Defiant Energy (DEF:TSX) www.defiantenergy.com
Current Price: $2.54
DEFIANT REPORTS 100% FIRST QUARTER DRILLING SUCCESS AND EXPLORATION
DISCOVERIES
During 2003, Defiant has drilled 6 (5.8 net) wells with an average
working
interest of 95.8%. The company cased all six wells as natural gas (or
natural gas and light oil) producers. Defiant estimates that the
initial
production rates, including flush production, from the 6 wells will add
over
1,000 barrels of oil equivalent per day net, comprising approximately
5.8
mmcf/d of natural gas and 120 barrels per day of light oil and natural
gas
liquids. Two of the six wells were placed on production in late March
and
are currently producing at a combined flush production rate of
approximately
740 boepd, comprising 4.0 mmcf/d of natural gas and 75 barrels per day
of
oil and natural gas liquids. Completion operations are underway on the
remaining four wells. Defiant expects to tie in all four wells and have
them
on production by mid-May.
Of the six wells drilled in the first quarter, four are categorized as
exploratory with the potential to add new reserves to the corporate
asset
base. Two are categorized as development, converting reserves
previously
evaluated as proved undeveloped in Defiant's Dec. 31, 2002 reserves
report,
to proved producing.
The company expects to drill up to 34 wells this year as part of a $30
million capital program. In 2002, Defiant drilled 20 (16.8 net) wells
with a
97% success rate.
David Evans, Defiant's president and CEO, commented: "We are very
pleased
with the early success of our drilling program. The next round of
drilling
involves a somewhat higher degree of risk and it would be unrealistic
to
expect a continued 100% success rate. It is also important to note that
these flush production rates are from new reservoirs so it is premature
to
comment on stabilized production rates. Nevertheless, our first quarter
drilling results suggest that the range of estimates for average annual
production provided in our guidance for 2003 is attainable."
QIS CAPITAL COMMENTS:
An excellent press release from Defiant Energy, which was recently
added to
QIS Capital's official update list. The nature of the company's asset
base,
a successful management team, along with expected gains in production,
cash
flow, and earnings, are just some of the reasons that we chose to add
Defiant to our updates. The first quarter drilling success has
confirmed
our decision.
Defiant was producing approximately 2,000 boepd prior to its latest
round of
drilling. The anticipated addition of over 1,000 boepd is a 50%
increase
and boosts corporate production well above the projected average of
2,370 to
2,600 boepd for 2003. (view Defiant's forecasted results for 2003 at
qiscapital.com. While the new
production will likely decline due to flush rates, Defiant has drilled
less
than 20% of its expected wells for the year. QIS Capital eagerly
anticipates receiving Defiant's first quarter results in May along with
further drilling updates.... |
