CALGARY, Oct. 24 /CNW/ - Breaker Energy Ltd. ("Breaker" or "Company")
(TSX-V: WAV.A and WAV.B) is pleased to announce the following operational
updates:
Breaker exited Q3 at over 1,400 boed and anticipates meeting or exceeding
its exit target of 1,575 boed, more than a 600% increase over Breaker's 2004
exit rate. Breaker is pleased to announce that its credit facility has been
increased to $21 million due to drilling success and its board has approved an
increase in its capital expenditure budget to $50.5 million to follow up a
significant light oil discovery. As of late October Breaker has drilled or
recompleted 60 gross/55.3 net wells in 2005 achieving a net success rate of
82%.
West Central Alberta
In the Girouxville area, Breaker has made a significant dual-zone deep
light oil discovery, and was successful in picking up adjacent on-trend lands
at the September landsale. The 100% working interest discovery well has
produced over 10,000 bbls of 46 API sweet crude in its first two months of
production from a secondary target, a 6 meter Slave Point shoal, with the
primary target, the Beaverhill Lake formation, yet to be completed. The well
is currently producing at approximately 100 bbl/d. The primary zone has
similar thickness and reservoir quality to analog wells within the Girouxville
Beaverhill Lake B Pool. It is anticipated that the primary zone is capable of
150 to 250 bbl/d of light oil production based on the nearby analogs, several
of which initially produced over 1,000 bbl/d. The discovery is nearby the 100%
Breaker-owned battery which has ample excess capacity. A 3D seismic program is
in progress over the discovery well and the newly acquired lands to firm up
additional drill locations. Current production from the Girouxville property
is approximately 300 boed which is more than a 30% increase from the 230 boed
at the time Breaker purchased the property in December 2004.
At East Prairie, 150 boed of Breaker's 520 boed of behind-pipe capability
has been brought on via added compression and the short tie-in of the 75% WI
12-28 Viking well. A further two Viking infill wells have recently been
drilled and cased. These wells are directly between the two gas producers to
the north, and the 14-8 standing well to the south which tested 154 boed net.
Both new wells have strong indications of hydrocarbon productivity based on
logs and gas shows while drilling and should be completed and tested before
the end of the year. One of the new wells also discovered a new pool in the
Gething formation, and will be completed as a dual-zone producer. Tie-ins of
the new wells and 14-8 require winter access as does a planned drill location
at 6-33. Current production of 400 boed represents a greater than 600%
increase since purchasing the property in Q1, with a further 370 boed of Q1
tested productivity plus the potential production from the three new zones
waiting on Q1 2006 tie in.
Southern Alberta
In the Suffield area, Breaker drilled a significant heavy oil discovery
on its newly acquired 100% WI lands. The new well contains a 41 meter thick
Glauconitic channel, which appears full of oil with no signs of water from
open hole log interpretation. The Company estimates the well contains
21 meters of net pay. Combined with 3D seismic data and earlier Breaker
drilling, the oil column is believed to be at least 60 meters thick, with oil
in place on Breaker lands potentially exceeding 20 million bbls net. Another
well on trend drilled by Breaker in Q1, had 3 meters of 30% porosity
perforated and was briefly tested at rates of 20 to 50 bbl/d from a vertical
pilot. Many risks remain, particularly variability of reservoir and oil
viscosity. However, the large size of the oil accumulation with no apparent
water, combined with presence of viable permeability and moveable oil, is
sufficiently encouraging that Breaker is now planning to complete and pilot
produce the latest discovery. This would be the last knowledge gathering step
before proceeding with 2006 development plans.
At Provost, Breaker's first drilling program consisted of 17 wells with a
100% success rate, resulting in 3 Mannville Oil wells and 14 Viking gas wells.
Drilling, completions and tie-ins were all delayed by unseasonably wet weather
and were completed in late September. Early completion results have met
expectations. Another 8 well drilling program has commenced, including 5
Viking wells and 3 Mannville targets. These new wells should be on production
before the end of the year. Total current production from the property is
approximately 650 boed, an increase of more than 75% since the property was
acquired earlier this year. Breaker continues to acquire production, and
continues to consolidate its position at Provost via a small acquisition that
will result in Breaker further increasing its working interest in its operated
wells.
In the Saskatchewan Shale Gas Resource Play, Breaker will commence test
drilling in Q4 in order to better quantify the gas in place and permeability.
The company currently estimates a gas resource in place of approximately
321 BCF on company lands.
As of late October Breaker has drilled or recompleted 60 gross/55.3 net
wells in 2005 achieving a net success rate of 82% with 5 more wells left to
drill in 2005. Breaker exited Q3 at over 1,400 boed. With the addition of the
new wells in progress this quarter, Breaker anticipates meeting or exceeding
its exit target of 1,575 boed.
Breaker's board has approved an increase in its capital expenditure
budget by $3.0 million to $50.5 million. Approximately $2.2 million of the
increase is for the land and seismic expenditures following up on the
Girouxville discovery which adds to Breaker's high-reward drill inventory for
2006. The company is also pleased to announce that based on a review of
Breaker's success to date in 2005 its credit facility has been increased to
$21 million.
Breaker is also pleased to announce that it has strengthened its
management team and board of directors with the addition of Arnie Ostapovitch
as Project Manager and Keith Macdonald as a Director and Chairman of Breaker's
Audit Committee. Mr. Ostapovitch is a professional engineer with over 25 years
of oil and gas experience and most recently has held various management
positions with Senior Oil and Gas Companies. Mr. Macdonald is a Chartered
Accountant, President of Bamako Investment Management Ltd. and is currently a
director with Rolling Thunder Exploration Ltd., Cirrus Energy Corporation,
Cork Exploration Inc and Artemis Exploration Inc. Mr. Macdonald is also a
director with the Small Explorers and Producers of Canada and serves as a
Co-Chair of its Securities and Accounting Committee.
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 has access to a land base of over 400,000 net acres in Western Canada.
Breaker Energy trades on the TSX Venture Exchange under the symbols WAV.A
and WAV.B.
NOTE: Boe means barrel of oil equivalent on the basis of 1 boe to
6,000 cubic feet of natural gas. Boe's 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.
Boed means a boe per day.
ADVISORY: This press release may contain forward-looking statements
including management's assessment of future plans and operations, expectations
of future production, cash flow and earnings. These statements are based on
current expectations that involve a number of risks and uncertainties, which
could cause actual results to differ materially 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),
acquisitions, commodity price and exchange rate fluctuation and uncertainties
resulting from competition from other producers and ability to access
sufficient capital from internal and external sources. Additional information
on these and other factors that could affect Breaker's operations and/or
financial results are included in Breaker's reports on file with Canadian
securities regulatory authorities.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
%SEDAR: 00021180E
