The 2006 capital program will focus predominantly on GEOCAN's high working-interest, core areas of northeast British Columbia ($5 million), west central Alberta ($17.5 million) and Lloydminster ($7.5 million). In its 2006 drilling program, the company plans ten exploratory wells and 24 development wells. Approximately 65% of the wells will target natural gas and light oil. In 2005 GEOCAN drilled 23 wells, resulting in nine natural gas wells, 11 oil wells and an 87% success rate.
The Company targets 2006 exit production at between 4,000 and 4,500 boepd (after declines), dependent on rig availability, success rates, commodity prices and access issues related to weather. The Company exited 2005 at 3,414 boepd, up 70% from the exit level for 2004. In 2005 exit volumes were: natural gas 32% (2004 - 10%), light and medium oil 22% (2004 - 4%), and heavy oil 46% (2004 - 86%). The Company's reliance on heavy oil production was dramatically reduced in 2005 due a major acquisition in September 2005.
In addition to the $22 million allocated to drilling, the 2006 capital program includes $6.5 million in land acquisitions and seismic programs in core areas, which currently encompass about 103,000 acres of net undeveloped land. At North Tomahawk, in west central Alberta, where the company made two natural gas discoveries in 2005, approximately $1.5 million is planned for pipeline and facilities projects to bring GEOCAN's 100% working interest natural gas and light oil to market in Q2/06.
GEOCAN is an oil and gas company with operations in British Columbia, Alberta and Saskatchewan. The focus of GEOCAN's current growth strategy is exploration and development while pursuing accretive acquisitions that create value for its shareholders. Fiscal discipline, operational control and a balanced risk profile are key components of this strategy. Over the past two years, GEOCAN has made two major acquisitions totalling approximately $56,000,000 which significantly increased market capitalization and moved the company's production mix toward natural gas and light oil. The company currently has 54.7 million basic common shares issued and outstanding.
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