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CALGARY, Jan. 18 /CNW/ - Iteration Energy Ltd. (TSX-ITX) ("Iteration" or the "Company") is pleased to provide an operational update highlighting its 2009 activity.
In the fourth quarter of 2009 the Company completed an 11 (10.5 net) well program for Sunburst oil at Manyberries in southern Alberta. Ten (9.5 net) wells were successful, and though the program was focused on improving the secondary recovery in existing pools, one new pool was discovered. Other activities in Manyberries completed during the fourth quarter included a number of facility upgrades, and the conversion of wells to water injection in order to improve waterflood recovery. Production in this area has increased by approximately 175 bbls/d and is currently estimated to be 450 bbls/d of light oil. Production for the area is expected to increase in the future as the waterflood recovery improves.
Iteration is currently conducting a winter drilling program aimed almost entirely at light oil prospects. We are currently on the third of a planned six (6.0 net) well program for Keg River reefs in the Rainbow area in northwestern Alberta. The first of these wells has flowed light oil at an average of 360 bbls/d since December 27, 2009. The second well in the program has flowed light oil at an initial rate of 100 bbls/d. In addition, Iteration plans to drill between 6 (4.5 net) and 8 (7.25 net) wells in Western Alberta, primarily the Gold Creek and Gordondale areas, targeting numerous stacked pays in the Cretaceous and Triassic formations. The first Montney farm-out well will be completed at Monias in BC in the first quarter of 2010, with the second well expected to follow later in the quarter - Iteration will have a 50% working interest in this play. A planned Q1 2010 eight (6.9 net) gas well drilling program in east central Alberta has been deferred to January 2011 due to the higher current net backs on oil prospects.
Production for the 2009 year is expected to average approximately 15,950 boed, which is toward the upper end of our most recently issued guidance of 15,600 to 16,100 boed. Exit production for 2009 is estimated to be 13,000 boed, which matches our guidance. In total, we drilled 16 (13.5 net) wells in the fourth quarter of 2009 with a 93% success rate bringing total drilling for 2009 to 31 (23.7 net) wells with a 89% success rate. Financial results for 2009 are expected to be released in mid March 2010 and we currently expect to be in line with our latest guidance.
Consistent with our hedging philosophy, Iteration added to its gas and oil 2010 hedge positions in the fourth quarter of 2009. On the gas side 15,000 mcf/d has been hedged against AECO for each of the first three quarters of 2010 at prices of $5.49/mcf for the first and second quarters and $5.84/mcf for the third quarter. Similarly on the oil side 800 bbls/d has been hedged against Canadian dollar WTI for each of the first three quarters of 2010 at prices of $85.25/bbl for the first quarter, $87.75/bbl for the second quarter and $85.10/bbl for the third quarter. Approximately 30% of Iteration's production is now hedged through the first three quarters of 2010. Below is a summary of Iteration's hedge positions:
<< ------------------------------------------------------------------------- AECO Gas Cdn$ WTI Oil ------------------------------------------------------------------------- Volume (mcf/d) Price ($/mcf) Volume (bbl/d) Price ($/bbl) ------------------------------------------------------------------------- Q1/10 18,300 $5.44 400 (collar) $70.00- $94.00 800 (swap) $85.25 ------------------------------------------------------------------------- Q2/10 18,300 $5.44 400 (collar) $70.00- $94.00 800 (swap) $87.75 ------------------------------------------------------------------------- Q3/10 18,300 $5.74 400 (collar) $70.00- $94.00 800 (swap) $85.10 ------------------------------------------------------------------------- Q4/10 2,400 $5.82 400 (collar) $70.00- $94.00 ------------------------------------------------------------------------- Q1/11 1,900 $6.33 - - ------------------------------------------------------------------------- Q2/11 1,900 $6.33 - - ------------------------------------------------------------------------- Q3/11 1,900 $6.33 - - ------------------------------------------------------------------------- Q4/11 600 $6.33 - - ------------------------------------------------------------------------- >>
We regret to announce that Peter Scott has left the Company effective January 17, 2010. Peter has made a very significant contribution as CFO since April 2009, and has greatly strengthened our accounting department over the last nine months. We wish him every success as he takes on similar responsibilities at a larger Calgary based company.
Mr. Willie Dawidowski joined the Company in June 2009 and is currently Vice President and Controller. Willie has 30 years of oil and gas experience and has served as Controller, Vice President or CFO for a number of oil and gas companies. Willie will provide ongoing continuity and leadership of the accounting and finance groups.
Additional Information:
Iteration is an Alberta based corporation engaged in the business of exploring for and developing oil and natural gas reserves in Western Canada and acquiring natural resource properties. Iteration's common shares are listed on the Toronto Stock Exchange under the symbol "ITX". Other information about the Company, including the Annual Information Form for the 2008 year, is available through the internet on the Company's website at www.iterationenergy.com and on the Company's SEDAR profile at www.sedar.com.
The TSX has not reviewed this press release and does not accept responsibility for the accuracy of any of the data presented here-in.
Advisory:
Natural gas is converted to crude oil equivalent at a ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent ("boe"). Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
This press release contains forward-looking statements, including in particular statements in respect of planned drilling as part of Iteration's drilling program and estimated production levels. Although Iteration believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Iteration can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The forward-looking statements contained in this press release are based on the Company's current beliefs as well as assumptions made by, and information currently available to, the Company including estimated production levels which are based assumptions for commodity prices, capital expenditures and funds from operations. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that forward-looking statements will not be achieved. Information regarding these factors may be found under the heading "Risk Factors" in Iteration's Annual Information Form for the year ended December 31, 2009 and in Iteration's most recent financial statement's and management's discussion and analysis, which are available at www.sedar.com. The forward looking statements contained in this press release are made as of the date hereof and Iteration undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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For further information: Mr. Brian Illing, President and CEO at (403) 261-6883