CALGARY, ALBERTA--(Marketwire - May 16, 2011) -
Kaybob KA Gas Plant ("KA")
Celtic Exploration Ltd. ("Celtic" or the "Company") (News - Market indicators) has been informed by SemCAMS ULC ("SemCAMS"), the operator of KA, that due to high winds and forest fires in the Kaybob area, the power company has elected to cut power to some areas for safety reasons. As a result, KA was shut down on May 14, 2011 and is expected to re-start after electricity is restored on May 17, 2011.
At the time of this press release, none of the facilities owned or used by Celtic have been damaged as a result of the forest fires.
Celtic's production from Kaybob that is processed at KA is approximately 11,500 BOE per day.
Kaybob K3 Gas Plant ("K3")
Celtic has also been informed by SemCAMS, the operator of K3, that it was determined that the sulphur plant condenser has developed a sulphur blockage. The root cause of the blockage is under investigation, and K3 staff is working to safely isolate and inspect the condenser, and to develop and execute the scope of repairs that will be required. SemCAMS estimates that repairs could take four to eight weeks to complete. As a result, K3 was shut down on May 5, 2011. Subsequently, SemCAMS has notified Celtic that installation of temporary modifications to the sulphur plant would allow K3 to start up this week.
Celtic recently brought on-stream new production from its Montney project at Fir/Bigstone that is tied-in to K3. As a result, the Company's production from Kaybob and Fir/Bigstone that is processed at K3 is approximately 4,500 BOE per day.
New Gas Plant at Kaybob
The Energy Resources Conservation Board has granted Celtic approval to construct a gas processing facility capable of handling 150 MMCF per day of raw gas. This facility would be located at 15-07-60-18W5 which is centered between the KA and K3 Gas Plants. Celtic is actively drilling wells at Kaybob targeting the Duvernay shale formation. With success in the Duvernay, Celtic could be in a position to construct an operated gas plant in the area in 2012.
Utikuma Lake
On the weekend, there were two forest fires burning around Slave Lake, Alberta. One of the forest fires was approximately six miles south of Slave Lake, and the other was at the east edge of the town, on the opposite side of Highway 88.
As a result of these forest fires, several power poles north of the Company's production at Utikuma Lake were damaged and currently there is no power to run the battery or wells in the area. Celtic has shut-in its light oil production of approximately 150 BOE per day at Utikuma Lake and for safety reasons; Celtic has evacuated personnel from the area.
McMahon Gas Plant
Celtic recently brought on-stream new production from its Doig project at Inga that is tied-in to the McMahon Gas Plant. This plant is expected to be down for approximately three weeks ending on June 10, 2011 for turnaround operations. Turnaround operations are expected to occur at this plant approximately every three years. Celtic currently produces approximately 650 BOE per day at Inga.
Impact on Guidance
Celtic expects to release its first quarter results on June 7, 2011, in accordance with the extended filing deadlines applicable to the first interim financial report required to be filed in the year adopting International Financial Reporting Standards. Previously, the Company prepared its financial statements in accordance with Canadian Generally Accepted Accounting Principles.
The impact to the Company's 2011 Guidance as a result of the aforementioned production downtime resulting from the foregoing plant outages will be discussed on June 7, 2011, at which time the Company expects to have more definite timelines for actual downtime.
Advisory Regarding Forward-Looking Statements
Certain information with respect to Celtic contained herein, including management's assessment of future plans and operations, expected timing of re-start of gas plants, effect of shut-in of production and timing of possible construction of a new plant contains forward-looking statements. These forward-looking statements are based on assumptions and are subject to numerous risks and uncertainties, certain of which are beyond Celtic's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency exchange rate fluctuations, imprecision of reserve estimates, environmental risks, competition from other explorers, stock market volatility and ability to access sufficient capital. As a result, Celtic's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur. In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. The forward-looking statements contained herein are made as of the date hereof and the Company does not intend, and does not assume any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.
Other Measurements
All dollar amounts are referenced in Canadian dollars, except when noted otherwise. Where amounts are expressed on a barrel of oil equivalent ("BOE") basis, natural gas volumes have been converted to oil equivalence at six thousand cubic feet per barrel and sulphur volumes have been converted to oil equivalence at 0.6 long tons per barrel. The term BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References to oil in this discussion include crude oil and natural gas liquids ("NGLs"). NGLs include condensate, propane, butane and ethane. References to gas in this discussion include natural gas and sulphur.
