CALGARY, March 29 /CNW/ - COSTA Energy Inc. ("COSTA" or the "Company")
(TSX Venture Exchange: COE) is pleased to announce that full production has
resumed from its Alderson field through the Imperial Redcliff North gas plant
and the City of Medicine Hat's Delta/Red Gas plants. Total production over the
last week has averaged 990 (430 net) thousand cubic feet per day (mcfd)
compared to previous production which was restricted to 880 (net 380) mcfd.
As discussed in the Company's press release dated December 21, 2006,
COSTA's Alderson production was shut in February 1, 2007. However, Imperial
then advised that effective February 15, 2007 they had capacity for COSTA on a
temporary basis for 530 (net 200) thousand cubic feet per day (mcfd). COSTA
will continue to produce through the Imperial plant as long as possible due to
the lower processing fees.
COSTA has reached agreement with the City of Medicine Hat for custom
processing at their plants. Approximately 1.25 miles of new pipeline has been
built at an estimated cost of $170,000 (net $75,000) and production through
the plants has averaged 500 (net 215) mcfd over the past week. While the fees
are higher than through the Imperial plant, there is capacity for COSTA's
total expected area production, allowing the Company to continue to develop
its Alderson field. Work is underway on surface lease acquisitions for COSTA
to drill three new wells in the fourth quarter of 2007.
The Company also provides the results of the production test from its
horizontal well COSTA Sahara Macoun South HZ 4C5-11-4A4-11-4-9 W2M, in the
Macoun area of Saskatchewan. COSTA paid 50% of the drilling costs to earn a
25% interest in the production from the well. Over the past week, the well has
produced an average of 13 barrels of oil and 470 barrels of water per day.
Work is underway to determine if the well is economic to produce with a tie-in
to the adjacent pipeline. Consideration is also being given to reworking the
well to attempt to reduce the water and increase the oil production.
In addition, the Company advises that Mr. Steve Cohen has tendered his
resignation as Corporate Secretary. We wish to thank Mr. Cohen for his
significant contribution to the initial stages of the Company and in
particular his expertise and advice through our acquisitions.
COSTA is a Calgary based junior oil and gas company, which explores for,
develops, produces, and sells crude oil, natural gas liquids and natural gas
in Alberta, British Columbia and Saskatchewan.
The TSX Venture Exchange has neither approved nor disapproved the
contents of this press release.
Oil Equivalent Conversion: Barrel of oil equivalent ("boe") amounts have
been calculated using a conversion rate of six thousand cubic feet of natural
gas to one barrel of oil and natural gas liquids equivalent. This ratio is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead or point
of sale. Barrel of oil equivalents may be misleading, particularly if used in
Forward Looking Statements: Certain information regarding COSTA in this
news release including management's assessment of future plans and operations,
anticipated resumption of Alderson production, estimated costs of new
pipelines and the timing of commencement of production resulting therefrom and
the timing of wells to be drilled, may constitute forward-looking statements
under applicable securities laws and necessarily involve risks including,
without limitation, risks associated with oil and gas exploration,
development, exploitation, production, marketing and transportation, loss of
markets, volatility of commodity prices, currency fluctuations, imprecision of
reserve estimates, environmental risks, competition from other producers,
inability to retain drilling rigs and other services, delays resulting from or
inability to obtain required regulatory approvals and ability to access
sufficient capital from internal and external sources. As a consequence,
COSTA's actual results, performance or achievements could differ materially
from those expressed in, or implied by, these forward-looking statements and,
accordingly no assurance can be given that any events anticipated by the
forward-looking statements will transpire or occur, or, if any of them do so,
what benefits COSTA will derive therefrom. Readers are cautioned that the
foregoing list of factors is not exhausted. Furthermore, the forward-looking
statements contained in this news release are made as at the date of this news
release and COSTA does not undertake any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a result of
new information, future events or otherwise, except as may be required by
applicable securities laws.
For further information:
For further information: Requests for shareholder information should be
directed to: Mr. Terry D. Brooker, President and Chief Executive Officer,
COSTA Energy Inc., (403) 206-3430, Email: email@example.com