Rockyview Energy Inc.
TSX : RVE

Rockyview Energy Inc.

January 26, 2006 18:16 ET

Rockyview Energy Provides Corporate Update and Announces $40 Million Capital Budget for 2006

CALGARY, ALBERTA--(CCNMatthews - Jan. 26, 2006) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Rockyview Energy Inc. (TSX:RVE) ("Rockyview" or the "Company") is pleased to provide the following corporate update.

2005 Drilling Program Update

Rockyview drilled 55 (39 net) gas wells with a 100% success rate, all of which are located in its Central Alberta core area. Total drilling, completions, tie-in and compression costs for the fifty-five wells, together with expenditures on land and seismic, are expected to amount to approximately $11.5 million for the period ended December 31, 2005.

- Drilled 13 (8 net) Belly River wells at Wood River.

- Drilled 42 (31 net) Horseshoe Canyon CBM wells at Wood River, Clive, Knellar, Stettler and Bittern.

- The productive capacity behind pipe as a result of the 2005 drilling program is estimated to be between 5.0 to 6.0 mmcf per day. Approximately 2.0 mmcf per day will be brought on stream during the first quarter of 2006, following the installation of 1,000 horsepower of compression at Wood River. The balance of the behind-pipe capacity is expected to be tied-in on a rolling basis and producing by the end of the second quarter, once compression is added at Bittern.

A portion of tie-in and compression costs relating to the 2005 capital program will be incurred in 2006.

2006 Capital Program and Production Guidance

Rockyview's board of directors has approved a 2006 capital budget of $40 million, of which $36.6 million is to be spent on drilling, completions, tie-ins and facilities; and $3.4 million on land and seismic. In total, the Company expects to drill 84 (58 net) wells, all targeting natural gas and approximately 90% of which will be operated. The program will be funded substantially from cash flow. Rockyview currently has bank debt of $19 million on its recently-increased $30 million credit facility, which will be further reviewed upon the completion of the Company's independent engineering report.

In Central Alberta (Wood River, Bittern, Clive, Knellar & Stettler), the Company expects to spend approximately $29.3 million on 68 (46 net) wells. Of this, 57 (39 net) will target coalbed methane in the Horseshoe Canyon formation, while the balance will be focused on the Belly River and Basal Quartz zones. Rockyview has a coiled tubing drilling rig under contract with respect to its CBM program.

In Western Alberta (Thunder, Neerlandia & Westlock), Rockyview plans to drill 12 (9 net) wells and incur approximately $5.5 million of expenditures. Primary targets are in the Nordegg and Banff formations.

In the Peace River Arch (Gordondale, Spirit River & Kakut), the Company expects to spend approximately $1.8 million on 4 (3 net) wells. The principal formations to be drilled are the Gething, Baldonnel, Halfway and Montney.

Although Rockyview has not currently allocated any 2006 capital to developing CBM in the Upper Mannville, the Company's asset base is highly prospective for this exciting resource play. In the Central Alberta (Wood River) and Western Alberta (Thunder) areas, Rockyview has 56 net sections (35,500 acres) with CBM rights in the Upper Mannville.

Based on a $40 million capital program, current production of approximately 1,950 boe per day and the projected on-stream dates for the behind-pipe production, Rockyview estimates that its average daily production during 2006 will be approximately 2,500-2,700 boe, comprised of 96% natural gas.

Reader Advisory - Certain information regarding Rockyview set forth in this news release, including management's assessment of future plans, contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Rockyview's control: the impact of general economic conditions; industry conditions; availability of rigs, equipment and other goods and services; volatility of commodity prices; risks associated with the uncertainty of reserve estimates; currency fluctuations; and the timing of certain activities. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

The term BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of six Mcf to one 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. 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
    or
    Rockyview Energy Inc.
    Alan MacDonald
    Vice President, Finance & C.F.O.
    (403) 538-5000
    (403) 538-5050 (FAX)
    Website: www.rockyviewenergy.com