CALGARY, Sept. 25 /CNW/ - Eagle Rock Exploration Ltd. ("Eagle Rock" or
the "Company") (TSX-V: ERX) announces positive developments during Q3 2008.
Current production is approximately 600 boe/d, almost 200 boe/d higher
than Eagle Rock's average production in Q2 2008. During Q3, Eagle Rock added
production at Beverley, SK and Red Coulee, AB, and has an additional 60 boe/d
awaiting tie-in at Enchant and Spring Coulee, AB. Eagle Rock is continuing
with an active drilling program for the balance of 2008 and throughout 2009.
The majority of the production increase comes from Eagle Rock's Beverley
property in southwest Saskatchewan where the Company has a new oil pool
discovery in the Centaur zone. Current production from one horizontal and four
vertical wells sits at approximately 130 bbls/d. This pool is now being
further defined. Given Eagle Rock's operational success in this area, the
Company is focusing on an accelerated drilling program of up to six horizontal
wells and 3 vertical wells in Q4 2008. Horizontal wells in Beverley,
Saskatchewan are subject to a nominal crown royalty on the first 38,000 bbls
To help fund its augmented capex program Eagle Rock has entered into a
joint venture funding agreement with WCSB GORR Income Participation Fund
operated by Brickburn Asset Management. The Fund pays certain drilling and
completion costs for wells drilled at Beverley, SK and will receive an
overriding royalty interest on all production from these wells going forward.
No shares or debt are involved. This funding together with cash flow from
operating activities and existing credit facilities is sufficient to finance
anticipated capital expenditures for the balance of 2008.
In southern Alberta, Eagle Rock is in the process of completing three
exploratory wells, one each in the Warner, Red Coulee and Sunburst areas. At
both Warner and Red Coulee, the wells have been drilled and cased and are
currently in various stages of completion. The Sunburst well will spud later
this month. These exploratory expenditures will complete Eagle Rock's
commitment for expenditures renounced to subscribers of "flow-through" shares
in February 2008.
Although commodity prices remain volatile, Eagle Rock expects continued
high netbacks per bbl and strong cash flows supported by its 2009 calendar
collar on WTI (100 bbls/d) with a floor of $US 100 and a ceiling of $US 200.
Eagle Rock remains focused on oil production, targeted to remain at 96% or
About Eagle Rock
Eagle Rock is a publicly traded energy company involved in the
exploration and development of low to medium risk oil and gas properties in
Western Canada. Eagle Rock's common shares trade on the TSX Venture Exchange
under the symbol "ERX".
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
This press release includes forward-looking statements and assumptions
respecting Eagle Rock's strategies, future operations, expected financial
results, financial sources, commodity prices, costs of production and quantum
of oil and natural gas reserves and discusses certain issues, risks and
uncertainties that can be expected to impact on any of such matters. By their
nature, forward-looking statements are subject to numerous risks and
uncertainties that can significantly affect future results. Actual future
results may differ materially from those assumed or described in such
forward-looking statements as a result of the impact of issues, risks and
uncertainties whether described herein or not, which Eagle Rock may not be
able to control. The reader is therefore cautioned not to place undue reliance
on such forward-looking statements. The forward-looking statements contained
in this news release are made as of the date hereof and Eagle Rock undertakes
no obligation to update publicly or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by applicable securities laws. The forward-looking statements
contained in this news release are expressly qualified by this cautionary
In addition, the term BOE or BOE's may be misleading, particularly if
used in isolation. A BOE (barrel of oil equivalent) conversion ratio of 6 Mcf
per one (1) BOE is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
For further information:
For further information: please visit the Company's website at
www.eaglerockexploration.com or contact: Jim Silye, President and Chief
Executive Officer, Tel: (403) 269-4040, Fax: (403) 261-1978, E-mail: