CALGARY, ALBERTA (TSX: SNG) (AMEX: SNG) is pleased to announce
its financial and operating results for the year ended December 31,
2007.
Highlights
- 2007 exit production rate was 3,530 boe/d, up 14% or 430 boe/d
above the target quoted in the fall of 2007;
- Q4 2007 production averaged 3,025 boe/d, up 10% or 300 boe/d
from Q3;
- Increased Proven Reserves to 5,231 mboe from 5,193 mboe and
Proven Plus Probable to 8,481 mboe from 8,131 mboe;
- 2007 year end before tax undiscounted cash flows on Proved
Plus Probable reserves of $241 million increased by 10% compared to
$219 million in 2006;
- On July 27, 2007, the Company and its joint venture partner,
the Petroleum Company of Trinidad and Tobago Limited ("Petrotrin"),
received the Exploration and Production Licence for the
Mayaro/Guayaguayare ("M/G") Block offshore Trinidad;
- On August 11, 2007, the BG Group plc partnered with Canadian
Superior by acquiring a 30% working interest in Canadian Superior's
"Intrepid" Block 5 (c) Production Sharing Contract by paying
Canadian Superior approximately US $39 million and on a go forward
basis paying approximately 40% of the exploration costs associated
with the drilling of the three commitment wells required on Block 5
(c). As a result of this joint venture and one other Canadian
Superior entered into on Block 5(c), Canadian Superior is paying
approximately 26-2/3% of the cost to get 45% of the production from
the Block.
- Completed equity financings in the year for approximately
$22.7 million;
- Subsequent to year end Canadian Superior had a large natural
gas discovery in Trinidad. Completed the drilling of its "Victory"
well, "Intrepid" Block 5(c), offshore Trinidad, a natural gas
discovery; and, two zones were successfully completed in the
"Victory" well. The first zone tested natural gas on a restricted
basis at high pressure rates averaging between 40 and 45 mmcf/d;
and, the second zone, which was tested independently and separate
from the first zone, tested natural gas on a restricted basis at
high pressure rates averaging in excess of 30 mmcf/d. Canadian
Superior and its partners have identified possible further
prospective horizons in the "Victory" well that will be evaluated
in other wells planned for the area; and,
- Also subsequent to year end, Canadian Superior announced the
acquisition of Seeker Petroleum Ltd. for approximately $51.2
million, including the assumption of approximately $8.5 million in
debt. Canadian Superior closed this acquisition in March 2008 and
has acquired approximately 1,035 boe/d; 2,073 MBOE of proven plus
probable reserves and 55,385 net acres of undeveloped land.
Speaking today, Craig McKenzie, Canadian Superior's Chief
Executive Officer, said, "Our 2007 physical and financial results
demonstrate the strength and delivery of our corporate objective,
which is to exponentially grow the business through high-impact
international exploration programmes and expansion of our Western
Canada core assets through focused drilling and selective,
accretive acquisitions. We carried out the drilling of our
'Victory' well offshore Trinidad in 2007 as the first of a
three-well series, which yielded a successful natural gas discovery
in this multi-TCF play. Now we are drilling the 'Bounty' well, and
later in 2008, we will drill 'Endeavour' as the third well in this
series. In Western Canada, we surpassed our 2007 exit production
rate of over 3,000 boe/d and now we are focused on our mid-year
2008 target of 5,000 boe/d, but more importantly we have an
aspiration to achieve 10,000 boe/d before year end so that more of
our international growth is funded from internal cash flows. At the
same time our objective is to provide our shareholders significant
growth in per share value."
