Bow Valley Energy Ltd. - Operations update


    TSX Trading Symbol: BVX

    CALGARY, Oct. 14 /CNW/ - Bow Valley Energy Ltd. (Bow Valley or the
Company) announces an update on its current international operations.

    Drilling Operations

    The 22/11b-13 exploration well, operated by Bow Valley Petroleum (UK)
Limited, a wholly owned subsidiary of the Company, (90%) on behalf of itself
and partner Faroe Petroleum Ltd. (10%), was drilled to a total measured depth
of 13,810 feet. The well penetrated a 123 foot gross sequence of Jurassic
sandstone formation which is hydrocarbon bearing in an upper 10 foot reservoir
section. Formation pressures and fluid samples were acquired during a TD
wireline logging programme. Further seismic and geological interpretation is
required to determine the potential associated with this discovery. In the
meantime, Bow Valley is proceeding with plugging and abandonment operations.
Bow Valley was carried for a portion of its costs in the drilling of this
    Elsewhere in the North Sea, Bow Valley (15.125%) is participating in
drilling a step out appraisal well on the Chestnut field. This well is nearing
completion and results should be available in the next few weeks.
    In addition, Bow Valley (30%) is participating in the drilling of an
exploration well on the MacDonald prospect on Block 14/25a operated by
Talisman. The well was drilled to a total depth of 12,600 feet and is being
plugged and abandoned.

    Financial Operations

    As previously disclosed, the Company financed its acquisition of an
interest in the Peik field in part with a bank facility in the amount of (pnds
stlg)17.5 million which is scheduled to mature for repayment on November 15,
2008. Additionally, the Company is scheduled to reduce the outstanding
principle of its senior bank facility from the current amount of
US$110 million to US$100 million at December 31, 2008; or to a lesser amount
based on a yearend redetermination of the Company's borrowing base. Given the
uncertainties currently facing the financial markets, the Company would prefer
to retain the cash that would otherwise be used for these principal repayments
to provide additional working capital for Bow Valley's ongoing exploration and
field development programs. While the Company is actively working to maintain
the amount of the borrowings beyond the scheduled repayment, conditions in the
credit markets have extended this process and given rise to investor inquiry.
As the financial markets improve Bow Valley would expect to make the principle
repayment in conjunction with a revised bank debt structure or from operating
cash flows. The Company expects to provide an update on the continuation of
the borrowing in the next several weeks.


    R.G. Moffat, President and CEO of Bow Valley stated: "The Company's
exploration strategy is to participate in a multi-well, multi-year portfolio
of prospects that is designed to be financed with the Company's cash flow
generated from its growing production base. Year-to-date, the Company has
participated in previously announced discoveries at Tofkat, Alaska and at
Blackbird, UK North Sea. Production additions have recently been achieved with
the announced start-up of the Chestnut field and further production additions
are scheduled near year-end with first oil expected from the Ettrick field
development. The Company is continuing to manage a balanced capital
expenditure program between its producing assets, pre-production field
developments, pre-sanction field developments, acquisitions and exploration."
Mr. Moffat added "The current turmoil in the world debt and equity markets has
created some uncertainty in financial planning but Bow Valley management does
not anticipate any departure from our current business strategy."

    Bow Valley Energy Ltd. is an international oil and natural gas
exploration, development and production company with operations in the U.K.
sector of the North Sea and Alaska. The common shares of the Company trade on
the Toronto Stock Exchange under the symbol BVX.

