Twin Butte Energy Ltd. provides operational update and initial 2008 guidance



    CALGARY, Feb. 11 /CNW/ - TWIN BUTTE ENERGY LTD. TBE-TSX (Twin Butte or
the Company) is pleased to provide an operational update and initial 2008
guidance.

    OPERATIONAL UPDATE - CONTINUED DRILLING SUCCESS
    -----------------------------------------------
    During the fourth quarter of 2007 Twin Butte executed another successful
drilling program allowing the Company to achieve its previously announced exit
guidance of over 2,100 BOE/d. Fourth quarter production averaged approximately
2,050 BOE/d representing a production increase of 88% from the Q4 2006 average
of 1089 BOE/d. During the fourth quarter the Company successfully drilled
5 gross (4.0 net) wells and in total Twin Butte drilled 18 gross (14.8 net)
wells in 2007 with a 100% success rate.
    To date in Q1 2008 the Company has drilled and cased one well in the
Thunder area and is preparing for a multi well program in its Plains operating
area and it's first horizontal well at Jayar both of which are planned to
commence in February. The Plains program includes two 100% WI oil development
wells at Bulwark, as well as a new oil facility, and the first two 100% WI
horizontal wells at Provost in a potential multi well program.
    At Jayar the Company will be drilling the first high impact horizontal
well in the Dunvegan light oil pool utilizing the Packers Plus multi frac
technology. The Jayar Dunvegan pool is an 85.5% WI, low permeability reservoir
that has been developed to date utilizing vertical drilling and completion
technology. Technical data indicates that recent advancements in horizontal
drilling and completion techniques utilized in the Bakken tight oil pool in
Saskatchewan and the Montney tight gas pool in British Columbia are applicable
to the Dunvegan zone at Jayar. Successful application of this technology
presents significant upside potential to the Company with vertical well
production to date representing less than 2 million barrels out of an
estimated 40 million barrels in place.
    Additionally in Q1, the Company will be completing a Fort St. John area
gas well that was cased in December. The well offsets existing infrastructure
and if successful represents the first well in a multi-well development
program. Finally, the Company anticipates the tie in of one non-operated well
at Tony Creek during the quarter.

    CONTINUED EXECUTION OF THE "ACQUIRE, EXPLOIT AND EXPLORE" BUSINESS MODEL
    ------------------------------------------------------------------------
    The Company continues to execute managements focused business strategy,
closing the acquisition of E4 Energy Inc. on February 8, 2008. Post this
acquisition, the combined asset base provides additional critical mass and
operational momentum to Twin Butte shareholders creating a financially strong
company with greater than 3,000 BOE/d of production, 8.9 million BOE of 2P
reserves, a prospect inventory of over 75 locations, a significant tax pool
base and 143,000 net undeveloped acres of land.

    INCREASE IN BANK LINE
    ---------------------
    With the closing of the E4 acquisition the Company has increased its bank
credit facility to a total of $62.5 million, which will leave approximately
$19 million of unutilized credit capacity at year end 2008. Twin Butte
currently has a capital prospect inventory of $30 million in addition to
currently budgeted projects, and the unutilized credit availability provides
the option to increase the capital budget during the year for projects and/or
acquisitions, subject to favourable business conditions.

    2008 GUIDANCE - CONTINUED PER SHARE GROWTH
    ------------------------------------------
    The Board of Directors have recently approved an initial capital budget
of $27 million which will include the drilling of 26 gross (25 net) wells. The
Company has excellent prospects for 2008 including low risk oil and gas
development in SE Alberta, Thunder and Fort St. John British Columbia as well
as high impact exploration and development prospects at Fort St. John and at
Jayar. Capital is allocated with $21.5 million for drilling and facilities,
and $5.5 million for land and seismic.
    Based on this budget the Company expects to realize average production in
2008 of 3,150 BOE/d with exit production greater than 3,350 BOE/d. This
represents an increase in average daily production of approximately 83% over
2007.
    The capital spending level parallels the forecasted 2008 annual cash flow
of $26.5 million and year end debt of approximately $43.5 million representing
1.4 times fourth quarter 2008 annualized cash flow. For budget purposes the
Company has used an average gas price of $6.44/GJ ($6.76/Mcf) at AECO and an
average oil price of US$76.25/bbl WTI, with a exchange rate of 1.0 C$/US$. The
Company has hedged 3000 GJ/d for 2008 at an average price of $6.55/GJ (AECO)
and an additional 3500GJ/d for (April - Oct) 2008 at $6.63/GJ (AECO) providing
additional cash flow stability through 2008.

