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CALGARY, Dec. 8 /CNW/ - Alberta Clipper Energy Inc. ("Alberta Clipper" or "the Company") is pleased to announce that the Board of Directors has approved a $60 million capital budget for 2007. The budget projects drilling 27 wells (14.6 net) in the Company's three core operating areas. Of the $60 million, approximately $42 million will be spent in Western Alberta, $16 million in Northeast British Columbia and $2 million in Central Alberta. Over 90% of the capital program will be invested in drilling and associated development activities with 66% of the budget being allocated to light oil targets on the Sylvan Lake Leduc play. Based on this capital program, the Company forecasts a 2007 exit rate of between 3,000 and 3,500 boe/d.
With Alberta Clipper having attained a 100% exploration success rate on the Leduc light oil play in 2006, a significant proportion of the Company's 2007 capital program will be dedicated towards extending the play along the Leduc Rimbey trend outside of the existing producing-area boundaries. Alberta Clipper has budgeted to drill 10 Leduc exploratory wells in 2007 at working interests of between 50 and 100%. In addition, 7 lower risk Leduc development wells will be drilled over the course of the year as follow-ups to recent discoveries made by the Company.
A total of 27 wells are planned for 2007, including 11 that are classified as exploratory and 16 of a development nature. The $60 million budget also anticipates the pre-investment of approximately $4 million on land and seismic in the Company's core areas. The Company currently holds approximately 230,000 acres of net undeveloped land and 3,100 square km of 3D seismic data in its core operating areas.
Current production is 1,800 boe/d with an additional 250 boe/d that is expected to be on production prior to year-end allowing the Company to attain its 2006 exit rate target of 2,000 boe/d.
As a result of the year-round access now provided by the new road at Trutch, Alberta Clipper has accelerated one well from its Q1 2007 drilling program into the fourth quarter of 2006. The Company has drilled two wells during the fourth quarter and is nearing total depth on a third at Trutch. The first well tested at rates of up to 1.2 MMcf/d and the second well is being prepared for completion and testing. Both wells are expected to be on-stream prior to year-end bringing the total producing well count at Trutch to nine. The well that is currently drilling and the final well to be drilled prior to year-end are both expected to be on-stream prior to the end of the first quarter of 2007 pending successful test results.
At Sylvan Lake, Alberta Clipper has also accelerated the drilling of a 100% Leduc location from the first quarter of 2007. The 6-15-37-5W5 well is targeting a Leduc pinnacle reef and is expected to reach total depth prior to the end of the year. In addition, a further Leduc well at 7-5-38-4W5 is undergoing completion and testing operations and is expected to be producing by the end of the year bringing the total number of new Leduc wells brought on-stream in 2006 to eight. One final Leduc exploratory drilling location is expected to spud in late December.
First quarter 2007 activity will include five Leduc locations at Sylvan Lake and two drilling locations and two re-completions at Trutch targeting Halfway gas. In addition, construction will begin on the Company's new 5,000 bopd battery at Sylvan Lake where the Company is near the limitations of the existing battery. The new capacity will allow the Company to fully optimize its existing wells and will provide processing capacity for future exploration and development activity.
Alberta Clipper's 2007 capital program will continue to focus on its light oil play at Sylvan Lake and its resource gas development project at Trutch. The pre-investment made during 2006 in land, seismic and infrastructure in these areas will allow the Company to allocate a larger component of its total 2007 budget to drilling. The 2007 drilling program exposes the Company to both multiple high-impact light-oil prospects, each with the ability to have a material impact on the Company, and a predictable gas development program that will provide an inventory of locations for many years.
Alberta Clipper Energy Inc. is a publicly traded Canadian energy company involved in the exploration, development and production of natural gas and crude oil in western Canada.
Boe Presentation - Barrels of oil equivalent ("Boe") may be misleading, particularly if used in isolation. A Boe conversion rate 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. All Boe conversions in the report are derived by converting gas to oil at the ratio of six thousand cubic feet of gas to one barrel of oil.
FORWARD LOOKING STATEMENTS
This press release may contain forward-looking statements including expectations of future drilling, capital expenditures, facilities construction and production. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Additional information on these and other factors that could affect Alberta Clipper's operations or financial results are included in Alberta Clipper Energy's reports on file with Canadian securities regulatory authorities.
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For further information: Kel Johnston, President & C.E.O., Alberta Clipper Energy Inc., Telephone: (403) 440-3474, Facsimile: (403) 440-3475, Website: www.albertaclipperenergy.com
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