CALGARY, Dec. 16 /CNW/ - Breaker Energy Ltd. ("Breaker" or "Company") (TSX: WAV) is pleased to provide an operational update and its 2009 guidance. The Company expects to continue its trend of delivering annual average production and production per share growth in 2009.
Operational update ------------------
Breaker continues to demonstrate success with its three major horizontal multi-frac resource plays at Irricana, Provost and Fireweed, highlighted by a significant flow test at its first Provost horizontal.
The Company's first horizontal multi-frac well in its extensive Viking gas resource play at Provost was recently drilled and completed. Initial flow rate, with significant frac fluids left to recover, was approximately 2.5 mmcf/d. The well was drilled in 13 days and completed with 7 successful fracs. Breaker has 80 potential horizontal drill locations in its extensive inventory at Provost, with a large operated infrastructure including a Company-owned gas plant and gathering system in this all-season accessible area.
At Irricana, Breaker has drilled and completed its first well outside of the original oil pool boundary. The well recently tested in excess of 500 boe/d, successfully extending Breaker's 100 percent owned light oil development play.
At Fireweed, the Company is currently drilling the horizontal section of its first horizontal multi-frac well in its large original gas in place Montney/Doig property in British Columbia.
2009 Guidance -------------
Breaker expects continued average production and production per share growth in 2009 with a total capital investment of $80 million. The Company's diversified high quality, year round accessible asset base provides flexibility to expand beyond this projected 2009 funds from operations budget if economic conditions warrant during the year. Breaker's 2009 guidance is as follows:
Average production 7,700 boe/d
Exit production 8,450 boe/d
Funds from operations (FFO) $75 million
FFO per basic share $1.82
Field netback $31.09/boe
Capital expenditures $80 million
2009 Year-end net debt $103 million
Debt/Q4 2009 annualized FFO 1.2 times
Unused bank line January 2009 $27 million
The above guidance assumes US$67.75/Bbl WTI, CDN$6.85/mcf AECO and US$/CDN$0.82 for 2009.
Breaker Energy Ltd. is a junior oil and gas company focused on creating shareholder value by growing per share production and reserves through acquisitions and a focused exploration, development and exploitation plan.
Breaker trades on the TSX under the symbol WAV.
Breaker has 41.0 million Class A Shares and 3.8 million Options outstanding.
Forward-looking Statements
This press release contains forward-looking statements. More particularly, this press release contains statements concerning anticipated: (i) average oil and gas production for the full year 2009, (ii) year-end 2009 exit rate of production, (iii) funds from operations for 2009 and funds from operations per share for 2009, (iv) capital expenditures for 2009, (v) 2009 year-end debt, (vi) unused bank line January 2009, (vii) annualized Q4 2009 debt to funds from operations, (viii) exploration and development activities, and (ix) field netback.
The forward-looking statements are based on certain key expectations and assumptions made by Breaker, including expectations and assumptions concerning the performance of existing wells and success obtained in drilling new wells, anticipated expenses, funds from operations and capital expenditures and the application of regulatory and royalty regimes.
Although Breaker believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Breaker can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (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 and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in Breaker's Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com.
The forward-looking statements contained in this press release are made as of the date hereof and Breaker undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Note: Boe means barrel of oil equivalent on the basis of 1 boe to 6,000 cubic feet of natural gas. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Boe/d means barrel of oil equivalent per day.
In this press release: (i) mmboe means million boe; (ii) boe/d means boe per day; (iii) bbls/d means barrels per day; (iv) mcf means thousand cubic feet; (v) mmcf means million cubic feet; (vi) mcf/d means thousand cubic feet per day; and (vii) mmcf/d means million cubic feet per day.
The TSX does not accept responsibility for the adequacy or accuracy of this release.
%SEDAR: 00021180E