Ironhorse Oil & Gas - Announces Increased Year-End 2008 Reserves
Calgary, Alberta CANADA, February 19, 2009 /FSC/ - Ironhorse Oil & Gas Inc. (IOG - TSX Venture), is pleased to announce that its successful 2008 drilling program in the Shackleton, Saskatchewan area has significantly increased the Company's reserves in 2008.
Highlights of our activities in 2008 were as follows:
* A drilling success rate of 100%, with 31 (15 net) new gas wells drilled and placed on production in the Shackleton area.
* A 61% increase in 2008 average production to 1,079 boe per day from the 670 boe per day in 2007. The Company's 2008 average production was 93% gas weighted.
* Positive reserves additions of 2,109 Mboe resulting from the infill drilling and technical revisions which represents a 68% increase in total proved plus probable reserves, net of production, for the year ended December 31, 2008. The Company's reserves are 95% gas weighted.
* Finding and development costs, including changes in future capital, were $11.75 per boe proved plus probable.
Highlights of our drilling activities to date in 2009 include:
* Drilling 32 (16 net) gas wells in the Shackleton area which have been assigned "Proved Undeveloped" reserves status as at December 31, 2008. These wells are expected to be on production as at March 31, 2009 and
* Drilling two (0.4 net) Nisku oil discoveries in the Pembina area.
The December 31, 2008 reserve report was prepared by GLJ Petroleum Consultants in accordance with standards contained in the Canadian Oil and Gas Evaluation Handbook. Reserve definitions are set out by the Canadian Securities Administrators in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. Highlights from the report are itemized below:
Net Present Values before tax ($000's)
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Discount Proved Proved Proved Total Total Total
Factor Producing Developed Undeveloped Proved Probable Proved
Non Plus
Producing Probable
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5% 29,512 2,371 11,269 43,152 25,532 68,685
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10% 25,486 1,365 7,812 34,663 14,021 48,684
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15% 22,458 789 5,572 28,820 8,048 36,867
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Reserves - Oil Equivalent
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Proved Proved Proved Total Total Total
Producing Developed Undeveloped Proved Probable Proved
Non Plus
Producing Probable
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Mboe 1,263 147 762 2,171 2,058 4,229
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Commodity Price Assumptions
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Light Sweet Oil Edmonton Par ($CDN/bbl) AECO/NIT-Spot ($CDN/MMBTU)
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2009 68.61 7.58
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2010 78.94 7.94
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2011 83.54 8.34
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2012 90.92 8.70
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2013 95.91 8.95
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Ironhorse plans to undertake preparation of a March 31, 2009 interim independent reserve report which will reflect the completion of the 2008/2009 drilling program at Shackleton, Saskatchewan and the Nisku oil discovery at Pembina, Alberta. We expect this report will be completed in May 2009.
The Company's priorities for the balance of 2009 are to complete and place the Pembina oil wells on production and to fulfill its remaining flow through expenditure commitments.
Ironhorse Oil & Gas Inc. is a Calgary-based junior oil and natural gas production company trading on the TSX Venture Exchange under the symbol "IOG".
For further information, please contact:
Rob Solinger
VP Finance & CFO
(403) 355-3620
rsolinger@ihorse.ca
or visit our website at www.ihorse.ca.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
Statements throughout this release that are not historical facts may be considered to be "forward looking statements". These forward looking statements sometimes include words to the effect that management believes or expects a stated condition or result. All estimates and statements that describe the Company's objectives, goals, or future plans, including management's assessment of future plans and operations, drilling plans and timing thereof, expected production rates and additions and the expected levels of activities may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, incorrect assessment of the value of acquisitions, failure to complete and/or realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources and changes in the regulatory and taxation environment. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: the ability of the Company to obtain equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manor; and field production rates and decline rates. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included elsewhere herein and in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this release are made as at the date of this release.
Boe Conversion
Certain natural gas volumes have been converted to barrels of oil equivalent ("boe") whereby six thousand cubic feet (mcf) of natural gas is equal to one barrel (bbl) of oil. This conversion ratio is based on an energy equivalency conversion applicable at the burner tip and does not represent a value equivalency at the wellhead.
Source: Ironhorse Oil & Gas Inc. (TSX-V: IOG) http://www.ihorse.ca
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