Sea Dragon Energy announces first quarter 2012 results
CALGARY, May 28, 2012 /CNW/ - Sea Dragon Energy Inc. ("Sea Dragon" or the "Company") (TSXV: SDX) is pleased to announce its 2012 first quarter financial and operating results (the "Quarter"). All dollar values are expressed in United States dollars unless otherwise stated.
Highlights:
- Achieved an average production rate of 1,019 bopd as compared to 991 bopd in fourth quarter of 2011;
- Generated funds from operations of $0.4 million compared to $0.5 million in the fourth quarter of 2011 and $2.0 million in the first quarter of 2011.
- Net loss for the Quarter was ($0.8) million compared to ($14.8) million in the fourth quarter of 2011 and net income of $0.5 million in the first quarter of 2011.
- Operating costs for the Quarter were $13.64/bbl compared to $12.07/bbl in the fourth quarter of 2011 and $9.51/bbl in the first quarter of 2011.
- Generated netbacks of $41.93/bbl in the Quarter, compared to $40.75/bbl in the fourth quarter of 2011 and $43.71/bbl in the first quarter of 2011.
- Exited the Quarter with cash and cash equivalents of $4.3 million and working capital of $8.1 million, and $6.0 million of debt;
Subsequent:
- Subsequent to Quarter end the Company collected $2.0 million in outstanding accounts receivable.
FINANCIAL & OPERATING HIGHLIGHTS
The following table provides a summary of Sea Dragon's financial and operating results for the three months ended March 31, 2012 and 2011 and the three months ended December 31, 2011. Consolidated financial statements with Management's Discussion and Analysis ("MD&A") are now available on the Company's website at www.seadragonenergy.com and on SEDAR at www.sedar.com.
Fiscal Year | Prior Quarter (1) | Three months ended March 31 | ||||
2012 | 2011 | |||||
Financial $000's | ||||||
Cash, end of period | 6,125 | 4,285 | 11,534 | |||
Working capital | 11,939 | 8,077 | 14,670 | |||
Funds from operations | 509 | 397 | 2,010 | |||
per share | 0.00 | 0.00 | 0.01 | |||
Net Income/(Loss) | (14,839) | (786) | 487 | |||
per share | (0.04) | (0.00) | 0.00 | |||
Capital expenditures | (1,892) | (1,955) | (2,897) | |||
Total assets | 75,663 | 76,876 | 87,234 | |||
Shareholders' equity | 68,877 | 68,289 | 81,669 | |||
Common shares outstanding (000's) | 376,459 | 376,459 | 376,459 | |||
Warrants outstanding (000's) | 30,000 | 30,000 | 30,000 | |||
Operational | ||||||
Oil sales (bbl/d) | 991 | 1,019 | 1,178 | |||
Brent oil price ($/bbl) | 109.38 | 118.47 | 105.87 | |||
Realized oil price ($/bbl) | 104.54 | 115.10 | 100.12 | |||
Royalties ($/bbl) | 51.72 | 59.53 | 46.90 | |||
Operating costs ($/bbl) | 12.07 | 13.64 | 9.51 | |||
Netback ($/bbl) | 40.75 | 41.93 | 43.71 |
(1) Denotes the three months ended December 31, 2011 |
Operations:
North West Gemsa:
During the first quarter of 2012, Sea Dragon participated in the drilling of two wells (0.2 net) in the NW Gemsa Concession. The AASE 10 was completed as the third injection well in Al Amir SE and the AASE-11 ST-1 well flowed at a maximum rate of 3,500 bopd. Water injection in Al Amir SE is now well underway, with three injection wells at Al Amir SE-7 and Al Amir SE-8 and Al Amir-10. In the Geyad field one injection well, Geyad-5 was placed online.
The NW Gemsa block is located in the Eastern Desert on the southwest part of the Gulf of Suez. Current production from the concession is running steady at around 10,000 bopd gross of light crude oil (42 API) (1,000 bopd net to the Company). Cumulative oil production as of May 14, 2012 is 8.0 MMbbl gross (6.6 MMbbl from Al Amir/Al Ola and 1.4 MMbbl from Geyad). Sea Dragon has a 10% working interest in the Concession.
NW Gemsa is producing from the Shagar and Rahmi sands of the Kareem formation. Potential for additional oil has also been demonstrated in the Belayim, South Gharib, and Lower Rudeis Formations.
Al Amir SE Field
Currently, 9 productive wells and 3 injectors exist at Al Amir SE. Water is being injected in Al Amir SE-7 and Al Amir SE-8 and Al Amir SE-10 injectors at a rate of over 16,000 bwpd.
AASE-10 Well:
The well was spud on December 20, 2011 and successfully drilled to its total depth of 10,450 feet in the Upper Rudeis. Petrophysical analysis of open hole logs indicated 34 feet of oil pay in the Shagar zone and 31 feet of oil pay in the Rahmi zone, thus extending the oil leg further west. Al Amir SE-10 well was completed in the Rahmi reservoir as the fourth water injection well in the NW Gemsa Concession. Water is currently being injected at a rate 3,000 barrels per day.
