newsFind Energy Ltd. Announces Expanded Capital Expenditures Program
CALGARY, ALBERTA, Apr 12, 2006 (CCNMatthews via COMTEX News Network) --
Find Energy Ltd. ("Find" or the "Company") (TSX:FE) is pleased to announce an expanded capital expenditures program for 2006. The Board of Directors of Find has approved an increase in the Company's capital spending program to $110 million, compared to $70 million announced in December 2005.
An estimated allocation of the $110 million capital program will see Find direct $38 million towards drilling, $26 million to well completions, $33 million to production facilities and $13 million to purchase additional land and seismic data.
The additional capital spending is to be directed almost entirely to the Company's Pembina West area. First quarter drilling results have prompted Find to begin the engineering work on a 20 mmcf per day expansion of the Pembina Blue Rapids Gas Plant which will increase the plant's capacity to 50 mmcf per day. The cost of the expansion is estimated at $10 million. Find will operate the expansion with a working interest of at least 85 percent, and own approximately 60 percent of the new gas to be processed. The Company will receive revenue for processing gas owned by other parties.
It is expected that the expansion will be completed in the fourth quarter of 2006 and will allow Find to increase its net production from the Pembina West area by approximately 2,300 boe per day including NGLs when completed. At the time the plant expansion is completed, Find estimates that its production from the area will be approximately 6,500 boe per day made up of 30 mmcf per day of gas and 1,500 bbls per day of crude oil and natural gas liquids.
Find's expanded 2006 capital program will now include the drilling of 77 wells (55.7 net). The majority of these will be drilled at Pembina West, where the Company is planning to drill 52 wells (38 net). Included in the wells to be drilled at Pembina West is the Company's first Nisku test (0.56 net), tentatively scheduled for the fourth quarter.
The Company has been active at Crown land sales during the first quarter and has purchased an additional 21 sections of land with various mineral rights at a 100 percent working interest in the Pembina West area. As well, an additional four sections have been purchased at Bigstone, Alberta and 10 sections in new exploration areas, all at 100 percent working interest for Find.
To date in 2006, Find has drilled a total of 17 wells (11.7 net) resulting in 14 gas wells (10.9 net), 1 oil well (0.3 net) and 2 wells (0.5 net) being dry and abandoned. The majority of drilling took place at Pembina West, where Find drilled 13 (10.3 net) gas wells.
Current production at the Company is estimated to be 5,650 boe per day, consisting of 26.2 mmcf per day of natural gas and 1,285 bbls per day of crude oil and natural gas liquids. Production at Pembina West is presently 4,200 boe per day. Only one of the wells drilled at Pembina West in the first quarter is on production. A total of eight wells are currently being tied-in and will be capable of commencing production in the second quarter.
In connection with the impending release of results from the first quarter, Find has engaged GLJ Petroleum Consultants Ltd., the Company's independent reserve evaluators, to prepare an evaluation of the Company's reserve additions since the beginning of 2006. The results of the evaluation will be released along with the Company's financial results on May 9, 2006.
During the month of March 2006, Find increased its Revolving Demand Loan to $100 million from the previously approved amount of $65 million. A further review is scheduled to occur once results from the first quarter are available.
Investors are further cautioned that the preparation of financial statements in accordance with Canadian generally accepted accounting principles ("GAAP") requires management to make certain judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Estimating reserves is also critical to several accounting estimates and requires judgments and decisions based upon available geological, geophysical, engineering and economic data. These estimates may change, having either a negative or positive effect on net earnings as further information becomes available, and as the economic environment changes.
Find has adopted the standard of 6 mcf of natural gas being equivalent to 1 barrel of oil when converting natural gas to barrels of oil equivalent (boe). This practice may be misleading, particularly if used in isolation. A 6:1 conversion ratio 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 news release contains certain forward-looking statements, which are based on Find's current internal expectations, estimates, projections, assumptions and beliefs. Some of the forward-looking statements may be identified by words such as "expects", "anticipates", "believes", "projects", "plans" and similar expressions. These statements are not guarantees of future performance and involve a number of risks and uncertainties, many of which are beyond Find's control. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Find's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits Find will derive from them. The risks and uncertainties associated with the forward-looking statements included in this news release include, among other things, changes in general economic, market and business conditions; changes or fluctuations in production levels, unexpected drilling results, commodity prices, currency exchange rates, capital expenditures, reserves or reserves estimates and debt service requirements; changes to legislation, investment eligibility or investment criteria; Find's ability to comply with current and future environmental or other laws; Find's success at acquisition, exploration and development of reserves; actions by governmental or regulatory authorities including increasing taxes, changes in investment or other regulations; and the occurrence of unexpected events involved in the exploration for, and the operation and development of, oil and gas properties. Many of these risks and uncertainties are described in Find's Annual Information Form and Find's Management's Discussion and Analysis. Readers are also referred to risk factors described in other documents Find files with Canadian securities authorities. Copies of these documents are available without charge from Find. Except as required by applicable law, Find disclaims any responsibility to update these forward-looking statements.
SOURCE: Find Energy Ltd.