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NLR.B Nuloch Resources

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Share Name Share Symbol Market Type
Nuloch Resources TSXV:NLR.B TSX Venture Ordinary Share
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0.00 -

NuLoch Resources Operational Update and Acquisition

15/01/2010 8:15pm

Marketwired Canada


NuLoch Resources Inc. (TSX VENTURE:NLR.A)(TSX VENTURE:NLR.B) is pleased to
provide a production and operations update. The Company's current corporate
presentation has been posted to its website at www.nuloch.ca.


Current Production

NuLoch has achieved a current production rate of 810 barrels of oil equivalent
per day comprised of 52% light and medium oil and NGL and 48% natural gas.
Production has increased by 43% compared to the 565 boe/d reported in February
2009. Currently, in North Dakota and Saskatchewan, four (1.3 net) Bakken-Sanish
wells are being completed and two (0.8 net) wells are drilling.


Line of Credit

NuLoch's bank line of credit has been expanded to $8.5 million and is currently
undrawn.


Saskatchewan Update

NuLoch drilled a 100% working interest Sanish Three Forks well in 17 days at
91/05-02-001-10W2 to a total depth of 3,427 metres that was rig-released on
December 5, 2009. The well has a 2,272 metre true vertical depth and a 1,065
metre horizontal leg. NuLoch is taking a phased approach to the completion of
this well. In late December, a water-based, 10 tonne, fracture stimulation was
undertaken at the toe of the well over five separate stages spaced approximately
40 metres apart. The remaining 878 metre portion of the horizontal well was left
uncompleted while results of the first five fracs are evaluated. To date, the
well has flowed back frac fluid, formation water and light 40 degrees API crude
oil. Since first oil was recovered on January 10, the well has flowed and
swabbed-back a total of 348 barrels of light oil with associated solution gas
and 678 barrels of water during 73.5 hours of operations. This equates to an
average of 114 barrels of oil per day with a 66% water cut.


While these results are still preliminary, the Company is satisfied that the
fracture program is effectively stimulating the Sanish formation. The remaining
878 metres of horizontal section are expected to be stimulated with 20
additional stages before the end of January.


This Sanish Three Forks oil completion in Saskatchewan is located approximately
8.5 miles from the known productive field in Divide County, North Dakota in
which NuLoch has a 10% working interest in 20 producing Sanish Three Forks
wells. The oil recovery from the current completion may represent a significant
extension of the play.


NuLoch spud a second well (70% working interest) at 91/11-02-001-09W2 in
December 2009, on the eastern edge of the Company's land block, six miles from
the 05-02 well. Core samples have been obtained from both the Sanish Three Forks
and Middle Bakken formations and the Company is currently drilling a horizontal
leg in the Middle Bakken. A successful result may lead to follow-up locations in
Saskatchewan and on the Company's 10% working interest acreage in North Dakota.


After the 11-02 Middle Bakken well is drilled, the rig is scheduled to move four
miles west to 91/16-06-001-09W2 (70% working interest), flanking the 05-02 well
to drill horizontally in the Sanish Three Forks. NuLoch has four additional
Sanish Three Forks locations licenced for drilling on lands in proximity to the
05-02 well.


North Dakota Operations

New production has been added in Divide County since the closing of the
acquisition on October 26, 2009. As reported in NuLoch's Q3 2009 interim report,
the Company's first participation well averaged 300 b/d of light oil over 30
producing days. Since then, two more Sanish Three Forks wells have individually
averaged 190 b/d and 460 b/d of crude oil over 30 production days. A fourth well
has been fracture simulated and is flowing back while two additional wells await
completion. A seventh well is currently drilling. NuLoch holds a 10% working
interest in all of these wells.


The Company's Divide County property will see an increase in drilling activity
with the addition of a second rig expected in February 2010. Current plans have
up to 24 horizontal participation wells being drilled in 2010 targeting oil
reserves in the Middle Bakken and Sanish Three Forks formations. Several of
these wells are expected to be 2 miles long with 28 stage completions.


NuLoch has also acquired an ownership in 240 square miles of recently shot, high
resolution, 3D seismic data that covers a large portion of the Divide County
land base. This seismic will assist in the selection of Bakken and Three Forks
Sanish locations but will also be used to identify other prospective horizons in
this oil rich basin.


Acquisition - Burke County, North Dakota

NuLoch has been actively reviewing opportunities in the Williston Basin and,
this month, has agreed to acquire production and undeveloped land in Burke
County, North Dakota for US$3.1 million with closing of the transaction expected
during January 2010. Burke County is adjacent to the Company's existing land
position in Divide County.


NuLoch is acquiring a 30% working interest in 23,000 undeveloped acres (6,900
net) and three Bakken/Sanish oilwells that produce 15 b/d net to NuLoch. The
vendor is a major independent US company that will continue to operate and hold
a 40% working interest in the property. The lands are positioned in a
contractual area of mutual interest and are prospective for Middle Bakken and
Sanish Three Forks light oil reserves. A two-mile horizontal well with
multi-stage completions targeting the Middle Bakken formation is planned for the
first half of 2010. The acquisition increases NuLoch's net undeveloped land
position in prospective Bakken and Sanish fairways to 64,000 acres consisting of
33,000 in Saskatchewan and 31,000 in North Dakota.


Advisories

Use of Barrels of Oil Equivalent (boe)

Disclosure provided herein in respect of boe units may be misleading,
particularly if used in isolation. A boe conversion ratio of 6 Mcf of natural
gas to 1 bbl of crude oil is based on an energy equivalency conversion method
primarily applicable at the burner tip and may not represent a value equivalency
at the wellhead.


Forward-Looking Statements

Certain statements in this document or incorporated herein by reference
constitute "forward-looking statements". These forward-looking statements can
generally be identified as such because of the context of the statements,
including words indicating that the Company "believes", "anticipates",
"expects", "plans" or words of a similar nature. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general economic and business
conditions which will, among other things, impact demand for and market prices
of the Company's products; industry capacity; the ability of the Company to
implement its business strategy, including exploration and development
activities; the ability of the Company to complete its capital programs;
successful negotiations with bankers and other third parties; the success of
exploration and development activities; production levels; government
regulations and the expenditures required to comply with them (especially safety
and environmental laws and regulations); asset retirement obligations; and other
circumstances affecting revenues and expenses.


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