Open Range Energy Corp.
TSX : ONR

Open Range Energy Corp.

December 16, 2010 09:00 ET

Open Range Energy Corp. Spuds Second Wilrich Horizontal Well, Divests Non-Core Assets

CALGARY, ALBERTA--(Marketwire - Dec. 16, 2010) - Open Range Energy Corp. ("Open Range" or the "Company") (TSX:ONR) is pleased to announce it has spud its second 100 percent working interest horizontal well targeting the Wilrich zone at the Company's core Ansell/Sundance Deep Basin property and has generated cash proceeds of $12.6 million through dispositions of non-core assets.

The Company's second horizontal Wilrich well began drilling December 3 and progress is on track, with the horizontal leg expected to be initiated over the next several days. The well is planned for a total measured depth of 4,200 metres, including the horizontal leg of over 1,300 metres. Open Range anticipates initiating completion operations in January and plans to utilize a packer system incorporating 13 fracturing stages.

A second drilling rig was recently booked, moved onto the Ansell/Sundance property this week and is expected to spud the Company's third 100 percent working interest Wilrich horizontal well in the next several days. This well is planned for a total measured depth of 4,300 metres, including a horizontal leg of 1,300 metres, and is also planned to be hydraulically fractured in multiple stages using a packer system.

The Company's first horizontal Wilrich well was brought on-stream October 15 at 7 mmcf/d plus natural gas liquids (NGL). The well was drilled with a horizontal leg of 1,060 metres and completed with 10 fracturing stages using a packer system. The well has produced at an average of 4 mmcf per day plus approximately 60 bbls of NGL per day (726 boe per day net) over its first 60 days of production. To date the well has produced a cumulative 240 mmcf of natural gas plus approximately 3,600 bbls of NGL.

Non-core asset dispositions raise $12.6 million in cash

In a series of recent transactions Open Range has divested of its non-core holdings at Big Bend, Garrington, Ferrier and Pembina. The divested assets had net production totalling 307 boe per day. Open Range has retained its 20 percent working interest in the Hoadley Glauconitic Deep Basin play at Ferrier.

The dispositions have generated total cash proceeds of $12.6 million. Key disposition metrics include $16.97 per proved plus probable boe of reserves, and $41,000 per daily flowing boe of production. Following the non-core property sales Open Range's net debt has been reduced to approximately $51 million. The modest reduction in reserves has not resulted in a decrease to Open Range's overall borrowing capacity of $80 million, which is based on the Company's strong multi-zone Deep Basin reserves at Ansell/Sundance.

The property sales reduce the Company's number of working interest producing wellbores by almost 60 percent, and are expected to result in an improvement of 5-10 percent or approximately $0.25 in operating costs per boe of production.

Open Range remains on-track to meet its 2010 average production guidance of 3,700 boe per day.

OPEN RANGE ENERGY CORP. IS A PUBLICLY TRADED CANADIAN ENERGY COMPANY WITH FOCUSED OPERATIONS IN THE DEEP BASIN REGION OF ALBERTA.

OPEN RANGE HAS APPROXIMATELY 60.9 MILLION COMMON SHARES ISSUED AND OUTSTANDING, WHICH TRADE ON THE TSX UNDER THE SYMBOL "ONR".

Reader Advisory

This news release contains certain forward-looking statements, which include assumptions with respect to (i) production; (ii) future capital expenditures; (iii) funds from operations; (iv) cash flow; and (v) debt levels. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Open Range's control. Such risks and uncertainties include, without limitation, risks associated with oil and natural gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada and the United States, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Open Range's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits, including the amount of proceeds, Open Range will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Open Range or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Open Range 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.

Disclosure provided herein in respect of barrel(s) of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

THE TORONTO STOCK EXCHANGE HAS NEITHER APPROVED NOR DISAPPROVED OF THE INFORMATION CONTAINED HEREIN.

Contact Information

  • Open Range Energy Corp.
    A. Scott Dawson, P.Eng.
    President and Chief Executive Officer
    403-205-3704
    or
    Open Range Energy Corp.
    Lyle D. Michaluk, CA
    Vice President, Finance and Chief Financial Officer
    403-262-9280
    www.openrangeenergy.com