E4 Energy Inc.
TSX VENTURE : EFE

E4 Energy Inc.

December 08, 2006 16:00 ET

E4 Energy Announces 2007 Capital Program and Operational Highlights

CALGARY, ALBERTA--(CCNMatthews - Dec. 8, 2006) - E4 Energy Inc. (TSX VENTURE:EFE) ("E4" or the "Company") is pleased to announce today that the Company's Board of Directors has approved a capital expenditure budget of $20 million for exploration and development in 2007.

Based upon the approved capital program, E4 expects corporate production to average 1,450 boe/d in 2007 (60 percent natural gas) and a budgeted exit rate of approximately 1,600 boe/d. With a projected cash flow of $17 million for 2007 the Company's budget will be financed by funds from operations and bank credit facilities which are presently at $18 million. E4's commodity price assumptions for the 2007 budget are CD$7.50 AECO per mcf for natural gas and CD$60.00 per barrel of oil.

The 2007 capital program provides for the drilling of 36 wells (29.3 net) at an average working interest of 82 percent. Drilling and completions expenditures are expected to be approximately $9.5 million with field facilities, equipment and optimization projects in the amount of $6.5 million. Additional spending is allocated towards land and seismic in the amount of $3.4 million.

With the recent closing of a $7.0 million flow through equity financing on November 30, 2006, E4 has begun to accelerate the Company's drilling program for December 2006 and the 2007 budget year. To date in Q4, E4 has recently drilled and cased 2 wells (100 percent working interest) in the Company's shallow gas exploration area of Southern Alberta. These wells plus an additional 5 other wells in the area are expected to be tied-in by Q1, 2007.

In E4's higher impact growth area of Fort St. John, B.C., the Company has recently drilled and cased 1 well (100 percent working interest) in Q4. This new well is expected to be completed and tested before year-end. As a result, one additional well has been added to the December 2006 drilling program for this area.

In the Provost area of Alberta, the Company is presently drilling the first of a four well program, which is expected to be completed before year-end.

The Company has continued to grow its extensive inventory of exploration and development drilling opportunities. In 2006, more than 20 percent of the Company's corporate budget was dedicated towards land acquisitions, and thus has now positioned E4 to continue to grow in 2007.

By year-end of 2006 E4 expects to have drilled 27 wells. From the in-house generation of new exploration plays, to the successful drilling and on-production new reserve adds, the Company has significantly grown its production base, and is on track to meet its exit production target of 1,200 boe/d. With the previously announced financing, E4 will exit 2006 with a net debt to annualized run rate cash flow of less than one times thereby providing the Company with excellent financial capabilities going into 2007. E4 is again well positioned to deliver on its corporate objectives for the coming year.

E4 Energy Inc. is a junior oil and gas company engaged in the exploration for, and development and production of natural gas and crude oil reserves primarily in the provinces of British Columbia and Alberta. E4's common shares trade on the TSX Venture Exchange under the symbol "EFE".

ADVISORY

This press release may contain forward-looking statements including management's assessment of future plans and operations, expectations of future production, cash flow and earnings. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), acquisitions, commodity price and exchange rate fluctuation and uncertainties resulting from competition from other producers and ability to access sufficient capital from internal and external sources. Additional information on these and other factors that could affect E4's operations and/or financial results are included in E4's reports on file with Canadian securities regulatory authorities.

Note: Boe means barrel of oil equivalent on the basis of 1 boe to 6,000 cubic feet of natural gas. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

In this press release: (i) boe/d means boe per day; (ii) bbls/d means barrels per day; (iii) mcf means thousand cubic feet;.

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

Contact Information

  • E4 Energy Inc.
    Paul Starnino
    President and Chief Executive Officer
    (403) 266-6747
    or
    E4 Energy Inc.
    Franco Civitarese
    Vice President Finance and Chief Financial Officer
    (403) 266-6747