Ember Resources Inc.
TSX : EBR

Ember Resources Inc.

January 24, 2008 08:30 ET

Ember Resources Inc. Provides Operational Update and 2008 Guidance

CALGARY, ALBERTA--(Marketwire - Jan. 24, 2008) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

Ember Resources Inc. (TSX:EBR) ("Ember") today announced an operational update, drilling plans and 2008 guidance.

Operational update

Ember Resources estimates that production for fourth quarter 2007 will average 7.1 mmcf/d, a 37% increase over third quarter 2007. Current production from field data is estimated at 8.2 mmcf/d with weather-related downtime reducing production by 200-300 mcf/d. Almost all of Ember's production is coalbed methane (CBM).

Production from Ember's newly commissioned Acme CBM property has stabilized at 2.8 mmcf/d from 31 producing wells. Productivity from the Horseshoe Canyon coals is in line with expectations however flush production from co-mingled conventional sands is lower than initial test rates indicated. The Company is conducting testing and evaluation work on the existing producing wells to optimize completion operations for the next round of drilling at Acme.

To date, Ember has drilled four wells at Acme in its first quarter drilling program. A total of 14 wells (7.5 net) are planned for the quarter, all at Acme. Production additions from this program and are forecasted to be on-stream prior to the end of the quarter.

2008 Guidance

Ember's Board of Directors has approved a 2008 capital budget of $15 million. The capital program is forecasted to yield average production of 9.0 mmcf/d, 52% higher than the 2007 annual average.

Drilling operations will focus on low risk, low cost Horseshoe Canyon CBM wells at Ember's Acme and Fenn Big Valley properties in Alberta. An estimated 30-35 net wells will be drilled in these areas.

In the Mannville coals, Ember plans to maintain its resource base with limited capital expenditures and selective land purchases. Due to the lack of sufficient funding from internal sources, the Company is considering various options for development of its Mannville resources including but not limited to joint ventures with third parties. The Company will be actively exploring such options over the next several months.

With the continued uncertainty in both natural gas and capital markets, the Board has taken a conservative approach to capital spending for 2008 by staying within Ember's current cashflow and balance sheet capabilities. At the same time, the Company expects to improve debt to cash flow ratios on a quarter over quarter basis, as well as maintain operational momentum.

Based on current strip prices, cash flow is estimated at $12 million or $0.33/share. Year-end 2008 net debt is estimated at $23 million or approximately 1.9 times annual cash flow. The Company has current bank lines of credit of $25 million.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements including expectations of future production, funds from operations, earnings, operating expenses and capital expenditures. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Additional information on these and other factors that could affect the Company's operations or financial results are included in the Company's reports on file with Canadian securities regulatory authorities.

Ember Resources Inc. is a resource company specializing in coalbed methane (CBM) with extensive land and resource holdings in Alberta, Canada. Ember's shares are traded on the Toronto Stock Exchange under the trading symbol "EBR"

Contact Information

  • Ember Resources Inc.
    Mr. Douglas A. Dafoe
    Chairman & CEO
    (403) 270-0803
    (403) 270-2850 (FAX)
    or
    Ember Resources Inc.
    Mr. Terry S. Meek
    President & COO
    (403) 270-0803
    (403) 270-2850 (FAX)