CALGARY, Jan. 17 /CNW/ - Galleon Energy Inc. ("Galleon") is pleased to
report the results of the company's most successful annual drilling program. A
success rate of 89% was recorded resulting in significant growth in
production, reserve value and drilling inventory.
In 2007, 93 wells were drilled and 83 wells (74.8 net) were cased for an
89% success rate. Wells cased for production include 29 light oil (26.7 net),
49 natural gas (44.5 net) and 5 heavy oil (3.6 net). 28% of these wells were
During the second half of 2007, Galleon focused its drilling program
towards light oil to take advantage of high crude oil prices. Six of 7
previously defined exploration areas were successfully converted into new
producing properties. The success of the 2007 exploration program has further
enhanced Galleon's portfolio of light oil and natural gas projects with long
life reserves and good well productivity. In 2008, Galleon will continue to
focus on expanding its light oil, high netback projects.
In fourth quarter 2007, 22 wells were drilled and 19 wells (18.0 net)
were cased for an 86% success rate. Wells cased for production include 8 light
oil (8.0 net), 10 natural gas (9.5 net) and 1 heavy oil (0.5 net).
Highlights in Q4 2007 and Q1 2008 to date
- Momentum continued to build with the exploitation phase in three of
Galleon's significant light oil growth areas of Eaglesham, McLean's
Creek, and Kimiwan. These projects have shown repeatability, high
chance of success, and broad aerial extent. Galleon has an extensive
multiyear drilling portfolio identified on existing 3D seismic. Up to
35 wells are planned for light oil in these areas in 2008.
- At Eaglesham, the completion of a new 10,000 bopd battery and
expansion of the existing gas plant is on track for start up prior to
the end of January 2008. The battery and plant expansion are required
to accommodate significant production growth expected from activity
planned in 2008.
- Four Beaverhill Lake sand oil wells were drilled and cased at Puskwa
in Q4 2007 and early Q1 2008. The northeast extension of the pool was
confirmed with the successful drilling of a well at 3-32-72-26W5M
which is located 8 miles away from the original discovery well at
16-32-71-26W5M. The 3-32 well was cased on January 14, 2008 and
showed over 20 feet of oil charged Beaverhill Lake sand on logs. The
well has yet to be evaluated and is expected to be completed within
two weeks. Up to thirteen light oil wells are planned at Puskwa in
- An exciting new upper Montney resource play was confirmed through
definitive well tests on Galleon lands. This new play is directly
analogous to recent industry successes in British Columbia and at
Pouce Coupe, Alberta. Galleon plans to aggressively pursue
delineation drilling of this pool in Q1 2008.
- In 2008, Galleon plans to drill horizontal wells on its Dawson,
Alberta Montney play commencing with the first well in Q1 2008.
Galleon has assembled a large contiguous land block at Dawson
covering over 500 square miles.
Due to the drilling success achieved in 2007, Galleon's planned capital
and drilling program in Q1 2008 will be the largest in the company's history.
Approximately $68 to $73 million has been allocated with 35 to 40 wells
planned. Up to 10 high impact exploration wells are planned in Q1 2008.
Upon closing of the acquisition of ExAlta Energy Inc., Galleon's credit
facilities were increased to $265 million comprised of a lending base facility
of $250 million and an acquisition facility of $15 million.
Galleon has entered into one term natural gas contract and two crude oil
financial contracts. The natural gas contract for 10,000 GJ/day has a term
from February 1 to December 31, 2008 with pricing subject to a costless collar
of $6.00/GJ and $8.00/GJ Canadian. During 2008, one crude oil costless collar
contract for 2,000 bbl/day is in place with a floor of $70.00 CDN WTI and a
ceiling of $80.75 CDN WTI. A second crude oil costless collar contract for
1,000 bbl/day is in place with a floor of $75.00 US WTI and a ceiling of
$100.00 US WTI.
Galleon is a growth oriented oil and gas company with focused operations
in the Peace River area of Alberta. Galleon has access to over 1 million gross
acres of land.
Galleon has approximately 67.6 million Class A shares and 922,500 Class B
shares issued and outstanding which trade on the TSX under the symbols "GO.A"
ADVISORY: Certain information regarding Galleon Energy Inc. in this news
release including management's assessment of future plans and operations,
number, type and timing of wells to be drilled and completed, the plan and
development of certain prospects, timing and completion of facilities, and
expected capital expenditures, 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, capital expenditure costs, including
drilling, completion and facilities costs, unexpected decline rates in wells,
wells not performing as expected, incorrect assessment of the value of
acquisitions, failure to realize the anticipated benefits of acquisitions,
delays resulting from or inability to obtain required regulatory approvals and
ability to access sufficient capital from internal and external sources. As a
consequence, actual results may differ materially from those anticipated in
the forward-looking statements. Readers are cautioned that the foregoing list
of factors is not exhausted. Additional information on these and other factors
that could effect Galleon's operations and financial results are included in
reports on file with Canadian securities regulatory authorities and may be
accessed through the SEDAR website (www.sedar.com), at Galleon's website
(www.galleonenergy.com). Furthermore, the forward-looking statements contained
in this news release are made as at the date of this news release and Galleon
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
Disclosure provided herein in respect of barrels of oil equivalent (boe)
may be misleading, particularly if used in isolation. A boe conversion ratio
of 6 Mcf: 1 Bbl 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: SEE www.galleonenergy.com OR CONTACT: Steve
Sugianto, President and Chief Executive Officer, (403) 261-9287,
email@example.com; Glenn R. Carley, Executive Chairman, (403) 261-9277,
firstname.lastname@example.org; Shivon Crabtree, Vice President and Chief Financial
Officer, (403) 261-9276