CALGARY, Jan. 28 /CNW/ - Result Energy Inc. ('Result'; TSX-V: RTE)
announces that, subject to TSX Venture Exchange approval, it intends to sell
substantially all of its producing assets in Saskatchewan. The properties to
be sold include the Company's 50% working interest in a shallow Viking natural
gas field (48 wells) and related compression facilities at Dodsland, plus
production (1 oil and 6 gas wells) and wellsite facilities at nearby East
Dodsland. Current production from these combined properties totals
approximately 1,800 mcfd net (300 boed net). The Dodsland properties represent
an excellent, mature asset base, consisting of concentrated, predictable
reserves characterized by large amounts of remaining gas in place, moderate
production volumes and a long reserve life index. Property upside consists
primarily of the drilling potential associated with reduced well spacing to
improve field recoveries.
Proceeds from the proposed disposition will be applied to the Company's
debt including payout of convertible debentures. This reduction in debt will
also provide Result with the flexibility to increase its Capex budget for 2008
to approximately $8 million. The increase in capital spending will be directed
to new exploration projects at Royce and Eureka in the Peace River Arch, and
to the Company's emerging combined shale gas and platform gas play in
northeastern British Columbia.
The disposition will remove a mature, development property from Result's
portfolio and allow the Company to focus on the substantial upside associated
with its Peace River Arch and British Columbia properties.
Production from Result's Saskatchewan properties will effectively be
replaced by new wells which are coming on stream in early Q1-08 at Kakwa and
Two new gross natural gas wells (0.22 net), which were drilled during
2007 are currently being tied-in at Kakwa, Alberta. Production is expected to
commence by the end of January 2008 These wells were completion tested at a
combined rate of 8,400 mcfd gross (1,800 mcfd net). Result also holds
interests in 4 additional undeveloped sections in the Kakwa project, all of
which are prospective for future development drilling.
In mid January, drilling commenced on an exciting 2,900 metre Slave Point
gas prospect at Mearon, Alberta. Mearon is located approximately 10 kilometers
south of the prolific Ladyfern discovery and immediately north of Result's
existing Clearhills project. Result holds a 25% working interest in this
prospect. Drilling and testing operations are expected to take approximately
To date, Result has acquired mineral rights to 40 gross sections of
exploratory acreage (at 100% working interest) that are prospective for Middle
Devonian shale gas and platform gas in the Horn River basin of northeastern
British Columbia. The Horn River basin has recently seen significant industry
land activity for shale gas rights. Result plans to commence an exploration
and appraisal program on these lands later this year.
As part of its annual compensation and retention program, Result has
today granted a total of 1.24 million options to certain directors, officers,
consultants, and employees of the Company. These options will vest over a
2 year period and entitle the holder to acquire common shares of the Company
at $0.35 per share for a period of 5 years.
Investors are cautioned that this news release contains forward looking
information. Such information is subject to known and unknown risks,
uncertainties and other factors that could influence actual results or events
and cause actual results or events to differ materially from those stated,
anticipated or implied in the forward-looking information. Readers are
cautioned not to place undue reliance on forward-looking information, as no
assurances can be given as to future results, levels of activity or
The term barrels of oil equivalent ("boe") may be misleading,
particularly if used in isolation. A boe conversion ratio of six thousand
cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence
is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wellhead. All
boe conversions herein are derived from converting gas to oil in the ratio mix
of six thousand cubic feet of gas to one barrel of oil.
Result Energy Inc. is a publicly traded Canadian energy company involved
in the exploration and development of oil and gas properties in western
Canada. Result trades on the TSX Venture Exchange under the symbol "RTE".
The TSX Venture Exchange does not accept responsibility for the adequacy
and accuracy of this release.
For further information:
For further information: William Matheson, President & CEO, Result
Energy Inc., (403) 777-0007