AA SE-11 Well:
This development well was spud on February 5, 2012 to appraise the northwest extent of the field. The well was drilled to a total depth of 9,600 feet and then sidetracked to the southwest. The sidetrack was successfully drilled to a total depth 11,160 feet in the Upper Rudeis Formation. The well encountered 42 feet of oil pay in the Shagar reservoir and 22 feet in the Rahmi reservoir. The well was successfully completed in the Shagar reservoir in the interval 10,730 feet to 10,780 feet and placed on a five point multi-rate production test on April 24, 2012. The well flowed at a maximum rate of 3,500 bopd on a one inch choke. The well was placed on production at a rate of 1,635 bopd on a half inch choke.
AASE-5 Well:
Al Amir SE-5 well is back on production at 650 bopd. The well was shut in since October 2010 due to a high gas/oil ratio (GOR). Recent test suggests the GOR has dropped, possibly reflecting positive response from water injection.
AASE-12 Well:
This development well, located in the south eastern area of the field, was spud April 25, 2012. The primary objective of this well is to produce oil from the Shagar and Rahmi reservoirs and appraise the shallower South Gharib and Belayim reservoirs.
The well was drilled to a total depth of 10,200 feet in the Upper Rudeis. Currently logging operations are ongoing.
Geyad Field
Currently there are 3 productive wells and 1 water injector well in the Geyad field. The Geyad-5 injector well was completed as a water injector in both the Shagar and Rahmi zones in January 2012. Water is being injected at a rate of 5,500 bwpd.
Kom Ombo:
This concession is located onshore in the southern part of Egypt some 1,000 km south of Cairo. It contains the Al Baraka oilfield, producing light oil from multiple reservoirs and an exploration area of 11,400 km². Sea Dragon has a 50% working interest in the Concession.
The Company's drilling program for 2012 was launched in March 2012. The main objective of the program is to delineate the extent of the deeper Kom Ombo sands, below the current shallow production. The Kom Ombo "A" sand has been proven to be oil bearing in each well that penetrated the sand. The program is designed to target optimal Kom Ombo "A" locations, with the shallow Six Hills and Abu Ballas formations as secondary targets.
The first exploration well, WAB-2, located 9 km southwest of Al Baraka field, discovered oil in the shallow Abu Ballas Reservoir. The AB-16 development well, targeting the deeper Kom Ombo Sands, was spud April 30, 2012.
Production from the Al Baraka field is averaging approximately 510 bopd (255 bopd net to Sea Dragon). The Company has a 50% working interest.
Kom Ombo Concession Exploration
West Al Baraka-2 Well:
The West Al Baraka-2 (WAB-2) exploratory well, the first well of the 2012 drilling campaign, was successfully drilled to a total depth of 4,070 feet in the Basement. The West Al Baraka structure is located 9 km to the southwest of Al Baraka oil field.
The WAB-2 well encountered oil shows in the Abu Ballas sand and the Six Hills F reservoirs, both zones are productive in Al Baraka oilfield. Petrophysical analysis indicated oil saturations in the primary target being the Abu Ballas sand.
The Abu Ballas sand was selectively perforated in the interval 2,085-2,164 feet. The well was tested for a short period and 37 degree API oil was recovered at surface with no water. The Abu Ballas sand is productive in Al Baraka oilfield and will require hydraulic fracturing stimulation to establish the well productivity.
West Al Baraka-2 is the second discovery on the Concession. The forward plan is to finalize the mapping of the West Al Baraka structure and develop an appraisal program and apply for a development lease.
A location for the second exploration commitment well, Faris is being finalized with a spud date expected in early July 2012.
Al Baraka Field Development
Al Baraka 16 Well (AB-16):
This development well was spud on April 30, 2012. The objective for AB-16 is to appraise the deeper Kom Ombo "A" sands in an up dip position to the ABSE-1, first Kom Ombo "A" producer 6 km to the southeast. Oil was also recovered from the Kom Ombo-1 well, situated 2 km to the east. The secondary objective is in the Kom Ombo "C" sands that were found oil stained in wells previously drilled.
The AB-16 well was successfully drilled to a total depth of 7,590 feet in the Basement, encountering oil shows in the Six Hills F and in the Kom Ombo "C" and Kom Ombo "A". Logging operations are ongoing to be followed by a petrophysical analysis and a testing program if warranted.
Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. In particular, statements concerning the 2012 drilling and capital expenditure programs of the NW Gemsa and Kom Ombo Concessions and the results referenced or implied herein should be viewed as forward-looking statements.
Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements". All reserves information contained herein as well as the net present value of such reserves should be considered as forward looking statements. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, costs and timing of exploration and production development, availability of capital to fund exploration and development and political, social and other risks inherent in carrying on business in Egypt. There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.
Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Corporation undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law. Although Sea Dragon has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Actual results may differ materially from those currently anticipated. See Sea Dragon's Annual Information Form for the year ended December 31, 2011 for a description of the risks and uncertainties associated with the Company's business, including its exploration activities. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
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 THE RELEASE.
Said Arrata
CEO and Director President
(403) 457-5035
Tony Anton Chairman
COO and Director
(403) 457-5035
Olivier Serra
Chief Financial Officer and Director
+331 5343 9442
Brisco Capital Partners Corp.
Investor Relations
(403) 262-9888
Share this article