THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. PERSONS.
Bowood Energy Inc. ("Bowood" or the "Company") (TSX VENTURE:BWD) is pleased to
announce its financial and operational results for the three months ended June
30, 2011 and to provide an operational update on current activity. The unaudited
Financial Statements and related Management Discussion and Analysis ("MD & A")
will be filed with the Canadian securities regulatory authorities on SEDAR. An
electronic copy of these materials will also be available under Bowood's issuer
profile on SEDAR at www.sedar.com and on the Company's website at
www.bowoodenergy.ca.
Operational Highlights
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Three Months Ended Six Months Ended
June 30 June 30
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(6:1 boe conversion) 2011 2010 2011 2010
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Average daily production
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Natural gas (mcf/d) 2,258 2,890 2,274 3,153
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Liquids (Oil & NGLs) (bbls/d) 55 47 82 33
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Oil equivalent (boe/d) 431 528 461 558
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Production (boe/d) per million
shares 2 3 2 3
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Average sales price (including fixed
commodity contracts):
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Natural gas ($/mcf) 4.13 3.91 4.05 4.70
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Liquids (Oil & NGLs) ($/bbl) 96.17 68.27 84.78 68.18
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Oil equivalent ($/boe) 33.93 27.42 35.01 30.57
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Operating cost ($/boe) 14.76 15.79 13.47 13.31
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Operating netback ($/boe) (including
fixed commodity contracts) 16.89 8.66 18.16 14.93
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Wells drilled - gross (net):
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Gas 0 (0.00) 1 (0.20) 0 (0.00) 1 (0.20)
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Oil 1 (0.50) 1 (0.60) 1 (0.50) 1 (0.60)
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Suspended -- -- -- --
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D & A -- -- -- --
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Total 1 (0.50) 2 (0.80) 1 (0.50) 2 (0.80)
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In the Southern Alberta Bakken, the initial well at Spring Coulee, which was
spudded in March, is now completed. The planned water based fracture
stimulations are now complete (20 stages) and flowback of frac fluids has
commenced. Light oil has been recovered along with frac water during the flow
back operations to date. Accelerated flow back is anticipated once the well can
be equipped with tubing which is expected shortly. At present the well has
recovered approximately forty five percent of the frac fluid. The Company hopes
to have extended production test results on the well by early October.
The second Alberta Bakken test well for the Company at Kipp 8- 30-8-23 W4, on
the Blood Reserve, commenced drilling in July. The pilot hole, which included
two separate cored intervals, has now been drilled to a measured depth of 2,395
mKb and plugged back to begin drilling the horizontal section of the well. The
Kipp well is licenced to a projected total depth of 3,658 meters which includes
a minimum horizontal section of 1,200 meters. Testing of the well is expected in
the fourth quarter of 2011.
In the Company's other core area at Armada, a two well drilling program was
delayed until the end of June as a result of unusually wet weather, postponing
associated production additions. Q2 production of 431 boe/d was negatively
impacted by this delay, as well as the required shut in of the 2-1-17-19w4 oil
well which was awaiting approval from the Energy Resources Conservation Board
for Good Production Practice ("GPP"). The GPP approval has now been received and
the well was subsequently re-activated in late July. Since being reactivated,
the well has produced at approximately 220 boe/d (78 boe/d net), approximately
85% of which is light oil.
Completion results on the two newly drilled wells at Armada include a gas well
(8-3-17-19W4) in which Bowood has a 90% working interest. The well began
production in mid August. The August field estimate for the Company's total
production is 520 boe/d.
