Innova Exploration Ltd. is pleased to announce that its board of directors has approved an operational plan and a capital expenditures budget in the maximum amount of $72.8 million for the fiscal year ending December 31, 2007.
The Company's guidance for 2007 is as follows:
<<
Low High
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2007 Capital Expenditures $51.3 million $72.8 million
2007 Drilling Program 52 (25.2 net) wells 66 (32 net) wells
2007 Average Production 3,800 boed 4,100 boed
December 2007 Average
Production 3,800 boed 4,600 boed
New Financing - $15.0 million
Exit Net Debt $43.0 million $45.0 million
>>
The guidance range depends on the varying number of wells that could be
drilled due to the uncertainty of production growth related to pipeline
apportionment limitations in southeast Saskatchewan by Enbridge Pipelines Inc.
("Enbridge"). Enbridge is expected to have pipeline expansion plans completed
by the end of the fourth quarter of 2007, which is expected to eliminate all
of the apportionment.
Under the high end of the guidance range, Innova expects full year
production for 2007 to average 4,100 boed (75% oil) with sequential quarterly
production expected to average 3,811 boed (72% oil), 3,792 boed (73% oil),
4,148 boed (77% oil) and 4,679 boed (77% oil) from first to fourth quarter
respectively. Production growth for the first half of 2007 is expected to be
relatively flat due to the spring break-up and the delay of the frac program
in southeast Saskatchewan over the winter months. The Company expects
December 2007 production to average 4,600 boed (77% oil). The majority of
production growth is expected to come in the second half of 2007 from
southeast Saskatchewan drilling and fracing of medium depth Bakken light oil
wells.
Under the high end of the guidance range, and assuming a mid year
$15.0 million financing, Innova anticipates having 2007 year end net debt in
the amount of approximately $44.5 million yielding a net debt to Q4-2007
annualized cash flow ratio of 0.74 which will allow maximum flexibility for
the Company on a go-forward basis.
Innova Exploration Ltd. is a publicly traded Calgary, Alberta based
junior oil and natural gas exploration and production company with operations
concentrated in core areas in southeastern Saskatchewan, northeastern British
Columbia and central and southern Alberta.
FORWARD LOOKING STATEMENTS
This press release may contain forward-looking statements including
expectations of future production, cash flow and earnings. These statements
are based on current expectations that involve a number of risks and
uncertainties, which could cause actual results to differ from those
anticipated. These risks include, but are not limited to: the risks associated
with the oil and gas industry (e.g., operational risks in development,
exploration and production; delays or changes in plans with respect to
exploration or development projects or capital expenditures; the uncertainty
of reserve estimates; the uncertainty of estimates and projections relating to
production, costs and expenses, and health, safety and environmental risks),
commodity price, price and exchange rate fluctuation and uncertainties
resulting from potential delays or changes in plans with respect to
exploration or development projects or capital expenditures. Additional
information on these and other factors that could affect Innova's operations
or financial results are included in Innova's reports on file with Canadian
securities regulatory authorities.
For further information: Kevin J. Gibson, President, Innova Exploration
Ltd., Telephone: (403) 699-8475; Kelly D. Kerr, Vice-President, Finance,
Innova Exploration Ltd., Telephone: (403) 699-8484
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