty gross (13.4 net) Cardium wells have been placed on production. The remaining four wells are expected to be producing in February 2011.
In November 2010, the Company reduced its interstage frac density from 100 meters to 75 meters with improved initial productivity when compared to offsetting wells. In January 2011, the Company conducted its first operated water based frac. The completion costs of this well are expected to be approximately $500,000 less than other oil based 18-20 tonne fracs. Initial oil production rates from the first water frac have been encouraging. The Company is continuing to evaluate the merits of water based fracs. If further evaluation is positive, this may prove to be a method to significantly decrease the costs of Cardium completions and improve economic returns.
The Company continues to add land through farm-ins, acquisitions and property swaps. The Company's non contingent drilling inventory has grown to 143 gross (85.3 net) development locations. Ultimate potential drilling inventory based on three wells per section is 309 gross (180 net) drilling locations. The Company has increased the Cardium prospective land that it owns or controls to 103 gross (60 net) sections of land.
In 2010, the Company developed Cardium horizontal core areas in Garrington, Willesden Green and Pembina East. This winter, a new Cardium core area is being developed in Ferrier. In each core area, tank batteries are built and individual wells drilled off pads are pipelined to the tank batteries further increasing efficiencies and decreasing operating costs. The Company consolidates its position in each core area through land acquisitions and farm-ins.

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