Drilcorp intends to continue with an active drilling program in the fourth quarter with plans to drill at least five wells (2.9 net) prior to year- end. In addition, completion of the tie in of a shut-in gas well in the Hanna area is expected by early December. A seismic program is being completed in the Bruce area, which is expected to detail two or three additional locations for drilling in the new-year. Drilcorp's recently completed and oversubscribed $2.375 million flow-through share issue, cash flow and utilization of existing credit facilities are expected to finance Drilcorp's drilling activity during the remainder of 2004 and into 2005.
As a result of these activities, the Company's debt to cash flow ratio continues to improve and increased production during the remainder of 2004 and into 2005 is expected to enable the Company to grow its debt capacity to fund continued development activities.
Andy Burnett, President and Chief Operating Officer commented that "the Company is poised for continued growth in 2005. Up to 30 locations have been identified for drilling on lands currently owned by the Company and, subject to weather and the availability of sufficient equipment, Drilcorp plans to drill 15 to 20 (8 to 10 net) of them in 2005. Drilcorp is currently focused on four separate areas in Alberta and the Company expects 2005 drilling to add an additional 600 boe/d, which is expected to offset normal production decline and increase Drilcorp's production to a planned 2005 exit rate of approximately 1250 boe/d."
Morley Salmon, Chairman and Chief Executive Officer commented that "Drilcorp's new management team is convincingly effecting a strategic change to grow by the drill bit and at the same time reduce risk by offsetting financial exposure while adding production. Operating costs and many other efficiencies are being positively impacted which are all adding up to significant increased shareholder value considering the Company's long life reserves and shallow decline rate."
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