SignalEnergy Inc.
TSX : SGI

December 15, 2005 23:59 ET

SignalEnergy Inc. - Operations Update

CALGARY--(CCNMatthews - Dec. 15) - SignalEnergy Inc. is pleased to provide shareholders with an update of ongoing operations. Activity levels in the fourth quarter represent the busiest time in the Company's short history and the results to date will materialize as new production volumes prior to year-end as well as early first quarter 2006.

In Redwater the infill drilling program is now complete resulting in 11 gross (10.35 net) oil wells drilled at 100% success rate plus one cased hole re-entry project. Of these 12 projects, completions operations have commenced on every well with 9 of the 12 locations having been successfully fractured and currently flowing on clean-up. Results to date have exceeded original expectations in terms of pay zone quality and initial production rates on the wells tested to date. Final construction of the emulsion gathering system and gas compression facilities continues with management's estimate that 7-9 of the 12 projects will be online by year-end. Extremely tight supply of equipment and services has resulted in some delays as we wait for required services to complete the projects as quickly as possible. Wells which are not online by year-end are expected to be on early in Q1-2006.

Construction of pipeline and wellsite facilities for three gross (one net) wells drilled in Carrot Creek are nearing completion and are anticipated to be online prior to year-end also. Signal and its partner are preparing for 6-8 operations in Carrot Creek as follow-ups to the successful summer drilling program to be completed in Q1 and Q2-2006. Based on the test rates on the new projects evaluated to date, Signal expects that the program will result in production of 2200 - 2500 Boe/d prior to year end with additional Redwater projects to be finalized early in the new year. Upon completion of the tie-in work, Signal's production will consist of approximately 60% natural gas and 40% crude oil and natural gas liquids.

Finally, drilling operations in Elmworth are now complete after evaluating the primary target zone in the Halfway-Doig formation at a depth of 2850 m. Signal and its partner have completed the evaluation of the logs and core form the primary formation and determined that it is not prospective but evaluating completion of an upper zone for Q1-2006 completion.

Caution to Reader

This news release contains forward-looking statements and the reader is cautioned not to place undue reliance on these statements, as there can be no assurance that the plans, intentions or expectation upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predications, forecasts, projections and other forward-looking statements will not occur.

Contact Information

  • Mr. J. Cameron Bailey
    President and Chief Executive Officer
    (403) 290-2450
    (403) 398-3366 (FAX)
    Email: cbailey@signalenergy.com