Crew Energy Inc. (TSX:CR) of Calgary, Alberta is pleased to present
its operating and financial results for the three month period
ended March 31, 2012.
Highlights
-- Funds from operations increased 99% over the first quarter of 2011 to
$48.1 million;
-- Funds from operations per share increased 38% to $0.40 per share;
-- Record first quarter production for the Company of 30,380 boe per day
represents a 95% increase over the first quarter of 2011 and a slight
increase over the fourth quarter of 2011;
-- Production per share increased 35% over the first quarter of 2011;
-- Oil and liquids production improved significantly to 16,037 bbls per day
(53% of production), increasing from 6,923 bbls per day (44% of
production) in the first quarter of 2011, representing a 132% increase
and a 57% increase on a per share basis;
-- Since deploying its liquids focus strategy in 2007, Crew has increased
its liquids production by 970% (315% per share);
-- Crew drilled 60 wells in the quarter with a 97% success rate;
-- Four first quarter wells were on production at the end of the quarter at
Princess with two vertical wells on production at seven day test rates
of 375 and 133 boe per day and two horizontal wells on production at 348
and 640 boe per day after seven days;
-- Three Montney liquids rich gas wells were completed at Septimus and came
on production at rates of 776, 693 and 588 boe per day;
-- The latest Tower oil well flowed at an average gross rate of 500 boe per
day (375 bbls per day oil and liquids and 0.75 mmcf per day of natural
gas);
-- Completed the annual renewal of the Company's credit facility receiving
approval for a $430 million credit facility.
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Three months Three months
Financial($ thousands, except per share ended ended
amounts) March 31, 2012 March 31, 2011
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Petroleum and natural gas sales 123,075 61,148
Funds from operations (note 1) 48,057 24,111
Per share - basic 0.40 0.29
- diluted 0.40 0.29
Net loss (6,430) (10,126)
Per share - basic (0.05) (0.12)
- diluted (0.05) (0.12)
Capital expenditures 128,743 75,165
Property acquisitions (net of dispositions) - 361
Net capital expenditures 128,743 75,526
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Capital Structure($ thousands) As at
As at December 31,
March 31, 2012 2011
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Working capital deficiency (note 2) 78,424 92,452
Bank loan 320,153 230,676
Net debt 398,577 323,128
Current bank facility 430,000 430,000
Common Shares Outstanding (thousands) 120,760 119,993
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Notes:
(1) Funds from operations is calculated as cash provided by operating
activities, adding the change in non-cash working capital,
decommissioning obligation expenditures and the transportation liability
charge. Funds from operations is used to analyze the Company's operating
performance and leverage. Funds from operations does not have a
standardized measure prescribed by International Financial Reporting
Standards and therefore may not be comparable with the calculations of
similar measures for other companies.
(2) Working capital deficiency includes only accounts receivable less
accounts payable and accrued liabilities.
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Operations Three months Three months
ended ended
March 31, 2012 March 31, 2011
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Daily production
Conventional oil (bbl/d) 6,770 5,794
Heavy oil (bbl/d) 6,162 -
Natural gas liquids (bbl/d) 3,105 1,129
Natural gas (mcf/d) 86,056 52,109
Oil equivalent (boe/d @ 6:1) 30,380 15,608
Average prices (note 1)
Conventional oil ($/bbl) 81.10 69.68
Heavy oil ($/bbl) 71.04 -
Natural gas liquids ($/bbl) 53.05 59.71
Natural gas ($/mcf) 2.34 4.00
Oil equivalent ($/boe) 44.52 43.53
Netback ($/boe)
Operating netback (note 2) 20.35 20.20
Realized gain on financial instruments - (0.01)
G&A 1.91 1.98
Interest on bank debt 1.06 1.06
Funds from operations 17.38 17.17
Drilling Activity
Gross wells 60 40
Working interest wells 57.8 39.3
Success rate, net wells 97% 100%
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Notes:
(1) Average prices are before deduction of transportation costs and do not
include hedging gains and losses.
(2) Operating netback equals petroleum and natural gas sales including
realized hedging gains and losses on commodity contracts less royalties,
operating costs and transportation costs calculated on a boe basis.
