Tanganyika Oil Company Ltd.

Published : February 15th, 2008

ANNOUNCES 2008 CAPITAL BUDGET

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NEWS RELEASE                                                                                        February 15, 2008

 

TANGANYIKA ANNOUNCES 2008 CAPITAL BUDGET

 

 

CALGARY, ALBERTA – Tanganyika Oil Company Ltd. (the “Company”) (TYK – TSX Venture, TYKS – OMX Nordic Exchange) is pleased to announce its capital investment program for 2008. 

 

The Company’s capital expenditure budget for 2008 is US$206 million, excluding new business acquisition considerations.

 

Capital Budget

 

The 2008 capital program is drilling intensive with 71% of the capital budget aimed at the drilling effort. It is expected that by the end of Q1 2008 there will be six rigs available for drilling in Syria. The budgeted drilling program is development focused with continued appraisal drilling on the large block areas outside of the proven and probable areas:

  • Oudeh: 59 wells total: 6 appraisal, 50 development, 3 water supply wells
  • Tishrine: 72 wells total: 32 appraisal, 37 development, 3 water disposal wells. 

 

The capital budget related to facilities and construction accounts for 11% of the 2008 capital budget. The budget is aimed at upgrading the capacity of both Oudeh and Tishrine to 60,000 barrels per day of fluid and 25,000 barrels of oil per day (“bopd”) at each central processing facility. Capital has been committed to the following project areas:

  • Constructing satellite production gathering systems in each field in support of the development drilling and expanded thermal enhanced oil recovery (“EOR”) efforts
  • Upgrading the central processing facilities to improve the efficiency of processing oil for export, disposing of produced water and redistributing produced natural gas to supply fuel for steam generation

 

Additional capital expenditure is planned for 2008 to support the thermal EOR program, accounting for 7% of the 2008 capital budget. The main areas for expenditure include:

  • Gas sweetening and distribution facilities to enhance the supply of gas to the expanding EOR project at Oudeh
  • Water sweetening and distribution facilities to enhance the water supply to the expanding EOR project at Tishrine

 

A capital work over program has been approved for 2008 accounting for 7% of the capital budget. The program will be weighted towards sidetrack drilling on existing wells in productive areas. The remainder of the planned 2008 capital budget is aimed at other corporate and Health Safety and Environmental expenditures, including integrated waste management centers planned for both Oudeh and Tishrine.

 

Tanganyika will reinvest cash flow generated from Syrian operations into the 2008 capital program.

 

 

Production Guidance

 

Tanganyika’s Syrian gross field production is expected to average between 17,500 and 20,000 bopd, an increase of over 100% in comparison to 2007 average gross field production. This translates into average expected Company net production of between 6,900 and 8,500 bopd, an increase of over 350% in comparison to 2007 average Company net production. This expected production may be broken down between Syrian oil fields as follows:

  • Oudeh: expected average gross field production of between 6,600 and 7,300 bopd (Company net production of between 4,000 and 4,500 bopd)
  • Tishrine: expected average gross field production of between 10,900 and 12,700 bopd (Company net production of between 2,900 and 4,000 bopd)

 

The Company forecasts 2008 exit rates of between 21,400 and 27,000 bopd, an increase of between 95% and 145% over 2007 exit rates. The expected exit rate may be broken down between Syrian oil fields as follows:

  • Oudeh: expected 2008 gross field exit rate of between  8,900 and 10,700 bopd (Company net production of between 5,500 and 6,800 bopd)
  • Tishrine: expected 2008 gross field exit rate of between 12,500 and 16,300 bopd (Company net production of between 4,000 and 6,000)

 

The variance between the upper and lower end of Tanganyika’s production guidance is attributable to the planned 2008 step out appraisal drilling in both Oudeh and Tishrine. In Oudeh, it is expected that 11% of the oil wells drilled in 2008 will be outside of the currently defined proved and probable reserve area. In Tishrine, it is expected that 46% of the oil wells drilled in 2008 will be outside of the currently defined proved and probable reserve area.

 

 

Tanganyika Oil Company Ltd. is a Canadian oil and gas company with production and exploration assets in Syria.  Its shares are traded on the TSX Venture Exchange under the symbol TYK and its Swedish Depository Receipts trade on the OMX Nordic Exchange under the symbol "TYKS".

 

For further information, please contact:

 

Gary Guidry - President and Chief Executive Officer

Tel:         (403) 716-4051

Fax:         (403) 261-1007

E-mail:   gary.guidry@tykoil.com

 

Ian Gibbs – Chief Financial Officer

Tel:         (604) 689-7842

Fax:         (604) 689-4250

E-mail:   ian.gibbs@tykoil.com

 

Sophia Shane – Corporate Development

Tel:       (604) 689-7842

Fax:      (604) 689-4250

E-mail:  sophias@namdo.com

 

Forward-looking statements: This press release contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management’s capability to execute and implement its future plans. Actual results may differ materially from those projected by management.

 

Tanganyika Oil Company Ltd.

CODE : TYK.TO
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Tanganyika Oil is a oil exploration company based in Canada.

Tanganyika Oil is listed in Canada, in Germany and in United States of America. Its market capitalisation is CA$ 1.9 billions as of today (US$ 1.5 billions, € 1.1 billions).

Its stock quote reached its lowest recent point on September 19, 2008 at CA$ 14.21, and its highest recent level on December 23, 2008 at CA$ 31.45.

Tanganyika Oil has 62 129 000 shares outstanding.

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Financings of Tanganyika Oil Company Ltd.
3/17/2008 CLOSES CDN $75 MILLION PRIVATE PLACEMENT
3/4/2008Cdn $75 Million Private Placement
Financials of Tanganyika Oil Company Ltd.
11/14/2008 Third Quarter Results
8/14/2008 ANNOUNCES SECOND QUARTER 2008 RESULTS - News Release
8/1/2008SECOND QUARTER RESULTS TO BE RELEASED AUGUST 14, 2008 - News...
5/14/2008 ANNOUNCES FIRST QUARTER 2008 RESULTS - News Release
5/12/2008 RELEASE FIRST QUARTER RESULTS WEDNESDAY MAY 14, 2008 - News...
2/29/2008ANNOUNCES FOURTH QUARTER 2007 RESULTS
1/8/2008PRODUCTION INCREASES 37% FROM THIRD QUARTER
11/9/2007RELEASE THIRD QUARTER AND NINE MONTHS RESULTS WEDNES
Corporate news of Tanganyika Oil Company Ltd.
12/2/2008TANGANYIKA REITERATES ITS SUPPORT FOR SINOPEC OFFER
9/25/2008 ANNOUNCES C$31.50 PER SHARE CASH OFFER BY SINOPEC INTERNATI...
9/22/2008IN NEGOTIATIONS
9/15/2008 TO COMMENCE TRADING ON TORONTO STOCK EXCHANGE ON SEPTEMBER ...
6/19/2008CONDITIONAL APPROVAL OF GRADUATION TO THE TORONTO STO
4/25/2008ANNUAL AND SPECIAL MEETING RESULTS - News Release
3/27/2008CORPORATE UPDATE
3/25/2008FILES AUDITED YEAR END 2007 FINANCIAL STATEMENTS, AIF AND NO...
2/15/2008 ANNOUNCES 2008 CAPITAL BUDGET
2/6/2008CONTINUED PRODUCTION AND RESERVES GROWTH AT TANGANYIKA
1/15/2008Research Report
9/25/2007Closes Sale of Egyptian Assets
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