The planned capital budget for 2007 is $45 million with capital being directed toward all four core areas of Pembina, the Deep Basin, Marten Hills and Lanfine. The plan includes up to 56 locations from our current undeveloped land base of 152,000 net acres. Thirty drilling locations are already approved with an additional 40 locations at various stages of review and approval.
Fifty percent of the capital budget is being directed toward Pembina, which represents the best combination of risk and reward with 25 drilling opportunities planned. The Lanfine and Marten Hills areas, which offer lower-risk natural gas opportunities, will receive 25 percent of the 2007 planned spending. The Deep Basin, primarily at Simonette and Waskahigan, will receive the remaining 25 percent of the planned spending.
Production volumes are expected to average 4,200 to 4,400 boe/d for the year, up 25 to 30 percent from 2006 production volumes. The production mix is expected to remain at 85 percent weighted toward natural gas, 13 percent light oil and natural gas liquids, and 2 percent heavy oil.
The budget is based on average natural gas price of Cdn. $7.50/mcf for AECO and an Edmonton par price of Cdn. $60.00/bbl. Berens may adjust its capital spending plans up or down, if, among other reasons, natural gas or oil prices vary materially from these assumptions, which may have an affect on production volumes.
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