Breaker Energy Ltd. announces increases in light oil drilling, cash flow, exit production guidance and the acquisition of a high impact exploration property in British Columbia



    CALGARY, Sept. 28 /CNW/ - Breaker Energy Ltd. ("Breaker" or "Company")
(TSX: wav.a and WAV.B) plans to accelerate development of its numerous light
oil opportunities due to drilling success and low debt levels. Breaker will
now invest an additional $14 million in 2007, focused on new drilling at its
three light oil growth properties. Up to seven new light oil wells will be
drilled before year end, including 100% working interest, high impact wells at
Irricana and Girouxville, and stepout wells to a 10 million bbl original light
oil in place discovery at East Prairie. Due to Breaker's continuing success,
current production is 4,950 boe/d based on field estimates.
    Breaker's 2007 capital budget forecast is now $60 million, increased from
$46 million. This will result in an increased forecast exit rate of
5,600 boe/d, up from the previous estimate of 5,250 boe/d. Breaker currently
estimates its 2007 full year production guidance to be 4,650 boe/d. This
represents a reduction of 100 boe/d from previous estimates, and is primarily
attributed to a longer than expected non-operated gas plant turnaround in the
third quarter. Cash flow is stronger than expected. Forecast 2007 annual cash
flow has increased by $3.5 million to $43.5 million. Breaker's bank line is
currently $74 million and management forecasts a conservative level of
leverage at year-end with a net debt to annualized fourth quarter 2007 cash
flow ratio of 1.0.
    At Irricana, Breaker's third horizontal light oil well will be drilled in
an area of the Wabamun Pool comparable to its first horizontal well. The first
well continues to perform above forecast at current rates of approximately
250 boe/d. Breaker's second horizontal well in the pool has been completed
with a multifrac similar to the first, and is currently producing in excess of
200 boe/d. Breaker has also utilized this multifrac technique to recomplete
one of the 25 horizontal wells drilled prior to Breaker acquiring the pool.
The recompletion well is currently being equipped for production. If
successful this operation will yield numerous additional opportunities on the
remaining horizontal wellbores. The Wabamun Pool contains over 53 million
barrels of light oil with associated solution gas in excess of 51 billion
cubic feet. Recovery factors to date have been low, less than 4 percent of the
oil and about 8 percent of the gas. These encouraging production results will
accelerate the rate of recovery from the Pool. Approximately 66% of Breaker's
current Irricana production is obtained from freehold mineral acreage.
    At Girouxville, Breaker has commenced drilling its first two direct
offsets to the 2006 dual-zone 13-15 deep light oil discovery. Both new wells
are within one mile of the discovery well, and target similar multi-zone pay
in the Granite Wash and Beaverhill Lake formations. The first well, at 13-10,
has reached total depth with hydrocarbon shows encountered while drilling. It
will be logged and evaluated in the next several days. The 13-15 well has
produced approximately 200,000 bbls of light sweet oil in 13 months of
production, and continues to produce at an MRL-limited rate of 600 bbls/d,
with apparent pay still behind pipe in the Beaverhill Lake Formation. From
field estimates, average production of light sweet crude at Girouxville was
greater than 1,000 bbls/d for the month of August, a greater than four-fold
increase since acquisition in late 2004. With many uphole zones behind pipe,
its three most productive gross wells currently rate-limited by the Alberta
Energy and Utilities Board (EUB), and approximately ten drilling locations in
the exploration and development inventory, Breaker is well positioned to
continue growing this high-netback property.
    Early this year, Breaker successfully delineated a significant light oil
discovery at East Prairie. The Company's external reserve evaluator has
confirmed a new pool with an original light oil in place estimate of
approximately 10 million bbls (gross). Breaker will drill up to four more
follow up wells this fall, which could substantially expand the size of the
pool beyond the 10 million bbls delineated to date. Breaker is currently
preparing to waterflood this high quality reservoir; and is currently testing
a water source well, licensing an injector location, and preparing a
waterflood application for submission to the EUB. Internal waterflood design
based on analogs and classical waterflood analysis suggest a recovery factor
in the range of 25 percent would result from successful waterflood
implementation. The impact to Breaker would be additions of approximately
2 million bbls of light oil to Breaker.
    Breaker currently has three drilling rigs active. In addition to the high
impact oil locations at Girouxville, the company is taking advantage of lower
costs for shallow activity to drill low risk gas wells at Medicine Hat and
Provost. These locations are profitable at current gas prices.
    Breaker also continues to increase its drilling opportunity inventory for
both light oil and natural gas. Acquisitions of 100% working interest
undeveloped land, standing wells near Breaker facilities, and new drilling
locations at Girouxville, Provost, and Medicine Hat are ongoing. In all cases,
these acquisitions build on Breaker's competitive advantages in these key
operating areas, including operated infrastructure and extensive seismic
database.
    In British Columbia, Breaker has recently acquired a 100 percent working
interest in a deep Leduc reef prospect with a potential target size of 1 TCF
(unrisked). The prospect currently consists of a cased well available for
re-entry in addition to the land interest, which the company believes may
represent a near-miss drilled on 2D seismic data. Breaker's plans include
shooting a 3D this winter to pinpoint the porous reef, followed by a lower
cost re-entry and whip from the standing well. The original well established
the presence of more than 130 metres of tight dolomite, allowing for the
possibility of a world-class pay column similar to other deep Leduc gas pools
elsewhere in western Canada.

