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.