    
    Twin Butte 2008 Guidance is summarized as follows:
    --------------------------------------------------
    Average production rate        3,150 BOE/d

    Exit production rate           3,350 BOE/d

    Cash flow                      $26.5 million

    Cash flow per share            $0.63

    Capital Program                $27 million

    Year end Debt                  $43.5 million

    Authorized Bank Line           $62.5 million

    Unused Bank Line Capacity      $19 million

    Shares outstanding (Basic)     43.4 million

    Shares outstanding (FD)        45.3 million
    

    During the course of 2007 Twin Butte management has positioned the
Company both operationally and financially with excellent growth potential for
2008 and beyond. This continues to set the Company apart from many of its
peers. The Company has a solid reserve and production base, a strong balance
sheet and a significant tax pool advantage. This combination will enable Twin
Butte to effectively pursue managements "acquire, exploit and explore" growth
strategy. We are very excited about the Company's future prospects.

    Twin Butte is a growth-oriented junior oil and natural gas company, with
43.4 million outstanding shares trading on the Toronto stock exchange under
the symbol "TBE".

    Reader Advisory

    Certain information regarding Twin Butte set forth in this news release
including management's assessment of the Company's future plans and
operations, the effect on the Company and on shareholders of Twin Butte,
production increases and future production levels contain forward-looking
statements that involve substantial known and unknown risks and uncertainties.
These forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond Twin Butte's control including,
without limitation, the impact of general economic conditions, industry
conditions, volatility of commodity prices, currency fluctuations, imprecision
of reserve estimates, environmental risks, competition from other producers,
lack of availability of qualified personnel, stock market volatility, ability
to access sufficient capital from internal and external sources and
uncertainty related to the effect of the Arrangement. Twin Butte's actual
results, performance or achievements may 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 that Twin Butte will derive therefrom. Additional information on
these and other factors that could affect Twin Butte's results are included in
reports on file with Canadian securities regulatory authorities and may be
accessed through the SEDAR website (www.sedar.com), or Twin Butte's website
(www.twinbutteenergy.com). Furthermore, the forward-looking statements
contained in this joint news release are made as at the date of this joint
news release and Twin Butte does not undertake any obligation to update
publicly or to revise any of the forward-looking statements, whether as a
result of new information, future events or otherwise, except as may be
required by applicable securities laws.

    In this news release, reserves and production data are commonly stated in
barrels of oil equivalent ("BOE") using a six to one conversion ratio when
converting thousands of cubic feet of natural gas ("Mcf") to barrels of oil
("bbl") and a one to one conversion ratio for natural gas liquids ("NGLs" or
"ngls"). Such conversion may be misleading, particularly if used in isolation.
A BOE conversion ratio of 6 Mcf: 1 bbl is based on energy equivalency
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.

    The TSX does not accept responsibility for the adequacy or accuracy of
    this news release.

    %SEDAR: 00001562E




For further information:

For further information: Twin Butte Energy Ltd., 415, 311-6th Avenue
S.W., Calgary, Alberta, T2P 3H2; Ron Cawston, President and Chief Executive
Officer, (403) 215-2045; R. Alan Steele, Vice President Finance and Chief
Financial Officer, (403) 215-2045, www.twinbutteenergy.com

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Twin Butte Energy Ltd.

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