Action Energy announced its 2008 Capital and Operating Budget. The Company has taken a conservative production maintenance approach to its budgeting for 2008 in an effort to live within its financial means for the year while continuing to test its high-impact exploration areas. To that end, the Company's bankers have renewed the Company's $34 million revolving credit facility. This credit facility is reviewed in July and December each year.
In an effort to provide a measure of certainty for cash flow toward funding of the capital and operating budget, the Company has entered into two costless collar hedging contracts. The first is a contract for 1.58 mmcf/d of natural gas with a floor of C$7.00/mcf and a ceiling of C$8.46/mcf from April 2008 until March 2009. The second is a contract for 150 bbl/d of oil with a floor of C$80.00/bbl and a ceiling of C$ 94.80/bbl from April 2008 to December 2008. The volumes hedged under these contracts represent less than 25% of 2008 total forecast average production.
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