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CALGARY, July 15 /CNW/ - Breaker Energy Ltd. ("Breaker" or the "Company")
(TSX: WAV.A and WAV.B) is pleased to announce it has closed the previously
announced acquisition of a 100% working interest operated property currently
producing approximately 850 boe/d of natural gas and natural gas liquids in
British Columbia. The current production consists of vertical wells producing
from an extensive tight gas sand, with up to 55 meters of gross pay in the
Triassic Doig formation. The Company plans to drill the property using
horizontal multi-frac wells, similar to developments elsewhere in the
Montney/Doig formations of British Columbia.
This property represents Breaker's third multi-frac horizontal resource
play property, in addition to ongoing light oil success at Irricana and the
Company's large tight gas resource play at Provost which will have its first
horizontal well drilled later in 2008. Based on projected average recovery of
approximately 1 BCF per historic vertical well at the new property, Breaker
believes that horizontals may ultimately recover 2-5 BCF each, at a cost of
approximately $5 million per well. Based on 500 meters inter-well spacing,
Breaker sees approximately 16 horizontal well locations in
substantially-undrained portions of the pool. Breaker plans to drill its first
horizontal well on the property in late 2008. Additionally, Breaker has
commenced the evaluation of the potential of the approximately 8,000 acres of
undeveloped Montney rights included in the acquisition.
Breaker is also pleased to announce it has completed the previously
announced issue of 3,000,000 subscription receipts for Class A Shares (the
"Subscription Receipts") on a bought deal, private placement basis at an issue
price of $11.50 per Subscription Receipt to raise gross proceeds of
$34.5 million. All necessary conditions have been met and the proceeds of the
offering of the Subscription Receipts have been released to Breaker and each
Subscription Receipt has been exchanged for one Class A Share of Breaker
without additional payment. The hold period on these shares expires on
November 16, 2008. The Class A Shares were issued through a syndicate of
underwriters led by FirstEnergy Capital Corp. and including Tristone Capital
Inc., Wellington West Capital Markets Inc., Blackmont Capital Inc., BMO
Capital Markets, CIBC World Markets Inc., Dundee Securities Corporation,
Scotia Capital Inc., and GMP Securities L.P.
Breaker has also completed the syndication of its bank line which has
been increased to $125 million.
