AltaCanada Energy Corp. releases third quarter results
TSX-V SYMBOL: ANG
Operations
AltaCanada continues to be challenged by the extended period of low natural gas prices. Over the past several years AltaCanada has focused upon the acquisition of land and the development of infrastructure associated with the Corporation's shallow gas play in Northern Montana. At the same time we have positioned the Corporation through land acquisitions, seismic and geological work to pursue drilling targets on the Corporation's Montana lands on trend with Shaunavon oil activity being conducted immediately north in
Management of AltaCanada has pursued a range of possible transactions to preserve value for AltaCanada's shareholders. This has been very challenging in the capital constrained environment associated with the international financial crisis. Regulatory hurdles and other issues have created unanticipated impediments to the implementation of several potential transactions pursued by AltaCanada over the past six months. The prospects nonetheless remain solid and there is considerable option value in the Corporation's natural gas properties when prices recover to levels that will support new development. AltaCanada is a low cost producer but is currently encumbered with a high level of debt. Management is focused on addressing that issue. Gas prices continue to be very volatile. At today's low prices some of our properties have poor economics, in response we shut in our ten Fort Belknap producing wells (55% ANG), representing 275 mcf/d (150 mcf/net). When gas prices recover, these wells will be returned to production.
No drilling for natural gas is planned in the short term. Subject to our ability to implement an effective recapitalization plan, our efforts will be directed to 4 oil opportunities for 3 Jurassic Shaunavon oil targets (100%) and a Bakken exploration well (50%).
Our large Montana block, (400,000 gross acres and 270,000 net acres) has few expiries. Many leases are held by the existing production.
Refinancing
AltaCanada has been exploring various refinancing structures in cooperation with its bank. The Corporation now proposes to pursue a refinancing plan where two existing large shareholders of the Corporation will assume some of the Corporation's current bank indebtedness on a subordinated basis and provide the Corporation with some short term working capital in exchange for the Bank providing the Corporation with some flexibility and some time to pursue its value enhancement program through drilling of oil targets.
On
Reorganization Proposal
As announced on
Overhead Reductions
While some exceptional costs were included in Q3, that related to evaluation of two uncompleted deals, AltaCanada continues to reduce overhead as part of the Corporation's refinancing plan. Since
Write-down
The Corporation recorded a write-down of
Full financials, notes and the Annual Report are available on SEDAR or our website www.altacanada.com.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE. BOEs MAY BE MISLEADING, PARTICULARLY IF USED IN ISOLATION. A BOE CONVERSION RATIO OF 6 MCF: 1 BBL IS BASED UPON AN ENERGY EQUIVALENCY CONVERSION METHOD PRIMARILY APPLICABLE AT THE BURNER TIP AND DOES NOT REPRESENT A VALUE EQUIVALENCY AT THE WELLHEAD.
The corporate information contained in this news release may contain forward-looking forecast information. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonably accurate by AltaCanada Energy Corp. at the time of preparation, may prove to be incorrect. The actual results achieved during the forecast period will vary from the information provided herein and the variations may be material. Consequently there is no representation by AltaCanada Energy Corp. that actual results achieved during the forecast period will be the same in whole or in part as that forecast.
* Reserve value calculation used the proved and probable reserve value from the GLJ report, PV(10) HIGHLIGHTS Period Ended September 30 Three Months Nine Months (unaudited) 2009 2008 2009 2008 ------------------------------------------------------------------------- FINANCIAL Total Revenue ($) 424,713 1,866,259 2,700,047 6,549,220 Cash Flow (Deficit) from Operations ($) (258,154) (180,048) (979,470) 574,695 Per Common Share ($) - Basic/Diluted (0.00) 0.00 (0.01) 0.01 Net Loss and Comprehensive Loss ($) (6,673,774) 779,784 (8,622,003) (1,769,276) Per Common Share ($) - Basic/Diluted (0.09) 0.01 (0.12) (0.03) Capital Expenditures ($) 323,762 1,816,391 2,207,829 5,077,266 Net Debt at September 30 ($) 16,853,608 11,588,140 Shareholders' Equity at September 30 ($) 16,195,132 26,038,551 Total Assets at September 30 ($) 35,244,195 41,169,087 Common Shares - (weighted average for the period) Basic 74,381,538 74,381,538 70,114,750 Diluted 74,381,538 74,381,538 70,114,750 Common Shares - (outstanding September 30) 74,381,538 74,381,538 ------------------------------------------------------------------------- OPERATIONS Average Daily Sales: Natural Gas (Mcf/d) 1,918 2,516 1,986 2,720 Oil and NGL (Bbls/d) 9 4 5 5 Total (BOE/d) 329 424 336 459 % Gas/Oil Ratio 97/3 99/1 99/1 99/1 Average Prices: Natural Gas ($/Mcf) 3.02 7.91 3.84 8.66 Oil and NGL ($/Bbl) 26.75 92.36 41.12 65.39 Total ($/BOE) 18.36 47.88 23.28 52.12 ------------------------------------------------------------------------- WELLS DRILLED Gross - 5 5 6 Net - 2.5 2.7 2.75 -------------------------------------------------------------------------
For further information: Donald Foulkes, President & CEO, Telephone: (403) 265-9091 (ext 248), Fax: (403) 265-9021, Email: [email protected]; Donald Jackson, Executive VP & COO, (403) 265-9091 (ext 234), (403) 265-9021
Share this article