Sabretooth and HFG Holdings Inc. ("HFG") have finished completing their first horizontal, exploration Montney well at Red Creek in February 2009. The well continues to recover gas and condensate and has recovered 59% of its completion fluid. The well is currently producing at 670 mcf/d with flow pressures of 1,000 kPa tubing and 3,650 kPa casing. Stabilized rates are below expectations, however, Sabretooth and HFG are currently equipping the well for extended cleanup and further flow test to better understand well performance once additional load fluid is recovered. The well is owned by HFG Holdings Inc. which is owned 71% by Sabretooth Energy.
Exploration and Development Update
Sabretooth will continue to focus its exploration and development efforts on its core land holdings which will provide opportunities for growth for the balance of 2009 and into 2010. Sabretooth and HFG plan to spud a vertical Montney exploration well in Sinclair this weekend. A second Sinclair Montney vertical exploration well is expected to spud in Q2. Sabretooth and HFG also plan a horizontal development Montney well, offsetting the recent successful horizontal Montney well in the Gordondale area, following spring breakup.
The Company locked in a price on an additional 6,000 GJ/d of natural gas at $7.85 / GJ from April 1, 2009 to March 31, 2010. This represents approximately half of the Company's current production and guarantees cash flow for capital projects and improving working capital position. The Company also has two hedges in place totaling 9,000 GJ/d for approximately $7.06 / GJ which expire on March 31, 2009.
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