Operating netback and funds from operations netback do not have a
standardized measure prescribed by International Financial Reporting
Standards and therefore may not be comparable with the calculations of
similar measures for other companies.
Overview
Operations for the first quarter of 2011 included the drilling
of 60 (57.8 net) wells resulting in 46 (45.0 net) oil wells, 11
(9.8 net) natural gas wells, one (1.0 net) service well and two
(2.0 net) dry and abandoned wells. Of the wells drilled, 24 were
brought on production during the quarter. Drilling during the
quarter was highlighted by 29 (29.0 net) wells at Princess,
Alberta. The Company is currently completing and tying in these new
wells and has been very pleased with the success of the vertical
wells extending existing pool boundaries and identifying new pools
at a cost of approximately $25,000 per producing boe. At
Lloydminster, Saskatchewan, the Company drilled 18 (17.8 net) wells
adding an estimated 760 boe per day of new production at a cost of
$15,000 per producing boe. Due to the low natural gas price
environment, gas well drilling was focused on providing production
to meet processing commitments and to achieve land retention in
Crew's main liquids rich gas areas at Septimus, British Columbia
and in the Deep Basin of Alberta. During the quarter, the Company
drilled five (5.0 net) wells at Septimus and currently plans to
only complete three of these wells due to the low natural gas price
environment. Additional gas drilling was conducted at Wapiti, in
the Deep Basin, where the Company drilled five (4.6 net) wells and
has since completed four wells resulting in successful gas wells
adding average new production at a facility restricted rate of 494
boe per day per well, including 173 bbl per day per well of
liquids.
Production during the quarter averaged 30,380 boe per day (53%
liquids), slightly above the fourth quarter of 2011 and 95% greater
than the first quarter of 2011. Production additions for the
quarter were provided by the successful drilling programs at
Princess, Lloydminster, Septimus and in the Deep Basin which helped
to offset declines and 6.3 mmcf per day of Alberta dry natural gas
production that was shut in during the quarter due to the poor
natural gas pricing environment.
Financial
The first quarter saw a dramatic change in Crew's commodity
pricing compared to the fourth quarter of 2011. During the quarter,
prices received for the Company's natural gas production dropped
32% to average $2.34 per mcf for the quarter. Prices continued to
fall throughout the quarter and sunk to a low of $1.60 per mcf
early in the second quarter. This decrease has had a significant
impact on the Company's funds from operations and has resulted in
the shut-in of 6.3 mmcf per day of uneconomic dry sour gas
production and the planned shut-in of an additional 4.5 mmcf per
day in the second quarter which, when combined, represents
approximately 12.5% of the Company's natural gas production. The
shut-in of this gas is expected to add approximately $600,000 per
month in funds from operations.
The Company's conventional and heavy oil prices were also
volatile in the first quarter experiencing a 6% and 8% respective
decline over the previous quarter. This decrease occurred
unexpectedly in late February when the entire Canadian crude
pricing complex declined by as much as $20 per barrel over a seven
day period. This decline was attributed to a combined shortage of
pipeline capacity and refinery demand out of the United States. The
decrease in Canadian pricing continued throughout the remainder of
February through to May. We are currently seeing improvement for
the coming months but it is uncertain if the situation is
completely resolved and there remains a possibility that we could
see further weakening.
The Company's capital expenditures for 2012 were planned to be
heavily weighted to the first quarter. During the quarter the
Company spent $129 million on its capital program including $90
million on drilling and completions, as outlined above, and $22
million on facilities, equipment and tie-ins. The program was
designed to provide production growth throughout the second quarter
and into the early third quarter while the Company's operations
were shut down during break-up. During the quarter, the Company
acquired a strategic pipeline in the Septimus area for $8.1
million. This asset allows access to the Company's liquids rich
natural gas production from the northwest portion of the Company's
Septimus Montney gas field and also provides a short tie-in point
for solution gas from the Company's emerging Tower oil play.
At quarter end, Crew's net debt increased to $399 million
compared to the Company's newly approved $430 million bank
facility. This debt level is projected to be the Company's peak
reported debt level during the year as planned net capital spending
for the remainder of the year is forecasted to bring year-end 2012
net debt back to approximately $350 million not including any
dispositions.
