WestFire Energy Ltd. Announces Second Half 2011 Capital Budget and Guidance
CALGARY, ALBERTA, Jul 06, 2011 (MARKETWIRE via COMTEX News Network) --
WestFire Energy Ltd. ("WestFire") (TSX:WFE) is pleased to announce a second half 2011 capital budget of $85 million resulting in a full year capital program of $133 million and updated production guidance.
As a result of the continued success of WestFire's Viking light oil resource play and the closing of the Orion Oil & Gas transaction, WestFire is planning for a second half 2011 exploration and development capital budget of $85 million. WestFire expects to drill 59 gross (48.2 net) wells including 53 gross (42.5 net) Viking horizontal light oil wells in the second half of 2011. This capital program will be funded by a combination of cash flow generated from its expanded asset base and its recently increased credit facility. Upon closing of the Orion merger, WestFire's credit facility has been increased to $200 million from $42 million, with only $53 million currently drawn.
WestFire's current production, based on field estimates, is approximately of 9,000 barrels of oil equivalent per day (boe/d) (65% oil and liquids). With the Orion merger and second half capital program, the company's production guidance for the second half is 9,750 boe/d (65% oil and liquids) yielding 6,450 boe/d for the year and a 2011 exit rate of 10,500 boe/d (70% oil and liquids). This exit rate represents a per share increase in production of 72% over that of one year ago. Year end closing net debt is expected to be approximately $92 million, based on this production guidance and current commodity price strips, with debt to second half 2011 annualized cash flow ratio of 0.7. WestFire's go forward operational model is to fund its exploration and development capital spending via cash flow from operations beginning in 2012.
"The transaction with Orion was transformational," said Lowell Jackson, president and chief executive officer of WestFire. "The company is now uniquely positioned as an intermediate oil resource focused company with the free funds flow from operations and expanded credit facilities that allow us to accelerate our large Viking drilling inventory at Redwater and Provost in Alberta and at Dodsland and Plato in west central Saskatchewan."