Open Range Energy Corp.
TSX : ONR

Open Range Energy Corp.

January 24, 2008 08:30 ET

Open Range Energy Corp. (TSX: ONR) Announces 2008 Guidance And Provides Operational Update

CALGARY, ALBERTA--(Marketwire - Jan. 24, 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 its planned 2008 capital investment program, associated production guidance and an operational update on recent drilling and production activities.

2008 CAPITAL INVESTMENT PROGRAM AND PRODUCTION GUIDANCE

The Board of Directors of Open Range has approved a $35 million capital investment program for 2008. The focus of the program will continue to be on the Company's core Ansell/Sundance property, with 11 (six net) wells forecast to be drilled.

The drilling program will include a balance of infill development locations and exploratory opportunities on existing acreage. The exploratory drilling will be strategically designed to further evaluate recently acquired lands with working interests ranging from 50 to 100 percent. All anticipated 2008 locations have been selected utilizing 3D seismic data. To date, Open Range has drilled 24 (11.5 net) successful wells at Ansell/Sundance and has generated an inventory of approximately 25 development and 25 exploration locations, all of which are supported by the Company's proprietary 3D seismic. Approximately 70 percent of the Company's 2008 capital budget will be allocated toward drilling and completion activities.

Based on the approved capital investment program, Open Range is forecasting 2008 average production of approximately 2,000 boe per day and expects to exit the year with production of approximately 2,350 boe per day. Natural gas is forecast to comprise approximately 85 to 90 percent of production.

Funding for the capital investment program will be accomplished through cash flow from operations and the Company's credit facilities. At the end of 2007, Open Range had an estimated $14 million in net debt on bank credit facilities of $30.5 million. In addition, the Company has approximately 50 percent or 5.9 mmcf per day of its forecast average 2008 production hedged at an average floor price of C$7.09 per mcf.

OPERATIONAL UPDATE

Open Range is pleased to report that it has met its 2007 production guidance targets. The Company's 2007 production averaged 1,450 boe per day based on field estimates. This represents a year-over-year average production increase of 80 percent on an absolute basis and 33 percent on a per share basis. The Company also confirms that it has met its year end exit production guidance for 2007 of 1,650 boe per day.

Currently, the Company's production is approximately 1,700 boe per day with three (1.6 net) wells recently drilled at Ansell/Sundance expected to be brought on-stream during the first quarter of 2008. One (0.6 net) of these wells is the successful earning well of the previously announced five section farm-in agreement. Completion operations for this well were recently executed with nine pay zones being successfully fracture stimulated. In addition, competitive third party processing has been secured and pipelining has commenced for the production of this well.

Field preparations are currently underway at Ansell/Sundance for the construction of the Company operated 20 mmcf per day natural gas plant. Commissioning of the gas plant and initial production is presently forecast to occur during the second quarter of 2008. Upon completion of this natural gas plant the Company will have a combined capacity throughput from its three operated facilities at Ansell/Sundance totalling approximately 33 mmcf per day (11.9 mmcf per day net). The Company is also expecting to continue its relationship with third party processors currently handling net production of approximately three mmcf per day.

In 2008 the Company will continue to pursue capital and operating cost efficiency measures including further evaluation of utilizing water as a replacement to oil for well fracture treatments and facilities and production optimization.

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 21.8 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.

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