Sabretooth Energy Ltd. announces an operational update and additional exploration and development details



    CALGARY, Feb. 19 /CNW/ - ("Sabretooth" or the "Company") (TSX: "SAB") is
pleased to provide an operational update and additional details on its future
exploration and development activities.

    Red Creek Horizontal, B.C.

    Sabretooth and HFG Holdings Inc. ("HFG") have finished completing their
first horizontal, exploration Montney well at Red Creek in February 2009. The
well continues to recover gas and condensate and has recovered 59% of its
completion fluid. The well is currently producing at 670 mcf/d with flow
pressures of 1,000 kPa tubing and 3,650 kPa casing. Stabilized rates are below
expectations, however, Sabretooth and HFG are currently equipping the well for
extended cleanup and further flow test to better understand well performance
once additional load fluid is recovered. The well is owned by HFG Holdings
Inc. which is owned 71% by Sabretooth Energy.

    Exploration and Development Update

    Sabretooth will continue to focus its exploration and development efforts
on its core land holdings which will provide opportunities for growth for the
balance of 2009 and into 2010. Sabretooth and HFG plan to spud a vertical
Montney exploration well in Sinclair this weekend. A second Sinclair Montney
vertical exploration well is expected to spud in Q2. Sabretooth and HFG also
plan a horizontal development Montney well, offsetting the recent successful
horizontal Montney well in the Gordondale area, following spring breakup.

    Additional Hedge

    The Company locked in a price on an additional 6,000 GJ/d of natural gas
at $7.85 / GJ from April 1, 2009 to March 31, 2010. This represents
approximately half of the Company's current production and guarantees cash
flow for capital projects and improving working capital position. The Company
also has two hedges in place totaling 9,000 GJ/d for approximately $7.06 / GJ
which expire on March 31, 2009.

    Asset Backed Commercial Paper

    The Pan-Canadian Investors Committee for Third-Party Structured Asset
Backed Commercial Paper announced the completion of the restructuring on
January 21, 2009. Due to the successful restructuring, $18 million of
Sabretooth's debt is converted from current debt to non-current for up to
seven years matching the maturity of the Asset Backed Commercial Paper
("ABCP"). The cost of servicing this loan is expected to offset the interest
to be received on the ABCP going forward. Additionally, Sabretooth received
its first of two interest payments from its ABCP since the restructuring was
completed in January 2009. The interest received was $858,000 representing the
amount owed from acquisition to July 31, 2008. The second accrued interest
payment of approximately $400,000 is expected by the end of the first quarter
of 2009.

    About Sabretooth Energy

    Sabretooth Energy Ltd. is a public oil and gas exploration and
development company, located in Calgary, Alberta and carrying out operations
in Western Canada. Sabretooth trades on the Toronto Stock Exchange under the
symbol "SAB".

    This news release contains forward-looking statements relating to the
Company's plans and other aspects of the Company's anticipated future
operations, strategies, financial and operating results and business
opportunities. Forward-looking statements typically use words such as
"anticipate", "believe", "project", "expect", "plan", "intend" or similar
words suggesting future outcomes, statements that actions, events or
conditions "may", "would", "could" or "will" be taken or occur in the future,
or statements regarding the outlook for petroleum prices, estimated amounts
and timing of capital expenditures, the timing, location and extent of future
drilling operations anticipated timing and results of construction projects
and project tie-ins, estimates of future production, the ability to realize
the timing, on investments in ABCP, the terms of the Corporation's new credit
facility, loans to be received from National Bank of Canada, if any, operating
costs or other expectations, beliefs, plans, objectives, assumptions or
statements about future events or performance. Statements regarding reserves
are also forward-looking statements, as they reflect estimates as to the
expectation that the deposits can be economically exploited in the future.
    These statements are based on certain factors and assumptions regarding
expected growth, results of operations, performance, business prospects and
opportunities, the terms of the Corporation's new credit facility and the
ability of the Company to realize on its investments in ABCP. While we
consider these assumptions to be reasonable based on information currently
available to us, they may prove to be incorrect.
    By their nature, forward-looking statements involve numerous risk and
uncertainties and other factors that contribute to the possibility that the
predicted outcome will not occur, 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, 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,
the ability to realize on investments in ABCP and ability to access sufficient
capital from internal and external sources. Readers are cautioned that the
foregoing list of factors is not exhaustive.
    Although Sabretooth believes that the expectations represented in such
forward-looking statements are reasonable, there can be no assurance that such
expectations will prove to be correct. As a consequence, actual results may
differ materially from those anticipated in the forward-looking statements and
you should not unduly rely on forward-looking statements. The forward-looking
statements contained in this news release are made as the date of this new
release and the Company 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.
    The term barrels of oil equivalent or boe may be misleading, particularly
if used in isolation. A conversion ratio for gas of 6 mcf : 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 wellhead.
    Statements regarding flow rates in this news release are current only as
of the date hereof. Future flow rates may vary, perhaps materially, and the
wells in question may prove to be technically or economically unviable. Any
future flow rates will be subject to the risks and uncertainties set out in
this news release.

    %SEDAR: 00023788E




For further information:

For further information: Sabretooth Energy/HFG Holdings Inc., Doug
Swartout, Investor Relations, (403) 806-4047, Email: doug@sabretooth.ca,
Website: www.sabretooth.ca; or Brookline Public Relations, Inc., Shauna
MacDonald, Media and Investor Relations, (403) 538-5645, Email:
smacdonald@brooklinepr.com

Organization Profile

SABRETOOTH ENERGY LTD.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890