Twin Butte Provides '09 Guidance, Plans to Drill 11 Gross Wells
Twin Butte has provided initial 2009 guidance as well as an update on current operations.
The Board of Directors has recently approved Twin Butte's 2009 Capital and Operating Plan. In light of the prevailing economic slowdown and uncertainty in near term commodity prices Twin Butte, like many peers has elected to execute a capital program which will be entirely funded from cash flow. It is our intent to slightly under spend cash flow in the first half of the year until we gain greater clarity on the operating environment and market conditions. Paramount to our plan is to maintain balance sheet flexibility while positioning the company for long term growth within our focus areas. Twin Butte's net debt at the end of 2008 was approximately $49 million with a current bank line of $65 million.
Capital spending in 2009, is forecast to be between $17 and $19 million concentrated in NE British Columbia as well as in Jayar and Thunder Alberta. The program will entail drilling 11 gross (9.5 net) wells; numerous recompletion and tie in of standing well operations; as well as a number of 2 and 3 dimensional seismic programs. Based on forecast results of the program, corporate production should average slightly greater than 3,000 boe's per day, a modest increase from 2008 average production.
Twin Butte's winter program has commenced with a new pool gas discovery at Oak in NE British Columbia, the first of a three well program in the area. Production optimization work is ongoing at Jayar with positive results while our second horizontal well has been deferred to later in the year for capital allocation reasons. At Thunder seismic programs are progressing along with successful land sale activity.
The Board and new management team at Twin Butte are committed to adding value for our shareholders through the long term execution of our business plan. The current economic environment dictates a cautious approach to spending. With a current inventory of over 100 drilling locations and 150,000 net undeveloped acres of land we will pursue creative ways to monetize these opportunities while growing our presence within our core focus areas.