SignalEnergy Inc.

September 13, 2005 23:59 ET

SignalEnergy Inc. (TSX-SGI) Announces Increase to its 2005 Capital Budget and Operations Update

CALGARY--(CCNMatthews - Sept. 13) - SignalEnergy Inc. ("Signal") is pleased to announce that is has received approval from its board of directors to increase its 2005 capital budget to $22.6 million from the originally approved amount of $14.8 million. The capital budget values are exclusive of three corporate acquisitions which were completed in 2005. The increased capital budget reflects the growing project inventory on Signal's current lands. With the addition of the Goose River assets effective August 9, 2005 the Company is now producing an average of 1550-1600 Boe/d with an estimated 300 Boe/d behind pipe awaiting tie-in and optimization in the short-term. In addition, Signal is currently in the early evaluation phase of its summer capital program that has resulted in Signal drilling a total of 16 gross wells (8.2 net) at a 100% success rate.

Preliminary results of the summer operations are as follows:

Carrot Creek-Kaybob

To date Signal has successfully drilled and cased 4 gross (1.4 net) wells in its Carrot Creek core area with a 100% success rate. Completion operations are currently underway with one new well (40% working interest) expected to be on stream prior to the end of September at 100 Boe/d of light sweet crude oil. Of the remaining three wells, two have been successfully completed with additional uphole zones to be evaluated before being placed on production in the fourth quarter. The Carrot Creek-Kaybob area remains Signal's largest core area with net current production of 550-600 Boe/d.


Subsequent to the announcement of the business combination of Goose River and Signal on May 6, 2005, a total of 5 gross (2.76 net) development wells have been drilled in Redwater with 100% success rate. The summer drilling program was the first of three rounds of infill drilling that Signal has identified to develop the Redwater area. Completion results are currently under way with results to date yielding one new pool discovery well which came on production September 12 at a restricted initial rate of net 150 Boe/d. Signal has kicked-off installation of additional field compression to handle the increasing production volumes from this well plus the upcoming Q4-2005 capital program in Redwater.

In addition to the active summer drilling schedule, construction of the field facilities and pipelines is nearing completion which will result in lower operating costs and allow for optimization of the field. The Redwater core is Signal's major crude oil property with current production of 350 - 400 Boe/d including 200 Bbl/d of light sweet crude oil.

Redwater is expected to deliver production gains throughout the remainder of 2005 with new volumes from the summer program beginning to contribute over the next month. Finally, Signal is currently surveying and acquiring surface leases to drill an additional 7 well development program to be completed before year-end pending access to surface leases and equipment.


Signal has accumulated a significant land and production base in the Bashaw-Chigwell region of central Alberta. The property consists primarily of shallow gas development including extensive CBM reserves in the Horseshoe Canyon formations, Belly River and Lower Mannville formations. Current combined production from the region is 250-300 Boe/d.

Since the end of the second quarter a total of 9 gross (3.42 net) wells have been drilled on the property at a 100% success rate with completions currently underway. The summer drilling program targeted the initial phase of CBM locations on Signal's lands. A total of 8 gross (2.52 net) CBM wells out of an expected inventory of 16 gross locations have been successfully drilled so far with 2 wells completed and awaiting tie-in. The remaining 6 locations will be completed and tied-in during Q4-2005.

Management is pleased with the initial results of the summer program and is planning for an aggressive development program in the fourth quarter of 2005 with plans to drill 11 gross (10.2 net) wells primarily in Redwater and Carrot Creek. The current budget is based on commodity prices of US$55/Bbl for crude and AECO pricing of $7.50/mcf, therefore continued strength in prices could support a further expansion in the capital program before year-end.

Web Site:

This news release is not for dissemination in the United States or to any United States news services. The common shares of SignalEnergy have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Contact Information