Rockyview Energy Inc.

Rockyview Energy Inc.

December 13, 2006 07:00 ET

Rockyview Energy Outlines 2007 Drilling Program

CALGARY, ALBERTA--(CCNMatthews - Dec. 13, 2006) - Rockyview Energy Inc. ("Rockyview" or the "Company") (TSX:RVE) is pleased to announce its 2007 capital expenditure budget and provide an operational update. Capital Expenditure Budget With a multi-year drilling inventory of 187 (131 net) wells, Rockyview's 2007 capital expenditure budget contemplates that a minimum of $20 million will be spent during the year on drilling, infrastructure, re-completions, land and seismic. Rockyview plans to drill a minimum of 57 (37 net) wells in 2007, most of which will be in its Central Alberta core area. Production additions resulting from these operations are estimated to be approximately 5,000 mcf (833 boe) per day. The Company, which is 95% levered to natural gas, is assuming a 2007 average AECO gas price of $6.50 per mcf.

Rockyview Energy Inc. 2007 Budget

Capital expenditures (000)
 Drilling & completions               $14,200
 Facilities                           $ 2,500
 Recompletions & workovers            $ 1,800
 Land, seismic & G&A                  $ 1,500
 Total                                $20,000

Quarterly capital expenditures (000)
 Q1                                   $11,000
 Q2                                   $ 1,300
 Q3                                   $ 7,500
 Q4                                   $   200
 Total                                $20,000

Capital expenditures by area (000)
 Central Alberta                      $16,500
 Western Alberta                      $ 1,000
 Peace River Arch                     $ 2,500
 Total                                $20,000

Activity in Central Alberta will continue to focus on the Horseshoe Canyon, Belly River and Mannville formations. Rockyview is also undertaking an extensive review of its deeper rights in Central Alberta, where it holds interests in 65 sections with rights in the Palaeozoic. In Western Alberta, the primary targets are in the Mannville, Nordegg and Banff formations, while drilling in the Peace River Arch will focus predominantly on Triassic objectives. At this juncture, Rockyview does not have any plans to drill Upper Mannville CBM wells during 2007, although the Company holds an interest in 55 net undeveloped sections of land. Rockyview will continue to monitor the progress made by key industry players with operations proximate to its own lands. With the recent completion of a $14.6 million equity issue, Rockyview has a well-positioned balance sheet. The Company's 2007 budget has been designed to maintain that financial flexibility throughout 2007, while preserving the opportunity to increase capital expenditures, should the price of natural gas remain above the $6.50 per mcf budgeted level. To that extent, the Company has entered into the following physical gas hedges:

Period                             Volumes (gj/d)   Price/gj

January 1, 2007-December 31, 2007          1,000       $7.50
April 1, 2007 - October 31, 2007             500       $7.55
April 1, 2007 - October 31, 2007             500       $7.60
April 1, 2007 - October 31, 2007             500       $7.88

Note: 1.0 gj equals 0.95 mcf

Operational Update The Company completed its 2006 drilling program in late September and since then has participated in the tie-in of several wells. At Watelet in Central Alberta, Rockyview has tied-in a 100% working interest Lower Mannville natural gas well. The well, which has demonstrated a capability of 2,100 mcf/d (350 boe/d), is producing through a third party system at a rate of only 75 mcf/d. The Company is currently exploring alternatives to deal with the restricted capacity. In the Peace River Arch, Rockyview participated in the tie-in of two Triassic oil wells (50% and 20% working interests) that are currently producing at a combined gross rate of 120 (40 net) bbl/d on an intermittent basis. Pumping units are being installed by the operator. Elsewhere in the Peace River Arch, the non-operated (28% interest) Triassic gas well drilled by Rockyview and a partner has begun to produce water, resulting in the operator shutting-in production in order to assess what remedial action might be undertaken to improve performance. Management estimates exiting 2006 with daily production of approximately 2,500 boe. About Rockyview Energy Rockyview is a Calgary-based company active in exploration, development and production of natural gas and crude oil in Western Canada. Following the completion of the above-noted equity issue, Rockyview will have 24.4 million basic shares outstanding and 27.0 million fully diluted shares outstanding. The Company's common shares trade on the Toronto Stock Exchange under the symbol "RVE". Reader Advisory - Statements in this news release contain forward-looking information including expectations of future production, expectations of future capital costs, plans for exploration, development and drilling activities and other operational developments. Readers are cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. These risks include, but are not limited to: the risks associated with the oil and gas industry, commodity prices and exchange rate changes. Industry related risks include, but are not limited to; operational risks in exploration, development and production, delays or changes in plans, risks associated with the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The risks outlined above should not be construed as exhaustive. The reader is cautioned not to place undue reliance on this forward-looking information. The Company undertakes no obligation to update or revise any forward-looking statements except as required by applicable securities laws. Boes 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. This conversion factor is an industry accepted norm and is not based on either energy content or current prices. The Toronto Stock Exchange has neither approved nor disapproved of the contents of this news release.

Contact Information

  • Rockyview Energy Inc.
    Steve Cloutier
    President & C.E.O.
    (403) 538-5000
    Rockyview Energy Inc.
    Alan MacDonald
    Vice President, Finance, C.F.O. & Corporate Secretary
    (403) 538-5000
    (403) 538-5050 (FAX)