Berens Energy (TSX:BEN) reported a 24% increase in production levels in the fourth quarter of 2008 of 4,700 barrels of oil equivalent per day ('boepd'), compared to the fourth quarter in 2007. The increase in production was due to a successful year of appraisal and development drilling at its interests in Western Canada.
The oil and gas junior added that it was forecasting first quarter 2009 production of 4,600 boepd as it trimmed production levels in Lanfine to preserve net asset value under a new royalty agreement that came into effect on January 1, 2009.
The company also reported further drilling milestones, with two successful vertical wells drilled and its first successful horizontal well at Pembina. The Horizontal well is now tied in and is currently producing at a rate of 4.5 million cubic feet of gas per day (mmcf/d). A further successful horizontal well drilled at Pembina, abandoned due to mechanical difficulties, will be re-drilled in Q1.
It total, Berens Energy is participating in 8 wells (4 net) in the first quarter - 7 at Pembina and 1 at Deep Basin. Berens cumulative capital expenditure program for 2009 is anticipated to be approximately $40 million, with 30 wells (18 net) drilled. Average 2009 production levels are expected to rise to 4,900 boepd.
"Consistent with its production increases, the company expects strong reserve additions for 2008 based on low finding and development costs that are anticipated to be consistent with the 2007 numbers. The company expects to release its year-end reserves prior to the end of February, 2009," the company added.