Sure Energy announces third quarter 2009 financial and operating results
The Company's MD&A and Financial Statements and Notes can be viewed or downloaded at www.sureenergyinc.com or www.sedar.com.
During the third quarter of 2009, Sure Energy accomplished the following:
- Closed the acquisition of Conifer Exploration Ltd. on August 14, 2009
- Third quarter cash flow increased from the second quarter 2009 to
$408,000 ($0.01/share) despite extremely low natural gas prices
- Shot a 13 square kilometer 3D seismic program on our 100% WI acreage
in SE Saskatchewan that will lead to the drilling of an oil prospect
in the fourth quarter of 2009
- Purchased a 2,560 acre block of 100% WI lands in the Southern Plains
area of Alberta that has a high impact drillable natural gas prospect
HIGHLIGHTS Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
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($000 except share and per share amounts)
Financial
Petroleum and Natural
Gas Revenues 1,439 1,813 4,572 5,128
Funds Flow from
Operations(1) 408 839 1,094 2,078
Per Share, Basic
and Diluted 0.01 0.02 0.03 0.06
Loss (1,284) (176) (2,932) (673)
Per Share, Basic
and Diluted (0.03) (0.00) (0.07) (0.02)
Capital Expenditures 8,600 3,125 9,767 10,168
Total Assets 36,959 35,761
Net Debt(1) (3,664) 4,963
Shareholders' Equity 30,824 31,692
Common Shares
Outstanding
Basic 46,873,962 37,659,208
Diluted 50,020,963 40,374,208
Fully Diluted with
Performance
Rights 53,525,962 44,154,208
Weighted Average
Common Shares
Outstanding
Basic and Diluted 42,166,425 36,086,035 39,178,123 33,726,832
Share Trading
High 0.47 1.20 0.47 1.35
Low 0.30 0.63 0.21 0.63
Close 0.46 0.66 0.46 0.66
Trading Volume 1,841,585 1,005,041 4,618,930 7,002,082
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HIGHLIGHTS Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
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Operations
Production
Natural Gas (Mcf/d) 3,453 2,088 3,505 1,869
Oil (bbls/d) 53 12 34 13
NGLs (bbls/d) 28 22 28 19
BOE/d 657 382 646 343
Average Selling Price
Natural Gas ($/Mcf) 3.07 8.08 3.86 8.66
Oil ($/bbl) 70.11 126.01 60.74 115.00
NGLs ($/bbl) 47.34 61.68 41.61 57.18
BOE ($/BOE) 23.83 51.58 25.93 54.55
Operating Netback
($/BOE)(1) 11.29 29.46 11.52 32.11
Funds Flow Netback
($/BOE)(1) 6.73 23.84 6.20 22.10
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(1) Please refer to Management's Discussion and Analysis for definition
of Non-GAAP measures.
OPERATIONAL REVIEW
Cash expenditures for the period were as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
Capital Program Summary 2009 2008 2009 2008
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($000s)
Land 292 173 437 551
Geological and
geophysical 502 180 869 635
Drilling 90 858 138 1,163
Completions (9) 535 41 556
Recompletions and
workovers 342 - 613 162
Production equipment
and facilities 86 1,271 189 1,955
Capitalized exploration
G&A 145 91 328 273
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1,448 3,108 2,615 5,295
Asset disposition - - - (158)
Corporate acquisitions 7,152 - 7,152 4,993
Asset retirement
obligation - 15 - 30
Other assets - 2 - 8
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8,600 3,125 9,767 10,168
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The acquisition of Conifer Exploration Ltd. ("Conifer") was the major event in the three months ending
Sure Energy will be more active in the fourth quarter of 2009 and plans on drilling two or three exploratory wells in Alberta and Saskatchewan as discussed below.
Areas of Activity
Southern Plains (Chinook)
The Company has had great success exploring for gas in the Southern Plains of Alberta, specifically at Chinook. In the current quarter Sure Energy produced 272 BOE/d from four shallow sweet natural gas wells in the Chinook area, and has one additional location to drill. Using the knowledge gained at Chinook the Company has mapped the producing reservoir regionally and has identified two prospects that it is currently developing, one for sweet gas and one for heavy oil. One of the prospects is planned to be drilled in Q4 of this year, the other in Q1 of 2010.
