Sabretooth Energy Ltd.
TSX : SAB

Sabretooth Energy Ltd.

January 21, 2008 22:11 ET

Sabretooth Energy Ltd. Provides Operational Update

CALGARY, ALBERTA--(Marketwire - Jan. 21, 2007) - ("Sabretooth" or the "Company") (TSX:SAB) is pleased to provide an operational update on current production and drilling success.

Production

With successful drilling and completions in the fourth quarter 2007 and early January 2008, Sabretooth has 700 boe/d tested and awaiting tie-in from 3 projects in the Peace River Arch area. These production adds are expected to be tied in between now and March 1st. As well, 6 wells will be drilled between now and spring break-up in the greater Arch area of Alberta. Current production is approximately 3,500 boe/d. Production was negatively impacted by 500 boe/d when the Triassic (Charlie Lake) zone in the newly drilled 4-33 well at George unexpectedly encountered water production problems. A remedial workover was performed in the last week but it was unable to recover gas production from the well. The zone is expected to be recompleted in an adjacent wellbore after break-up. The 4-33 well continues to produce 100 BOED out of the Kiskatinaw and has 2 additional uphole zones awaiting future completion.

Estimated 2008 exit production rate remains intact. Net debt of $25 million on available bank lines of $55 million and $3-4million of cash flow per month put the Company on a strong financial footing.

Drilling

Gunnell, British Columbia:

A new multi-lateral Jean Marie development well was rig released in late December 2007 and is currently being tied in. 7 to 12 additional wells on this property are planned for the summer of 2008 by the Operator. Sabretooth working interest is 22% in the latest well and up to 30% in the play.

Royce, Alberta:

Sabretooth has completed two (net 1.5) Kiskatinaw wells drilled in December 2007 resulting in two gas wells. Both wells are expected to be on production by mid February 2008. One well encountered three pay horizons in the Kiskatinaw, the first of which tested at 4.5 MMCF/d, with the other two zones remaining behind pipe for future recompletion. A third well in the area will spud this weekend with multizone potential.

Fireweed, British Columbia:

The two wells drilled at Fireweed in Q4 of 2007 are now completed and are anticipated to be tied in by spring break-up. Six additional wells are planned after break-up.

Oak, British Columbia, Montney:

Two long reach horizontals targeting the Montney in B.C. are expected to be drilled after break-up. These development wells will further evaluate 16,000 contiguous net acres that Sabretooth holds within the prolific Upper and Middle Montney fairway.

Hedges

Sabretooth has entered into two new hedge agreements with an AECO basis to sell 9,000 GJ/d of gas at a weighted average price of $7.06 / GJ from April 1, 2008 until March 31, 2009.

Short Term Investments - Expects no Material Adverse Effect on Company

The Pan-Canadian Investors Committee for Third-Party Structured Asset Back Commercial Paper led by Purdy Crawford has announced on December 23, 2007 that an agreement in principle to restructure the ABCP issue has been approved with closing still expected to be March 31, 2008. At that time it is anticipated that liquidity will return to Sabretooth's $24.2 million asset backed commercial paper investment. Sabretooth does not anticipate any impact on our 2008 capital spending program as a result of continuing to hold this investment at this time.

About Sabretooth Energy

Sabretooth Energy Ltd. is a public oil and gas exploration and development company, located in Calgary, Alberta and carrying out operations in Western Canada. Sabretooth trades on the Toronto Stock Exchange (TSX) under the symbol "SAB".

Our mandate is to grow through a balanced approach of drill bit adds, accretive acquisitions, and aggressive exploitation of upside.

Reader's Advisory:

Certain information regarding Sabretooth Energy Ltd. in this news release identified with "expected to" or "estimated" include management's assessment of the future plans and operations and their timing may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, 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, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information and that could cause actual results to differ materially from those anticipated in the forward-looking statements are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or at the Corporation's website (www.sabretooth.ca). Furthermore, the forward-looking statements contained in this news release are made as the date of this new release and the Corporation 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. Forward looking statements set forth above will be updated in our next Management Discussion and Analysis.

The term barrels of oil equivalent may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 mcf : 1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Contact Information

  • Media and Investor Relations Contact:
    Brookline Public Relations, Inc.
    Natalie Harper
    (403) 538-5641, ext. 104
    Email: nharper@brooklinepr.com
    or
    Corporate Contact:
    Sabretooth Energy Ltd.
    Joe McFarlane, CFO
    (403) 806-4041
    Email: joem@sabretooth.ca
    or
    Sabretooth Energy Ltd.
    Suite #702, 2303 4th Street S.W.
    Calgary, Alberta, T2S 2S7
    Main Phone: (403) 229-3050
    (403) 229-0603 (FAX)
    Website: www.sabretooth.ca