Cordero Energy Inc.

Cordero Energy Inc.

October 11, 2005 09:00 ET

Cordero Energy Inc. Announces Increase to 2005 Capital Budget and Expanded Credit Facility

CALGARY, ALBERTA--(CCNMatthews - Oct. 11, 2005) - Cordero Energy Inc. (TSX:COR) ("Cordero" or the "Corporation") announced an increase to its 2005 capital budget to $44.0 million, up from $28 million. As a result of positive results to date, the increase will be used to accelerate the Malmo CBM/Belly River development project and conventional exploration. Additionally, the Corporation has expanded its credit facility with CIBC from $12 million to $25 million.

Cordero is increasing the pace of development at Malmo, Alberta based on production and drilling results to date. As a result, a portion of the expanded budget will be allocated to increasing the fall drilling program to approximately 32 net wells from a previously planned program of 13.5 net wells. A further 33 net wells are planned for 2006, which will bring the total number of wells drilled or re-completed to over 120.

The Corporation is currently installing 2,700 hp of compression to bring previously drilled wells on-stream. An additional 1,450 hp compression unit has been ordered to accommodate the anticipated production capacity from the up-coming fall drilling program. The majority of the incremental production is expected to be pipeline connected in early 2006.

Cordero is pleased with the progress of its conventional exploration program and is increasing its budget to accommodate additional drilling, land and seismic expenditures as follows:

Willesden Green, Alberta - the Corporation has recently drilled and cased a well (100% interest) for Cardium oil. Pending completion, a second follow-up well may be drilled prior to year-end.

Knopcik, Alberta - the Corporation is currently drilling a well (100% interest) targeting Gething and Nikanassin potential in the area. A second well (60% interest) may be drilled prior to year-end.

Flat Rock, B.C. - two wells (100% interest) are currently planned for drilling in November targeting the Montney, Siphon and Gething formations.

Cordero is currently producing 1,550 boe/d. Pending ground conditions and commissioning of new facilities, production is expected to exit the year between 2,000 - 2,300 boe/d, primarily from wells already drilled.

Cordero is an independent exploration and development company pursuing conventional oil and natural gas production and reserves as well as coalbed methane development in western Canada. Cordero is based in Calgary, Alberta.

In this release, references to equivalent barrels of oil, or boe, reflect the conversion of natural gas to oil on a 6:1 energy equivalent basis. Such conversion does not reflect economic equivalence of wellhead prices and can be misleading.

The corporate information contained in these pages contains forward-looking information. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by Cordero at the time of preparation, may prove to be incorrect. The actual results achieved in future periods will vary from the information provided herein and the variations may be material. Consequently, there is no representation by Cordero that actual results achieved during future periods will be the same in whole or in part as the information contained herein.

Contact Information

  • Cordero Energy Inc.
    David Elgie
    President and Chief Executive Officer
    (403) 265-7006
    Cordero Energy Inc.
    Dean Setoguchi
    Vice President and Chief Financial Officer
    (403) 265-7006