Financial and Operational Highlights
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Twelve months ended December 31, 2007 2006 % change
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($000s, except where otherwise noted)
Financial
Petroleum and natural gas sales, net of
transportation 47,847 48,766 -2
Cash flow from operations 13,855 23,083 -40
Per share - basic $0.10 $0.19 -47
Net loss (9,936) (10,913) -9
Per share - basic ($0.07) ($0.09) -22
Capital Expenditures 66,282 59,548 11
Nova Scotia offshore term deposits 14,559 14,805 -2
Working capital surplus (net debt) 12,663 (670) 1,990
Share outstanding at year end 140,312 131,216 7
Operating
Average production
Natural gas (mcf/d) 13,496 13,414 1
Crude oil and natural gas liquids (bbl/d) 594 653 -9
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Total (boe/d) 2,843 2,889 -2
Average sales price
Natural gas ($/mcf) 6.72 6.95 -3
Crude oil and natural gas liquids ($/bbl) 67.95 61.95 10
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Total ($/boe) 46.10 46.26 0
Reserves (working interest)
Total Proved
Natural gas (mmcf) 25,333 24,875 2
Crude oil and natural gas liquids (mbbl) 1,009 1,047 -4
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Total (mboe) 5,231 5,193 1
Total Proved plus Probable
Natural gas (mmcf) 39,632 37,962 4
Crude oil and natural gas liquids (mbbl) 1,944 1,805 8
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Total (mboe) 8,549 8,131 5
Undeveloped land (gross acres)
Offshore Trinidad and Tobago 135,041 135,041 0
Offshore Nova Scotia 1,234,546 2,590,473 -52
Western Canada 107,074 131,747 -19
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Total 1,476,661 2,857,261 -48
Wells drilled
Gross 73.0 58.0 26
Net 25.0 28.6 -13
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Operational Update
Trinidad and Tobago
On July 20, 2005, Canadian Superior signed a PSC for the 80,020
acre "Intrepid" Block 5(c), offshore Trinidad and Tobago, with the
Government of the Republic of Trinidad and Tobago. The PSC provides
Canadian Superior the right to explore on "Intrepid" Block 5(c).
The "Intrepid" Block 5(c) is located approximately 96 kilometers
(60 miles) off the east coast of the island of Trinidad with water
depths in the range of 150m to 450m (500 to 1,500 feet). The three
"Intrepid" Block wells will evaluate three large separate potential
hydrocarbon bearing structures that have been delineated by
extensive 3D seismic over the entire "Intrepid" Block 5(c) that
Canadian Superior has evaluated and interpreted. The first well
commenced drilling shortly after the Kan Tan IV had completed a
scheduled refurbishment in Brownsville, Texas. On May 11, 2007 the
Kan Tan IV was towed out of the port of Brownsville, Texas, en
route to the port of Chaguaramus in Trinidad to load up supplies
and finalize drilling preparations and was then moved to the first
drilling location on the "Victory" Prospect arriving on site June
19, 2007. The first well on the "Intrepid" Block 5(c) was on the
"Victory" Prospect, the second and third wells are planned for the
"Bounty" and "Endeavour" prospects.
On June 25, 2007, the drilling of a pilot hole at the "Victory"
well site commenced. Following that drilling and evaluation, the
main well bore was spudded on June 29, 2007. On August 30, 2007,
the "Victory" well site reached Total Depth of 16,621 feet (subsea)
and due to difficulties encountered the lower portion of the well
was re-drilled to a total depth of 16,150 feet. On December 17,
2007, the Corporation announced that it had unanimously agreed with
its partners to case and conduct flow tests on the "Victory"
well.
The "Victory" natural gas discovery tested natural gas in two
main formations and the Corporation estimates that the well is
capable of producing at sales gas flow rates of well over 100
mmcf/d from the lower zone alone, which was the first formation
tested. In addition, the Corporation estimates that the well is
capable of flowing over 50 mmcf/d from the second formation flow
tested. Both zones were tested at restricted rates and had high
flowing pressures.
On February 20, 2008, the Corporation successfully spudded the
"Bounty" well with the Kan Tan IV semi-submersible drilling rig.
The rig has moved approximately 2.2 miles from the "Victory" well.
The "Bounty" well is planned to be drilled to a total vertical
depth of approximately 18,000 feet subsea in about 1,000 feet of
water and is expected to take about 110 days to drill. It is
expected that the "Bounty" well and the third well, "Endeavour",
will both be drilled and evaluated by year end 2008.
