Eagle Rock Enters JV Funding Agreement
To help fund its augmented capex program, Eagle Rock has entered into a joint venture funding agreement with WCSB GORR Income Participation Fund operated by Brickburn Asset Management. The Fund pays certain drilling and completion costs for wells drilled at Beverley, SK and will receive an overriding royalty interest on all production from these wells going forward. No shares or debt are involved. This funding together with cash flow from operating activities and existing credit facilities is sufficient to finance anticipated capital expenditures for the balance of 2008.
In southern Alberta, Eagle Rock is in the process of completing three exploratory wells, one each in the Warner, Red Coulee and Sunburst areas. At both Warner and Red Coulee, the wells have been drilled and cased and are currently in various stages of completion. The Sunburst well will spud later this month. These exploratory expenditures will complete Eagle Rock's commitment for expenditures renounced to subscribers of "flow-through" shares in February 2008.
Although commodity prices remain volatile, Eagle Rock expects continued high netbacks per bbl and strong cash flows supported by its 2009 calendar collar on WTI (100 bbls/d) with a floor of US $100 and a ceiling of US $200. Eagle Rock remains focused on oil production, targeted to remain at 96% or higher weighting.