Duvernay Oil Corp.
TSX : DDV

Duvernay Oil Corp.

January 22, 2007 17:01 ET

Duvernay Oil Corp.: Record Production Levels Achieved and Growth Continues

CALGARY, ALBERTA--(CCNMatthews - Jan. 22, 2007) - Duvernay Oil Corp. (TSX:DDV) is pleased to provide the following EP/Operational update.

Production

The Company achieved record exit production of 22,000 boe/d, with a total of 17 new gas wells tied in during December. Exit Production capability without unplanned downtime was in excess of 23,000 boe/d. Fourth quarter 2006 production growth was at the high end of the previously targeted 5-20% quarterly growth range. Duvernay expects both the first and second quarter 2007 quarterly average production growth levels to also be at the high end of the targeted 5-20% growth range as the Company maintains very strong growth momentum. A total of 47 new wells are expected to be tied in during the first quarter of 2007.

EP Program

The Company is currently operating nine drilling rigs in BC and Alberta which will yield a large inventory of new gas wells early in the year allowing Duvernay to maintain the aforementioned production growth momentum. Given current natural gas prices, the Company plans to pursue the previously released 2007 capital budget case of $325.0 million. Should gas prices strengthen Duvernay will revisit the level of capital spending for the balance of the year. This proposed capital budget case will result in a seven rig drilling program after spring break-up. Duvernay's operating plus cash general and administrative costs were approximately 40% less than the industry average during the first nine months of 2006. The Company expects 2007 unit operating costs below $5.00 per boe, a further 10% improvement on 2006 costs.

In Northeast BC, Duvernay is operating three drilling rigs pursuing a variety of Exploration and Development targets. The Company made two additional new pool discoveries in the complex late in 2006. Both have been successfully production tested in 2007 and further delineation drilling is planned. The large 3D seismic program at Sunset is underway in advance of two deep Paleozoic exploration tests in the second half of the year. The expansion of the Sunset 5-3 gas plant is on-going and the Brassey plant expansion of 10 mmcf/d is expected to be completed in late April. Duvernay will have the necessary completed gas well inventory to fill the expanded BC gas facilities capability.

In the Alberta Deep Basin, Duvernay is currently operating six drilling rigs and seven service rigs. The first quarter EP program is designed to fill the expanded facility network. The 100% owned and operated Cecilia gas plant is capable of 120.0 mmcf/d of natural gas production. Significant recent production increases have been realized at the Sundance, Oldman and Wroe Creek compressor stations. The Company is expanding the Obed facility during the first-quarter and expects an additional 10.0 mmcf/d at that site by late March. The 2007 deep Devonian Exploration program in the Deep Basin consists of, at minimum, three new pool tests including large volume gas prospects at Edson and greater Wild River.

At Dawson, Alberta, Duvernay has drilled and successfully completed a third well into the new Slave Point oil pool discovered in 2006, confirming a pool of significant areal extent and reserve potential. A fourth well into the pool is planned to spud in early February.

2006 Full Year Reporting

Duvernay plans to press release year-end 2006 reserve, production and financial information on March 22, 2007, after the close of business.

Disclosure

Certain information set forth in this press release contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Duvernay's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Duvernay'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 of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Duvernay will derive therefrom. Duvernay disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Per barrel of oil equivalent ("boe") amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil equivalent (6:1). The term boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6mcf: 1bbl of oil is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Additional information about Duvernay Oil Corp. may be found in documents filed on SEDAR at www.sedar.com and which are also available on Duvernay's website www.duvernayoil.com.

Contact Information

  • Duvernay Oil Corp.
    Michael Rose
    President and C.E.O.
    (403) 571-3600
    or
    Duvernay Oil Corp.
    Brian Robinson
    Vice-President, Finance and C.F.O.
    (403) 571-3609
    or
    Duvernay Oil Corp.
    Scott Kirker
    Manager, Corporate Affairs
    (403) 571-3683
    Website: www.duvernayoil.com