Palliser Oil & Gas Corporation Reports 2010 Third Quarter Financial and
Operating Results
/NOT FOR DISTRIBUTION IN THE UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
CALGARY, Nov. 17 /CNW/ - Palliser Oil & Gas Corporation ("Palliser" or the "Company") (TSX VENTURE:PXL) is pleased to report the financial and operating results for the three and nine months ended September 30, 2010. Certain selected financial and operational information are set out below and should be read in conjunction with Palliser's quarterly financial statements complete with the notes to the financial statements and related MD&A which is available on www.sedar.com or the Company's website at www.palliserogc.com. Interested parties are invited to visit the Company's website to view an updated corporate presentation for November 2010.
HIGHLIGHTS
Three and nine months ended September 30, 2010 and 2009 (unaudited)
Three months ended | Nine months ended | |||||
September 30, | September 30, | |||||
2010 | 2009 | 2010 | 2009 | |||
Operating | ||||||
Wells drilled (net wells) | ||||||
Oil | 2 | 5 | 8 | 5 | ||
Natural gas | - | - | - | - | ||
Salt water disposal | 1 | - | 1 | - | ||
Dry and abandoned | - | - | - | - | ||
Total | 3 | 5 | 9 | 5 | ||
Success (%) | 67% | 100% | 89% | 100% | ||
Undeveloped land holdings (net acres) | 39,665 | 39,249 | 39,665 | 39,249 | ||
Average daily production | ||||||
Crude oil (bbl per day) | 626 | 68 | 469 | 24 | ||
Natural gas (Mcf per day) | 422 | 592 | 420 | 557 | ||
Barrels of oil equivalent (boe per day, 6:1) | 696 | 167 | 539 | 117 | ||
Crude oil production (%) | 90% | 41% | 87% | 21% | ||
Average sales prices | ||||||
Crude oil ($ per bbl) | $ 58.49 | $ 60.49 | $ 60.47 | $ 59.65 | ||
Natural gas ($ per Mcf) | $ 3.16 | $ 2.32 | $ 3.88 | $ 3.03 | ||
Barrels of oil equivalent ($ per boe, 6:1) | $ 54.52 | $ 32.87 | $ 55.65 | $ 26.65 | ||
Operating netback($ per boe) | ||||||
Petroleum and natural gas revenue | $ 54.52 | $ 32.87 | $ 55.65 | $ 26.65 | ||
Royalties | $ 14.59 | $ 5.75 | $ 14.29 | $ 3.00 | ||
Operating expenses | $ 14.69 | $ 26.21 | $ 16.76 | $ 20.18 | ||
Transportation expenses | $ 0.87 | $ - | $ 0.86 | $ - | ||
Operating netback (1) | $ 24.37 | $ 0.91 | $ 23.74 | $ 3.47 | ||
Financial | ||||||
Petroleum and natural gas revenue | $ 3,492,558 | $ 503,055 | $ 8,188,289 | $ 848,818 | ||
Funds flow from operating activities (2) | $ 1,068,080 | $ (351,356) | $ 1,679,109 | $ (1,026,746) | ||
Net Loss and comprehensive loss | $ (432,023) | $ (650,523) | $ (2,130,365) | $ (1,615,170) | ||
Per share - basic and diluted | $ (0.01) | $ (0.03) | $ (0.07) | $ (0.08) | ||
Weighted average shares | ||||||
outstanding | 34,368,348 | 21,325,276 | 31,120,912 | 21,211,345 | ||
Shares outstanding | 34,368,348 | 21,703,348 | 34,368,348 | 21,703,348 | ||
Capital expenditures | $ 2,770,811 | $ 3,588,918 | $ 7,596,707 | $ 5,609,703 | ||
Working capital | $ 1,042,506 | $ 116,000 | $ 1,042,506 | $ 116,000 | ||
Shareholder's equity | $ 22,518,095 | $ 16,011,104 | $ 22,518,095 | $ 16,011,104 |
(1) Operating netback is a non-GAAP measure and is the net of revenue, royalties, operating and transporation expenses.
(2) Funds flow from operating activities is a non-GAAP measure that represents net loss and comprehensive loss or net income and comprehensive income before non-cash items such as depletion, depreciation and accretion, stock-based compensation and future income tax. The inclusion of changes in non-cash working capital results in cash flow from operating activities on the statements of cash flows. Per share amounts are calculated using weighted average shares outstanding consistent with the calculation of net loss per share. Funds flow from operating activities is a key measure as it demonstrates the Company's ability to generate the funds necessary to achieve future growth through capital investment. Other entities may calculate these figures differently than Palliser. This table also contains other industry benchmarks and terms, such as working capital (calculated as current assets less current liabilities) and operating netbacks (calculated on a per unit basis as production sales less royalties, transportation and operating costs), which are not recognized measures under GAAP. Management believes these are useful supplemental measures of, firstly, the total net position of current assets and current liabilities the Company and secondly, the profitability relative to commodity prices. Funds flow from operating activities excludes non-cash items totaling $109,996 for the three month period ended September 30, 2010 (September 30, 2009 - ($47,467)) and ($207,585) for the nine month period ended September 30, 2010 (September 30, 2009 - ($145,466).
