TSX Exchange: BEC
CALGARY, Jan. 3 /CNW/ - Berkana Energy Corp. ("Berkana" or the "Company")
is pleased to provide an operational update concerning recent production
increases and new drilling.
Berkana's average field production in December, 2007 was 4,028 boe/d
which exceeds the Company's most recent exit rate guidance (November 23, 2007)
of 3,400 to 3,600 boe/d. Ten wells, four of which have produced for extended
times, at Red Earth, Kaybob and Rimbey are currently shut-in awaiting tie-in,
additional processing capacity or regulatory approvals and provide additional
productive capacity of 400-600 boe/d. This additional productive capacity will
more than cover anticipated production declines over the next six to twelve
months. Six new wells which have been drilled in the fourth quarter (two of
these wells have been flow tested with anticipated initial production rates of
over 250 boe/d) form a solid foundation for further production growth in 2008.
Based on field estimates of production, Berkana calculates fourth quarter
production of approximately 3,470 boe/d with average production of
approximately 2,820 boe/d for calendar 2007. Fourth quarter production was
consistent with the most recent market guidance and average 2007 production
has slightly exceeded Berkana's market guidance of between 2,700 to 2,800
Berkana is a highly focused company, currently producing over 95% of its
sales volumes from three core properties in Alberta at Rimbey, Kaybob and Red
Earth. Berkana's corporate production mix is 75% natural gas and 25% oil and
Capital expenditures for the fourth quarter were approximately
$10 million with the majority of that invested in the drilling of six gross
(5.0 net) wells in the Company's core areas. An additional three gross
(0.7 net) wells were spudded in the fourth quarter and are currently drilling.
Of the six wells drilled in the fourth quarter, two have been completed and
tested, the remainder require completion and flow testing.
Berkana is in the midst of its first drilling program in the Rimbey area
and expects the current drilling activities will add additional reserves and
production. The Company has drilled four gross (3.0 net) wells, with two to
four additional wells planned for later this winter. One of these wells was
drilled pursuant to a farm-in agreement in the Gull Lake area and this well
has been cased. This well targeted and successfully encountered a thick
Ellerslie channel identified on seismic. The well is scheduled for completion
over the next several weeks, along with several other wells drilled at Rimbey
this fall. In addition, the Company has identified a new Belly River oil trend
and the first well into this is a new pool discovery. That well swabbed at
rates of 100-200 bbls/d of clean oil and is currently being equipped for
production. This may represent a new pool development opportunity.
Berkana's Kaybob winter drilling program commenced with the drilling of
two gross (2.0 net) wells in a four to six well program. Both of these wells
were cased and completion and evaluation work has commenced.
Berkana continues to maintain financial discipline and estimates budgeted
net debt at December 31, 2007 to be approximately $15 million.
Takeover Bid Update:
On December 12, 2007, Quatro Resources Inc. ("Quatro") mailed its
Takeover Bid Circular to shareholders of Berkana, including a copy of the
Berkana Director's Circular responding to the Quatro offer to purchase all of
the Class A common shares of Berkana. The takeover of Berkana by Quatro is
scheduled to close on January 16, 2008.
Berkana Energy Corp. is a Calgary based public resource company actively
pursuing crude oil and natural gas through exploration, development,
production and strategic acquisitions in key focus areas located in
Western Canada. Berkana was created as a vibrant, growing Canadian energy
company with a mission to grow shareholder wealth by adding reserves and
production through a balanced mix of low risk drilling opportunities, high
impact exploration and strategic acquisitions. The Company's common shares
trade on the TSX Exchange under the symbol BEC.
Additional information relating to Berkana is filed on SEDAR and can be
viewed at www.sedar.com. Information can also be obtained by contacting the
Company at Berkana Energy Corp., Suite 2100, 801 Sixth Avenue S.W., Calgary,
Alberta, Canada T2P 3W2 or by e-mail at firstname.lastname@example.org. Information is
also accessible on the Company's website at www.berkanaenergy.com.
Statements in this press release may contain forward-looking statements
including management's assessment of Berkana's future plans and operations.
Information concerning reserves may also be deemed to be forward-looking
statements as such estimates involve the implied assessment that the resources
described can be profitably produced in future. These statements are based on
current expectations that involve a number of risks and uncertainties, which
could cause actual results to differ from those anticipated. These risks
include, but are not limited to: the background risks of the oil and gas
industry (e.g., operational risks in development, exploration and production;
potential delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of reserve
estimates; the uncertainty of estimates and projections relating to
production, costs and expenses, and health, safety and environmental risks),
and uncertainties resulting from potential delays or changes in plans with
respect to exploration, development projects, capital expenditures or
Per barrel of oil equivalent ("boe") amounts may be misleading,
particularly if used in isolation. A boe conversion ratio has been calculated
using a conversion rate of six thousand cubic feet of natural gas to one
barrel of oil (6 mcf:1 bbl) and is based on an energy equivalency conversion
method applicable at the burner tip and does not represent a value equivalency
at the wellhead.
For further information:
For further information: Glenn Gradeen, CEO, email@example.com;
Robb Thompson, CFO, firstname.lastname@example.org; Berkana Energy Corp., Suite
2100, 801 Sixth Avenue S.W., Calgary, Alberta T2P 3W2, Telephone: (403)
221-7700, Fax: (403) 221-7719, Website: www.berkanaenergy.com