The Company continues to actively protect its cash flow by
hedging a portion of its future production against volatile
commodity prices. Crew currently has hedged approximately 23.3 mmcf
day of natural gas for the period of May through December 2012 at a
price of approximately $2.00 per mcf. The Company also holds hedges
against a significant decline in oil prices with an average of
6,600 barrels per day of West Texas Intermediate ("WTI") oil hedged
at an average floor price of $94.25 per barrel for the period April
through December 2012 and 2,000 barrels per day of WTI oil hedged
at an average floor price of $102.25 per barrel for 2013. In
addition, the Company currently holds hedges that fix the
differential between WTI and Western Canadian Select ("WCS")
pricing on an average of 2,000 barrels a day at a differential of
$15.63 per barrel. During the first quarter, the Company
successfully monetized certain 2012 WTI to WCS differential hedges
resulting in realized hedging gains of $3.7 million.
OPERATIONS UPDATE
Pekisko Play, Princess, Alberta
Crew had a successful first quarter at Princess drilling 29
wells including 19 vertical wells and 10 horizontal wells. The
Company's first quarter program focused on development of existing
pools with the most appropriate technology and the drilling of two
vertical wells that extended existing pool boundaries. One of the
vertical wells tested at 296 boe per day and the second recently
came on production with a seven day average rate of 375 boe per
day. Four vertical wells were drilled beyond existing pool
boundaries discovering new oil pools. One has come on production at
an average seven day rate of 133 boe per day and the other three
are in the process of being completed and brought on production.
Two horizontal wells were brought on production subsequent to the
end of the first quarter with seven day rates of 348 boe per day
and 640 boe per day. First quarter production at Princess has been
added at a cost of $25,000 per producing boe.
PRINCESS WATERFLOOD
Progress was made on infrastructure installation including
Crew's 2012 waterflood implementation program where it is expected
that all five approved waterfloods will be in operation by early in
the third quarter. Two existing waterfloods (Pekisko "K" and "N"
pools) continue to respond well with oil production rates
increasing 50% and 35%, respectively, from pre-waterflood
conditions with gas-oil ratios down 50% in both pools. Response on
the "N" Pool has been very rapid with injection initiated less than
ten months ago. Crew plans to implement six additional waterfloods
in 2013.
HISTORY
Crew acquired the Princess asset in August 2008 which was
producing approximately 2,000 boe per day at the time primarily
from the West Tide Lake area. The Company recognized the
significant hydrocarbon potential of the Pekisko formation on this
large land base (300,000 net acres as at December 31, 2011 with
only 13% classified as developed) and the potential to apply
horizontal well technology to further enhance productivity. In
September of 2008, Crew's first horizontal well was flowing at a
rate of 633 bbls of oil per day and the impact of infill drilling
with horizontal wells was confirmed. The first horizontal
development program was at West Tide Lake which had previously been
developed with 40 acre spacing using vertical wells. The vertical
well control allowed Crew to map the distribution of the productive
reservoir so that a horizontal depletion strategy could be
undertaken. The Company then drilled 26 net wells (50% horizontal)
in 2009 resulting in 22 net oil producing wells. This program
yielded production growth to 5,238 boe per day in December 2009
which declined to 3,382 boe per day (35% decline) in April 2010 due
to the initial decline rates typically experienced on horizontal
wells (60% to 65% decline in the first year). In 2010, the Company
drilled 62 net wells (54% horizontal) resulting in 54 oil wells.
Production peaked at 8,000 boe per day during the month of December
2010 before declining to 4,948 boe per day (38% decline) in July
2011. At the time, Crew also recognized that secondary recovery
would become critical to provide a growth platform for the future
and started injection into the Pekisko "K" pool.
In 2011, Crew drilled 119 net wells (54% horizontal) resulting
in 104 net oil wells (64 horizontal wells) and grew production to
over 10,000 boe per day during the month of December 2011. The
Company expanded transportation and processing infrastructure to
handle increasing fluid production associated with the extensive
drilling program and initiated the Company's second waterflood in
the Pekisko "N" pool.
