CALGARY, ALBERTA--(Marketwire - Jan. 13, 2009) - Open Range Energy Corp. ("Open Range" or the "Company") (TSX:ONR) is pleased to provide details of its initial 2009 capital investment program and associated production guidance and an operational update on recent activities.
2009 CAPITAL INVESTMENT PROGRAM AND PRODUCTION GUIDANCE
Consistent with Open Range's track record of prudent financial management and capital discipline, the Company's Board of Directors has approved an $18 million capital investment program for 2009. The program will be weighted to the first half and will focus on the Company's core Ansell/Sundance property, including the drilling of one (100 percent working interest) horizontal well into the Bluesky Formation and one (0.3 net) vertical well, and the completion and tie-in of three (1.8 net) vertical wells drilled late in 2008. The 2009 program also includes drilling one (100 percent working interest) well at the Company's Big Bend property and the procurement of equipment to expand the Company's Ansell/Sundance natural gas plant by 20 mmcf per day. Construction of the plant expansion will be scheduled at the appropriate time, with consideration given to prevailing market conditions and the Company's natural gas processing capacity requirements. The initial capital program is expected to be funded entirely through cash flow from operations.
During this period of financial and commodity market instability, Open Range will continue to focus on its balance sheet and maintaining financial flexibility. As the Company gains more clarity on the near- to mid-term outlook for the financial and commodity markets, it may adjust its 2009 capital investment program accordingly. At the end of 2008 Open Range had net debt of approximately $28 million compared to recently reviewed bank lines of $54 million. With extensive unused borrowing capacity, Open Range remains well-positioned to accelerate drilling activity on its 100-well inventory at Ansell/Sundance and to delineate its Rough discovery well once prevailing market conditions again encourage such capital investments.
Based on the approved capital investment program, Open Range is forecasting average production of approximately 2,400 boe per day for 2009, which represents a year-over-year increase of 15 percent. Natural gas is forecast to comprise approximately 90 percent of 2009 production.
OPERATIONAL UPDATE
Open Range is pleased to report that it estimates the Company's 2008 production averaged 2,075 boe per day. This is a year-over-year increase of 43 percent from the 2007 average rate of 1,456 boe per day. Fourth quarter production is estimated at 2,475 boe per day, an increase of 24 percent from third quarter production of 1,992 boe per day.