Financial Highlights
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Three Months Ended Six Months Ended
June 30 June 30
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(Cdn $ except common
share data) 2011 2010 2011 2010
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Petroleum and natural
gas revenue 1,332,199 1,325,392 2,918,762 2,960,387
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Per share - basic 0.005 0.007 0.011 0.016
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- diluted 0.005 0.007 0.011 0.016
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Funds flow from
operations 104,403 (69,991) 418,716 491,630
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Per share - basic 0.000 (0.000) 0.002 0.003
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- diluted 0.000 (0.000) 0.002 0.003
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Net income (loss) 134,238 (1,247,221) (426,067) (677,635)
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Per share - basic 0.000 (0.007) (0.002) (0.003)
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- diluted 0.000 (0.007) (0.002) (0.003)
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Capital expenditures 2,878,037 1,692,868 4,442,164 2,239,208
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Net debt/(surplus) (2,318,300) 2,941,939 (2,318,300) 2,941,939
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Shareholders' equity 50,056,448 25,854,072 50,056,448 25,854,072
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Total assets 59,713,837 35,770,635 59,713,837 35,770,635
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Common share data:
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Basic 274,933,373 186,233,373 274,724,533 186,233,373
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Diluted 274,933,373 186,233,373 274,724,533 186,233,373
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Company net acreage at June 30, 2011 in the Alberta Bakken fairway was 104,000
acres. The Company has the financial ability to continue to develop its position
in the Alberta Bakken fairway. At the end of Q2, 2011 Bowood had $2.3 MM in net
cash and an additional $8.5 MM of capacity in an undrawn credit facility through
the Canadian Western Bank. The majority of the $2.9 MM of capital expenditures
in Q2 was focused on land, seismic and drilling activity in the Alberta Bakken
play.
About Bowood Energy Inc.
With operations based in Calgary, Alberta, Bowood Energy Inc. is a TSX-V Tier 2
corporation. Through its wholly owned subsidiary, Bowood Energy Ltd., the
Company is engaged in the acquisition, exploration, development, and production
of oil and gas resources. Current projects are in the Province of Alberta.
Reader Advisories
Forward-Looking Statements: Certain information in this press release is
forward-looking within the meaning of Canadian securities laws as it relates to
anticipated financial performance, events or strategies. All statements other
than statements of historical fact contained in this news release are
forward-looking statements. Readers can identify many of these statements by
looking for words such as will, anticipate, believe, plan, intend, target, and
expect or similar words that suggest future outcomes. Although management
believes that the expectations represented in such forward-looking statements
are reasonable, there can be no assurance that such expectations will prove to
be correct.
Forward-looking information in this press release includes, among other things,
information relating to: (i) expectations regarding the Company's production
results in its properties; (ii) expectations relating to the Company's financial
position and its ability to access capital (iii) expectations regarding the
Company's production rates, (iv) expectations regarding the completion and
evaluation of the Company's Spring Coulee well; and (v) expectations regarding
the spudding and drilling of new wells, including the timing of such activities.
The forward-looking statements included in this press release involve
substantial known and unknown risks, uncertainties and assumptions, certain of
which are beyond the Company's control. Such risks, uncertainties and
assumptions include, without limitation, those associated with oil and gas
exploration, development, exploitation, production, marketing, processing and
transportation, loss of markets, volatility of commodity prices, currency
fluctuations, imprecision of reserve estimates, environmental risks, competition
from other producers, inability to retain drilling rigs and other services,
delays resulting from or inability to obtain required regulatory approvals and
ability to access sufficient capital from internal and external sources, the
impact of general economic conditions in Canada, the United States and overseas,
industry conditions, changes in laws and regulations (including the adoption of
new environmental laws and regulations) and changes in how they are interpreted
and enforced, increased competition, the lack of availability of qualified
personnel or management, fluctuations in foreign exchange or interest rates,
stock market volatility and market valuations of companies with respect to
announced transactions and the final valuations thereof, and obtaining required
approvals of regulatory authorities. The Company's actual results, performance
or achievements could differ materially from those expressed in, or implied by,
these forward-looking statements and, accordingly, no assurances can be given
that any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what benefits that the Company will
derive there from. Readers are cautioned that the foregoing list of factors is
not exhaustive. Additional information on these and other factors that could
affect the Company's operations and financial results are included in reports,
including the Company's annual information form for the financial year ended
December 31, 2010, on file with Canadian securities regulatory authorities and
may be accessed through the SEDAR website (www.sedar.com). All subsequent
forward-looking statements, whether written or oral, attributable to the Company
or persons acting on its behalf are expressly qualified in their entirety by
these cautionary statements. Furthermore, the forward-looking statements
contained in this news release are made as at the date of this news release and
the Company does not undertake any obligation to update publicly or to revise
any of the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required by applicable
securities laws.
BOE may be misleading, particularly if used in isolation. A BOE conversion 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.
Bowood Energy Inc. was recognized as a TSX Venture 50(R) company in 2011. TSX
Venture 50 is a trade-mark of TSX Inc. and is used under license.
For more information on Bowood Energy Inc. (TSX VENTURE:BWD) and to see the
updated corporate presentation please visit our website at:
http://www.bowoodenergy.ca.
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