Alberta Clipper Energy Inc. (ACN - TSX) Announces First Quarter Results
Tue May 13, 2:57 PM/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW./
CALGARY, May 13 /CNW/ - Alberta Clipper Energy Inc. ("Alberta Clipper" or the "Company") is pleased to announce that it has filed its unaudited financial statements and related management's discussion and analysis for the three months ended March 31, 2008 on www.albertaclipperenergy.com and www.sedar.com. Certain selected financial and operational information for the three months ended March 31, 2008 and March 31, 2007 comparatives are set out below and should be read in conjunction with Alberta Clipper's unaudited financial statements and related MD&A.
In this report, all references to barrels of oil equivalent (boe) are calculated converting natural gas to oil at a ratio of six thousand cubic feet to one barrel of oil.
CORPORATE HIGHLIGHTS
-------------------------------------------------------------------------
Three months Three months
ended ended
Financial March 31, March 31,
($000's, except per share amounts) 2008 2007
-------------------------------------------------------------------------
Petroleum and natural gas sales 17,489 8,208
Funds generated by operations (1) 8,985 3,999
Per share basic 0.16 0.10
Per share diluted 0.16 0.10
Net loss (333) (684)
Per share basic (0.01) (0.02)
Per share diluted (0.01) (0.02)
Capital expenditures 11,725 20,460
Acquisitions, net of dispositions 5,904 8,604
Net debt and working capital surplus (deficiency) (49,515) (21,915)
-------------------------------------------------------------------------
Operating
-------------------------------------------------------------------------
Production
Crude oil and natural gas liquids
(Bbls per day) 1,244 687
Natural gas (Mcf per day) 9,560 6,327
Barrels of oil equivalent (Boe per day, 6:1) 2,837 1,741
Average realized price
Crude oil and natural gas liquids ($ per Bbl) 88.34 62.33
Natural gas ($ per Mcf) 8.61 7.65
Barrels of oil equivalent ($ per Boe, 6:1) 67.74 52.38
Netback per Boe (6:1) ($)
Petroleum and natural gas sales 67.74 52.38
Hedging (0.95) -
Royalties (15.32) (11.40)
Operating expenses (10.18) (11.14)
Transportation expenses (0.67) (0.96)
-------------------------------------------------------------------------
Operating Netback 40.62 28.88
-------------------------------------------------------------------------
Undeveloped land holdings (net acres) 179,940 206,520
-------------------------------------------------------------------------
Common Shares (000's)
Shares outstanding, end of period 56,473 42,064
Weighted average shares, diluted 57,144 42,768
-------------------------------------------------------------------------
(1) Management uses funds generated by operations to analyze operating
performance and leverage. Funds generated by operations as presented
do not have any standardized meaning prescribed by Canadian GAAP and
therefore it may not be comparable with the calculation of similar
measures for other entities.
OPERATIONS OVERVIEW
Alberta Clipper Energy Inc. ("Alberta Clipper" or the "Company") increased the production base of the Company from 1,741 boe/d in the first quarter of 2007 to 2,837 boe/d in the first quarter of 2008, an increase of 63% year over year and an increase of 11% over the fourth quarter of 2007. With current production in excess of 3,300 boe/d, the Company continues its consistent growth in production and production per share. Operations during the first quarter of 2008 were focused in Western Alberta ("WAB") and Northeast British Columbia ("NEBC") concentrating on drilling and re-completion operations that resulted in a 100% success rate. Late in the quarter, the Company was also successful in closing a strategic acquisition at its Trutch, NEBC core asset thereby increasing its interest from 60% to 80%.
