Charger Energy Corp. Announces 2012 Third Quarter Results
November 12 2012 - 6:00AM
Marketwired Canada
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 LAWS.
Charger Energy Corp. ("Charger", the "Company") (TSX VENTURE:CHX) announces its
unaudited interim financial and operating results for the quarter ended
September 30, 2012. Charger has filed interim Financial Statements and
Management's Discussion and Analysis on www.sedar.com and on the Company's
website at www.chargerenergy.com.
Third Quarter 2012
-- Successfully drilled and completed 1 (0.9 net) horizontal Viking light
oil well during the quarter at Brownstone in the Halkirk-Provost core
area. The Brownstone well was placed on production late in the third
quarter and is currently producing approximately 135 boe/d;
-- Completed construction of a 4,000 bbl/d multi-well battery and treating
facility at Neutral Hills;
-- Achieved third quarter production of 3,139 boe/d (34% oil and liquids),
consistent with second quarter production;
-- Capital spending totalled $6.7 million during the third quarter of 2012,
focused primarily on development of the Viking light oil play in the
Halkirk-Provost core area where the Company spent approximately $1.7
million to drill, complete and equip the Viking well at Brownstone and
$2.6 million on facilities which includes the cost to complete the
multi-well battery at Neutral Hills; Also during the quarter, Charger
spent approximately $1.0 million for recompletions, workovers and
optimizations on the assets the Company acquired in the first quarter;
and
-- Generated funds flow from operations during the third quarter of $2.0
million ($0.03 per share).
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Selected Financial & Operational Three Months Ended Nine Months Ended
Information Sept. 30, Sept. 30,
($000 except per share amounts) 2012 2011 2012 2011
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Financial
Petroleum and natural gas sales 9,430 109 22,957 232
Funds flow from (used in)
operations(1) 1,997 (174) 3,927 (1,021)
Per share - basic and diluted 0.03 (0.01) 0.07 (0.05)
Net loss and comprehensive loss (3,461) (1,382) (7,515) (3,242)
Per share - basic and diluted (0.05) (0.05) (0.13) (0.17)
Capital expenditures (6,711) (11,375) (25,261) (19,183)
Dispositions - - 4,000 -
Bank debt 58,600 - 58,600 -
Working capital(deficiency)(2) (2,656) 14,958 (2,656) 14,958
Operational Production
Crude oil and liquids (bbls/d) 1,071 8 868 4
Natural gas (mcf/d) 12,407 185 9,749 151
Oil equivalent (boe/d) 3,139 38 2,493 29
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(1) Funds flow from (used in) operations is calculated based on cash flow
from operating activities before changes in non-cash working capital,
transaction costs, and decommissioning expenditures.
(2) Working capital (deficiency) - excludes the current portion of financial
derivative instruments. 2011 comparative figures as at December 31,
2011.
Outlook
Charger drilled and completed 1 (0.9 net) Viking horizontal well at Brownstone
which was placed on production late in the third quarter. This well is
performing in line with management expectations with current production of
approximately 135 boe/d. Charger has achieved improved capital cost efficiencies
with the Company's recent long reach Viking horizontal wells costing
approximately $1.7 million to drill, complete and equip. The Company believes
that further cost efficiencies are achievable with a large scale drilling
program incorporating multi-well pads.
To date in the fourth quarter of 2012, Charger has recompleted 1 (0.7 net)
vertical well at Wilson Creek by perforating and stimulating the Belly River
zone. This well is capable of producing approximately 140 boe/d (94 boe/d net)
and is yet to be tied-in. Charger has also recently recompleted 1 vertical
Viking gas well in the Drumheller area. The well is currently producing
approximately 50 boe/d.
Charger's senior lender has confirmed Charger's revolving credit facility at $65
million. At September 30, 2012, the Company had drawn $58.6 million against this
credit line.
Charger's capital program for the remainder of 2012 and 2013 will be directed
primarily toward development drilling in the Halkirk-Provost area and low cost
workover, recompletion and optimization initiatives where production and cash
flow can be added with minimal risk. Charger will continue to manage capital
spending in the context of cash flow and available credit lines. The Company
continues to evaluate a number of financing, joint venture and other strategic
opportunities that will help accelerate Charger's capital program and increase
production and cash flow. The company expects 2012 exit production to be
approximately 3,000 boe/d with 2012 average production of 2,600 to 2,700 boe/d,
recognizing that the business combination did not close until March 6, 2012.
