Wild Stream Exploration Inc. Announces Third Quarter 2009 Operating and Financial Results
November 30 2009 - 7:23PM
Marketwired Canada
Wild Stream Exploration Inc. (formerly Eagle Rock Exploration Ltd.) (TSX
VENTURE:ERX) (the "Company") is pleased to announce that it filed on SEDAR its
unaudited financial statements and related Management's Discussion and Analysis
("MD&A") for the three and nine months ended September 30, 2009 and 2008.
Certain selected financial and operational information is set out below and
should be read in conjunction with Wild Stream's unaudited financial statements
and related MD&A. These filings will be available at www.wildsr.com and
www.sedar.com. Please note that the numbers presented below are representative
of the operations of the Company prior to the material subsequent events as
described in the section below.
Highlights
--------------------
Three months ended Nine months ended
September 30, Percent September 30, Percent
2009 2008 Change 2009 2008 Change
--------------------------------------------------------
Financial (thousands
of dollars except
share data)
Petroleum and
natural gas revenue 2,513 5,242 (52) 7,468 12,698 (41)
Funds from
operations (1) 1,035 3,245 (68) 4,657 6,981 (33)
Per share
- basic (4) 0.56 1.86 (67) 2.56 3.87 (31)
- diluted 0.55 1.86 (67) 2.49 3.85 (18)
Net earnings (loss) (447) 2,207 (120) (2,009) 1,718 (217)
Per share
- basic (4) (0.25) 1.21 (125) (1.11) 0.95 (233)
- diluted (0.25) 1.21 (125) (1.10) 0.95 (233)
Capital
expenditures, net (1,713) 7,662 (122) (171) 7,711 (102)
Working capital
(deficiency) (17,523) (10,261) 71
Weighted average
shares (thousands) (4)
Basic 1,818 1,806 1
Diluted 1,834 1,811 1
Operating (6:1 boe
conversion)
Average daily
production
Natural gas (mcf/d) 108 119 (9) 324 121 168
Liquids (bbls/d) 413 517 (20) 463 455 2
Barrels of oil
equivalent (2)
(boe/d) 431 536 (20) 517 475 9
Average sales price
Natural gas ($/mcf) 3.05 8.13 (62) 3.93 8.63 (54)
Liquids ($/bbl) 65.32 108.17 (40) 56.35 99.33 (43)
Barrel of oil
equivalent ($/boe) 63.34 106.33 (40) 52.93 97.56 (46)
Netbacks
Operating netback
($/boe) 39.17 77.39 (49) 44.58 67.99 (34)
Corporate netback
(3) ($/boe) 26.13 65.84 (60) 33.00 53.67 (39)
(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.
(2.) Boe conversion ratio for natural gas of 1 Boe: 6 Mcf has been used,
which is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not necessarily represent a value
equivalency at the wellhead.
(3.) Corporate netbacks are calculated as the operating netback less general
and administrative expenses and financial charges. Also included in the
nine months ended September 30, 2009 is the monetization of a commodity
hedge
(4.) All share and per share amounts reflect the approved share
consolidation on a thirty for one basis.
2009 Third Quarter Highlights
The three months ended September 30, 2009 mark the start of a Wild Stream
transformation to a resource focused high growth oil and gas junior exploration
company:
-- During the third quarter, continuing from the first six months of 2009,
the Company restricted capital expenditures to preserve capital and
focus on managing bank debt. A total of $1.7 million of net property
dispositions occurred during this quarter.
-- On September 23, 2009 the Company announced a recapitalization and
change of management team and Board of Directors.
Subsequent Events
-- October 7, 2009 - announced that shareholder consent had been received
for the recapitalization and that the management team, board of
directors and $14.6 million private placement had been completed.
-- October 15, 2009 - announced southwest Saskatchewan acquisitions of 235
bbls/d of production and approximately 17,600 net acres of land on two
key resource oil prospects in the Shaunavon and Dodsland areas. In
conjunction with the acquisitions, a $54.5 million bought deal financing
was announced.
-- November 6, 2009 - announced closing of the southwest Saskatchewan
acquisitions and bought deal financing that was announced on October 15,
2009.