    Legal Notice - Forward Looking Information

    Certain statements included or incorporated by reference in this news
release constitute forward-looking statements or forward-looking information
under applicable securities legislation. Such forward-looking statements or
information are provided for the purpose of providing information about
management's current expectations and plans relating to the future. Readers
are cautioned that reliance on such information may not be appropriate for
other purposes, such as making investment decisions. Forward-looking
statements or information typically contain statements with words such as
"anticipate", "believe", "expect", "plan", "intend", "estimate", "propose",
"project", "seek", "continue", "forecast", "may", "will", "potential",
"could", "should" or similar words suggesting future outcomes or statements
regarding an outlook. Forward-looking statements or information in this news
release include, but are not limited to, statements or information with
respect to: business strategy and objectives; development plans; exploration
plans; acquisition and disposition plans and the timing thereof; reserve
quantities and the discounted present value of future net cash flows from such
reserves; future production levels; capital expenditures; net revenue;
operating and other costs; royalty rates and taxes.
    Forward-looking statements or information are based on a number of
factors and assumptions that have been used to develop such statements and
information but which may prove to be incorrect. Although the Company believes
that the expectations reflected in such forward-looking statements or
information are reasonable, undue reliance should not be placed on
forward-looking statements because the Company can give no assurance that such
expectations will prove to be correct. In addition to other factors and
assumptions which may be identified in this news release, assumptions have
been made regarding, among other things: the effects of increasing
competition; the general stability of the economic and political environment
in which the Company operates; the timely receipt of any required regulatory
approvals; the ability of the Company to obtain qualified staff, equipment and
services in a timely and cost-efficient manner; the ability of the operator of
the projects which the Company has an interest in to operate the field in a
safe, efficient and effective manner; the ability of the Company to obtain
financing on acceptable terms; field production rates and decline rates; the
ability to replace and expand oil and natural gas reserves through
acquisition, development or exploration; the timing and costs of pipeline,
storage and facility construction and expansion and the ability of the Company
to secure adequate product transportation; future oil and natural gas prices;
currency, exchange and interest rates; the regulatory framework regarding
royalties, taxes and environmental matters in the countries in which the
Company operates; and the ability of the Company to successfully market its
oil and natural gas products. Readers are cautioned that the foregoing list is
not exhaustive of all factors and assumptions which may have been used.
    Forward-looking statements or information are based on current
expectations, estimates and projections that involve a number of risks and
uncertainties which could cause actual results to differ materially from those
anticipated by the Company and described in the forward-looking statements or
information. These risks and uncertainties which may cause actual results to
differ materially from the forward-looking statements or information include,
among other things: the ability of management to execute its business plan;
general economic and business conditions; the risk of war or instability
affecting countries in which the Company operates; the risks of the oil and
natural gas industry, such as operational risks in exploring for, developing
and producing crude oil and natural gas; market demand; the possibility that
government policies or laws may change or governmental approvals may be
delayed or withheld; risks and uncertainties involving geology of oil and
natural gas deposits; the uncertainty of reserves estimates and reserves life;
the ability of the Company to add production and reserves through acquisition,
development and exploration activities; the Company's ability to enter into or
renew leases; potential delays or changes in plans with respect to exploration
or development projects or capital expenditures; the uncertainty of estimates
and projections relating to production (including decline rates), costs and
expenses; fluctuations in oil and natural gas prices, foreign currency,
exchange, and interest rates; risks inherent in the Company's marketing
operations, including credit risk; uncertainty in amounts and timing of
royalty payments; health, safety and environmental risks; risks associated
with existing and potential future law suits and regulatory actions against
the Company; uncertainties as to the availability and cost of financing; and
financial risks affecting the value of the Company's investments. Readers are
cautioned that the foregoing list is not exhaustive of all possible risks and
uncertainties. Additional risk factors affecting the Company and its business
are contained in the Company's Annual Information Form filed on SEDAR at
    The forward-looking statements or information contained in this news
release are made as of the date hereof and the Company undertakes no
obligation to update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events or
otherwise unless required by applicable securities laws. The forward-looking
statements or information contained in this news release are expressly
qualified by this cautionary statement.
    Where amounts are expressed on a barrel of oil equivalent (boe) basis,
natural gas volumes have been converted to barrels of oil equivalent at six
thousand cubic feet to one barrel of oil equivalent (6 mcf = 1 boe). This
conversion ratio is the conversion used in the oil and natural gas industry
and is based on an energy equivalency conversion method primarily applicable
at the burner tip and does not represent a value equivalency at the wellhead.
The use of boe's may be misleading, particularly if used in isolation.

    %SEDAR: 00008379E

For further information:

For further information: Bow Valley Energy Ltd., Robert G. Moffat,
President and Chief Executive Officer, C.W. Leigh Cassidy, Vice President and
Chief Financial Officer, Phone (403) 232-0292, website:

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