Expenditures of $10 Million Mostly for Drilling Berkana's 'Core Areas'
Capital expenditures for the fourth quarter were approximately $10 million with the majority of that invested in the drilling of six gross (5.0 net) wells in the Company's core areas. An additional three gross (0.7 net) wells were spudded in the fourth quarter and are currently drilling. Of the six wells drilled in the fourth quarter, two have been completed and tested, the remainder require completion and flow testing.
Berkana is in the midst of its first drilling program in the Rimbey area and expects the current drilling activities will add additional reserves and production. The Company has drilled four gross (3.0 net) wells, with two to four additional wells planned for later this winter.
One of these wells was drilled pursuant to a farm-in agreement in the Gull Lake area and this well has been cased. This well targeted and successfully encountered a thick Ellerslie channel identified on seismic. The well is scheduled for completion over the next several weeks, along with several other wells drilled at Rimbey this fall.
In addition, the Company has identified a new Belly River oil trend and the first well into this is a new pool discovery. That well swabbed at rates of 100-200 bbls/d of clean oil and is currently being equipped for production. This may represent a new pool development opportunity.
Berkana's Kaybob winter drilling program commenced with the drilling of two gross (2.0 net) wells in a four to six well program. Both of these wells were cased and completion and evaluation work has commenced.
Berkana continues to maintain financial discipline and estimates budgeted net debt at December 31, 2007 to be approximately $15 million.
On December 12, 2007, Quatro Resources Inc. ("Quatro") mailed its Takeover Bid Circular to shareholders of Berkana, including a copy of the Berkana Director's Circular responding to the Quatro offer to purchase all of the Class A common shares of Berkana. The takeover of Berkana by Quatro is scheduled to close on January 16, 2008.