Report to Shareholders
Palliser Oil & Gas Corporation ("Palliser" or the "Company") is pleased to report to shareholders the Company's activities in the third quarter of 2010. During the quarter, Palliser drilled 3 (3.0 net) wells, with two oil wells brought on production late in the third quarter and one well cased for salt water disposal. Palliser achieved record quarterly production levels during the third quarter of 2010 with continued production per share growth.
Production during the quarter averaged 696 boe/d, an increase of 317% from 167 boe/d in the third quarter of 2009. Palliser continues to achieve quarter over quarter production growth, with production in the third quarter being higher by 30% from the second quarter average of 536 boe/d. Production in the third quarter was weighted 90% to crude oil with strong operating netbacks.
The Company continues its focus on developing and expanding its heavy oil prospects in the greater Lloydminster area. The Company's remaining capital program for 2010 includes the drilling of an additional seven wells in the fourth quarter, with drilling having commenced in mid November. These seven wells are forecasted to be on production by year end, with oil production from these wells increasing into the first quarter of 2011 resulting in significant production gains in the first quarter of 2011 as these wells are brought on production.
During the third quarter, the Company completed seismic programs that were started in the second quarter to delineate and identify additional drilling and reactivation opportunities. Subsequent to quarter end the Company accumulated additional undeveloped land at 100% working interest in the greater Lloydminster area. Palliser has more than doubled its future drilling inventory to 112 locations, as compared to 45 locations at the start of the year.
Outlook
The Company maintains a strong balance sheet and is currently debt free with a positive working capital balance of $1.0 million at the end of the third quarter. The Company's credit facility was recently increased to $7.0 million and the Company is forecasted to exit 2010 with minimal net debt in the amount of approximately $1.3 million. The Company is well financed, maintains a strong balance sheet and is on track with guidance for 2010 yearly production average between 650 to 750 boe/d and 2010 exit production of between 1,100 to 1,250 boe/d.
2011 Guidance
Palliser's preliminary guidance for 2011 is for a $23 million capital program financed from cash flow and available credit lines, without the need for an equity issue, average yearly production of between 1,550 to 1,700 boe/d, a 97% crude oil weighting, and 2011 exit production of between 1,900 to 2,100 boe/d. This capital program is forecasted to achieve continued quarter over quarter production per share growth in 2011. The Company's guidance includes maintaining a strong balance sheet and continued top quartile capital efficiency.
On behalf of the Board of Directors,
"Signed"
Kevin Gibson
President and Chief Executive Officer
November 17, 2010
For further information regarding Palliser Oil & Gas Corporation, the reader is invited to visit the Company's website at www.palliserogc.com.
Palliser is a Calgary-based emerging junior oil and gas company currently focused on high netback conventional heavy oil production in the greater Lloydminster area of both Alberta and Saskatchewan.
Cautionary Statements
Certain information contained in this press release constitutes forward-looking statements, including, without limitation, the Corporation management's assessment of future plans and operations, anticipated exploration and development opportunities, drilling inventory and wells to be drilled, capital expenditures and the timing thereof, drilling programs and drilling efficiencies, the quantity of undeveloped land and drilling locations and inventory, operating costs, debt levels, credit facilities. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the party's control including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources, inability to meet or continue to meet listing requirements, the inability to obtain required consents, permits or approvals and the risk that actual results will vary from the results forecasted and such variations may be material. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Corporation'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 the Corporation will derive therefrom.
The forward-looking statements contained in this press release are made as of the date of this press release. Palliser disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Additionally, Palliser undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.
Production volumes are commonly expressed on a barrel of equivalent ("BOE") basis whereby natural gas volumes are converted at a ratio of six thousand cubic feet to one barrel of oil. The intention is to convert oil and natural gas measurement units into one basis for improved analysis of results and comparisons with other industry participants. The term BOE may be misleading, particularly if used in isolation. The conversion ratio is based on an energy equivalent method and does not represent an economic value equivalency at the wellhead.
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this Press release.
For further information:
Kevin Gibson President and CEO [email protected] (403) 209-5717 |
|
Ivan J. Condic Vice President, Finance & CFO ivan@palliserogc.com (403) 209-5718 |
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