September 9, 1998
Revised 1999 Capital Program And Reduced Production Forecast
CALGARY, Sept. 9 /CNW/ - Amber Energy Inc. (''Amber'') announces that due to continued low world oil prices its board of directors has approved a 1999 base case capital expenditure program of $150 million, compared to Amber's previous estimate of $250 million.
The Company has also deferred most of its fourth quarter 1998 drilling programs in the Pelican Lake and Springburn oil areas. Amber will spread out its 1999 capital expenditures throughout the year, rather than concentrate its drilling in the winter months. Amber's previous 1999 capital expenditure program of $250 million may be reinstated in whole or in part as a result of commodity price increases and/or the results of Amber's asset disposition program.
Pelican Lake
Current oil production at Pelican Lake is 11,500 barrels of oil per day and 6.0 million cubic feet per day of natural gas. Current production is lower than expected due to last winter's drilling into a
thinner pay area and an area with high solution gas content. Oil production in these areas of the Pelican Lake heavy oil pool has demonstrated lower initial oil rates with flatter declines. This has
resulted in a decrease of 5,000 barrels per day in current production from that previously forecast. Amber has revised its production forecasts for its future wells accordingly. Amber will begin its
winter drilling program at Pelican Lake in November 1998, using two drilling rigs throughout 1999,excluding spring breakup in May and June of 1999. Amber expects to drill 80 wells from November 1998 to November 1999 (including 40 wells in the 1998-1999 winter drilling season),compared to the 140 wells (including 100 wells in the 1998-1999 winter drilling season) it previously had expected to drill at Pelican Lake. Amber now expects its oil production at Pelican
Lake to average 17,600 barrels of oil per day in 1999 based on its revised capital program. Based on high netbacks at Pelican Lake which are currently approximately Cdn $11.00 per barrel, Amber still intends to drill at least an additional 240 wells at Pelican Lake after 1999.
As a result of these changes, Amber expects total oil production to average 18,000 barrels per day in 1998 and 22,000 barrels per day in 1999. Natural gas production is expected to average 95 million cubic feet per day in 1998 and 115 million cubic feet per day in 1999. Based on the revised 1999 base case capital expenditure program, and assuming US $16.00 WTI, US $4.65 differential,US $0.67/Cdn $1.00 and $2.20/mcf natural gas prices, Amber estimates 1999 cash flow to be
$125 million or $2.17 cash flow per share basic.
This press release contains forward-looking statements that are subject to risk factors associated with the oil and gas business. Amber believes that the expectations reflected in this release are
reasonable, but results may be affected by a variety of variables including, but not limited to, price fluctuations, currency fluctuations, industry competition, environmental risks, political risks and capital restrictions.
Amber is an independent Canadian oil and gas exploration, development and production company with common shares trading on The Toronto Stock Exchange and The Alberta Stock Exchange under the symbol AMB.
Amber is holding an analyst conference call at 8:00 a.m. (Calgary time) on Thursday, September 10, 1998. Any persons who want to be included in the conference call should phone (403)
216-0900. The participants' passcode is 8904(pound key).
For further information: Richard Lewanski, President & CEO; James C. (Pep) Lough, Vice President Finance & CFO, (403) 237-9977, Fax: (403) 237-9970, Website:
www.amber-energy.com |