Peace River Arch
The Company currently produces 109 BOE/d from the Peace River Arch area in Northern Alberta. 45 BOE/d, net to Sure Energy is currently being produced from a Halfway gas pool at Boundary Lake, which is producing from a proved plus probable reserve base of 4 BCF. The Company owns a 25 percent working interest in the pool, gas plant and pipeline infrastructure related to this new pool discovery. At Valhalla the Company produces 64 BOE/d from three
Sure Energy has an inventory of six drillable locations on the Peace River Arch, three of which are new pool prospects. One of these wells was drilled in November and has been cased for potential in multiple zones.
Plains
Although the Company has some minor shallow gas production in the Redwater area, its focus in the area is on an emerging horizontal light oil conventional resource play. Following the acquisition of Conifer, the Company owns 8,300 acres of undeveloped land on a regionally extensive sand fairway in the lower Viking formation. The sand exhibits low permeability but is distributed over several townships and is hydrocarbon bearing across the whole area. Vertical wells in this sand typically produce at 8 - 20 BOE/d, but exhibit very low declines, once stabilized, indicating that they are accessing large reserves. Recent horizontal activity by third parties in the area has proven highly successful at improving production rates; new wells stabilizing between 40 and 80 BOE/d. The Company currently produces 90 BOE/d from 4 gross wells (2.4 net wells) in the area and has an inventory of 9 primary development horizontal locations and a further 34 contingent on their success. The Company anticipates drilling 5 - 6 wells on this play in 2010 and will focus on its lower working interest lands, while learning the most efficient and economic methods of exploiting the reservoir.
SE Saskatchewan
The Company owns 1,725 acres of land on a prospective light oil fairway at Queensdale in SE Saskatchewan. After shooting 13 square kilometres of proprietary 3D seismic the Company has identified two light oil prospects. One of these prospects will be evaluated with a vertical well prior to year end. Should the vertical well be successful the prospect will be exploited using horizontal wells. The Company plans to drill a development horizontal well into the other prospect in 2010. Success with both prospects could lead to up to seven development horizontals.
Tweedie
The Company currently produces 1.0 MMcf/d (169 BOE/d) of sweet gas from shallow Cretaceous reservoirs in the Tweedie area, just northeast of
West Central
Sure Energy produces 80 BOE/d of low decline, liquids rich gas production in West Central Alberta. The Company owns 12,160 net acres of undeveloped land in the area and has inventory of three drillable prospects.
Production
Production for the quarter by major property is as follows:
Three Months Ended September 30, 2009
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Gas Oil NGLs Total
Mcf/d Bbls/d Bbls/d BOE/d
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Peace River 520 9 13 109
Plains 38 37 - 44
Southern Plains 1,596 - 6 272
Tweedie 1,014 - - 169
West Central 285 7 9 63
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Total 3,453 53 28 657
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OUTLOOK
Sure Energy plans on ramping up its capital activities in the fourth quarter of 2009 and 2010. In the fourth quarter 2009 the Company plans on drilling three high impact 100% working interest locations in Gordondale, Southern Plains and SE Saskatchewan.
For 2010 the Company has established a base capital budget of
Sure continues to evaluate numerous acquisition opportunities that can complement our assets and ongoing opportunities.
Sure Energy Inc. is a publicly traded oil and gas exploration and development company listed on the
Forward-looking Information
Certain statements contained in this release constitute forward-looking information. These statements relate to future events or Sure Energy's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on Sure Energy's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, Sure Energy's statements in the section "Outlook" in the MD&A and the Company's stated intentions and expectations for drilling and development on its main producing properties are forward looking information. Sure Energy's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. Sure disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.
%SEDAR: 00024118E
For further information: please visit our website at www.sureenergyinc.com or contact: Mr. Jeff Boyce, President and CEO, Mr. Lance Wirth, Vice President, Finance and CFO, Phone: (403) 410-3100, Fax: (403) 410-3111, Email: [email protected]
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