Open Range Approves $35 Million in Drilling Investments
The Board of Directors of Open Range Energy has approved a $35 million capital investment program for 2008. The focus of the program will continue to be on the Company's core Ansell/Sundance property, with 11 (six net) wells forecast to be drilled.
The drilling program will include a balance of infill development locations and exploratory opportunities on existing acreage. The exploratory drilling will be strategically designed to further evaluate recently acquired lands with working interests ranging from 50 to 100 percent. All anticipated 2008 locations have been selected utilizing 3D seismic data. To date, Open Range has drilled 24 (11.5 net) successful wells at Ansell/Sundance and has generated an inventory of approximately 25 development and 25 exploration locations, all of which are supported by the Company's proprietary 3D seismic. Approximately 70 percent of the Company's 2008 capital budget will be allocated toward drilling and completion activities.
Based on the approved capital investment program, Open Range is forecasting 2008 average production of approximately 2,000 boe per day and expects to exit the year with production of approximately 2,350 boe per day. Natural gas is forecast to comprise approximately 85 to 90 percent of production.
Funding for the capital investment program will be accomplished through cash flow from operations and the Company's credit facilities. At the end of 2007, Open Range had an estimated $14 million in net debt on bank credit facilities of $30.5 million. In addition, the Company has approximately 50 percent or 5.9 mmcf per day of its forecast average 2008 production hedged at an average floor price of C$7.09 per mcf.