Vero Energy Inc. announces 100% first quarter drilling success and operations update



    
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    CALGARY, April 14 /CNW/ - Vero Energy Inc. (TSX - VRO, "Vero" or the
"Company") is pleased to report drilling and operating results for the first
quarter of 2009. During this quarter, Vero participated in the drilling of 7
(6.4 net) wells of which 4 (4.0 net) were horizontal wells, and had a drilling
success rate of 100%. Edson was the primary focus where 5 (5.0 net) wells were
drilled including all the horizontal wells. The Company also performed 2 (2.0
net) successful recompletions on lands owned by industry partners. In the
quarter Vero was able to fulfill seven of the eight commitments on industry
partners still remaining from year end 2008, and have entered into no
additional commitments.
    "Vero once again had a very successful quarter of drilling and
completions, stepping out of our existing base and continuing to increase our
inventory of projects," said Doug Bartole, President and CEO. "Vero is
committed to sustainability and profitability and over the past few months we
have had discussions with many of our shareholders about the current operating
and economic environment. Like our shareholders we do not believe the current
environment is profitable for our industry to reinvest capital into
exploration and drilling. As such we have taken various measures which will
position us into the recovery."
    Finding and development costs in 2008 for North America are averaging
approximately $3.65/mcfe (based on third party research which has been
normalized for foreign exchange and comparison of reserve categories) as
compared to Vero at $2.61/mcfe.
    Current production, based on field estimates, is approximately 8,200 (82%
natural gas). With the Alberta Government's latest royalty relief designed to
stimulate activity, 4 (3.7 net) wells were brought on production at the
beginning of April and 1 (0.4 net) non-operated well was brought on late last
week. These wells had tested production of over 2,000 boed (84 % natural gas)
and were brought on production at approximately 1,200 boed. With a focus on
profitability the Company also shut in over 400 boed (82 % natural gas), due
to high field operating costs. This includes one well producing over half of
the shut in volumes that was restricted at a third party facility and had high
processing and gathering fees. The well is to be re-routed to another third
party facility and the Company expects to have that well back on production
sometime in the second quarter.
    Other highlights in the quarter included the completion of the expansion
of our Edson gas processing facility to 35 mmcfd with Vero maintaining a 70%
working interest (and operatorship). In addition Vero commenced production of
a horizontal well that had test rates of approximately 1000 boed with very
little pressure drawdown or depletion. Based on pressure data Vero believes
this well has the potential to maintain these rates for a significant amount
of time, but it is currently restricted due to capacity restraints and
intentional choking due to current commodity prices. The Company has now
drilled 26 producing horizontal wells in the greater Edson core with 17
producing in the Rock Creek and 9 producing in two different zones within the
Mannville Group. This is substantially more horizontal wells than any other
operator in the area and this continues to establish us as a leader in this
technology and with low capital cost structure. The full cycle economics from
our Edson project are on par with most of the top natural gas projects in
North America.
    Industry finding costs, coupled with current natural gas prices due to
the near term supply and demand imbalance, verify Vero's position that
currently there is very poor to no return in investment into new drilling. The
Company will be deferring drilling activity until later in the second half of
the year. When operations resume the Company will execute a solid drilling
program with plans to drill approximately 7 (6 net) wells including 5 (4.5
net) horizontal wells to be brought on production prior to the end of year.
This project is expected to bring on over 12 mmcfd of natural gas net to Vero
by year end and specifically into the first quarter of 2010 where currently
future commodity prices have natural gas at approximately $6.00/mcf. This plan
allows Vero to continue to monitor changes throughout upcoming quarters and we
will be ready to react quickly. Key to the Company's plan is to pace growth
prudently while delineating for the future. Our drilling inventory and reserve
base is solid, continues to grow, and will be accessed in a timely manner.

    Vero Energy Inc. is a publicly traded Canadian energy company involved in
the exploration, development and production of oil, natural gas and liquids in
Alberta. The Company's shares trade on The Toronto Stock Exchange under the
symbol "VRO". Please visit our website for the latest presentation with a new
one to be posted on or about April 20th, 2009.

    
    The Toronto Stock Exchange has neither approved nor disapproved of the
    information contained herein.
    

    READER ADVISORY

    Forward Looking Statements: Certain information regarding the Company in
this news release including management's assessment of future plans and
operations, production estimates, drilling inventory and wells to be drilled,
timing of drilling and tie-in of wells, productive capacity of new wells,
capital expenditures and the timing thereof, 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, the timing and length of
plant turnarounds and the impact of such turnarounds and the timing thereof,
delays resulting from or inability to obtain required regulatory approvals and
ability to access sufficient capital from internal and external sources. As a
consequence, the Company'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
events anticipated by the forward-looking statements will transpire or occur,
or, if any of them do so, what benefits the Company will derive therefrom.
Readers are cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could effect the
Company'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), and the Company's website
(www.veroenergy.ca). Furthermore, the forward-looking statements contained in
this news release are made as at the date of this news 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.
    Finding and Development Costs: Disclosure provided herein in respect of
Vero's finding and development costs for the year ended December 31, 2008 is
based upon and should be read in conjunction with the more detailed
calculations, related disclosure and cautionary language contained within the
Corporation's press release dated February 11, 2009, a copy of which may be
accessed on SEDAR or on the Corporation's website.
    BOE Disclosure: 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 wellhead.

    This press release is reproduced on Vero's website at www.veroenergy.ca.
Also for the latest presentation and other information about Vero Energy Inc.,
please visit the website (www.veroenergy.ca).

    %SEDAR: 00022902E




For further information:

For further information: Doug Bartole, President & CEO, at (403)
218-2063; Gerry Gilewicz, Vice-President Finance & Chief Financial Officer at
(403) 693-3170; Scott Koyich, Investor Relations, (403) 714-5979

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