News highlights-- Total Current Production at 12.2 Million Cubic Feet Per Day Net
-- Three Fayetteville Shale Wells Drilled; Two Completed
-- Pipeline Agreement in Place for Fayetteville Acreage
--Year-over-year production increased 117.6% to 808.2 MMcf in the third quarter 2007 from 371.5 MMcf in the second quarter 2006.
--During the quarter the Company drilled 28 wells bringing the total number of wells drilled during the first nine months of 2007 to 67.
--In Elk Valley, located in South-Eastern British Columbia, the Company has nine producing wells, including five wells drilled in 2006, in the de-watering and evaluation stage. The Company remains encouraged by observed water and associated gas production rates and expects to disclose its progress on the project at year-end 2007.
--Storm Cat Chief Executive Officer, Joe Brooker, said, "During the quarter we advanced our Fayetteville Shale acreage completing two of our three 2007 budgeted wells. Further, with a pipeline agreement in place in the Fayetteville we should begin to realize cash flow from this area by late first quarter 2008. Despite the difficult price environment and curtailments in the PRB we anticipate delivering on the expectations for both year end rate and reserves in the PRB. Rate, cash flow and reserves are the key components that will create shareholder value"
--Storm Cat President and Chief Operating Officer Keith Knapstad commented, "From an operational stand point the third quarter represented continued progress in our three core areas. In the PRB, we are well positioned to ramp production into year-end and achieve our estimated exit rate of 17.0 net Mmcf/d. We reached the goals we set in the Fayetteville having now drilled and completed Company operated wells. Post stimulation we saw favorable gas rates during limited flow-back periods. In Elk Valley, we continue to be encouraged by water and gas production rates. However, until we achieve and maintain lower water levels in the wellbores, allowing unrestricted production flow from all producing coal seams, we will not be able to fully evaluate the commercial viability of the project."
--And most importantly the company had it's credit restored even in consideration of the highly unusual and unique circumstances that resulted in its higher than expected loss for the quarter