Petrobank Energy : Petrobank Provides 2012 Strategy and Capital Plan
12/13/2011| 09:46am US/Eastern
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Calgary, Alberta - December 13, 2011 - Petrobank Energy and
Resources Ltd. (TSX: PBG) is pleased to announce our 2012
strategic objectives and capital plan. In 2012, Petrobank
will focus on our Kerrobert project to increase production
and bring the project to commerciality. Petrobank's 2012
capital expenditures are expected to be approximately $34
million, with approximately half the capital plan considered
to be discretionary.
Kerrobert
At Kerrobert, our focus will be to increase production and
bring the project to commerciality. Capital expenditures in
2012 at Kerrobert are expected to be approximately $10
million.
The Kerrobert project is an attractive investment with
break-even cash flow estimated to occur at less than
1,000 barrels of oil production per day at current commodity
prices. We plan to provide an operational update for our
Kerrobert project in the first quarter of 2012.
Dawson
Our two demonstration well-pairs have now been drilled, with
both production wells and one injector well completed. The
Kerrobert demonstration project's facilities have been moved
to the Dawson site. We have elected to defer further work on
the project until the second quarter of 2012 when the
permanent grid power will be tied into the site, avoiding the
costs of temporary power generation and winter start-up
expenses.
The regulatory application for our commercial project at
Dawson is expected to be submitted by mid-2012. Recent
project planning has shown that a full field development may
be optimal for the Dawson field, versus our original plan to
implement a multi-stage development. This change in scope
requires additional environmental reviews and project
planning before the regulatory applications can be submitted.
Capital expenditures in 2012 at Dawson are expected to be
approximately $10-$12 million, including the completion of
the demonstration project and on-going capital once
operational. The timing of these capital expenditures is
discretionary.
Conklin and May River
At Conklin, operations have now been fully suspended.
At May River, activity will focus on our regulatory hearing
on March 6, 2012. All other development activity, including
completion of engineering, has been deferred until regulatory
approval has been received. We plan to make final progress
payments on long-lead time equipment in 2012 of approximately
$5 million.
Other Opportunities
Petrobank continues to invest in other development areas. We
plan to drill several stratigraphic wells at Plover and
Luseland, near the Kerrobert project, and acquire seismic to
further delineate these assets for future development. We
will also continue with research and development activities
at Archon to improve and protect our intellectual property.
2
Financial Liquidity and Capital Resources
Petrobank's 59% owned subsidiary, PetroBakken Energy Ltd.,
intends to institute a dividend re-investment plan ("DRIP")
in early 2012. Petrobank has elected to participate in the
DRIP at a 50% level, which, based on current dividend levels,
is expected to result in the receipt of over $52.5 million of
cash and $52.5 million of PetroBakken common shares per year,
paid monthly.
Petrobank manages our capital structure independently of
PetroBakken. We expect to fund our 2012 capital expenditure
program with dividends received, available credit and cash
from operations. Our current capital resources are expected
to be more than adequate for our planned expenditures.
In Memoriam
We are sad to announce that one of the founders and directors
of Petrobank, Louis L. Frank, passed away December 8, after a
long and storied life, which he lived "his way". Lou has been
a Director of Petrobank since September 1993. Lou was a key
player in the formation and strategic growth of the entire
Petrobank group of companies, and we will miss his guidance,
wisdom, humour and friendship.
Forward-Looking Statements: Certain information
provided in this press release constitutes forward- looking
statements. Specifically, this press release contains
forward-looking statements relating to future capital
expenditures, timing for development of our various projects
and availability of capital. Forward- looking statements are
necessarily based upon assumptions and judgments with respect
to the future including, but not limited to, the outlook for
commodity markets and capital markets, success of future
evaluation and development activities, the successful
application of technology, prevailing commodity prices, the
performance of producing wells and reservoirs, well
development and operating performance, general economic and
business conditions, weather, and the regulatory and legal
environment. The reader is cautioned that assumptions used in
the preparation of such information, although considered
reasonable at the time of preparation, may prove to be
incorrect. Actual results achieved during the forecast period
will vary from the information provided herein as a result of
numerous known and unknown risks and uncertainties and other
factors. You can find a discussion of those risks and
uncertainties in our Canadian securities filings. Such
factors include, but are not limited to: general economic,
market and business conditions; fluctuations in oil prices;
the results of exploration and development drilling, risks
associated with the development and application of early
stage technology, recompletions and related activities;
timing and rig availability; fluctuation in foreign currency
exchange rates; the uncertainty of reserve and resource
estimates; changes in environmental and other regulations;
risks associated with oil and gas operations; and other
factors, many of which are beyond the control of the Company.
There is no representation by Petrobank that actual results
achieved during the forecast period will be the same in whole
or in part as those forecast. Except as may be required by
applicable securities laws, Petrobank assumes no obligation
to publicly update or revise any forward-looking statements
made herein or otherwise, whether as a result of new
information, future events or otherwise.
Petrobank Energy and Resources Ltd. is a Calgary-based
oil and natural gas exploration and production company with
operations in western Canada. The Company operates
high-impact projects through two business units and a
technology subsidiary. Petrobank's 59% owned TSX-listed
subsidiary, PetroBakken Energy Ltd. (TSX:PBN), is an oil and
gas exploration and production company combining light oil
Bakken and Cardium resource plays with conventional light oil
assets, delivering industry leading operating
netbacks,
strong cash flows and production growth. PetroBakken is
applying leading edge technology to a
multi
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