Consistent with the Princess production profile of the previous
three years, production declined from 10,400 boe per day in
December to current levels of 7,000 boe per day (33% decline).
There is currently approximately 550 boe per day shut-in from
single wells batteries due to spring breakup and only ten new wells
from the first quarter drilling program are currently on
production. Infrastructure expansion has been successful in
allowing Crew to optimize production from a number of pools while
some areas continue to encounter gathering system limitations
particularly when a prolific well is introduced into the pipeline
system. As the production from individual wells stabilizes within
an area, the Company can better assess if any further facility
enhancements are required.
Crew has historically used both vertical and horizontal wells to
exploit and develop the Pekisko formation at Princess. The vertical
wells are very effective tools to initially evaluate and delineate
new pools providing significant data about the vertical
distribution and quality of the reservoir. In cases where enhanced
permeability is encountered as evidenced by high production rates
(in excess of 100 boe per day per well), vertical wells are an
economic means of developing these types of pools. If the
permeability is more restricted resulting in lower production rates
from the initial vertical wells (less than 40 boe per day per
well), horizontal wells would be used to develop the pool. The
economics of primary pool development are similar for the two
methods described above as individual vertical or horizontal wells
achieve an economic rate of return between 140% and 145% based on
the average type wells currently booked by GLJ Petroleum
Consultants ("GLJ") (135 mboe per horizontal well and 64 mboe per
vertical well) and the April 1, 2012 GLJ price deck. In all cases,
consideration of future secondary waterflood is also a factor in
the selection and implementation of the most appropriate reservoir
drainage architecture.
Heavy Oil, Lloydminster, Saskatchewan
At Lloydminster, Crew drilled 18 (17.8 net) wells and
recompleted 20 (19.3 net) wells targeting oil in various Mannville
group formations. The first quarter program added 760 boe per day
of production for total capital expenditures of $11.5 million
resulting in a capital efficiency of $15,000 per producing barrel
of oil equivalent. This area continues to provide the Company with
robust economics and will be a focus for drilling for the remainder
of 2012. Crew was active at Crown land sales increasing its land
position in the first quarter and expects to continue this level of
activity through 2012. The Company has identified a number of
reservoirs at Lloydminster that are excellent candidates for
horizontal drilling with secondary recovery potential. With
preferential access to the Manitou pipeline system and its wholly
owned battery, water disposal and sand handling facility, Crew is
in the position to expand its heavy oil program over the next 18
months.
Tower, British Columbia
Crew's second well at Tower was rig released and completed early
in the second quarter with a horizontal section of 1,067 meters.
The well was tested up 114 mm casing and after 12 days of testing
was producing at a rate of 500 boe per day consisting of 375 bbls
per day of 46 API oil and liquids and 0.75 mmcf per day of natural
gas. The well is tied-in to the Septimus gas plant and will be able
to be continuously produced following the initial test period.
Crew's initial well at Tower with a horizontal section of 1,835
meters tested at 610 boe per day (342 bbls of oil and liquids and
1.7 mmcf per day of natural gas) and is awaiting surface land
approval to be tied-in. Crew has a 33% working interest in both of
these wells with the second well drilled adjacent to Crew's 100%
working interest lands. Crew is preparing several multi-well pads
to advance this project as dictated by production results. In
addition to the significant oil test rates, the solution gas is
richer than the gas stream at Septimus and is expected to yield
approximately 63 bbls per mmcf which is 2.5 times greater than the
liquids recovery at Septimus.
Crew has 30 net sections of Montney land at Tower including 27
sections with 100 percent working interest. The Company has
modelled a depletion strategy that would require six to eight wells
to be drilled per section. Crew is proceeding with necessary
approvals to drill up to eight (6.0 net) additional wells at Tower
and will assess timing based on well performance, capital
availability and economic factors.
Septimus, British Columbia
At Septimus, Crew drilled four Montney horizontal wells and one
vertical well. Three horizontal wells were completed in the quarter
(one that was drilled in 2011) with two of the wells on production
at initial rates of 776 boe per day and 693 boe per day (15%
liquids) based on the initial ten days of production. The third
well came on production at 588 boe per day (11% liquids) from a
lower stratigraphic Montney interval that had not been previously
tested. The test confirmed productivity from this lower unit and
would indicate additional horizontal wells could be drilled to
develop this interval of the Montney.
