Renegade Petroleum Ltd.
TSX VENTURE : RPL

Renegade Petroleum Ltd.

March 06, 2012 06:30 ET

Renegade Petroleum Ltd. Announces Operational Update including Record Production, Strategic Land Acquisitions in Southeast Saskatchewan and New Core Area in the Alberta Slave Point

CALGARY, ALBERTA--(Marketwire - March 6, 2012) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES.

Renegade Petroleum Ltd. ("Renegade" or the "Company") (TSX Venture: RPL) is pleased to announce that due to its successful first quarter 2012 drilling program, the Company recently achieved and is currently maintaining record production in excess of 4,000 boe/d. In addition, the Company is pleased to announce that it has materially increased its land position in southeast Saskatchewan and has entered into a new core area in the Slave Point light oil play in Alberta. Renegade now controls over 154,000 net acres of undeveloped land.

HIGHLIGHTS & ACCOMPLISHMENTS
  • Achieved and currently maintaining record production in excess of 4,000 boe/d with a 96% light oil weighting;
  • Executed a land acquisition strategy on the Souris Valley trend and Wordsworth-Queensdale trends in southeast Saskatchewan bringing the total land position on these trends to approximately 60 net sections;
  • Recently drilled a successful dual leg Frobisher well on the Wordsworth-Queensdale trend with initial production exceeding 200 boe/d. Renegade's previously announced well in the Souris Valley trend with initial rates of 300 boe/d (150 boe/d net) is currently producing in excess of 150 gross boe/d (75 boe/d net); and
  • Established a new strategic light oil core area having acquired 32 sections of Slave Point prospective land in the Senex and Joan areas of Alberta.

OPERATIONAL UPDATE

Southeast Saskatchewan

During the fourth quarter of 2011, and based on recent land sales in 2012, Renegade has increased its land position along the Souris Valley and Wordsworth-Queensdale trends to approximately 60 net sections of land. Renegade previously announced that it had successfully drilled a dual leg Souris Valley well in late 2011 that had a 48 hour production test exceeding 300 boe/day (150 boe/day net) of light oil. The well is stabilizing and has averaged in excess of excess of 150 gross boe/d for the last 15 days. In addition, Renegade recently drilled a dual leg Frobisher well in the Wordsworth-Queensdale trend which began producing on February 24, 2012 that has produced an average of 200 boe/d for the last 7 days. Capital costs for each of the wells was approximately $1.15 million. Based on the initial success of both wells, Renegade has identified an additional 125 gross (110 net) locations along the trends.

Slave Point Play - Alberta

Over the past 5 months Renegade has been active in strategically acquiring a significant land position in the Senex and Joan areas in Alberta that is prospective for Slave Point oil production. Renegade now controls 32 sections (over 20,000 acres) of land in the area. Renegade believes that it has up to 125 drilling locations on its existing land and anticipates drilling its first Slave Point well in 2012. The Senex and Joan areas are both prospective for light oil (approximately 40 degree API).

The depth of the Senex play is approximately 1,100 metres versus approximately 1,600 metres in the Slave Point play in Sawn Lake Alberta, and as such, provides lower capital drill costs. Renegade estimates the total capital commitment to be approximately $2.8 million to $3.0 million per well.

2012 GUIDANCE

Renegade is pleased to report production ahead of its 2012 budget, recently surpassing 4,000 boe/d, and reiterates its 2012 annualized average guidance of 4,000 to 4,200 boe/d based on a $76 million capital expenditure program.

Due to the extended break-up in 2010 and 2011 resulting from wet weather conditions, Renegade has assumed an extended break-up for 2012 in southeast Saskatchewan and has factored the extended break-up into its 2012 averages.

Renegade continues to be excited and optimistic about generating growth prospects in 2012 and continues to be committed to delivering per share growth and top-tier capital efficiencies. Renegade currently has over 706 potential gross (626 net) drilling locations in its inventory. This depth of drilling inventory positions the Company well for long-term organic growth in production, cash flow, reserves and net asset value for 2012 and beyond.

CORPORATE INFORMATION

Please note that the Company has updated its corporate presentation which can be found on the Company's website at www.renegadepetroleum.com.

Renegade's common shares trade on the TSX Venture Exchange under the symbol RPL. Renegade currently has approximately 77.5 million shares outstanding and 86.8 million fully-diluted shares.

ADVISORY

This press release contains forward-looking statements. More particularly, this press release contains statements concerning Renegade's capital expenditure program, Renegade's drilling plans, the expected ability of Renegade to execute on its exploration and development program and Renegade's anticipated production (both in terms of quantity and raw attributes) and other similar matters.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Renegade, including: (i) with respect to capital expenditures, generally, and at particular locations, the availability of adequate and secure sources of funding for Renegade's proposed capital expenditure program and the availability of appropriate opportunities to deploy capital; (ii) with respect to drilling plans, the availability of drilling rigs, expectations and assumptions concerning the success of future drilling and development activities and prevailing commodity prices; (iii) with respect to Renegade's ability to execute on its exploration and development program, the performance of Renegade's personnel, the availability of capital and prevailing commodity prices; and (iv) with respect to anticipated production, the ability to drill and operate wells on an economic basis, the performance of new and existing wells and accounting risks typically associated with oil and gas exploration and production.

Although Renegade believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Renegade can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (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; health, safety and environmental risks; commodity price and exchange rate fluctuations; and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures).

The forward-looking statements contained in this document are made as of the date hereof and Renegade undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Meaning of Boe: When used in this press release, boe means barrel of oil equivalent on the basis of 1 boe to 6 thousand cubic feet of natural gas. Boe's may be misleading, particularly if used in isolation. A Boe conversion ratio of 1 boe for 6 thousand 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. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Any references in this news release to initial production (IP) rates, test rates or initial 48 hour test rates are useful in confirming the presence of hydrocarbons, however, such rates are not necessarily indicative of long-term performance or ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Renegade Petroleum Ltd.
    Michael Erickson
    President & CEO
    (403) 355-8922

    Renegade Petroleum Ltd.
    Alex Wylie
    Vice-President, Finance & CFO
    (403) 410-3376