Tuesday, September 25, 2012

Dejour Energy, Inc. (DEJ) Drills and Cases Initial Well at Kokopelli Down to 8,400 Feet, Encounters 2,500 Foot Gas Column

Dejour Energy, which has put together an impressive 129k-acres of prime domestic oil and gas land, reported some great news today out of their 2,200-acre (72% WI) chunk of the Kokopelli Field, over in Colorado’s Piceance Basin, as the first directional well has been successfully drilled to a depth of 8,440 feet.

This is an exceptionally choice property for DEJ, whose broad array of domestic hydrocarbon interests is quite extensive, as it is sandwiched between major players Bill Barrett Corp. and Williams Energy, both of whom have seen abundant recent drilling success. Moreover, the target zone (containing the same sand, salt, shale, and coal concentrations seen elsewhere at Kokopelli) in the Lower Mesa Verde formation, just below the base of the Rollins formation, has paid off with the well encountering a 2,500-foot gas column strikingly similar to parallels drilled recently in the immediate area.

The new well has been cased to total depth and completion is anticipated for Q4 this year, including perf, frack, and tie-in work. Wrapping up on this first well will solidify the company’s position in the field nicely, with the substantial part of the proven/probable undeveloped reserves (some 200 BCF equivalent, including roughly 12M barrels of liquids net) deriving from the Williams Fork part of the leasehold (according to independent engineering analysis), thusly secured by DEJ.

President and COO of DEJ, Harrison Blacker, was excited to report on this culmination of three years of extensive prep work by the company at Kokopelli, calling the success with the Dejour Federal 6/7 well a great opportunity for all of the company’s stakeholders.

The site is ideal for access to both the Williams Fork and Mancos production targets, hydrocarbon-rich shale formations that drew in the big boys next door (Barrett and Williams), with the deeper Mancos horizontal gas play accessibility (Antero-Encana) sweetening the package further. The company has put in extensive due diligence work with both the local community and government, working hand-in-hand with the BLM, as well as the Colorado Division of Wildlife officials, coming out of the process with a very well-developed environmental plan for this relatively sensitive area.

As of the December 31, 2011, Canadian NI 51-101-compliant report analysis (Gustavson and Associates out of nearby Boulder), the before tax discounted NPV10 (net present value 10%) of proved undeveloped reserves is approximately $94M, with the proven plus probable undeveloped Lower Mesa Verde reserves representing some $202M net.

For more information on Dejour Energy, Inc., please visit the company’s website at: www.Dejour.com

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