Alberta Clipper drilled 5 (1.7 net) wells in the first quarter of 2008 resulting in 1 oil well and 4 gas wells. Drilling activity for the three months ended March 31, 2008 is summarized in the following table:
-------------------------------------------------------------------------
Gross (Net) Well Count- ALL AREAS
-------------------------------------------------------------------------
Oil Gas Service D&A Total
-------------------------------------------------------------------------
2008 Q1 1 (0.1) 4 (1.6) - - 5 (1.7)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Gross (Net) Well Count by Area- ALL AREAS
-------------------------------------------------------------------------
CAB WAB- WAB-
Other Sylvan TRUTCH NEBC Total
-------------------------------------------------------------------------
2008 Q1 - 3 (1.1) 2 (0.6) - - 5 (1.7)
-------------------------------------------------------------------------
Highlights of achievements for the first quarter of 2008 for Alberta
Clipper include the following:
- Increased cash flow by 125% and cash flow per share by 60% over
Q1 2007
- Increased production by 63% and production per share by 21% over
Q1 2007
- Achieved a 100% success rate including the discovery of a significant
new gas pool
- Increased the Company's working interest in the Trutch Area of NEBC
to 80% through the acquisition of a partner interest
- Reduced operating costs by 8% to $10.18 per boe in the first quarter
of 2008 from $11.14 per boe in the same period of 2007
- Initiated increase in bank credit facility to $65 million from
$55 million
During the first quarter, Alberta Clipper's drilling program was highlighted by a significant new pool discovery made in an emerging area in Western Alberta. For strategic reasons, results remain confidential at this time. Alberta Clipper's interest in the area ranges between 25 and 50%. The first 2 wells drilled into the new pool are now on production with additional delineation drilling on the discovery scheduled to commence after freeze-up in Q4/08.
Further drilling activity during the quarter included 2 new pool discoveries - one at Rycroft and the other at Sylvan Lake - and a successful Leduc development well at Sylvan Lake. The new pool gas discovery at Sylvan Lake occurred within the Pekisko Formation and drill stem tested at in excess of 3,000 mcf/d. Of strategic significance, by way of this discovery plus a successful re-completion program that was also undertaken during the period in offsetting lands, significant potential for the Pekisko zone has been firmed up. Alberta Clipper holds a 37.5% working interest in the discovery which is currently awaiting completion and tie-in.
The new pool discovery made at Rycroft encountered 5 meters of Gething gas pay and is currently awaiting completion and tie in. Alberta Clipper holds a 25% BPO (35%APO) working interest in the well.
The first quarter of 2008 also marked the completion of a 10km pipeline project at Trutch B.C. that has established a new development corridor for the Trutch property. The construction of this new pipeline will allow for aggressive development of the lands to the west of current production.
Alberta Clipper participated in two projects during the first quarter of 2008 that tested the feasibility of newly identified scalable development opportunities. One of the projects has provided sufficient encouragement to facilitate the pursuit of this play on Company lands while the second project remains in the evaluation stage. These projects, if successful, have significant positive implications for the development of new technology-driven plays in the Company's core operating areas.
Expansion activities within the Company's core areas continued during the quarter with 2,770 gross (2,632 net) acres of land being acquired in the company's NEBC core area plus an additional 1,280 gross (1,280 net) acres acquired in the WAB area. The Company's total opportunity inventory count now stands at over 200.
OUTLOOK
Alberta Clipper continues to enhance its position in assets that satisfy the three strategic initiatives that will facilitate the Company's growth objectives over the longer term. These initiatives include:
- Increasing the Company's participation in "scalable development"
projects that employ leading-edge recovery-optimization technologies,
- Continuing the Company's participation in high impact, repeatable
exploration plays discernable on 3D seismic, and
- Accelerating enhanced oil recovery (EOR) initiatives to exploit the
Company's large oil-in-place reservoirs.
Consistent with the Company's strategic initiatives, subsequent to quarter end, Alberta Clipper has signed a letter agreement to further increase its working interest in the Trutch property in NEBC to approximately 90%.
Alberta Clipper is currently finalizing its operations plans for the second half of 2008 and will be releasing its second half 2008 budget in June. The second half budget will see a marked increase in activity in NEBC driven by both the resurgence in natural gas prices and royalty regime advantages that exist in NEBC relative to Alberta. Subsequent to the end of the quarter, the Company brought on-stream its most distant delineation well at Trutch which is located approximately 10 km west of existing production. Production from this well proves up a substantial new development fairway for the Trutch asset. In Trutch, and elsewhere in NEBC, Alberta Clipper operates large land blocks that have the potential for large scale resource development. During the second half of the year, the Company will be employing recovery optimization technologies on potentially scalable development plays on this large land base. Alberta Clipper holds over 50,000 net acres of undeveloped land in NEBC with production proven from 8 stratigraphic intervals - 3 of which have potential to benefit significantly from the application of new recovery-optimization technologies not yet applied to the properties.
