Seeking 52% Increase in 2008 Production, Ember Approves $15M Budget
Ember's Board of Directors has approved a 2008 capital budget of $15 million. The capital program is forecasted to yield average production of 9.0 mmcf/d, 52% higher than the 2007 annual average.
Drilling operations will focus on low risk, low cost Horseshoe Canyon CBM wells at Ember's Acme and Fenn Big Valley properties in Alberta. An estimated 30-35 net wells will be drilled in these areas.
In the Mannville coals, Ember plans to maintain its resource base with limited capital expenditures and selective land purchases. Due to the lack of sufficient funding from internal sources, the Company is considering various options for development of its Mannville resources including but not limited to joint ventures with third parties. The Company will be actively exploring such options over the next several months.
With the continued uncertainty in both natural gas and capital markets, the Board has taken a conservative approach to capital spending for 2008 by staying within Ember's current cashflow and balance sheet capabilities. At the same time, the Company expects to improve debt to cash flow ratios on a quarter over quarter basis, as well as maintain operational momentum.
Based on current strip prices, cash flow is estimated at $12 million or $0.33/share. Year-end 2008 net debt is estimated at $23 million or approximately 1.9 times annual cash flow. The Company has current bank lines of credit of $25 million.