MEDICINE HAT, AB, June 5 /CNW/ - Reece Energy Exploration Corp.
(TSX-V/RXR) ("Reece") is pleased to announce that following its amalgamation
with Long View Resources Corporation, as previously announced, its Board of
Directors has revised the 2007 capital budget and has approved the largest
budget in Reece's history. A landmark budget of $20,000,000 was approved for
2007. The budget includes expenditures of $3,000,000 on seismic exploration
and other asset acquisitions, with a further $17,000,000 to be spent on
drilling, completions and facility construction. It should be noted that
$3,000,000 of this budget has been spent to date.
Funding for this budget will be divided equally between future cash flow
and existing debt facilities. If market conditions are favourable, Reece may
consider equity and/or debt financing.
With this budget Reece is planning to drill approximately 40 wells
(gross). Reece's total production is expected to increase from a current rate
of 780 BOE/d to an estimated exit range for 2007 of 1450 to 1550 BOE/d.
Through this increase in production Reece expects its monthly cash flow to
grow to $1,200,000 per month, which would equate to $0.50 per share on an
Reece will target the following areas and play types:
- North Dodsland, approximately 40 km North East of Kindersley,
produces natural gas from the Viking formation. This field has
been a core area for Reece since the Company's inception. With
reduced spacing approval from Saskatchewan Industry and Resources,
Reece plans to drill 11 wells (gross).
- Continuing its successful exploration program in the Brock area
just south of Kindersley, Saskatchewan, Reece plans to drill 6
further wells (gross). Wells in the Brock area produce natural gas
from the Viking formation. Based on Reece's first quarter drilling
program, initial production from properly positioned well bores
can exceed 1,000,000 cubic feet per day. Reece has shot and
manages a large seismic database in the Brock area which will play
a key role in selecting new well locations.
- Reece plans to drill another 3 wells (gross) at Greenan,
approximately 60km South East of Kindersley, Saskatchewan. Wells
in the Greenan area produce natural gas from the Viking formation.
Reece wells currently producing at Greenan represent the highest
return on investment for the Company.
- A Bakken formation deep test well is planned in the Coleville area
of Saskatchewan. This location was selected based on a 3D seismic
program shot earlier. The Bakken formation in this area is capable
of producing natural gas or heavy oil.
- Reece plans to spend part of the budget on exploration and
drilling in the Cutherbert and Bayhurst areas of Saskatchewan.
Target formations include the Bakken, Mannville and Viking.
- Reece is quickly expanding its land holdings in the Bakken fairway
of South East Saskatchewan. A drilling program is anticipated on
these lands targeting both the Bakken and Frobisher formations.
The pilot well in this project is scheduled to be drilled in 2007.
- One exploratory horizontal well is planned for the Hastings North
area which lies just North of Oxbow, Saskatchewan. Based on drill
stem tests from older vintage wells in the area, management
believes there is a large volume of oil in place which has yet to
be recovered from the Frobisher formation.
- At Lost Horse Hills north of Stoughton, Saskatchewan one vertical
well penetration is planned into the Frobisher formation.
- The Souris Valley formation in the Crystal Hill area, north of
Carlyle, Saskatchewan has been a successful exploration area for
Reece. Recently, Reece has completed 2 wells (gross) and plans to
drill a further 4 horizontal wells (gross) in this area. Drilling
at Crystal Hill is a follow up to two 3D seismic programs.
- Further geological, geophysical and engineering studies are in
progress which management believes will culminate in 3 horizontal
wells (gross) in the Workman area, just south of Carnduff,
Saskatchewan. The Workman unit, which Reece operates, is under
water flood, exhibits very low declines and represents an
excellent candidate for low risk horizontal wells.
- At Pinto, southeast of Bienfait, Saskatchewan, Reece plans to
drill a horizontal well targeting the Midale formation.
Reece's ambitious drilling program includes a diversified but balanced
set of geological and risk/reward opportunities. The Reece management team
believes this drilling program to be a milestone in Reece's corporate
Reece is a publicly held oil and gas company headquartered in Medicine
Hat, Alberta, Canada that trades on the TSX Venture Exchange under the symbol
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
BOEs derived by converting gas to oil at a ratio of six thousand cubic
feet of gas to one barrel of oil (6 Mcf: 1 bbl). BOEs may be misleading,
particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead.
Certain statements in this news release including (i) statements that may
contain words such as "anticipate", "could", "expect", "seek", "may" "intend",
"will", "believe", "should", "project", "forecast", "plan" and similar
expressions, including the negatives thereof, (ii) statements that are based
on current expectations and estimates about the markets in which the Reece
operates and (iii) statements of belief, intentions and expectations about
developments, results and events that will or may occur in the future,
constitute "forward-looking statements" and are based on certain assumptions
and analysis made by the Reece. Forward-looking statements in this news
release include, but are not limited to, statements with respect to future
capital expenditures, including the amount, nature and timing thereof; oil and
natural gas prices and demand; other development trends within the oil and
natural gas industry; business strategy; expansion and growth of Reece's
business and operations and other such matters. Such forward-looking
statements are subject to important risks and uncertainties, which are
difficult to predict and that may affect Reece's operations, including, but
are not limited to: the impact of general economic conditions; industry
conditions; government and regulatory developments; oil and natural gas
product supply and demand; competition; and Reece's ability to attract and
retain qualified personnel. Reece'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 of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do transpire or occur, what benefits
Reece will derive therefrom. Subject to applicable law, Reece disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
All forward-looking statements contained in this document are expressly
qualified by this cautionary statement. Further information about the factors
affecting forward-looking statements is available in Reece's current Annual
Report which has been filed with Canadian provincial securities commissions
and is available on www.sedar.com.
For further information:
For further information: Lorne Swalm, President & C.E.O., Reece Energy
Exploration Corp., Phone: (403) 526-9700, firstname.lastname@example.org,