Cinch Energy Corp.
TSX : CNH

Cinch Energy Corp.

September 17, 2008 16:41 ET

Cinch Energy Updates Dawson Activity

CALGARY, ALBERTA--(Marketwire - Sept. 17, 2008) - Cinch Energy Corp. (TSX:CNH) ("Cinch" or the "Company") is pleased to provide an update on its drilling activities in the Dawson Area, of British Columbia.

Cinch re-entered the Dawson 6-6 cased potential gas well and deepened the well to 3695 metres to evaluate the potential of the Wabamun zone. The well was completed and flowed over a four day period during which it had a stable rate of 6.4 mmcf/d of very dry gas. Tie-in options for this well are currently being evaluated with the Company anticipating that production may commence in December 2008. Cinch farmed in on its area partner and paid the deepening and completion costs of this well, in order to earn an 85% working interest in the well below the Kiskatinaw formation and an additional 4 sections of land surrounding the well. Cinch has identified multiple prospective locations and anticipates spudding a second deep test well in late October.

Cinch's production during September has been averaging approximately 2050 boepd and Cinch anticipates bringing on production an additional 1,300 boepd before year end. Production exit rates for 2008 are very dependent upon the tie in of the Dawson 6-6 well. The Company is still projecting that production will average between 1900-2100 boepd for the year.

The Company has increased its capital budget to approximately $36 million from the previously stated amount of $25 million due to its exploration success in the Dawson area. This additional capital will be allocated to the Dawson area for land acquisitions, drilling activities, acquisition of 3-D seismic data, as well as expanding the existing production facilities to accommodate additional gas wells.

It is expected that the Dawson 6-1 Kiskatinaw test, which offsets the Parkland Montney gas pool will spud this week. This well will evaluate the Montney zone, which will then be developed, if warranted, via a Montney horizontal well that is now projected to spud in January 2009.

At the B.C. land sale on August 13, 2008, and through a private transaction, Cinch has been successful in acquiring an additional 7 sections of land (65-85% working interest) prospective for deeper horizons in the Dawson area. The Company currently has interests in 48 gross sections of land in the Dawson area and expects to allocate a significant portion of its 2009 capital budget to this active multi-zone area.

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 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.

Contact Information