Crew successfully completed the acquisition of a 35.1 kilometer
six inch pipeline extending through Crew's Septimus and Tower land
base. Acquisition of this pipeline will allow Crew to ultimately
develop lands on the far western edge of the Septimus area. In
addition, Crew can immediately increase production from producing
Septimus wells by providing additional pipeline capacity and
reduced operating pressures into the Septimus gas plant. The
pipeline provides a tie-in point for production from Tower wells
directly to the Septimus gas plant.
Crew has two horizontal wells to complete and does not have any
plans for any additional drilling at Septimus for the remainder of
2012 pending a recovery in natural gas prices.
Kobes, British Columbia
Crew continues to flow test its two horizontal wells at Kobes
testing the long-term production characteristics of the Montney in
this area. Liquids rates from the wells are averaging 88 bbls per
mmcf per day (33% condensate). The Company has an inventory of over
200 drilling locations on this block and continues to work toward
long-term processing and takeaway capacity in the area.
Deep Basin, Alberta
In the Deep Basin of Alberta, Crew drilled seven (5.9 net)
liquids rich natural gas wells in the first quarter. The Company
also expanded a facility adding compression in the Elmworth area.
Four Cardium horizontal wells were drilled and completed with
better than expected performance resulting in restricted rates of
an average of 494 boe per day per well including 173 bbls per day
per well of liquids (90 bbls/mmcf). One vertical well was drilled
at Wanyandie and a horizontal well was drilled at Wapiti for lease
retention as well as one horizontal Fahler well which is awaiting
completion. Crew has an inventory of 185 Cardium drilling locations
in the greater Wapiti area, the value of which will be preserved
until the economics of this play compete with the Company's oil
plays.
2012 Guidance
Crew previously announced the 2012 capital expenditure program
of $300 million on January 11, 2012 using the natural gas strip
price at the time of $3.25 per mcf, $95 WTI and a 17% WTI to WCS
differential for 2012. Realized commodity prices have declined
precipitously with current natural gas prices now 25% lower than
first quarter realized prices. Differentials between WTI pricing
and WCS and Lloyd blend heavy oil widened significantly in the
first quarter and continue to be volatile as a result of tightening
pipeline and refining capacity in the United States. In light of
reduced cash flow from these factors, Crew is reducing its 2012
capital expenditure budget by $75 million to $225 million. This
will enable the Company to continue to grow its production year
over year, increase its liquid weighting and maintain a strong
balance sheet. The funding of this program will be from funds from
operations, asset dispositions and the existing bank facility.
Crew has shut-in 6.3 mmcf per day of dry gas production and
intends to shut-in an additional 4.5 mmcf per day (1,800 boe per
day combined) of natural gas production in the second quarter which
is expected to add approximately $600,000 per month in funds from
operations. In addition, a third party facility at Elmworth,
Alberta is going down for an unplanned turnaround which will result
in approximately 2,000 boe per day being shut in for the month of
May. With the $75 million (25%) reduction in capital expenditures,
2,500 boe per day of behind pipe of natural gas weighted production
that has been deferred and 1,800 boe per day of shut-in production,
Crew is forecasting to average approximately 28,000 to 29,000 boe
per day in 2012 representing a 14% (5% without shut-in and deferred
production) reduction in the Company's previous guidance. Despite
the revised program, the Company is expected to deliver a 25%
increase in production or 8% on a per share basis over 2011,
positioning the Company to continue to grow its production into
2013.
Outlook
When Crew was founded in 2003, the business strategy was to
expose our shareholders to large oil and gas in place reservoirs
and to grow per share production and reserves. The Company has
established a sizeable land position of just under one million net
acres focusing on four plays that offer our shareholders exposure
to large accumulations of oil and liquids rich natural gas. Crew
has a history of profitable growth with compounded annual growth
per share in production and reserves of 13% and 28%, respectively.
