TUSK Energy Corporation
TSX : TSK

TUSK Energy Corporation

October 09, 2008 12:37 ET

TUSK Energy Corporation: Operations Update

CALGARY, ALBERTA--(Marketwire - Oct. 9, 2008) - TUSK Energy Corporation ("TUSK" or the "Corporation") (TSX:TSK) is pleased to announce that current production is over 6,000 boe/d and expects to meet or exceed TUSK's exit rate guidance of 6,500 boe/d. TUSK's average daily production for the first half of 2008 was approximately 4,000 boe/d. Most of the increase results from successful drilling during the third quarter of 2008.

Conroy

At Conroy, 24 wells of a 37-well summer drilling program are tied-in and Conroy area production has increased to 20 mmcf/d from 8 mmcf/d. The remaining 13 wells will be completed and on production by early November. Early indications are that initial production rates exceed the expected average rate per well of 425 mcf/d of sales gas.

Clairmont

At Clairmont, four new wells were drilled during the summer that will add 400 boe/d of production to this 800 boe/d asset. TUSK experienced production curtailments during the second quarter of 2008 related to third party facility shut downs. Production in July averaged 450 boe/d due to the third party pipeline constraints. Most of the oil production was brought back on-stream by the end of August through a temporary arrangement for the transportation of associated natural gas. Production levels have been approximately 1,000 boe/d since that time. There is approximately 250 boe/d of non-associated natural gas that has remained shut in. This production is expected to be on-stream upon completion of third party pipeline repairs which is scheduled for completion on or about October 30, 2008.

Financial

Based on commodity price assumptions of US$90.00 WTI and natural gas prices of CAD$6.00 at AECO, TUSK expects annualized December 2008 cash flow to be approximately equal to year end debt.

TUSK Energy Corporation

TUSK is engaged in the acquisition, exploration, development and production of oil and natural gas reserves in three focus areas in the northwestern part of the Western Canadian Sedimentary Basin. TUSK is developing natural gas in the Conroy area of northeastern British Columbia and light oil and natural gas in the Peace River Arch and Mega/Gutah areas of northern Alberta. TUSK has 90,443,000 common shares outstanding.

Basis of Presentation

Barrels of oil equivalent may be misleading, particularly if used in isolation. The boe conversion ratio of 6 mcf : 1 bbl of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived by converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil.

Forward-Looking Statements

This news release contains forward-looking statements with respect to TUSK and its operations and contains reserves and cash flow estimates, drilling plans, debt levels, production expectations, opinions, forecasts, projections, guidance and other statements that are not statements of fact. Although the Corporation believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to be correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Some of the risks and other factors that could cause results to differ materially from those expressed in the forward-looking statements contained in this release include, but are not limited to, the lack of precision around estimates of reserves, performance of the Corporation's oil and gas properties, volatility in market prices for oil and gas, estimations of future costs, geological, technical, drilling and processing problems, third party timing and completion of infrastructure repairs, and such other risks and uncertainties described from time to time in the reports and filings made with securities regulatory authorities by the Corporation, including in the Management's Discussion and Analysis and the Annual Information Form. The reader is cautioned that the foregoing list of important factors is not exhaustive. These statements speak only as of the date of this news release and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, other than as required by law. The forward-looking statements contained in this release are expressly qualified by this cautionary statement.

Contact Information

  • TUSK Energy Corporation
    John Rooney
    Chief Executive Officer
    (403) 264-8875
    or
    TUSK Energy Corporation
    Michael Makinson
    VP Finance
    (403) 264-8875
    Website: www.tusk-energy.com