Portfolio Stock / Case Resources Inc.
TSX SYMBOL: CAZ
FEBRUARY 27, 2003 - 17:55 EST
Case Announces Record Production, Sale of a Portion of Case's Heavy Oil Properties and Operations Update
CALGARY, ALBERTA--Case Resources is pleased to provide an operations update respecting the company's current activities, including its production, debt, and the sale of a portion of its heavy oil properties.
PRODUCTION
Case is pleased to announce that it averaged approximately 1650 boe per day of production during the fourth quarter of 2002. During the month of January 2003 Case continued with its record production rates averaging approximately 1700 boe per day. The production increases are a direct result of the fall drilling program at Cases Haynes property in central Alberta.
DRILLING
Case plans to drill four, 100% working interest Nisku infill development oil wells in the next several months at its Haynes property, and thereafter review a number of contingent locations based on the results of this drilling program. Case is hopeful that it will drill two wells before spring breakup and two wells immediately after breakup, with the intention of having all of the wells on production by July 30, 2003. Case is budgeting the infill oil wells to cost approximately $1.1 million per well and expects to average 100 boe per day of 40 degree light oil from each of these wells. Further, Case has also budgeted approximately $2 million dollars for exploration activities in 2003 from which no production volumes have been included in Case's budget.
DISPOSITIONS
Case also announced today that it has entered into two separate transactions whereby Case has agreed to sell approximately 230 boe per day of heavy oil production for gross proceeds of $2.5 million. These transactions are expected to close on or about February 28, 2003 and will reduce Case's current debt from approximately $8.5 million to approximately $6.1 million. Case expects that its current lines of credit, established at $9.7 million, will be increased after Case has received and provided its new engineering report to its lender, the Alberta Treasury Branches. Accordingly, Case is in excellent financial health.
HEDGING
Case has an existing hedge applicable to 100 barrels per day of its remaining 200 barrels per day of its heavy oil production. This contract provides for an oil price of $Cdn 24.87/bbl and extends to December 31, 2003. Case has no other commodity hedges in place at this time.
OUTLOOK
Finally, after completion of the 4 well infill drilling program at Haynes, Case expects to be producing approximately 1800 boe per day (6 to 1), consisting of approximately 1300 barrels per day of 40 degree light oil and NGL's, 2mmcf per day of gas and 200 barrels per day of heavy oil.
Case Resources Inc. is a Calgary based oil and gas company whose common shares are listed on The Toronto Stock Exchange under the symbol "CAZ". |