-- November 16, 2009 - announced the consolidation of the shares on 30 for
1 basis, a name change to Wild Stream Exploration Inc. and began trading
under the symbol WSX on the TSXV.
-- November 25, 2009 - announced a corporate and asset acquisition of 300
boe/d of production and approximately 35,000 undeveloped acres,
providing the Company a third core area, that being in the Garrington
area of west central Alberta
Operations
As the new management team assumed operations early in the fourth quarter there
was very little operational activity to report on during the actual third
quarter period. Since October 7, 2009, the southwest Saskatchewan acquisitions
have closed and active operations have commenced.
The fourth quarter will see approximately 4 gross (4 net) wells drilled late in
the quarter. The balance of the activities in the fourth quarter are revolving
around facilities optimizations, workovers and preparations including surveying
and licensing for what is expected to be a very active first quarter in 2010.
Outlook; Upward Revision to Guidance
The acquisitions which were announced on October 15, 2009 and subsequently
closed on November 6, 2009 have resulted in an upward revision to the 2009 exist
production rate from 450 boepd to more than 700 boepd. This upward revision does
not include the additional acquisitions that were announced on November 25,
2009. These transactions are expected to close in January 2010.
Upon closing of all acquisitions it is expected that Wild Stream will be in a
surplus working capital position of approximately $5 million. This balance sheet
strength, combined with strong anticipated 2010 cashflow will allow us to
participate in an aggressive capital program throughout 2010.
The first quarter of 2010 is anticipated to be very active with the current
budget anticipating the drilling of 13 gross (11 net) wells. This first wave of
drilling will be focused on multi-stage fractured horizontal wells that will
begin to delineate both the lower Shaunavon and Dodsland Viking plays. Activity
in the Garrington area is not expected to ramp up until the third quarter of
2010 due to the timing associated with the regulatory approvals required to
begin drilling our horizontal well program.
Additional guidance for 2010 will be forthcoming in December.
The Wild Stream team has developed an enviable drilling inventory in the short
time since the new management team has assumed operations. To date, we have an
inventory of in excess of 200 net oil drilling locations of which 85% are
concentrated on our three key resource oil plays. This multi year inventory
combined with our commitment to prudent fiscal management will allow your
company to see meaningful per share growth for the foreseeable future. We remain
committed to increasing shareholder value through a combination of exploration,
strategic acquisitions and subsequent exploitation while maintaining a
conservative approach to balance sheet management.
FORWARD LOOKING STATEMENTS: This press release contains forward-looking
statements. More particularly, this press release contains statements concerning
the anticipated impact of workovers and repairs, the anticipated impact of the
Private Placement or bought deal financing and the anticipated timing of the
release of the Company's 2010 capital expenditure budget. The forward-looking
statements are based on certain key expectations and assumptions made by the
Company, including expectations and assumptions concerning the success of
optimization and efficiency improvement projects, the availability of capital,
the success of future drilling and development activities, the performance of
existing wells, the performance of new wells and prevailing commodity prices.
Although the Company believes that the expectations and assumptions on which the
forward-looking statements are based are reasonable, undue reliance should not
be placed on the forward-looking statements because the Company can give no
assurance that they will prove to be correct. Since forward- looking statements
address future events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ materially from those
currently anticipated due to a number of factors and risks. These include, but
are not limited to, risks associated with the oil and gas industry in general
(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 and exchange rate fluctuations and
uncertainties resulting from potential delays or changes in plans with respect
to exploration or development projects or capital expenditures. Certain of these
risks are set out in more detail in the Company's Annual Information Form which
has been filed on SEDAR and can be accessed at www.sedar.com or Wild Stream's
website www.wildsr.com.
The forward-looking statements contained in this press release are made as of
the date hereof and the Company 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.
Meaning of Boe: When used in this press release, Boe means a barrel of oil
equivalent on the basis of 1 Boe to 6 thousand cubic feet of natural gas. Boe
per day means a barrel of oil equivalent per day. Boe's may be misleading,
particularly if used in isolation. A Boe conversion ratio of 1 Boe for 6
thousand cubic feet of natural gas is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
This press release shall not constitute an offer to sell, nor the solicitation
of an offer to buy, any securities in the United States, nor shall there be any
sale of securities mentioned in this press release in any state in the United
States in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.