Twin Butte's 2008 Production Target at 83% Increase Over 2007
The Board of Directors of Twin Butte Energy have recently approved an initial capital budget of $27 million which will include the drilling of 26 gross (25 net) wells. The Company has excellent prospects for 2008 including low risk oil and gas development in SE Alberta, Thunder and Fort St. John British Columbia as well as high impact exploration and development prospects at Fort St. John and at Jayar. Capital is allocated with $21.5 million for drilling and facilities, and $5.5 million for land and seismic.
Based on this budget the Company expects to realize average production in 2008 of 3,150 BOE/d with exit production greater than 3,350 BOE/d. This represents an increase in average daily production of approximately 83% over 2007.
The capital spending level parallels the forecasted 2008 annual cash flow of $26.5 million and year end debt of approximately $43.5 million representing 1.4 times fourth quarter 2008 annualized cash flow. For budget purposes the Company has used an average gas price of $6.44/GJ ($6.76/Mcf) at AECO and an average oil price of US$76.25/bbl WTI, with a exchange rate of 1.0 C$/US$. The Company has hedged 3000 GJ/d for 2008 at an average price of $6.55/GJ (AECO) and an additional 3500GJ/d for (April - Oct) 2008 at $6.63/GJ (AECO) providing additional cash flow stability through 2008.
During the course of 2007 Twin Butte management has positioned the Company both operationally and financially with excellent growth potential for 2008 and beyond. This continues to set the Company apart from many of its peers. The Company has a solid reserve and production base, a strong balance sheet and a significant tax pool advantage. This combination will enable Twin Butte to effectively pursue managements "acquire, exploit and explore" growth strategy. We are very excited about the Company's future prospects.