PanWestern announces first quarter 2010 financial and operating results
CALGARY, May 31 /CNW/ - PanWestern Energy Inc. ("PanWestern" or the "Corporation") (TSX-V: "PW") is pleased to report highlights of the unaudited interim financial and operating results for the Corporation as well as its wholly-owned subsidiary, Northern Hunter Energy Inc. ("Northern Hunter"), for the three month period ended March 31, 2010, and to provide an update on subsequent developments. The complete quarterly reporting packages for each of PanWestern and Northern Hunter, including the unaudited interim financial statements and associated management discussion and analysis, have been filed on SEDAR at www.sedar.com and posted on the Corporation's website at www.panwesternenergy.ca.
HIGHLIGHTS - BUSINESS DEVELOPMENT
- Implemented a number of positioning steps outlined below which have
provided the Corporation with the key people and sufficient seed
capital to launch a new international growth strategy focused on
Latin America, the Middle East and North Africa ("MENA") region and
the Mediterranean Basin.
- Announced on February 22 details of a definitive reorganization and
arrangement agreement, which subsequently closed on April 9 whereby:
- The Corporation acquired all of the issued and outstanding
shares of the private company Northern Hunter (the "Northern
Hunter Shares") by way of a plan of arrangement (the
"Arrangement");
- A new management team and board of directors were appointed
consisting of individuals from Northern Hunter and a board
nominee from PanWestern; and
- The Corporation was recapitalized with a non-brokered private
placement (the "Private Placement") of $6.0 million.
- Announced on March 25 terms of a bought-deal financing (the "Bought
Deal") of $15.0 million (gross), which was increased to $24.0 million
on March 26. The Bought Deal closed on April 16 and consisted of 51.1
million special warrants (the "Special Warrants") priced at $0.47 per
special warrant, of which approximately 42% were placed with Canadian
and international financial institutions.
- Filed the Corporation's 2009 Annual Information Form on May 7 and
Final Short Form Prospectus on May 14 which enabled qualification for
distribution of 51.1 million common shares issuable on May 21
pursuant to the exercise of the 51.1 million Special Warrants.
- Received net proceeds of $28.5 million in April upon the closing of
the Private Placement and Bought Deal financings. As at the end of
May 2010 the Corporation is debt free with a cash balance of
approximately $28.0 million and has 198.3 million common shares
outstanding.
- The Corporation is pursuing acquisitions of companies and assets to
grow the international business and is encouraged by the growing
number of opportunities available to it. Multiple proposals are under
active discussion with companies with assets in the targeted regions.
- The Corporation remains confident that one or more material
acquisitions can be completed in 2010 to provide traction for the
international growth strategy.
HIGHLIGHTS - OPERATIONS
- Petroleum and natural gas sales from Canadian operations in the first
quarter of 2010 averaged 238 barrels of oil equivalent per day
("boepd") in Northern Hunter and 29 boepd in PanWestern, compared to
178 boepd and 31 boepd, respectively, in the first quarter of 2009.
- Funds flow from operations of Northern Hunter in the first quarter of
2010 was negative ($328,006) compared to positive $57,264 in the
first quarter of 2009 reflecting the impact of one-time Northern
Hunter transaction costs of $586,951 associated with the Arrangement,
partially offset by higher petroleum and natural gas revenues.
- Funds flow from operations of PanWestern in the first quarter of 2010
was negative ($624,569) compared to negative ($66,750) in the first
quarter of 2009 due primarily to the impact of one-time PanWestern
transaction costs of $593,419 associated with the Arrangement.
- The working capital surplus/(deficit) at March 31, 2010 stood at
($5,992,407) in Northern Hunter and $4,815,798 in PanWestern.
RESULTS SUMMARY
The acquisition of the Northern Hunter Shares pursuant to the Arrangement was accounted for under generally accepted accounting principles as a reverse take-over of PanWestern by Northern Hunter. The Arrangement was not completed until April 9, 2010 and as a consequence the results of PanWestern and Northern Hunter are shown separately for the first quarter of 2010. The consolidated financial results for PanWestern reflecting the acquisition by Northern Hunter will be presented for the first time in the Corporation's second quarter 2010 financial statements which will be reported by August 27, 2010.
Northern Hunter PanWestern
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Three Three Three Three
Months Months Months Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
(unaudited) 2010 2009 2010 2009
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Financial ($ except
share and per share
amounts)
Petroleum and natural
gas revenues (net) 861,347 533,327 163,431 114,047
Funds flow from
operations(1) (328,006) 57,264 (624,569) (66,750)
Net income/(loss) (1,744,826) (237,108) (999,011) (538,429)
Capital expenditures 413,688 1,605,615 89,375 141,447
Working capital
surplus/(deficit) (5,992,407) (3,361,096) 4,815,798 7,254,741
Common shares
outstanding
Basic 14,030,406 13,405,406 47,447,384 47,447,384
Diluted 25,139,406 16,169,406 73,829,944 73,829,944
Share trading
High - - 0.73 0.27
Low - - 0.40 0.17
Close - - 0.73 0.21
Operations
Production
Crude oil (bbls/d) 53 40 22 17
Natural gas liquids
(bbls/d) 24 18 - -
Natural gas (mcf/d) 967 724 41 86
Boe/d (@ 6:1)(2) 238 178 29 31
Average reference price
WTI (US$ per bbl) 78.72 43.08 78.72 43.08
Brent (US$ per bbl) 76.24 44.40 76.24 44.40
AECO (Cdn$ per mcf) 4.95 4.92 4.95 4.92
Average selling price
Crude oil (Cdn$ per
bbl) 71.36 44.15 74.39 42.82
Natural gas liquids
(Cdn$ per bbl) 45.23 24.38 62.47 38.50
Natural gas (Cdn$
per mcf) 4.82 5.20 5.96 5.37
Average Operating
Netback (Cdn$ per
BOE @ 6:1)(2) 17.49 16.03 35.98 10.45
Notes:
1. The above table includes non-GAAP measures, which may not be
comparable to other companies. See MD&A for further discussion.
2. BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6.0 mcf per 1.0 bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the well head.
OUTLOOK
PanWestern has developed a corporate goal to create a $1.0 billion global exploration and production company in five to seven years and is pursuing a strategy to build a portfolio of assets in at least one or two regions of the world. Selected countries in Latin America, MENA and the Mediterranean Basin are of prime interest but the Corporation may pursue acquisitions in other regions on an opportunistic basis that otherwise meet its criteria of acceptable political and contract risk, attractive fiscal and royalty regimes, established infrastructure and significant deal flow.
The Corporation is targeting underexploited, onshore oil and gas assets (conventional and non-conventional) and undercapitalized companies that can provide material exploitation, development and step-out exploration upside opportunities where the Corporation is in a high working interest, operating position. The Corporation aims to leverage its knowledge of certain countries and hydrocarbon basins and its proven execution skills in applying best available technologies to capture value.
The Corporation's executive team consists of four founding officers: Jim McFarland, President and CEO; Steve Bjornson, CFO; Lyle Martinson, VP Operations; and, Don Shepherd, VP Engineering. The team has recently been expanded to support the international business development activities, including: two employee senior geoscientists, Rob Sadownyk and Barry Wihak; and, two contract senior geophysicists and a reservoir engineering/business development specialist. The officers, employees and contractors have worked together at various times in previous companies and collectively have extensive international experience particularly in North Africa and Latin America.
The Corporation is currently pursuing potential acquisitions in the regions of interest and has multiple proposals under active discussion with companies with assets in these regions. These include a mix of opportunities identified by the Corporation from its own efforts as well as opportunities presented to it by companies attracted by the track record of the management team and the board of directors, as well as the success of the recent financing.
Until such time as one or more material transactions are completed, the focus of the international business development activity will remain relatively broad and opportunistic.
The Corporation has recently reassessed its base load G&A expenditures (gross) and expects these to be approximately $3.0 million in 2010, of which approximately 50% is directed to business development activities, and excluding any increase that would result from execution of an acquisition(s).
ANNUAL GENERAL MEETING
The Corporation's Annual and Special Meeting of Shareholders will be held on June 29, 2010 at 9:00 AM MST at the Westin Calgary Hotel in the Eau Claire Room, 320-4th Ave S.W., Calgary, Alberta. At the meeting, the shareholders will be asked to approve a change in the name of the Corporation to Valeura Energy Inc., amongst other matters.
ABOUT PANWESTERN
PanWestern Energy Inc. is a Calgary, Alberta based public company currently engaged in the exploitation, development and production of petroleum and natural gas in Western Canada. The Corporation is pursuing a new strategy to expand internationally to selected countries in Latin America, the Middle East and North Africa region and the Mediterranean Basin.
FORWARD LOOKING INFORMATION
This news release contains certain forward-looking statements relating, but not limited, to operational information, future acquisition and drilling plans and the timing associated therewith, anticipated capital budgets and estimated costs. Forward-looking information typically contains statements with words such as "anticipate", "estimate", "expect", "potential", "could", or similar words suggesting future outcomes. The Corporation cautions readers and prospective investors in the Corporation's securities to not place undue reliance on forward-looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by PanWestern.
Forward looking information is based on management's current expectations and assumptions regarding, among other things, plans for and results of future acquisitions, future drilling activity, future capital and other expenditures (including the amount, nature and sources of funding thereof), future economic conditions, future currency and exchange rates, continued political stability of the areas in which the Corporation is anticipating completing acquisitions and the Corporation's continued ability to obtain and retain qualified staff and equipment in a timely and cost efficient manner. In addition, budgets are based upon PanWestern's current acquisition plans and exploration plans and anticipated costs both of which are subject to change based on, among other things, the actual results of acquisitions, drilling activity, unexpected delays and changes in market conditions. Although the Corporation believes the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect.
Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by PanWestern including, but not limited to, risks associated with the oil and gas industry (e.g. operational risks in exploration; inherent uncertainties in interpreting geological data; changes in plans with respect to exploration or capital expenditures; the uncertainty of estimates and projections in relation to costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with third parties in countries other than Canada and risk associated with international activity. The forward-looking information included in this news release is expressly qualified in its entirety by this cautionary statement. The forward-looking information included herein is made as of the date hereof and PanWestern assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law.
Additional information relating to PanWestern is also available on SEDAR at www.sedar.com.
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 news release.
For further information: Jim McFarland, President and CEO, PanWestern Energy Inc., (403) 237-7102, [email protected]; Steve Bjornson, CFO, PanWestern Energy Inc., (403) 237-7102, [email protected], www.panwesternenergy.ca
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