Sabretooth Energy Ltd.

Sabretooth Energy Ltd.

September 18, 2007 20:35 ET

Sabretooth Energy Provides Operational and Financial Update


CALGARY, ALBERTA--(Marketwire - Sept. 18, 2007) - Sabretooth Energy Ltd. ("Sabretooth" or the "Company") (TSX:SAB) is pleased to provide an operational update on current production and drilling success, as well as comments on short-term investments and hedging.

Operations Update - Successful Drilling and Production Additions

Current production has increased to 3,600 boe/d, approximately 87% gas weighted. Sabretooth expects to exit 2007 at 4,000 boe/d. An additional eight wells are expected to be drilled prior to year end.

Gunnell, British Columbia:

Four (1.2 net) development wells were drilled in Q3 at Gunnell in N.E. British Columbia. These wells are now tied in and began production in late August. The wells are expected to stabilize at a combined production rate of 400 boe/d net to the Company. Additional horizontal development wells are planned in the area for 2008.

George, Alberta:

Sabretooth cased its first development well following the 14-28 discovery, and is currently drilling a third well at George. The development wells are expected to be completed and tied-in in October. Sabretooth's working interest in all three wells is 100%. The newly cased well, drilled to the Debolt zone, has multiple pay zones.

Production at the 14-28 George well began in August at 4 mmcf/d out of one zone and is currently choked back to 2 mmcf/d while the Gunnell wells enjoy flush production. This provides flexibility in protecting production under existing hedges.

Oak, British Columbia:

Sabretooth received Good Engineering Practice ("GEP") from the Oil and Gas Commission ("OGC") for its oil discovery well at Oak. The approval allows the Company to initially produce the well at 100 bopd. Once further production history has been obtained from the well, the Company expects that the OGC will further increase this allowable rate. Development drilling is expected to start in 2008.


Currently Sabretooth has 17,000 GJ per day hedged at a weighted average floor and ceiling price of $6.37 / GJ and $8.77 / GJ respectively. Currently 95% of Sabretooth's gas production is hedged to take advantage of the premium over AECO spot pricing.

Short Term Investments - Expects no Material Adverse Effect on Company

Sabretooth also advises on the impact of global credit markets on $24.2 million of its cash and investments.

Sabretooth inherited $24.2 million in asset backed securities, which are rated as AAA, R1-High by Dominion Bond Rating Service, as part of the corporate assets of Bear Ridge Resources Inc. ("Bear Ridge"). The asset backed commercial securities were purchased by Bear Ridge Resources prior to the Sabretooth acquisition of Bear Ridge. A liquid market for these securities does not currently exist. Sabretooth does not expect that the absence of the liquid market will have any material adverse effect on the Company.

Sabretooth currently has a working capital deficit of $16 million, available bank lines of $55 million and has bank approval to borrow additional funds if required using the asset backed commercial paper as collateral. Management of Sabretooth believes the Company has sufficient cash, bank lines and cash flow to meet its obligations and fund its 2007 and 2008 capital programs.

The Company will continue to monitor the liquidity of the asset backed commercial paper and update shareholders as appropriate.

About Sabretooth Energy Ltd.

Sabretooth develops solutions to discover and develop energy. We are a company located in Calgary and carrying out operations in Western Canada. Sabretooth's energy comes from young assets and an experienced management team.

Cautionary Statements

Certain information regarding Sabretooth Energy Ltd. in this news release include managements assessment of the future plans and operations and their timing may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and 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, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors in not exhausted. Additional information on these and other factors that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information and that could cause actual results to differ materially from those anticipated in the forward-looking statements are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website ( or at the Corporation's website ( Furthermore, the forward-looking statements contained in this news release are made as the date of this new release and the Corporation 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.

The term barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. A BOE conversion ratio for gas of 6 mcf : 1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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