CALGARY, Aug. 16 /CNW/ - Berkana Energy Corp. ("Berkana" or the
"Company") announced today that the Board of Directors have unanimously
approved a $9 million increase in the Company's 2007 capital budget. Budgeted
capital expenditures for the last six months of 2007 are now estimated to be
approximately $22 million primarily for land, seismic and drilling.
Glenn Gradeen, Berkana's President and Chief Executive Officer said,
"This represents a 35% increase in Berkana's annual capital budget, increasing
it from $25 million to $34 million for fiscal 2007." Mr. Gradeen went on to
say, "With increasing volatility in natural gas prices, we've seen a sharp
decrease in the levels of Canadian drilling activity this year which presents
us with significant opportunities for continued growth. Firstly, deal flow has
increased and opportunities exist to expand our core properties of Rimbey,
Kaybob/Kakwa and Red Earth. Secondly, we have seen a twofold improvement in
service costs and efficiencies. Not only have drilling costs decreased, but
also the quality of work has improved."
The opportunity to take advantage of the current slow down and be
counter-cyclical is a strong motivating factor for the Company to proceed with
an expanded capital program. The Company now plans to drill an additional 4-6
wells in its core areas. The expanded program will include drilling to earn
new lands and the purchase of additional undeveloped lands. The Company is
also considering expanded seismic programs for both of Kaybob/Kakwa and Red
At the end of the second quarter, Berkana had net debt (bank debt plus
working capital) of $7.4 million, with operating lines of $40 million. Berkana
expects average production for 2007 of between 2,600 to 2,900 boe/d and to
exit the year between 2,800 to 3,000 boe/d.
Mr. Gradeen continued, "We are revising and updating our three-year plan
to take into account these expanded opportunities and have identified growth
prospects which will allow for reserves and production growth per year of 20%
to 30% per share for several years to come. Furthermore, we are actively
seeking quality acquisition opportunities that will further supplement our
growth and move Berkana towards its target of 10,000 boe/d."
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.
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 is 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.
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