Austin Engineering Ord Shs V.ANG

Target not met again

[hawkowl]

AltaCanada drills, borrows, sells 2005-07-22 12:15 ET - News Release Shares issued 59,788,251 ANG Close 2005-07-21 C$ 0.55 Mr. Don Foulkes reports ALTACANADA ENERGY CORP. ANNOUNCES OPERATIONS UPDATE AltaCanada Energy Corp. is now proceeding with planned drilling and production additions after most field operations were delayed due to the unusually wet weather experienced in June. Montana Activity during May and June consisted of the tie-in of four wells and the installation of a 400-horsepower compressor that increased Montana production to 1.6 million cubic feet per day from 1.26 million cubic feet per day. A well that was drilled at 1-9 (97.2-per-cent working interest) to evaluate new reserves in the western margin of the corporation's acreage came on production on July 15 at 500 thousand cubic feet per day (83 barrels of oil equivalent per day). Construction commenced on July 14 to tie in two other significant wells (both 100-per-cent working interest) with shut-in total deliverabilities of 800 thousand cubic feet per day (130 boe/d). A six-well program originally scheduled to commence in June, was initiated on July 6. Two wells have been completed to date. Tie-ins will follow as AltaCanada expands infrastructure to connect to both the Havre and Many Islands pipeline systems, both of which ship gas over the United States/Canada border. New banking At June 30, AltaCanada paid out the bridging term facility of $7-million to Brascan Financial and replaced the facility with a conventional revolving loan from the Toronto Dominion Bank of $8-million, with $7-million drawn down to repay Brascan. Property sales To finance AltaCanada's activities in Montana and to rationalize the balance of the corporation's portfolio, AltaCanada sold its interests in the Donalda area of Alberta during June for $1.8-million with an effective date of May 18, 2005. AltaCanada has negotiated a second asset sale of minor properties effective April 1 for $910,000, which is scheduled to close in July. The combined production reduction represented by both sales is 80 boe/d. Production update The small increase in Montana production in June from the corporation's delayed program was offset by the two asset sales of 80 boe/d in Alberta. As a result, total production remained at approximately 600 boe/d at June 30. An increase of production to 680 boe/d occurred on July 15 with the tie-in of the 1-9 well. Production can be expected to increase further with the tie-in of 4-6 wells in the third quarter.