    
    Upward Revision to 2007 Guidance
    --------------------------------

    Breaker's revised 2007 guidance is as follows:

        Average Production Rate                   4,650 boe/d
        Exit Production Rate                      5,600 boe/d
        Cash flow                                 $43.5 million
        Cash flow per A share                     $1.24
        Capital Program                           $60 million
        Year-End Debt                             $52 million
        Authorized Bank Line                      $74 million
        Unused Bank Line Capacity at Year End     $22 million
        Q4 Annualized Debt to Cash Flow           1.0 times
    

    The above guidance assumes US$75.00/Bbl WTI, CDN$5.25/Mcf AECO and
US$/CDN$1.00 for the remainder of 2007.

    Breaker Energy Ltd. is a junior oil and gas company focused on creating
shareholder value by growing per share production and reserves through
acquisitions and a focused exploration, development and exploitation plan.
    Breaker has 35,127,258 Class A shares and 900,000 Class B shares
outstanding.
    Breaker Energy trades on the TSX under the symbols WAV.A and WAV.B.

    Forward-Looking Statements
    --------------------------

    This press release contains forward-looking statements concerning the
Company's expectations of future production, cash flow, earnings and expansion
of its oil and gas property interests and concerning the Company's exploration
and development drilling, seismic operations, regulatory applications, payout
estimates, capital expenditures, number of drilling locations, seismic
acquisitions and facility upgrades. These statements are based on current
expectations that involve a number of risks and uncertainties, which could
cause actual results to differ from those anticipated. These risks include,
but are not limited to: the risks associated with the oil and gas industry
(e.g., operational risks in development, exploration and production; delays or
changes in plans with respect to exploration or development projects or
capital expenditures; the uncertainty of reserve estimates; the uncertainty of
estimates and projections relating to production, costs and expenses, and
health, safety and environmental risks), acquisitions, commodity price, price
and exchange rate fluctuation and uncertainties resulting from competition
from other producers and ability to access sufficient capital from internal
and external sources. Additional information on these and other risk factors
that could affect the Company's operations and/or financial results are
included in the Company's reports on file with Canadian securities regulatory
authorities.
    The forward-looking statements or information contained in this news
release are made as of the date hereof and the Company undertakes no
obligation to update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events or
otherwise, unless so required by applicable securities laws.

    Oil and Gas Advisory
    --------------------

    This press release contains disclosure expressed as "boe/d". Boe means
barrel of oil equivalent and boe/d means boe per day. All oil and natural gas
equivalency volumes have been derived using the ratio of 6,000 cubic feet of
natural gas to 1 barrel of oil. Boe equivalency measures may be misleading,
particularly if used in isolation. A conversion ratio of 6,000 cubic feet of
natural gas to 1 barrel of oil is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the well head.
    In this press release: (i) mmboe means million boe; (ii) boe/d means boe
per day; (iii) bbls/d means barrels per day; (iv) mcf means thousand cubic
feet; (v) mmcf means million cubic feet; (vi) mcf/d means thousand cubic feet
per day; and (vii) mmcf/d means million cubic feet per day.

    The TSX does not accept responsibility for the adequacy or accuracy of
    this release.

    %SEDAR: 00021180E




For further information:

For further information: Dan O'Neil, President & Chief Executive
Officer, (403) 215-5264 or Max Lof, Vice President, Finance & Chief Financial
Officer, (403) 215-5264, info@breakerenergy.com, www.breakerenergy.com

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BREAKER ENERGY LTD.

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