Equal Energy Ltd. (TSX: EQU) (NYSE: EQU) announce its financial and operating results for the fourth quarter and year ended December 31, 2011.
Don Klapko, President and Chief Executive Officer commented, "I am pleased to report during 2011, Equal successfully executed on a number of key strategies, putting us in the best financial and operating shape we have seen in years. With a consolidated, high quality asset base, over eight years of identified drilling prospects and a restructured balance sheet that will provide secure, low cost financial flexibility, we are more optimistic than ever that we can effectively deliver on Equal's exciting growth prospects."
Specifically over the course of 2011 our accomplishments include:
- Completion of an acquisition of the working interests from a former joint venture partner adding approximately 3,100 boe/d of liquids-rich natural gas to our production base;
- Consolidation of our land position in the emerging Mississippian light oil play which we plan to begin drilling during 2012;
- Re-financing of $120 million of high cost convertible debentures with $45 million of lower cost convertible debentures and repaying the remainder with proceeds from non-core asset sales and low cost revolving bank debt;
- Reduction of the Company's annual interest burden by approximately $2.5 million;
- The execution of a very successful 26 well drilling program; and
- The sale of non-core assets totaling $40 million during 2011 with another $8.3 sold in early 2012, reducing our debt burden and consolidating our asset base.
- In 2011, production volumes averaged 10,142 boe/d, an increase of 11 percent over 2010. We also were successful in increasing our total proved reserves by 35 percent and our proved and probable reserves by approximately 19 percent.
Operationally, we are pleased with our drilling program, which consisted of drilling 26 wells (22.8 net) with over a 96 percent success rate. Thirteen Hunton liquids-rich natural gas wells were drilled in Oklahoma with 12 wells successful in the Hunton and one well producing from the Mississippian. Seven of those wells also preserve additional Mississippian acreage. Three light oil wells were drilled in the Cardium play with very positive results. We increased the number of frac stages when compared to our 2010 wells and experienced consistently stronger results. Nine Viking wells were drilled in 2011 with the ninth Viking well utilizing a new monobore technology and a larger number of frac stages which not only resulted in very encouraging well performance but it was also our lowest cost well to date.
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