In 2007, Crew anticipated the growth of unconventional natural gas
was going to have a profound impact on the supply-demand balance of
natural gas. At that time, the Company committed to increase its
liquids component of production which was 1,500 bbls per day or 17%
of total production of 8,700 boe per day. The liquids component in
the first quarter 2012 increased to 53% of total production and has
grown to over 16,000 bbls per day increasing 970% (315% per share)
over 2007. The strategy remains intact with the focus in the
current commodity price environment to prioritize and invest in the
highest return and the most capital efficient projects while
retaining the upside for our shareholders on a significant resource
of natural gas and natural gas liquids.
Crew will focus on oil development at Princess and Lloydminster
and the testing of the emerging oil play at Tower. First quarter
drilling results were strong with the Company discovering several
new pools and successfully advancing secondary recovery programs at
Princess as well as adding production at attractive flowing barrel
metrics in all areas of operation. This program also addressed land
retention at Septimus and the Deep Basin that will allow the
Company to retain its resources in these areas. Crew will maintain
its capital discipline by curtailing 2012 capital projects to
preserve balance sheet strength while maintaining its long-term
growth profile.
We would like to thank our shareholders for their patience and
support in this environment. We are confident in the quality of our
assets and the ability of our team to continue to build a top tier
energy company. We look forward to updating our shareholders in the
second quarter report.
Normal Course Issuer Bid
The Toronto Stock Exchange ("TSX") has accepted Crew's Notice of
Intention to commence a normal course issuer bid (the "NCIB").
Under the NCIB, Crew may purchase for cancellation, from time to
time, as Crew considers advisable, up to a maximum of 6,038,492
common shares of the Corporation ("Common Shares"), which
represents 5% of the currently issued and outstanding Common
Shares. Purchases of Common Shares will be made on the open market
through the facilities of the TSX. The price which Crew will pay
for any Common Shares purchased by it will be the prevailing market
price of the Common Shares on the TSX at the time of such purchase.
The actual number of Common Shares that may be purchased for
cancellation and the timing of any such purchases will be
determined by Crew, subject to a maximum daily purchase limitation
of 261,920 Common Shares which equates to 25% of Crew's average
daily trading volume for the six months ended April 30, 2012.
The NCIB will commence on May 14, 2012 and will terminate on May
13, 2013 or such earlier time as the NCIB is completed or
terminated at the option of Crew. Macquarie Capital Markets Canada
Ltd. will act on the Corporation's behalf to make purchases of
Common Shares pursuant to the NCIB.
Management of Crew believes that, from time to time, the market
price of its Common Shares may not fully reflect the underlying
value of the Common Shares and that at such times the purchase of
Common Shares would be in the best interests of Crew. Such
purchases will increase the proportionate interest of, and may be
advantageous to, all remaining shareholders.
Financial statements and Management's Discussion and Analysis
for the three month periods ended March 31, 2012 and 2011 will be
filed on SEDAR at www.sedar.com and are available on the Company's
website at www.crewenergy.com.
Cautionary Statements
Forward-looking information and statements
This news release contains certain forward-looking information
and statements within the meaning of applicable securities laws.
The use of any of the words "expect", "anticipate", "continue",
"estimate", "may", "will", "project", "should", "believe", "plans",
"intends" "forecast" and similar expressions are intended to
identify forward-looking information or statements. In particular,
but without limiting the foregoing, this news release contains
forward-looking information and statements pertaining to the
following: the volume and product mix of Crew's oil and gas
production; production estimates including 2012 forecast average
production; plans to shut-in production; future oil and natural gas
prices and Crew's commodity risk management programs; future
liquidity and financial capacity; projected debt levels; future
results from operations and operating metrics; management's
expectations in regards to waterfloods at Princess; anticipated
reductions in operating costs; future costs, expenses and royalty
rates; future interest costs; the exchange rate between the $US and
$Cdn; future development, exploration, acquisition and development
activities and related capital expenditures and the timing thereof;
the number of wells to be drilled, completed and tied-in and the
timing thereof; the number of potential drilling locations; the
amount and timing of capital projects; operating costs; the total
future capital associated with development of reserves and
resources; and methods of funding our capital program.
