Birchcliff Energy Ltd.
TSX : BIR

Birchcliff Energy Ltd.

October 14, 2005 05:00 ET

Birchcliff Energy Ltd.: Operations Update

CALGARY, ALBERTA--(CCNMatthews - Oct. 14, 2005) -

This press release is not for distribution to United States Newswire Services or for dissemination in the United States.

Birchcliff Energy Ltd. ("Birchcliff") (TSX:BIR) is pleased to provide a production and operational update.

PRODUCTION

Birchcliff is pleased to announce that it expects to average approximately 4,600 boe per day, approximately 80% natural gas, for the third quarter of 2005. This is an increase of 259 boe per day from its first operating month average of 4,341 boe per day in June 2005. Further, Birchcliff is confident that it will meet its exit target of 5,000 boe per day by December 31, 2005. Current production is approximately 4,600 boe per day.

CASH FLOW AND DEBT

Birchcliff expects to cash flow approximately $14 million in the third quarter. Accordingly, in light of current commodity prices and Birchcliff's expected production gains, Birchcliff expects to exit the year with less than $50 million in debt, which is less than one year's estimated forward cash flow (2006) compared to Birchcliff's estimated 2005 year end debt. Birchcliff has no hedges in place.

DRILLING

Birchcliff's fall drilling program has to date been very successful. Birchcliff has drilled and cased 16 gross wells (9.1 net) in the Peace River Arch area of Alberta. Birchcliff continues to have two drilling rigs working and expects to complete its previously announced 34 gross (22 net) fall drilling program by December 31, 2005. The vast majority of the wells have been drilled for natural gas. Birchcliff is very encouraged by the initial drilling results of the first 16 potential wells, many of which have a number of potential productive zones.

Birchcliff has chosen not to increase its exit production target numbers because the majority of the potential new oil and gas wells have not been tested, completed or properly flowed. Further, Birchcliff continues to be concerned with the time required to bring potential new wells on in light of industry activity.

Land

Birchcliff is pleased to announce that it continues to add to its undeveloped land base and currently has in excess of 156,000 gross undeveloped acres and 112,000 net undeveloped acres, all of which is in the Peace River Arch and close to Birchcliff's infrastructure. This is an increase of approximately 50 per cent from June 2005. The land has been purchased in Alberta Crown Land Sales.

2006 Budget Update

Birchcliff will announce its 2006 Budget, Drilling and Capital Expenditure plans after it has had an opportunity to review the results of its current drilling program estimated to be in January 2006. On a preliminary basis Birchcliff has determined that based on current production and current commodity prices it expects to have a capital expenditure program of at least $60 million.


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

Birchcliff is a publicly traded company that trades on the TSX Exchange under the symbol "BIR".

The TSX Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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