Cinch Energy Corp.
TSX : CNH

Cinch Energy Corp.

April 22, 2009 09:00 ET

Cinch Energy Operational Update

CALGARY, ALBERTA--(Marketwire - April 22, 2009) - Cinch Energy Corp. ("Cinch" or the "Company") (TSX:CNH) is pleased to provide an update on its activities in the Dawson Area, of British Columbia.

The Company brought on production the Dawson 6-6 Wabamun well (85% working interest) on March 22, 2009. The well is currently producing at an average restricted rate of 5.0 mmcf/d, which is less than the wells productive capacity but production is currently being restricted due to pipeline capacity. As a result of this well, Cinch's current production has increased to approximately 2800 boepd. Cinch has been successful in diversifying its production base whereby 60% of the current Corporate production comes from British Columbia.

Cinch continues to complete vertical wells to reduce the risk in the Montney horizon in its core Dawson area, located between the Storm Parkland pool and the Arc Dawson pool. Currently, Cinch has an interest in 61 sections in the Dawson area including an average working interest of approximately 33% in 26 sections where Montney mineral rights are held. To date, Cinch and its partners have completed 4 vertical Montney tests between the Parkland and Dawson Montney pools. Cinch is currently reviewing alternatives to bringing its Montney gas on production.

The Dawson 11-26 well (65% working interest) was drilled and cased to the PreCambrian zone at 3841 metres. This well was initially completed in the Wabamun with marginal results and was subsequently vertically completed in the shallower Montney zone. By completing the Montney zone, Cinch earned a 32.5% working interest in the section. The Montney zone was flow tested over a 3.5 day period at a stable rate of approximately 2 mmcf/d.

The Dawson 10-15 well (26% working interest) was cased to the Kiskatinaw formation. The Kiskatinaw completion was unsuccessful and the well was subsequently vertically completed in the Montney zone. The natural gas rate after a 5 day flow period was approximately 600 mcf/d.

The Company has completed its annual line of credit review with its lender. The Company's line of credit has been increased from $40 million to $43 million. Current net debt is estimated at $36 million, which is projected to remain fairly constant through 2009 with the Company projecting capital expenditures to match 2009 estimated cash flow. Cinch's 2009 capital budget remains at $15 million but is reliant on higher commodity prices in the latter part of the year. The capital budget is being closely monitored and will be adjusted accordingly with any further movements in commodity prices.

Forward Looking Statements

Statements throughout this release that are not historical facts may be considered to be "forward looking statements". These forward looking statements sometimes include words to the effect that management believes or expects a stated condition or result. All estimates and statements that describe the Company's objectives, goals, or future plans, including management's assessment of future plans and operations, drilling plans and timing thereof, expected debt levels, projected capital expenditures and the funding thereof, expected production rates and additions and the expected levels of activities 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, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, incorrect assessment of the value of acquisitions, failure to complete and/or 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 and changes in the regulatory and taxation environment. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect.
Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: the ability of the Company to obtain equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manor; and field production rates and decline rates. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included elsewhere herein and in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), or at the Company's website (www.cinchenergy.com). Furthermore, the forward-looking statements contained in this release are made as at the date of this release and the Company 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.

Barrel of Oil Equivalency

Natural gas volumes are converted to barrels of oil equivalent (BOE) on the basis of six thousand cubic feet (mcf) of gas to one barrel (bbl) of oil. The term "barrels of oil equivalent" may be misleading, particularly if used in isolation. A BOE conversion ratio of six mcf to one bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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