SkyWest Energy Corp.
TSX VENTURE : SKW

SkyWest Energy Corp.

March 08, 2011 12:44 ET

SkyWest Energy Corp. Provides an Update on Drilling Results and Expanded Credit Facilities

CALGARY, ALBERTA--(Marketwire - March 8, 2011) - SkyWest Energy Corp. ("SkyWest" or the "Company") (TSX VENTURE:SKW) is pleased to release an update on drilling operations and the expansion of its credit facilities.

SkyWest has now drilled or participated in a total of 11 gross wells (9.325 net) and have seven operated wells on production. Six of the operated wells have been on production for greater than thirty days and have averaged approximately 340 boepd over the initial 30 days. Five of the operated wells have been on for greater than 60 days and have averaged approximately 300 boepd over the initial 60 day production period.

The company's current stabilized production is approximately 1,750 boepd weighted approximately 50% oil and NGL's with an additional 900 boepd awaiting tie-in, which is scheduled to be brought on production within the next 30 days. The Company is currently drilling its twelfth Cardium horizontal in the Carrot Creek area. The Company plans to drill 10 to 12 net Cardium horizontal wells in 2011.

SkyWest has over 130 net undrilled locations in the Cardium formation.

The Company's Evening Star Gas Facility in the Willesden Green area has seen a significant increase in capacity utilization since the Company acquired this asset in December of 2010. The facility was running at 1.3 mmcf/d when it was acquired and is now processing 7.0 mmcf/d with more tie-ins pending. The facility is licensed for 30 mmcf/d. The Company is in the process of installing a main gathering line from the north end of our Willesden Green lands to the Evening Star facility to accommodate SkyWest's future Cardium development drilling in the area.

CREDIT FACILITY

Based on the Company's operational success to date, effective February 8, 2011, the Company's revolving operating demand loan was increased to $16.5 million through to the next scheduled borrowing base determination on May 30, 2011. In addition, the Company has a non-revolving acquisition/development demand loan in the amount of $6 million.

Information Regarding SkyWest

SkyWest Energy Corp. is a Cardium focused public oil and gas exploration and Development Company, located in Calgary, Alberta with operations in Alberta. SkyWest currently trades on the TSX Venture Exchange (TSXV) under the Symbol "SKW".

Statements herein that are not historical facts may be considered forward looking statements including management's assessment of future plans and operations, growth expectations within the Corporation, expected initial production rates from certain new wells, timing of completion of wells and of production additions, expected size of various plays, construction or expansion of facilities and the timing thereof and expected costs and the effects thereof, drilling plans and the effects thereof. These forward-looking statements sometimes include words to the effect that management believes or expects a stated condition or result. All estimates and statements that describe the Corporation's objectives, goals or future plans are forward-looking statements. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties including, without limitation, risks associated with the Acquisition, 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, 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, SkyWest's actual results may differ materially from those expressed in, or implied by, the forward-looking statements.

Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although SkyWest believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because SkyWest can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: the impact of increasing competition; the ability of SkyWest to obtain equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which SkyWest has an interest in to operate the field in a safe, efficient and effective manner; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development or exploration; the timing and costs of pipeline, storage and facility construction and expansion; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which SkyWest operates; and the ability of SkyWest to successfully market its oil and natural gas products.

Readers are cautioned that the foregoing list of factors and assumptions is not exhaustive. Additional information on these and other factors that could affect SkyWest's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and SkyWest 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.

BOEs

Disclosure provided herein in respect of barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 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.

Contact Information

  • SkyWest Energy Corp.
    Lawrence Urichuk
    President & CEO
    (403) 265-0071
    (403) 265-0073 (FAX)
    or
    SkyWest Energy Corp.
    Joel MacLeod
    VP Finance and CFO
    (403) 265-0071
    (403) 265-0073 (FAX)
    or
    SkyWest Energy Corp.
    Suite 480, 435 - 4th Ave S.W.
    Calgary, Alberta T2P 3A8