In Western Alberta, the Company has recently completed drilling a horizontal well in the Sylvan area where it intends to test the application of recovery-optimizing, multi-stage fracture stimulations on a traditionally low-recovery, large resource-in-place reservoir. Also in Western Alberta, Alberta Clipper will continue to pursue both new and existing medium depth opportunities that have the potential to create scalable development projects, and its selective deeper exploration prospects that have the potential for multi-well development follow-up.
Subject to finalizing the second half 2008 budget, Alberta Clipper anticipates testing three vertical wells for Montney potential prior to year-end. All three of the proposed tests are on significant land blocks with material development upside pending success on the initial tests.
A summary of H1-2008 activity is provided in the following table:
-------------------------------------------------------------------------
Gross (Net) Well Count- ALL AREAS
-------------------------------------------------------------------------
Oil Gas EXPLN DVMNT Total
-------------------------------------------------------------------------
2008 YTD 2 (0.7) 4 (1.6) 2 (0.7) 4 (1.6) 6 (2.3)
-------------------------------------------------------------------------
H1-2008 Remaining 2 (0.6) - - 2 (0.6) 2 (0.6)
-------------------------------------------------------------------------
H1-2008 Total 4 (1.3) 4 (1.6) 2 (0.7) 6 (2.2) 8 (2.9)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Gross (Net) Well Count by Area- ALL AREAS
-------------------------------------------------------------------------
CAB WAB- WAB- NEBC- NEBC- Total
Other Sylvan TRUTCH Other
-------------------------------------------------------------------------
2008 YTD - 3 (1.1) 3 (1.2) - - 6 (2.3)
-------------------------------------------------------------------------
H1-2008
Remaining - - 2 (0.6) - - 2 (0.6)
-------------------------------------------------------------------------
H1-2008 Total - 3 (1.1) 5 (1.8) - - 8 (2.9)
-------------------------------------------------------------------------
The resurgence in natural gas prices, along with the continued strength in oil prices, will allow Alberta Clipper to aggressively pursue both its light oil and natural gas opportunity inventory. Foremost, this price strength will allow the company to exploit its substantial opportunity base in NEBC that has seen limited capital investment over the past 18 months. In addition, strong cash flows generated by the Company's premium product mix will allow Alberta Clipper to continue to develop, diversify, and expand the Company's asset base. This financial flexibility, coupled with the company's depth of both disclosed and confidential emerging opportunities, will ensure that Alberta Clipper achieves its stated growth strategy through the remainder of 2008.
For further information regarding Alberta Clipper Energy Inc., the reader is invited to visit the Company's website at www.albertaclipperenergy.com.
On behalf of the Board of Directors,
(Signed) "Kel Johnston"
Kel Johnston
President and Chief Executive Officer
May 13, 2008
Alberta Clipper Energy Inc. is a publicly traded Canadian energy company involved in the exploration, development and production of natural gas and crude oil in western Canada.
As referred to above, to view Alberta Clipper's unaudited financial statements and related MD&A for the three months ended March 31, 2008 please visit www.albertaclipperenergy.com or www.sedar.com. To the extent investors do not have access to the internet, copies of the audited financials and related MD&A can be obtained on request without charge by contacting Investor Relations at (403) 440-3474 or at 1800, 500 - 4th Avenue SW, Calgary, Alberta, T2P 2V6.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements including expectations of future production. More particularly, this press release contains statements concerning Alberta Clipper's future production estimates, expansion of oil and gas property interests, exploration and development drilling, capital expenditures, number and drilling locations to be drilled in 2008, seismic acquisitions and facilities upgrades. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Additional information on these and other factors that could affect Alberta Clipper's operations or financial results are included in Alberta Clipper Energy's reports on file with Canadian securities regulatory authorities.
The forward-looking statements or information contained in this news release are made as of the date hereof and Alberta Clipper undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Oil and Gas Advisory
This press release contains disclosure expressed as "Boe/d". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand cubic feet of natural gas to one barrel of oil 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.
The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. Not for
distribution to U.S. newswire services or for dissemination in the United
States. Any failure to comply with this restriction may constitute a
violation of U.S. securities law.
ContactsKel Johnston
President & C.E.O.
Alberta Clipper Energy Inc.
Telephone: (403) 440-3474
Facsimile: (403) 440-3475
Website: www.albertaclipperenergy.com
535.02 (5.57%)
