TSX Exchange: BEC
CALGARY, Oct. 3 /CNW/ - Berkana Energy Corp. ("Berkana" or the "Company")
is pleased to provide the following operational update.
Berkana has exceeded its year-end corporate production target (previously
estimated at 2,900 to 3,000 boed) with new production brought on-stream in
August and September. Corporate average production has increased to over
3,100 boe/d (field estimates) for the month of September from approximately
2,450 boe/d for the second quarter. New production came on-stream
intermittently through August as third party processors commissioned new
capacity. Not all committed gathering and processing capacity is operational
yet, however, new facility reliability increased through September and
additional capacity is expected to become available later this year to
accommodate future drilling.
"Increased sales volumes, primarily at Kaybob, have moved our corporate
production rates up such that we have already realized our year end production
targets," said Glenn Gradeen, CEO of Berkana. He continued that "based on
having already exceeded this goal, we are increasing our estimated 2007 exit
rate to a range of 3,000 to 3,100 boe/d".
Berkana remains 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. All volume
conversions have been done on an energy equivalent basis of 6 mcf to one
barrel of oil.
In August, Berkana announced Board of Director approval for a $9 million
expansion of the Company's 2007 capital budget. Budgeted capital expenditures
for the last six months of 2007 are now expected to be approximately
$22 million primarily for drilling, seismic and land.
The Company is pleased to announce that its fall drilling program has
commenced with an initial four well program at Rimbey and two to four further
wells planned at Rimbey for later this fall. In September, the Company
participated in one well at Red Earth and licensing has commenced for up to
six more wells to be drilled at Red Earth and Kaybob this fall and winter.
Berkana's Red Earth and Kaybob properties are generally winter only drilling
areas and thus drilling depends largely on the timing of freeze-up. At Red
Earth, Berkana has entered into a farm-in agreement with a third party
operator to increase its land position and production base in this core
The Company is reviewing the potential impact of the recent Alberta
Provincial Royalty Review in the context of corporate netbacks and economics.
"There is no question that the proposed changes to Alberta Crown royalty rates
will hurt the traditional, conventional junior producer such as Berkana.
Alberta represents one of the highest cost regions in the world to do business
and I do not believe the Royalty Review process has properly considered the
impact on small producers such as Berkana. The recent elimination of Alberta
Royalty Tax Credit, the weakness of natural gas prices, an appreciating
Canadian dollar and the high operating and capital cost structure in Alberta
have all come together with a negative impact on the economics of our ongoing
operations " stated Gradeen.
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 email@example.com. 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.
THE TORONTO STOCK EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information:
For further information: Glenn Gradeen, CEO, firstname.lastname@example.org;
Robb Thompson, CFO, email@example.com; 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