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CALGARY, Jan. 8 /CNW/ Vero Energy Inc. ("Vero" or the "Company")
(TSX-VRO) is pleased to report that year end exit production based on field
estimates is approximately 5,700 boed (79% natural gas), which exceeds the
high end of our most recent year end exit production guidance. In the quarter,
Vero participated in the drilling of 8 (6.3 net) wells with a success rate of
100% including four new pool discoveries. Currently 7 (4.3 net) wells are
awaiting either completion or tie-in.
Highlights for the fourth quarter include the completion of Vero's Edson
100% working interest, 20 MMCFD, expandable gas processing facility. The
facility was running in early December but was delayed in getting to full
operational capacity until the last week of December due to third party issues
relating to the tie-in to the main sales gas transmission system. The new
facility eliminates restrictions on production that were caused by high and
increasing line pressures and will allow for continued growth from Vero's
drilling program in the area. In Edson, 6 (4.3 net) wells were drilled in the
quarter including 1 (0.7 net) horizontal Rock Creek well. Vero received
regulatory approval for the down-spacing of more land in the Edson area. There
are now 35 sections approved for the drilling of two wells per pool, per
section and an additional 13 sections are awaiting approval. Edson currently
has over 60 drilling locations with the current potential to drill up to 50%
of these as horizontal wells. Vero acquired six sections of crown land in the
quarter continuing on the strategy of acquiring high-grade, "ready to drill
sections". At Corbett 1 (1.0 net) well was drilled in the quarter. This area
continues to grow and now has production over 850 boed (45% oil) based on
field estimates. In addition, the Company increased capacity and reduced the
field suction pressure by optimizing compression at the 100% owned facility.
The Company is in the process of optimizing and leveling out production in
these fields with the addition of the new facilities along with new wells
recently brought on production.
2008 Guidance and Capital Budget
The Company currently has three operated drilling rigs working and will
therefore have a very active first quarter. Plans for the first quarter are to
drill 10-12 (7.3-8.8 net) wells including 4 (2.9 net) horizontal wells. With
the exit production of 5,700 boed, the current optimization process underway,
wells currently waiting to be put into production and a quick start to the new
year with regards to the drilling program, the Company is increasing its
previous average guidance for 2008 to 6,000-6,400 boed from 5,800-6,200 boed.
Vero's Board of Directors has approved an initial capital budget of $50 MM for
2008, which is less than estimated cash flow. Capital spending for 2008 will
be focused primarily on drilling as less facility infrastructure is expected
to be needed due to the extensive facility work done in 2007. The 2008
drilling program is currently anticipated to consist of approximately 30-32
(22-23.5 net) wells, which are highlighted by higher working interests than
those participated in by Vero in the past. With budgeted 2008 drilling rates,
the Company has over three years of drilling inventory.
Vero is currently forecasting an estimated fourth quarter, 2008 net debt
to cash flow ratio of less than one while providing yearly average production
growth of 38%. The capital budget will be continually reviewed and changes
made on a quarterly basis as circumstances dictate. Vero believes that 2008
will provide a number of opportunities which fit with the management teams'
philosophy of building a company with a long term view and strategy. Vero will
continue to manage its business in a prudent and efficient manner and this
will ensure that profitable growth and sustainability occurs for its
Vero Energy Inc. is a publicly traded Canadian energy company involved in
the exploration, development and production of oil, natural gas and liquids in
Alberta. The Company's shares trade on The Toronto Stock Exchange under the
symbol "VRO". Please visit our website for the latest presentation.
The Toronto Stock Exchange has neither approved nor disapproved of the
information contained herein.
Forward Looking Statements: Certain information regarding the Company in
this news release including management's assessment of future plans and
operations, production estimates, drilling inventory and wells to be drilled,
timing of drilling and tie-in of wells, productive capacity of new wells,
capital expenditures and the timing thereof, may constitute forward-looking
statements under applicable securities laws and necessarily involve risks
including, without limitation, risks associated with oil and gas exploration,
development, exploitation, production, marketing and transportation, loss of
markets, volatility of commodity prices, currency fluctuations, imprecision of
reserve estimates, environmental risks, competition from other producers,
inability to retain drilling rigs and other services, the timing and length of
plant turnarounds and the impact of such turnarounds and the timing thereof,
delays resulting from or inability to obtain required regulatory approvals and
ability to access sufficient capital from internal and external sources. As a
consequence, the Company's actual results, performance or achievements could
differ materially from those expressed in, or implied by, these
forward-looking statements and, accordingly no assurance can be given that any
events anticipated by the forward-looking statements will transpire or occur,
or, if any of them do so, what benefits the Company will derive therefrom.
Readers are cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could effect the
Company's operations and financial results are included in reports on file
with Canadian securities regulatory authorities and may be accessed through
the SEDAR website (www.sedar.com), and the Company's website
(www.veroenergy.ca). Furthermore, the forward-looking statements contained in
this news release are made as at the date of this news release and the Company
does not undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable securities
BOE Disclosure: Disclosure provided herein in respect of barrels of oil
equivalent (BOE) may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 Mcf: 1 BBL is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
This press release is reproduced on Vero's website at www.veroenergy.ca.
Also for the latest presentation and other information about Vero Energy Inc.,
please visit the website (www.veroenergy.ca).
For further information:
For further information: Doug Bartole, President & CEO, at (403)
218-2063; Gerry Gilewicz, Vice-President Finance & Chief Financial Officer, at
(403) 693-3170; Scott Koyich, Investor Relations, (403) 714-5979