White Fire Energy Ltd.
TSX : WF

White Fire Energy Ltd.

September 22, 2005 10:13 ET

White Fire Energy Ltd. Announces Operations Update and Guidance Change

CALGARY, ALBERTA--(CCNMatthews - Sept. 22, 2005) - White Fire Energy Ltd. (TSX:WF) ("White Fire") is pleased to announce that we have drilled and cased 7 wells (3.6 net) with a 100 percent success rate. The company has completed 2 wells (1.0 net) to date and currently has an estimated 700 boe/d of behind pipe production, including the previously announced 265 boe/d in Pembina. Conversion of this behind pipe volume to on stream production is currently underway.

Current production is approximately 400 boe/d and combined with the estimated 700 boe/d of behind pipe production the company expects to exit 2005 in the range of 900 to 1,100 boe/d.

White Fire has an active drilling program planned over the balance of 2005 and into 2006 with significant drilling activity scheduled for the Pembina, North Ferrier, Wilson Creek and Karr areas. We plan to drill 8 to 10 wells (4.0 to 5.2 net) prior to year-end 2005 with an additional 15 wells (6.4 net) scheduled to be drilled in 2006.

At North Ferrier, we have drilled and cased 3 wells (1.6 net) and completed 1 well (0.5 net). Completion of the first well resulted in rates in excess of 2 mmcf/d and 80 bbls/d of natural gas liquids. Currently, a completion rig is moving to complete the 2 remaining cased wells. As with numerous other operators this year, drilling and completion operations have been significantly hindered due to the extremely wet conditions encountered since the beginning of June. Production from all three wells is expected to be connected and on stream by the end of the year. Three to five additional wells (1.4 to 2.3 net) are scheduled to be drilled prior to year-end. White Fire plans to drill as may as 5 additional wells in North Ferrier in 2006.

At Pembina, White Fire is pleased to announce that we have recently been granted two well licences to drill Nisku tests and is one of only two companies to receive licences in the sour Nisku reef play since early in 2005. The first of these wells is scheduled to spud early in October. Additionally, we expect to obtain one more drilling licence prior to year-end.

In 2006 the Company is planning to drill 6 wells (1.8 net) and shoot 3D seismic on select lands across our previously announced joint venture lands within the prolific Pembina Nisku fairway. Currently, the Company has a total of 16 drilling locations that target the Nisku formation at an average working interest of approximately 33 percent. White Fire continues to work closely with Pembina area stakeholders to expedite the licencing of its Nisku drilling program. Currently, there is 265 boe/d of tested, behind pipe production that is awaiting completion of production facility expansions which are scheduled for completion in December.

At Wilson Creek, we have drilled and cased 4 wells (2.0 net) of which 1 well (0.5 net) has been completed. Drilling and completions operations have also been significantly held up in this area due to extremely wet conditions. Tested, behind pipe production currently stands at an estimated 125 boe/d (net). Currently, we are completing the remaining three cased wells. Production from these wells is expected to be connected and on stream by the end of November. Up to four additional wells (2.0 net) are scheduled to be drilled and completed prior to year-end. Remaining 2006 drilling inventory at Wilson Creek totals a minimum of 3 and as many as 5 additional wells (1.5 to 2.5 net).

Given the uncertainty on the timing associated with well licencing, production facility delays at Pembina and wet weather conditions in all our operational areas, we are revising our guidance for 2005. Exit rate production for 2005 is estimated to be in the range of 900 to 1,100 boe/d down from previous guidance of 1,600 boe/d; while average 2006 remains essentially unchanged at 2,000 boe/d. Capital expenditures are estimated to be $23 million for 2005 and in excess of $23 million for 2006. Cash flow ranges for 2006 are estimated to be $22.9 to $25.4 million ($0.63 to $0.70 per share - fully diluted) employing a West Texas Intermediate crude oil price of $60 (U.S.)/bbl and a Henry Hub natural gas price of $9.25 (U.S.)/mmbtu combined with a foreign exchange rate of $0.84 U.S./$Cdn.

White Fire Energy Ltd. is a Calgary, Alberta based, independent public company actively engaged in the exploration, development and production of natural gas, natural gas liquids and crude oil in the Western Canadian Sedimentary Basin. The Corporation's common shares are listed and traded on The Toronto Stock Exchange under the symbol "WF".

Statements in this press release may contain forward-looking statements including expectations with respect to future events and the actions of third parties. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to: the underlying risks of the oil and gas industry (i.e. operational risks in development, exploration and production; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserves estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental factors), commodity price and exchange rate fluctuation and uncertainties.

Contact Information

  • White Fire Energy Ltd.
    Bob Rosine
    President & CEO
    (403) 232-4850
    or
    White Fire Energy Ltd.
    Stuart Symon
    CFO
    (403) 232-4851