Stealth Ends 2008 Shale Gas Program, Boosts Production Base
Stealth has completed its 2008 shale gas program at Wildmere, Alberta. The bulk of the 08 capital program commenced on July 3rd, 2008, coming in under the budgeted $350,000 full cycle cost per well.
Of the total 81 wells undertaken for the year (including Q1 wells and recompletions) twenty-four were not tied-in (or producing) prior to year-end. Four are projected to be tied-in during Q1 2009 and an additional five were tied-in but had not been turned on as of December 31, 2008. Of the remaining wells, nine are deemed as non-productive and the final six are not economically viable given today's commodity pricing. The Companies net gas sales number for the month of December 2008 averaged ~550 BOE/D a significant increase of 380% over last year's fourth quarter average of 143BOE/D.
Stealth has used a hedging program to protect its balance sheet and capital expenditures for 2009. The Company currently has approximately 25% of its production hedged from February 01, 2009 to October 31, 2009 at a set price of $5.48Cdn/GJ.
The Company is currently planning additional new drilling at Wildmere in the latter half of the year in order to avoid "spring breakup" and limited surface access as a result of agricultural activities. During the interim the Company intends to conduct a full evaluation of the results and data collected from its 2008 activity while closely monitoring market conditions in anticipation of the next drilling program. Prior to December 31, 2008 the Company established a $3.1 million credit facility with a Canadian chartered bank and may increase this facility after completing its annual reservoir engineering report in Q1 of 2009.
During such challenging times Stealth has the distinct competitive advantage as a shale gas producer with low decline, low royalty, and long-life reserves. With hundreds of current in-fill locations this low cost, predictable production is poised to effectively grow the Company's reserves and productive capability from the Cretaceous Colorado Group of Shales.