One Exploration Inc. announces 2009 3rd quarter results, property disposition
and updated banking arrangements
/NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
Financial and Operating Summary
Three months ended Nine months ended
September 30 September 30
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2009 2008 2009 2008
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Financial highlights ($)
Petroleum and natural
gas sales 1,506,817 4,617,866 5,540,970 14,806,481
Net earnings (loss) (2,267,450) (700,994) (6,284,253) 597,218
Net earnings (loss)
per share(i)
- basic (0.04) (0.02) (0.11) 0.02
- diluted (0.04) (0.02) (0.11) 0.02
Cash flow (413,677) 1,460,133 (1,162,610) 5,255,174
Cash flow per share(i)
- basic (0.01) 0.04 (0.02) 0.14
- diluted (0.01) 0.04 (0.02) 0.14
Working capital
(deficit) at period
end (4,525,561) (8,519,465) (4,525,561) (8,519,465)
Capital expenditures
and dispositions (2,749,211) 3,024,645 (522,507) 9,700,907
Operating
Production
Natural gas (mcf
per day) 2,036 3,944 2,816 4,136
Crude oil and
NGLs (bbls per
day) 177 178 166 182
BOE per day (6:1) 517 835 635 871
Average realized price
Natural gas ($ per
mcf) 3.01 8.21 4.10 9.04
Crude oil and NGLs
($ per bbl) 52.30 92.77 50.02 87.49
BOE ($ per boe, 6:1) 31.68 60.09 31.94 62.04
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(i) Class B common shares are converted to Class A common shares using a
ratio of $10 divided by the greater of the period end Class A common
share price and $1. For periods ended June 30, 2009, Class B common
shares were converted using a Class A common share price of $1. At
September 30, 2008, the closing Class A common share price was $1.25
and as such Class B common shares were converted at $1.25 for periods
ended September 30, 2008.
Third Quarter Review
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OneEx carried out limited field activities in the third quarter of 2009 as it continued to focus on cost reduction, cash conservation and balance sheet strength. Net dispositions totaled
Low natural gas prices resulted in Operating netbacks for the third quarter of 2009 of
Over all, our primary focus in the third quarter of 2009 was cost reduction along with adding additional drilling and completion projects into inventory to ensure the Corporation has significant growth opportunity as capital ultimately gets directed to these projects. OneEx currently has an inventory of 45 drilling and 18 recompletion opportunities. In addition, the Corporation is continuing to add to its prospect inventory by accessing its
Subsequent to the Quarter
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In November, 2009 OneEx sold several non-operated Alberta properties in the Watelet and Willesden Green areas (the "Assets") for
At
The total company share of reserves associated with the assets in the Reserves Update is disclosed in the following table:
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Light and Natural Gas
Medium Oil Natural Gas Liquids
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Reserve Gross Net Gross Net Gross Net
Category (Mbbl) (Mbbl) (MMcf) (MMcf) (Mbbl) (Mbbl)
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Developed Producing 13.6 11.6 472 445 14.1 9.3
Developed Non-Producing 0.4 0.2 52 43 0.7 0.5
Undeveloped 0.0 0.0 267 209 2.7 1.9
Total Proved 14.0 11.8 857 697 17.4 11.8
Probable 12.5 9.1 1,111 830 23.4 15.5
Total Proved Plus Probable 26.5 20.9 1,969 1,527 40.7 27.3
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Pricing used in the Reserves Update is outlined in the following table:
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Natural
Crude Oil gas NGLs
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Pent-
Edmonton Cromer Natural anes
Par Medium Gas(i) Plus Butanes
WTI Price 40 29.3 AECO FOB F.O.B. Exchange
Cushing degrees degrees Gas Field Field Infla- Rate
Oklahoma API API Prices Gate Gate tion (iii)
($US/ ($Cdn/ ($Cdn/ ($Cdn/ ($Cdn/ ($Cdn/ Rate(ii) ($US/
Year bbl) bbl) bbl) MMBtu) bbl) bbl) (%/Yr) $Cdn)
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2009(iv) 71.49 77.63 73.75 3.24 79.50 54.97 2.0 0.800
2010 75.09 81.60 76.71 5.26 83.57 60.82 2.0 0.850
2011 78.11 84.94 78.15 6.29 87.00 63.31 2.0 0.875
2012 82.28 87.09 79.26 6.95 89.20 64.92 2.0 0.950
2013 92.01 94.97 85.48 7.50 97.27 70.79 2.0 0.950
There-
after Various Escalation Rates
Notes:
(i) This summary table identifies benchmark reference pricing
schedules that might apply to a reporting issuer.
(ii) Inflation rates for forecasting prices and costs.
(iii) Exchange rates used to generate the benchmark reference prices in
this table.
(iv) Three months ending December 31, 2009.
(v) Product sale prices will reflect these reference prices with
further adjustments for quality and transportation to point of
sale.
