Excelsior Reports First Quarter 2008 Results-Delineation Drilling Program Confirms Resource Potential
May 30 2008 - 11:15AM
Marketwired Canada
Excelsior Energy Limited (TSX VENTURE:ELE) ("Excelsior" or the "Company") is
pleased to report results for the three month period ended March 31, 2008. The
Company continued to focus efforts on oil sands exploration and appraisal in the
Hangingstone and West Surmont areas in the Athabasca oil sands region of
Alberta. Excelsior completed its first delineation drilling program in March
2008, drilling 35 core wells at its Hangingstone and Surmont properties on time
and on budget, with results exceeding expectations.
"We are very pleased with our drilling results this winter and are accelerating
development planning at Hangingstone" said David Winter, President and Chief
Executive Officer. "These results have confirmed the resource potential at
Hangingstone and we are moving towards a Phase I, 10,000 barrels of bitumen per
day SAGD production project."
First Quarter Highlights
- At Hangingstone the Company drilled, cored and logged 26 core wells, 22 of
which exceeded the 10 meter net pay cut off. Net pay cut off is defined as
greater than 27% porosity, greater than 50% oil saturation and shale content
less than 40%. Fourteen of these wells contained net pay thickness in excess of
20 meters and six core wells contained net pay thickness in excess of 30 meters.
- At West Surmont nine core wells were drilled, cored and logged and a channel
trend was identified which contained three core wells with net pay thickness
exceeding 20 meters.
- Both drilling programs were completed on time and on budget.
- Excelsior completed the second tranche of a December private placement issuing
2,305,500 common shares at $0.52 for gross proceeds of $1,198,860.
- Excelsior fully earned its 75% working interest in the 39 section Hangingstone
property with the completion of the core drilling program in March 2008.
Second Quarter Outlook
- Core analysis from the core drilling programs has been completed as at May 28,
2008.
- An independent engineering report on the Hangingstone asset is expected to be
completed by McDaniel and Associates in Q2, 2008. Independent engineering
reports for Surmont are planned to be updated in Q3, 2008.
- Excelsior has engaged an experienced oil sands contractor to assist in
regulatory application and environmental assessments for the Phase I production
project with fieldwork to commence in July 2008.
- Excelsior contracted Paradigm Strategic Consulting, an industry leader in
digital subsurface asset management, to assist in accelerating the development
planning of a Phase 1, 10,000 barrels of bitumen per day SAGD project at
Hangingstone.
- The Company restructured its holdings in Excelsior Energy North Sea Limited
("ENS") exchanging all shares of ENS for shares in a newly incorporated Alberta
private company ("NorthseaCo"). In connection with the restructuring NorthseaCo
intends to issue 25% of its common shares in a private placement for gross
proceeds of $1.0 million. The transaction segregates the oil sands and North Sea
assets providing access to capital markets for these opportunities
independently.
The following information should be read in conjunction with the management
discussion and analysis and unaudited interim consolidated financial statements
for the three months ended March 31, 2008, available online at www.sedar.com.
Selected Information
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($'s except weighted average shares) Three Months Three Months
Ended Ended
March 31, 2008 March 31, 2007
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Gas sales 37,038 31,954
Royalties (6,051) (9,059)
Operating costs (8,046) (1,828)
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Net gas revenue 22,491 21,067
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Interest and other income 140,529 26,069
General and administrative expense 279,028 236,441
Net loss and comprehensive loss (577,495) (304,103)
Loss per share (basic and diluted) (0.01) (0.01)
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Capital expenditures
Petroleum and natural gas properties 10,839,905 2,388,621
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Cash flows
Cash flows used in operations (407,158) (218,393)
Cash flows used in investing (6,697,462) (2,827,628)
Cash flows from financing 1,111,725 2,957,133
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Change in cash position (5,992,895) (88,888)
Cash and cash equivalents, beginning of
period 15,848,648 3,965,957
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Cash and cash equivalents, end of period 9,855,753 3,877,069
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Weighted average number of shares
outstanding 108,517,539 28,266,101
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About Excelsior Energy
Excelsior is active in oil sands exploration and appraisal in the Hangingstone
and West Surmont areas near Fort McMurray, Alberta and will hold a 75% working
interest in 58 contiguous sections on completion of its farm-in obligations. The
Company also indirectly holds a 100% working interest in Blocks 16/1a and 16/6c
in the UK North Sea and a minor interest in gas production in Alberta.
Excelsior's strategy is to capture oil and gas appraisal and development
opportunities where we can leverage Management's diverse international
experience and field development expertise. This includes heavy oil reservoir
engineering and development of complex fields.
Forward Looking Statements: This press release contains forward-looking
statements. Management's assessment of future plans and operations, expected
production levels, operating costs, capital expenditures, the nature of capital
expenditures, methods of financing capital expenditures, future engineering
reports and the timing of increases in production may constitute forward-looking
statements under applicable securities laws and necessarily involve risks
including, without limitation, risks associated with oil and gas exploration,
development, exploitation, production, marketing 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, incorrect assessment of
the value of acquisitions, failure to realize the anticipated benefits of
acquisitions, delays resulting from or inability to obtain required regulatory
approvals and ability to access sufficient capital from internal and external
sources. As a consequence, the Company's actual results may differ materially
from those expressed in, or implied by, the forward-looking statements. Readers
are cautioned that the foregoing list of factors is not exhaustive. Additional
information on these and other factors that could effect the Company's
operations and financial results are included in reports on file with Canadian
securities regulatory authorities and may be accessed through the SEDAR website
(www.sedar.com). Furthermore, the forward looking statements contained in this
press release are made as at the date of this press 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.
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