Spitfire Energy Ltd.
TSX VENTURE : SEL

Spitfire Energy Ltd.

November 03, 2006 17:44 ET

Spitfire Energy Passes 400 Boed and Expands Into New Focus Area

CALGARY, ALBERTA--(CCNMatthews - Nov. 3, 2006) - Spitfire Energy Ltd. (TSX VENTURE:SEL) is pleased to provide an operational update reporting the results of drilling, workovers, facility upgrades and land negotiations for a new focus area.

Spitfire directed capital resources to its strategic business plan focusing on the Fosterton exploitation program. The company successfully completed the battery expansion phase of the program, increasing emulsion handing capacity over 200%. Several re-completions and high volume pump installations have been completed. The company expects the exploitation program will ultimately provide an additional 160 boed with minimal capital input (less than $5,000 boed) and we have seen an incremental 60 boed in the first phase of the exploitation program.

Spitfire's current production has grown to approximately 403 boed, consisting of 70% crude oil. With the addition of the production from the second phase of the Exploitation Program, the company forecasts production of 500 boed.

Spitfire has entered into a Joint Venture Agreement in a new area of west central Saskatchewan whereby it will acquire 50% of 23 sections of land in an internally generated geological and geophysically delineated prospect area. Additional land and seismic is being acquired and our first well into the area could be as early as April 2007.

Highlights

In the Fosterton area of southwest. Saskatchewan, Spitfire completed a significant battery expansion at the company's main facility. Facility capacity has been increased from approximately 650 to 1800 m3 of emulsion per day. There were 7 re-completions conducted to increase fluid deliverability. To accommodate the additional fluid throughput, an existing marginal oil well was converted to a disposal well. The output from wells is increased in stages to ensure operational integrity and reduce facility upsets.

Spitfire commenced gas and oil production form the new pool discovery on the Company's Verlo East property in southwest Saskatchewan. The well has stabilized at a rate of 45 bopd after producing a small associated gas cap. The company anticipates a delineation 3-D seismic program will be completed and interpreted prior December 31st with development locations expected.

In the Pakowki area of southwest Alberta, the company completed tied-in two new gas wells. The wells were put on production in the first week of October adding approximately 44 boed. A two dimensional seismic program was shot during the quarter. This program identified additional wells, which are planned pending production history and pressure analysis.

Spitfire Energy Ltd. is a junior oil and gas company engaged in the exploration, development and production of natural gas and crude oil reserves. Spitfire's common shares trade on the TSX Venture Exchange under the symbol "SEL".

This press release contains forward-looking statements that are based on current expectations. There are a number of risks and uncertainties associated with the oil and gas industry that could cause actual results to differ materially from those anticipated.

A barrel of oil equivalent, derived by converting gas to oil using a ratio of six thousand cubic feet of gas to one barrel of oil, may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.


The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of the contents of this press release.

Contact Information

  • Spitfire Energy Ltd.
    Keith N. Chase
    President and Chief Executive Officer
    (403) 205-3400 x224
    or
    Spitfire Energy Ltd.
    Danny Zivkusic
    Chief Financial Officer
    (403) 205-3400 x228