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April 21, 2008
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Open Range Energy Corp. Expands 2008 Capital Program and Provides Operations
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CALGARY, ALBERTA--(Marketwire - April 21, 2008) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
Open Range Energy Corp. ("Open Range" or the "Company") (TSX:ONR) is pleased to announce that as a result of continued exploration and development drilling success at its core Ansell/Sundance property, recently announced exploratory success at the emerging Rough play and closing of a $25 million bought-deal equity financing, Open Range's Board of Directors has approved expanding the Company's 2008 capital investment program to $45 million.
The increase of $10 million to the capital program will accommodate Open Range's extensive land acquisitions at Rough, Alberta and expand the drilling program at Ansell/Sundance to approximately 13 (7 net) wells. The Company expects the additional two (1.0 net) wells to increase its 2008 exit production rate to approximately 2,500 boe per day from the 2,350 boe per day announced previously.
During the first quarter of 2008 the Company drilled five (2.6 net) multi-zone natural gas wells at its Deep Basin Ansell/Sundance property. All of these wells were successful and three (2.0 net) are on production while the remaining two (0.6 net) are awaiting completion following spring break-up. Open Range's first-quarter production averaged approximately 1,800 boe per day based on field estimates and current production is estimated at 2,100 boe per day. A triple drilling rig continues to operate full-time at Ansell/Sundance. First-quarter 2008 drilling brings wells drilled at Ansell/Sundance to a total of 28 gross (14 net) since the play's inception in 2005, with a combined 81 zones on production from 15 separate commercial natural gas reservoirs.
The first quarter also saw Open Range complete construction of its 20 mmcf per day Ansell/Sundance natural gas plant. The 33 percent working interest, Company-operated facility entered service on March 20, 2008, ahead of schedule and on-budget at $4.5 million gross, significantly reducing Open Range's dependence on third-party processing and transportation. Total operated gas handling capacity at Ansell/Sundance now stands at 33 mmcf per day gross (11.9 mmcf per day net).
The expanded 2008 capital budget reflects Open Range's strong financial position. This includes: the bought-deal financing, which closed April 4, 2008 raising $25 million gross through the issuance of approximately 5.5 million common shares; bank lines totalling $40 million, of which approximately $4 million is currently drawn; plus forecast cash flow from the Company's growing production base.
The Company is currently finalizing its completion program for the recently announced discovery well at Rough, Alberta. Operations are scheduled to commence following spring break-up and it is estimated that six to eight weeks will be required to complete and acquire preliminary test data from two potential natural gas horizons. As previously announced, Open Range has assembled 35 sections of contiguous, high-working-interest lands at Rough through Crown sales and farm-ins, the core of which is covered by 3-D or 2-D seismic. The Company drilled a 3,800-metre exploratory well in the fourth quarter of 2007 that encountered three potential pay zones and was assigned 821,000 boe of probable reserves from one zone in the Company's year-end 2007 independent reserve evaluation.
Open Range is also pleased to announce that Bob Martin, P.Geol., has joined the Company as Manager, New Ventures. An accomplished geologist with an extensive exploration background and consistent record of drilling success in the Deep Basin, Mr. Martin has more than 23 years of experience in the Western Canadian Sedimentary Basin. He is a key addition to Open Range and will assist in expanding the Company's exploration and development programs.
OPEN RANGE ENERGY CORP. IS A PUBLICLY TRADED CANADIAN ENERGY COMPANY WITH FOCUSED OPERATIONS IN THE DEEP BASIN REGION OF ALBERTA.
OPEN RANGE HAS APPROXIMATELY 27.3 MILLION COMMON SHARES ISSUED AND OUTSTANDING WHICH TRADE ON THE TSX UNDER THE SYMBOL "ONR".
Reader Advisory
This news release contains certain forward-looking statements, which include assumptions with respect to (i) production; (ii) future capital expenditures; (iii) funds from operations; (iv) cash flow; and (v) debt levels. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Open Range's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada and the United States, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, changes in federal and provincial tax laws and legislation (including the adoption of new royalty regimes), increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Open Range's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits, including the amount of proceeds, that Open Range will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Open Range or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Open Range does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Disclosure provided herein in respect of barrel(s) of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 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.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
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CONTACT INFORMATION:
Open Range Energy Corp
A. Scott Dawson, P.Eng.
President and Chief Executive Officer
(403) 205-3704
or
Open Range Energy Corp
Lyle D. Michaluk, CA
Vice President, Finance and Chief Financial Officer
(403) 262-9280
Website: www.openrangeenergy.com
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INDUSTRY: Energy and Utilities - Oil and Gas
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