High North Resources Ltd. announced Montney oil flowing production rates from the five horizontal wells drilled to-date on its 100% owned core area 20.25 contiguous sections (Blocks A to H) at the Girouxville-Mclean property. Since bringing on the company's first well in mid-January 2014 to the end of May, 2014, over 40,700 barrels of oil (bbls) or over 54,600 barrels of oil equivalent (boe), including associated gas have been produced. Five out the five 100% working interest wells flowed oil during test periods.

The two wells currently on production (09-02-76-21W5M, 16-02-76-21W5M) on section 02-76-21W5M, and wells 08-21-76-21W5M, 08-02-76-21W5M, 16-02-76-21W5M meet or exceed management's Montney oil type curve. A work over at 09-26-75-21W5M is planned to increase productivity after larger surface equipment is installed. Larger sized equipment is currently being installed and is expected to be completed by mid-August, 2014.

In management's opinion this increase in productivity will enable the wells to pay out between one year and one and a half years. The cost to-date of drilling and completion is on average $2.5 million per well. The Alberta Energy Regulator has granted approval to flare a total of 781,000 cubic feet per day on the associated gas production from section 02-76-21W5M wells until the end of April, 2015.

Currently, a total of 415 Mcf/d or 53% is flared from 16-02-76-21W5M and 09-02-76-21W5M and approximately 200 Mcf/d from 09-26-75-21W5M. The associated gas flaring will be minimal until major facilities such as a gas plant and gas sales line are installed. The company has filed an application with the AER to flare natural gas from 09-26-75-21W5M and 08-21-76-21W5M along with future drills until gas and natural gas liquids conservation is finalized and executed.

In addition to the three wells currently producing oil, the company has de-risked the 20.25 contiguous sections by drilling two Montney horizontal step-out wells at 08-21-76-21W5M and 09-26-75-21W5M. The 09-26-75-21W5M well is 23 meters structurally lower than the 09-02-76-21W5M well and is producing oil, while 08-21-76-21W5M is 12 meters structurally higher than 09-02-76-21W5M. Moreover, it appears that net pay in the well exceeds 30 meters.

This discovery proves highly encouraging to the prospectively of much of the 20.25 contiguous sections (Blocks A to H) in that most of the Blocks A to H sections are structurally up dip of the 09-26-75-21W5M well. Oil production from these wells extends the company's Montney oil pool to the South-West and North-West. At current spacing of four horizontal Montney oil wells per section, it is possible with continued success to drill a minimum of 80 wells on the company's core area 20.25 contiguous sections (Blocks A to H).

Further down spacing to eight wells per section completed in the offsetting section 01-76-21W5M acreage suggests that the company may be able to drill additional infill locations in order to effectively recover a greater percentage of the oil-in-place. For the remainder of 2014, the company intends to drill four additional wells to further de-risk the company's core area 20.25 contiguous sections (Blocks A to H). The company expects to spud the first well in early September 2014.