Forward-looking statements or information are based on a number
of material factors, expectations or assumptions of Crew which have
been used to develop such statements and information but which may
prove to be incorrect. Although Crew believes that the expectations
reflected in such forward-looking statements or information are
reasonable, undue reliance should not be placed on forward-looking
statements because Crew can give no assurance that such
expectations will prove to be correct. In addition to other factors
and assumptions which may be identified herein, assumptions have
been made regarding, among other things: the impact of increasing
competition; the general stability of the economic and political
environment in which Crew operates; the timely receipt of any
required regulatory approvals; the ability of Crew to obtain
qualified staff, equipment and services in a timely and cost
efficient manner; drilling results; the ability of the operator of
the projects in which Crew has an interest in to operate the field
in a safe, efficient and effective manner; the ability of Crew to
obtain financing on acceptable terms; field production rates and
decline rates; the ability to replace and expand oil and natural
gas reserves through acquisition, development and exploration; the
timing and cost of pipeline, storage and facility construction and
expansion and the ability of Crew to secure adequate product
transportation; future commodity prices; currency, exchange and
interest rates; regulatory framework regarding royalties, taxes and
environmental matters in the jurisdictions in which Crew operates;
the ability of Crew to successfully market its oil and natural gas
products. Included herein is an estimate of Crew's year-end net
debt based on assumptions as to cash flow, capital spending in 2012
and the other assumptions utilized in arriving at Crew's 2012
capital budget. To the extent such estimate constitutes a financial
outlook, it is included herein to provide readers with an
understanding of estimated capital expenditures and the effect
thereof on debt levels and readers are cautioned that the
information may not be appropriate for other purposes.
The forward-looking information and statements included in this
news release are not guarantees of future performance and should
not be unduly relied upon. Such information and statements,
including the assumptions made in respect thereof, involve known
and unknown risks, uncertainties and other factors that may cause
actual results or events to defer materially from those anticipated
in such forward-looking information or statements including,
without limitation: changes in commodity prices; changes in the
demand for or supply of Crew's products; unanticipated operating
results or production declines; changes in tax or environmental
laws, royalty rates or other regulatory matters; changes in
development plans of Crew or by third party operators of Crew's
properties, increased debt levels or debt service requirements;
inaccurate estimation of Crew's oil and gas reserve and resource
volumes; limited, unfavourable or a lack of access to capital
markets; increased costs; a lack of adequate insurance coverage;
the impact of competitors; and certain other risks detailed from
time-to-time in Crew's public disclosure documents (including,
without limitation, those risks identified in this news release and
Crew's Annual Information Form).
The forward-looking information and statements contained in this
news release speak only as of the date of this news release, and
Crew does not assume any obligation to publicly update or revise
any of the included forward-looking statements or information,
whether as a result of new information, future events or otherwise,
except as may be required by applicable securities laws.
BOE equivalent
Barrel of oil equivalents or BOEs may be misleading,
particularly if used in isolation. A BOE conversion ratio of 6 mcf:
1 bbl is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the wellhead. Given that the value ratio based on
the current price of crude oil as compared to natural gas is
significantly different than the energy equivalency of 6:1,
utilizing a 6:1 conversion basis may be misleading as an indication
of value.
Test Results and Initial Production Rates
A pressure transient analysis or well-test interpretation has
not been carried out and thus certain of the test results provided
herein should be considered to be preliminary until such analysis
or interpretation has been completed. Test results and initial
production rates disclosed herein may not necessarily be indicative
of long term performance or of ultimate recovery.
Crew is an oil and gas exploration and production company whose
shares are traded on The Toronto Stock Exchange under the trading
symbol "CR".
Financial statements and Management's Discussion and Analysis
for the three month periods ended March 31, 2012 and 2011 will be
filed on SEDAR at www.sedar.com and are available on the Company's
website at www.crewenergy.com.
Contacts: Crew Energy Inc. Dale Shwed President and C.E.O. (403)
231-8850dale.shwed@crewenergy.com Crew Energy Inc. John Leach
Senior Vice President and C.F.O. (403)
231-8859john.leach@crewenergy.com Crew Energy Inc. Rob Morgan
Senior Vice President and C.O.O. (403)
513-9628rob.morgan@crewenergy.com www.crewenergy.com
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