The Corporation also continues to prepare for the first phase of
operations on its Mayaro/Guayaguayare ("M/G") "Tradewinds" project.
On July 27, 2007, Canadian Superior, as operator, and its joint
venture partner, the Petroleum Company of Trinidad and Tobago
Limited ("Petrotrin") received the Exploration and Production
License for the near shore Mayaro/Guayaguayare ("M/G") Block off
the east coast of the island of Trinidad and Tobago from the
Trinidad and Tobago Ministry of Energy and Energy Industries. This
joint venture encompasses two near-shore Blocks (58,080 gross
acres) off the east coast of Trinidad where management hopes to
establish significant oil reserves in the heart of a known
producing hydrocarbons-bearing structural trend. For the M/G Block
Land, the Corporation is working on the design of a seismic program
to evaluate the near-shore block and is planning this program to be
shot during 2008 where we intend to drill 2 offshore wells on the
M/G Block prior to year end 2009.
Offshore Nova Scotia, Canada
Canadian Superior is one of the few operators involved in all
three main play types in the offshore Nova Scotia basin where the
Corporation has evolved as the company holding the largest
exploration acreage position with 100% interests in five
exploration licences totaling 1.29 million net acres at year end
2007. Canadian Superior relinquished EL2412 and EL2413 at the end
of 2007 and currently holds the following exploration licenses
"Mayflower" (EL2406), "Marauder" (EL2415), "Marconi" (EL2416),
"Mariner" (EL2409) and "Marquis" (EL2402) exploration blocks. Four
of these licences, "Marquis", "Mariner", Marauder" and "Marconi",
are in the Sable Island area which is an area of natural gas supply
that is very important and strategic for the North Eastern United
States gas supply.
Canadian Superior has identified several other large Cretaceous
and Jurassic prospects on its 100% "Marauder" and 100% "Marconi"
exploration lands which cover an additional 370,890 acres offshore
Nova Scotia, offsetting the Sable Island area. The "Marauder" lands
directly offsets three significant discovery licences and have
several seismically defined prospects, two of which lie on trend
with significant discoveries near existing production
infrastructure. The "Marconi" licence has a seismically defined
tilted fault / anticlinal prospect similar to other Sable area
fields.
Canadian Superior's "Mariner" shallow water block (EL2409)
covers 100,656 acres and is located approximately nine kilometres
northeast of Sable Island, offshore Nova Scotia and directly
offsets five significant discoveries near Sable Island, including
the ExxonMobil Venture natural gas production field and other
nearby Sable Offshore Energy Project existing production
infrastructure. Three large Cretaceous structures have been
identified for drilling on the "Mariner" block based on an
evaluation of seismic data. The first exploration well, Canadian
Superior El Paso "Mariner" I-85, was drilled on this block in
November 2003 to March 2004 and encountered gas pay in multiple
zones. Two new prospective locations have been identified and
further drilling is planned by Canadian Superior on the "Mariner"
Block in 2009. Front end geological and geophysical analyses are
complete and environmental approvals are in place.
Western Canada
The Corporation continued its successful Western Canada
exploration and development program in 2007 where it focused its
drilling activity in its core Drumheller area. Currently, the
Corporation derives all of its production and cash flow from
Western Canada, with approximately 90% of the Corporation's
production coming from the Drumheller area, where the Corporation
remains focused on continued growth through the "drill-bit". In
addition, the Corporation has placed more focus on the Boundary
Lake and Cecil areas and surrounding properties such as Giroux Lake
and evaluating selected acquisition opportunities.
Canadian Superior is pleased to report that due to ongoing
drilling success in 2007, with new production brought on-stream
throughout 2007, production averaged approximately 3,025 boe/d raw
(2,843 boe/d, average daily sales volume) for the year, and in
addition 2007 saw significant production growth in the 4th quarter
resulting in year end production of approximately 3,530 boe/d raw
(3,290 boe/d, average daily sales volume).