Historical reported production from the Assets is outlined in the table below:
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Barrel oil
Natural gas Crude oil NGLs equivalent
(mcf/d) (boe/d) (boe/d) (boe/d)
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Year ended December 31, 2008 156 4 2 32
Quarter ended March 31, 2009 387 10 14 89
Quarter ended June 30, 2009 398 10 24 100
Quarter ended September 30, 2009 303 18 23 92
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Outlook
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Notwithstanding the short term weakness of natural gas prices, we believe the mid to long range fundamentals in our sector remain strong. OneEx will continue to assemble projects through its strategic land joint venture along with focusing on cost reduction and production optimization. The Corporation is keenly aware of the challenges of operating in this low commodity price environment and will continue to target its financial and operating decisions toward meaningful growth opportunities while continuing to maintain the strength of its balance sheet. OneEx continues to evaluate accretive consolidation and capitalization opportunities and believes that a stable production base, clean balance sheet, large prospect inventory and tax pools in excess of
The Corporation will commence drilling one (1.0 net) exploratory well in Central Alberta within the next month along with completing two (2.0 net) additional wells prior to year end. If successful, these wells will be on production in the first quarter of 2010.
On behalf of the board of directors,
Walter Vrataric
Reader Advisory
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This news release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction. All sales will be made through registered securities dealers in jurisdictions where the offering has been qualified for distribution. The securities offered are not, and will not be, registered under the securities laws of the
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Natural gas volumes are converted to barrel of oil equivalent at six thousand cubic feet of natural gas for each barrel of oil equivalent ("boe") based on the relative heating content of natural gas to crude oil. Readers are cautioned that the relative values of natural gas and crude oil may differ and that the barrel of oil equivalent measure may not be representative of the relative values of natural gas and crude oil. In this news release: boe/d means boe per day; mcf/d means thousand cubic feet per day; mboe means thousand boe; mmcf means million cubic feet; bbl means barrel and mmbtu means million British Thermal Units .
Investors are further cautioned that the preparation of financial statements in accordance with Canadian generally accepted accounting principles ("GAAP") requires management to make certain judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Estimating reserves is also critical to several accounting estimates and requires judgments and decisions based upon available geological, geophysical, engineering and economic data. These estimates may change, having either a negative or positive effect on net earnings as further information becomes available, and as the economic environment changes.
The terms "funds from operations", "operating netbacks" and "net debt" are not recognized measures under GAAP. OneEx's method of calculating these measures may differ from other companies, and accordingly these measures may not be comparable to measures used by other companies. The Corporation determines its funds from operations as cash flow from operating activities before changes in non-cash working capital. Funds from operations per share are calculated using the weighted average basic and diluted shares used in the calculation of earnings per share. Management believes that in addition to cash flow from operating activities, funds from operations is a useful supplemental measure as it demonstrates OneEx's ability to generate cash necessary to repay debt or fund future growth through capital investment before changes in non-cash working capital balances. Investors are cautioned that funds from operations should not be construed as an alternative to cash flow from operating activities determined in accordance with GAAP. Operating netback per boe is the net result of the Corporation's revenue, royalty, lease operating and transportation expenses as found in the accompanying financial statements divided by total sales volumes in the period. Management considers operating netback an important measure as it demonstrates its property level profitability on a unit of production basis. Net debt is the net result of deducting the Corporation's current assets from its total bank debt and current liabilities.
This news release contains certain forward-looking statements, which are based on OneEx's current internal expectations, estimates, projections, assumptions and beliefs. Some of the forward-looking statements may be identified by words such as "expects", "anticipates", "believes", "projects", "plans" and similar expressions. These statements are not guarantees of future performance and involve a number of risks and uncertainties, many of which are beyond OneEx's control. In particular, forward-looking statements included in this news release include, but are not limited to, statements with respect to average production and projected exit rate; areas of operations; spending and increase in capital budget; availability of funds for OneEx's capital program; the size of, and future net revenues from, reserves; the focus of capital expenditures; expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; projections of market prices and costs; the performance characteristics of OneEx's properties; OneEx's future operating and financial results; capital expenditure programs; supply and demand for oil and natural gas; average royalty rates; and amount of general and administrative expenses. In addition, statements relating to "reserves" or "resources" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future .These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond OneEx's control, including the effect of acquisitions; changes in general economic, market and business conditions; changes or fluctuations in production levels; unexpected drilling results, commodity prices, currency exchange rates, capital expenditures, reserves or reserves estimates and debt service requirements; changes to legislation, investment eligibility or investment criteria; OneEx's ability to comply with current and future environmental or other laws; OneEx's success at acquisition, exploration and development of reserves; actions by governmental or regulatory authorities including increasing taxes, changes in investment or other regulations; the occurrence of unexpected events involved in the exploration for, and the operation and development of, oil and gas properties; competition from other producers; the lack of availability of qualified personnel or management; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; hazards such as fire, explosion, blowouts, cratering, and spills, each of which could result in substantial damage to wells, production facilities, other property and the environment or in personal injury; stock market volatility; and ability to access sufficient capital from internal and external sources. Many of these risks and uncertainties are described in OneEx's Annual Information Form which is available at www.sedar.com. Readers are also referred to risk factors described in other documents OneEx files with Canadian securities authorities. With respect to forward-looking statements contained in this news release, OneEx has made assumptions regarding: current commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil and natural gas; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; royalty rates and future operating costs. Management has included the above summary of assumptions and risks related to forward-looking information provided in this news release in order to provide shareholders with a more complete perspective on OneEx's future operations and such information may not be appropriate for other purposes. OneEx's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the OneEx will derive there from. Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this NEWS RELEASE and OneEx disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
For further information: Walter Vrataric, President and Chief Executive Officer, One Exploration Inc., Phone: (403) 781-2752, Fax: (403) 232-8463; Dennis Ward, Vice President, Finance and Chief Financial Officer, One Exploration Inc., Phone: (403) 781-2756, Fax: (403) 232-8463
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