Hart Energy Publishing

Petroflow Suspends Drilling Program, Citing Poor Economic Conditions

March 30, 2009
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Petroflow Energy Ltd., Calgary, (TSX: PEF; NYSE Alternext: PED) says it has suspended its drilling activities in light of the current economic downturn.
 
Petroflow chief executive officer John Melton says, “In light of the rapid drop in commodity prices for gas, NGLs and oil to historically low levels, we are undertaking a re-evaluation of all the costs associated with our operations. We have met with all of our larger suppliers and are confident that we will be able to reduce our costs such that we can continue to earn the rates of return on our capital that we have enjoyed previously. There remain many economically viable drilling locations in our Hunton resource play, even at currently depressed prices. We will also live within our financial means. While we are working through these arrangements with our service providers, we will be suspending our drilling efforts for a short time. Once we have resolved these issues, we will resume our drilling program.”
 
Petroflow chief operating officer Sandy Andrew adds that the company anticipates that overall drilling costs could decrease as much as 40% per well in 2009 compared to 2008.
 
“When the right parameters are achieved, we will be in a position to re-activate our drilling program rapidly,” Andrew says.
 
The company’s peak production rate in February was 3,841 barrels of oil equivalent per day, an increase of 165 barrels of oil equivalent per day from the peak rate in January.
 
February’s production averaged approximately 3,645 barrels of oil equivalent per day, a 4% increase over January's average production. Approximately 31% of the production was oil and natural gas liquids, and 69% was natural gas.
 
Andrew says, “Our production volumes continue to grow consistently each month. The Bubble Point technology that we employ in Oklahoma is reliable and the Hunton play continues to represent a large opportunity for Petroflow. We made a commitment to acquire a deep technical understanding of this region and our consistent production increases are a reflection of this commitment. Combining our technical experience with our business strategy and the forward thinking culture at Petroflow, we are moving to expand our presence in the Hunton play in Oklahoma.”