During 2007, the Corporation drilled or participated in 73
gross, 25 operated and 48 non-operated (total of 25.0 net wells)
with an overall success rate of 92%. In addition, the land picture
for Canadian Superior continues to remain steady as the Corporation
drills and makes strategic land sale acquisitions. At December 31,
2007, the Corporation held in Western Canada 246,445 gross acres
(164,968 net acres) of predominately Canadian Superior operated
lands with a high working interest of approximately 70%.
On January 16, 2008, the Corporation announced entering into an
acquisition agreement whereby Canadian Superior will acquire
subject to certain conditions, all of the issued and outstanding
shares of Seeker Petroleum Ltd., for total consideration of
approximately $51.2 million, including the assumption of
approximately $8.5 million of debt. Canadian Superior will acquire
approximately 1,035 boe/d of Western Canadian production and 2,073
MBOE of proven plus probable reserves.
Six wells were drilled and cased in the first quarter of 2008
and currently another well, from the Seeker assets, is being
drilled. There are two 3D seismic programs planned for winter 2008
that total 73 square kilometers. A third program will be added to
evaluate Seeker's acreage. The Corporation's comprehensive 2008
drilling plan will be adjusted further to rank and prioritize the
two companies drilling portfolios.
Canadian Superior is a Calgary, Alberta, Canada based oil and
gas exploration and production company with operations Offshore
Trinidad and Tobago, Offshore Nova Scotia, Canada and in Western
Canada. See Canadian Superior's website at www.cansup.com to review
Canadian Superior's operations in Western Canada, Offshore Trinidad
and Tobago and Offshore Nova Scotia interests. Canadian Superior
has approximately 20,000 shareholders worldwide, including some of
the top institutional shareholders in North America.
Canadian Superior is paying approximately 26-2/3% of the Block
5(c) exploration program cost to maintain a 45% working interest in
Block 5(c), with its partners, BG International Limited, a wholly
owned subsidiary of the BG Group plc (LSE: BG.L), paying
approximately 40% for a 30% working interest and Challenger Energy
Corp. (TSX VENTURE: CHQ) (AMEX: CHQ) paying 33-1/3% for a 25%
working interest through Canadian Superior.
This news release contains forward-looking information,
including estimates, projections, interpretations, prognoses and
other information that may relate to current, past or future
production, development(s), testing, well test results, project
start-ups and future capital spending. Current, past and/or future
actual results and/or reported results, estimates, projections,
interpretations, prognoses, well results, test results, reserves,
production, resource and/or resource potential, development(s),
project start-ups, and capital spending, plans and/or estimated
results could differ materially due to changes in project
schedules, operating performance, demand for oil and gas,
commercial negotiations or other technical and economic factors or
revisions. This news release may contain the reference to the terms
discovery, reserves and/or resources or resource potential which
are those quantities estimated to be contained in accumulations.
There is no certainty that any portion of these accumulations or
estimated accumulations in this news release may not change
materially; and that, if discovered, in any discovery, the
accumulations or estimated accumulations may not be economically
viable or technically feasible to produce.
Statements contained in this news release relating to estimates,
results, events and expectations are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements involve known and unknown
risks, uncertainties, scheduling, re-scheduling and other factors
which may cause the actual results, performance, estimates,
projections, interpretations, prognoses, schedules or achievements
of the Corporation, or industry results, to be materially different
from any future results, performance or achievements expressed or
implied by such statements. Such factors include, among others,
those described in the Corporations' annual reports on Form 40-F or
Form 20-F on file with the U.S. Securities and Exchange
Commission.
Contacts: Canadian Superior Energy Inc. Investor Relations (403)
294-1411 (403) 216-2374 (FAX) Website: www.cansup.com Canadian
Superior Energy Inc. Suite 2700, 605 - 5th Avenue S.W. Calgary,
Alberta Canada T2P 3H5
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