Charger's strategy is to grow shareholder value by focusing primarily on
developing and producing Viking light oil primarily in the Halkirk-Provost area
of Central Alberta using horizontal drilling and multi-stage fracturing
technology.
About Charger Energy Corp.
Charger is a Calgary, Alberta based crude oil and natural gas company that
trades on the TSX Venture Exchange under the symbol "CHX". The Company is
committed to maximizing value for its shareholders through successful drilling
of internally-generated light oil prospects and by pursuing strategic property
and corporate acquisitions with light oil potential using new completion
technology. The Company has operated, high working interest, light oil and
natural gas assets in the Halkirk-Provost and Ghost Pine areas of east central
Alberta as well as the Peace River Arch area of north western Alberta.
Reader Advisory and Note Regarding Forward Looking Information
This news release contains forward-looking statements and forward-looking
information within the meaning of applicable securities laws. These statements
relate to future events or future performance. All statements other than
statements of historical fact may be forward-looking statements or information.
Forward-looking statements and information are often, but not always, identified
by the use of words such as "appear", "seek", "anticipate", "plan", "continue",
"estimate", "approximate", "expect", "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should", "believe",
"would" and similar expressions. More particularly and without limitation, this
news release contains forward-looking statements and information concerning the
expected results of the Arrangement; the Company's petroleum and natural gas
production and reserves; drilling opportunities; management team; business
strategy; future development and growth opportunities; prospects; asset base;
anticipated benefits from the Arrangement; value and debt levels; and capital
programs. The forward-looking statements and information are based on certain
key expectations and assumptions made by the management of the Company,
including expectations and assumptions concerning prevailing commodity prices
and exchange rates, applicable royalty rates and tax laws; future well
production rates and reserve volumes; the timing of receipt of regulatory
approvals; the performance of existing wells; the success obtained in drilling
new wells; the sufficiency of budgeted capital expenditures in carrying out
planned activities; and the availability and cost of labour and services.
Although management of the Company believes that the expectations and
assumptions on which such forward looking statements and information are based
are reasonable, undue reliance should not be placed on the forward-looking
statements and information since no assurance can be given that they will prove
to be correct. Forward-looking information is provided for the purpose of
providing information about the current expectations and plans of management of
the Company relating to the future. Readers are cautioned that reliance on such
information may not be appropriate for other purposes, such as making investment
decisions. Since forward-looking statements and information 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, the risks
associated with the oil and gas industry in general such as 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
reserves, production, costs and expenses; health, safety and environmental
risks; commodity price and exchange rate fluctuations, marketing and
transportation, loss of markets, environmental risks, competition, incorrect
assessment of the value of acquisitions, failure to realize the anticipated
benefits of acquisitions, ability to access sufficient capital from internal and
external sources, failure to obtain required regulatory and other approvals and
changes in legislation, including but not limited to tax laws, royalties and
environmental regulations. There are risks also inherent in the nature of the
Arrangement, including failure to realize anticipated synergies or cost savings;
risks regarding the integration of the four entities and incorrect assessments
of the values of each entity. Accordingly, readers should not place undue
reliance on the forward-looking statements, timelines and information contained
in this news release. Readers are cautioned that the foregoing list of factors
is not exhaustive. The forward-looking statements and information contained in
this news release are made as of the date hereof and no undertaking is given 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.
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. As the value ratio between
natural gas and crude oil based on the current prices of natural gas and crude
oil is significantly different from the energy equivalency of 6:1, utilizing a
conversion on a 6:1 basis may be misleading as an indication of value.
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Charger Energy Corp.
Tom Buchanan
Chairman and CEO
(403) 457-1612
info@chargerenergy.com
Charger Energy Corp.
Dan O'Byrne
President
(403) 457-1612
info@chargerenergy.com
Charger Energy Corp.
Mark Walker
Vice President Finance and CFO
(403) 457-1612
info@chargerenergy.com
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