Berens Energy Ltd.

January 09, 2009 23:59 ET

2008 Fourth Quarter Update and 2009 Corporate Guidance - Continued Production Growth

CALGARY, ALBERTA--(Marketwire - Jan. 9, 2009) - We are pleased to announce that estimated fourth quarter 2008 production volume averaged over 4,700 boepd, exceeding forecast fourth quarter production of 4,400 boepd. The fourth quarter 2008 results represent a 24% volume increase over the fourth quarter of 2007 (on a gross and per share basis) and a 14% increase over third quarter of 2008 (on a gross and per share basis) while keeping debt levels flat. The production results for the quarter were driven by strong third quarter drilling results. First quarter 2009 production is expected to be 4,600 boepd with production gains from ongoing drilling being offset by the Company's decision to curtail higher production wells in Lanfine. This curtailment will preserve net asset value under the new royalty framework which became effective January 1st, 2009.

Drilling success continued in the fourth quarter of 2008 with 2 successful (1.4 net) vertical wells and our first successful horizontal well (0.5 net) in Pembina. The horizontal well was placed on production in late November at rates in excess of 8 mmcf/d and the well currently is producing 4.5 mmcf/d after being on stream for six weeks. We also participated in 2 unsuccessful wells during the quarter consisting of one (0.4 net) unsuccessful completion in Deep Basin and one (0.4 net) horizontal well in Pembina where the operator had to abandon operations due to mechanical difficulties. The unsuccessful Pembina horizontal well will be re-drilled as part of our first quarter 2009 program. The first quarter 2009 drilling program is already underway, with 7 wells (3.5 net) planned for Pembina and 1 well (0.5 net) scheduled for Deep Basin. In Pembina, 4 (2.1 net) of the wells planned for the first quarter will be horizontal wells following the successful horizontal well drilled in the fourth quarter of 2008.

In 2009, Berens expects to spend $40 million to drill 30 wells (18 net) which is equivalent to the capital spent in 2008 and is planned to be within anticipated cash flow. The level of capital spending is based on natural gas prices of $7.00/mmbtu AECO and Edmonton reference light oil prices averaging $70.00/bbl Cdn. The $40 million capital program in 2009 is expected to deliver an average 2009 production volume of 4,900 boepd which is a 17% increase over the estimated average 2008 volume of 4,200 boepd.

Consistent with its production increases, the company expects strong reserve additions for 2008 based on low finding and development costs that are anticipated to be consistent with the 2007 numbers. The company expects to release its year-end reserves prior to the end of February, 2009.

Berens Energy Ltd is a junior oil and gas company currently trading on the Toronto Stock Exchange. The company currently produces and explores for oil and gas in the Western Canadian Basin with its primary growth areas focused in the Pembina and Deep Basin regions. The company's strategy is to focus on profitable growth through a strategic combination of investments in exploration, development and acquisitions in western Canada.

All calculations converting natural gas to crude oil equivalent have been made using a ratio of six thousand cubic feet (six "mcf") of natural gas to one barrel of crude equivalent. Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six mcf of natural gas to one barrel of crude oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Caution Regarding Forward Looking Information

This press release contains forward looking information within the meaning of applicable securities laws. Forward looking statements may include estimates, plans, expectations, forecasts, guidance or other statements that are not statements of fact. Forward looking information in this Press Release includes, but is not limited to, statements with respect to capital expenditures and related allocations, production volumes, production mix and commodity prices.

Forward-looking statements and information are based on current beliefs as well as assumptions made by and information currently available to Berens concerning anticipated financial performance, business prospects, strategies and regulatory developments. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to: crude oil and natural gas price volatility, exchange rate and interest rate fluctuations, availability of services and supplies, market competition, uncertainties in the estimates of reserves, the timing of development expenditures, production levels and the timing of achieving such levels, the Company's ability to replace and increase oil and gas reserves, the sources and adequacy of funding for capital investments, future growth prospects and current and expected financial requirements of the Company, the cost of future abandonment and site restoration, the Company's ability to enter into or renew leases, the Company's ability to secure adequate product transportation, changes in environmental and other regulations and general economic conditions.

The forward-looking statements contained in this press release are made as of the date of this press release, and Berens does not undertake any obligation to up-date publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. This cautionary statement expressly qualifies the forward-looking statements contained in this press release.

Contact Information

  • Berens Energy Ltd.
    Mr. Daniel F. Botterill
    President and Chief Executive Officer
    (403) 303-3262
    Email: dbotterill@berensenergy.com

    OR

    Berens Energy Ltd.
    Mr. Dell P. Chapman
    Vice President, Finance and Chief Financial Officer
    (403) 303-3267
    Email: dchapman@berensenergy.com