Caribou Resources Corp.

Caribou Resources Corp.

January 25, 2006 12:25 ET

Caribou Resources Corp. Provides Guidance for 2006, Gives Corporate Update and Announces Board Appointment

CALGARY, ALBERTA--(CCNMatthews - Jan. 25, 2006) - Caribou Resources Corp. (TSX VENTURE:CBU) is pleased to announce that the Board of Directors has approved its capital budget for 2006. Highlights of the planned budget are as follows:

- Capital program of approximately $30.0 million which includes up to $3.0 million for seismic and land. The Company plans to drill approximately 20 gross wells (16 net). Drilling has commenced at Larne in the company's Northern core area. Caribou has two drilling rigs under contract, with access to a third rig through a joint venture partner's drilling program and has also retained two service rigs.

- The 2006 average production target is in the range of 2,200-2,300 boe per day. Production is estimated to be comprised of over 70% natural gas and the remainder light oil.

- Assuming average price assumptions of $8.50 Cdn. per mcf for gas, $55.00 WTI, and an exchange rate of $0.87, cash flow is expected in the range of $25.0 to $26.0 million.

The guidance for 2006 is based on estimated decline rates, and the drilling and tie in of successful wells being completed on schedule. Very competitive industry conditions, possible regulatory delays and unseasonably warm weather may impact the timing of capital expenditures and guidance.

Caribou's corporate production is over 1,700 boe day. Caribou estimates that it also has over 200 boe/d of potential behind pipe capacity awaiting the conclusion of completion and tie-in operations in its Central Alberta and Northern core areas. It is estimated that this production will be brought on stream by the end of February. The company estimates that by year end it had expended approximately $7.5 million of the planned $10.0 million summer/fall program in Central Alberta, primarily as a result of surface, access and regulatory approval related delays. The remaining projects will be included in the 2006 summer program for which the company has a drilling rig under contract.

Caribou will continue to develop its Central Alberta properties during the year with additional drilling on the Basal Quartz oil pools and a development drilling program following up the successful hydraulic fracture stimulation of a recently drilled Ellerslie well which has been placed on production at Redwater. Down spacing of the Ellerslie play area (one section) is underway. The Company also anticipates drilling up to two potentially high impact Leduc tests (approximately 70% WI) in Central Alberta as part of the summer program. Caribou is currently implementing three 3D seismic programs at Redwater, Wizard Lake and Westlock.

At Wizard Lake, the Company's coal bed methane partner Mahalo Energy completed the drilling of five commitment wells prior to yearend, with Caribou being carried to a tie-in point election. Caribou will evaluate the completions information and has until late February to make its election to either participate for its approximate 23% WI share of the tie-in costs (with tie-ins scheduled to be completed by February) or elect to take an over riding royalty on these wells. Mahalo plans to drill an additional 16 wells during the summer/fall of 2006.

On December 30th, 2005 the Company was successful in closing another strategic acquisition from a senior producer in its Northern core area for $3.1 million The acquisition includes approximately 400 mcf/d of production and consolidates the Company's ownership in transportation and processing facilities in the Steen River area to a 100% Working Interest (WI). Caribou acquired an incremental 20% interest in the 35mm/d capacity Marlowe Creek gas plant (previous WI 80%) and an incremental 80% interest in the 50 km. large diameter Jackpot Creek pipeline (previous WI 20%). The December acquisition also included over 26,000 net acres of undeveloped land and a significant seismic database.

The Company is pleased to announce that Mr. Steve Fagan has joined the Board of Directors. Steve has extensive experience in the oil and gas industry and has held various executive and director positions with junior oil and gas companies since the early 1990's. Most recently, Steve was President of a private company Addison Energy Inc. Steve joined Addison in 1999 when it had 300 boe/d and played a key leadership role in its growth to approximately 11,000 boe/d in early 2005 when it sold for over $550 million. Steve has a Bachelor of Commerce degree from Memorial University and an MBA from the Richard Ivey School of Business at the University of Western Ontario.

Caribou Resources Corp. is an opportunity rich company that now has a greater than 80% WI in more than 250,000 net acres of undeveloped land focused in two core areas and operates over 85% of its production. The Company has approximately 34.8 million basic shares outstanding and estimates that net debt at the end of December, including the $3.1 million asset acquisition, is approximately $22.5 million.

This news release may contain forward looking statements. Actual results may differ materially from those contemplated. The risks, uncertainties and other factors that could influence actual results are described in documents filed with regulatory authorities.

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

Contact Information

  • Caribou Resources Corp.
    Christina M. Fehr
    Vice Chairman & CEO
    (403) 539-4322
    Caribou Resources Corp.
    Ross Robertson
    President & COO
    (403) 539-4316
    Caribou Resources Corp.
    Suite 1545, 101 - 6th Ave. SW
    Calgary, Alberta T2P 3P4