Excelsior Energy Limited (TSX VENTURE:ELE) ("Excelsior" or the "Company") is
pleased to report results for the three and six month periods ended June 30,
2008. The Company continues to focus efforts on oil sands exploration and
appraisal in the Hangingstone and West Surmont areas in the Athabasca oil sands
region of Alberta. The success of the core delineation program at Hangingstone
during the past winter has confirmed the resource potential of this asset. An
independent resource evaluation by McDaniel and Associates dated July 1, 2008
("the Report"), as announced on July 29, 2008, supports an economically feasible
commercial project, allowing Excelsior to move towards an application for a
development pilot project at Hangingstone by mid-2009.
"The Report confirms the commercial potential of the Hangingstone asset and
supports Excelsior's plan for a 10,000 bopd SAGD demonstration project
application in Q2 2009," said David Winter, Excelsior's President and Chief
Executive Officer. "The report results triggered a financing of up to $20
million to fund the 2008/2009 winter drilling program."
Second Quarter Highlights
- Core analysis from the core drilling programs was completed on May 28, 2008.
- Excelsior engaged an experienced oil sands contractor to assist in regulatory
application and environmental assessments for the Phase I production project;
fieldwork commenced in July 2008.
- Excelsior contracted Paradigm Strategic Consulting, an industry leader in
digital subsurface asset management, to accelerate 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
("EENS") exchanging all shares of EENS for shares in ENS Energy Ltd. ("ENS"), a
newly incorporated Alberta private company. Subsequent to the restructuring, ENS
issued 25% of its common shares in a private placement for gross proceeds of
$1.0 million. The financing had the effect of reducing the Company's interest in
ENS from 100% to 75% as Excelsior did not participate in the financing. The
transaction segregated the Company's oil sands and North Sea assets, providing
access to capital markets for these opportunities independently.
Third Quarter Outlook
- Excelsior entered into an agreement on August 6, 2008 to raise up to $20
million through a private placement financing on a best efforts basis. The
Company plans to issue a combination of common shares at $0.29 per share and
common shares issued on a flow-through basis at $0.34 per share. The financing
is expected to close in early September 2008.
- An independent engineering report on the Hangingstone asset was completed by
McDaniel and Associates in July 2008.
- Excelsior will submit an oil sands exploration application to Alberta's Energy
Resources Conservation Board permitting the Company to engage in seismic and
drilling activities at Hangingstone and West Surmont for the 2008/2009 winter
program.
The following information should be read in conjunction with the management
discussion and analysis and unaudited interim consolidated financial statements
for the three and six months ended June 30, 2008, available online at
www.sedar.com.
Selected Information
----------------------------------------------------------------------------
($'s except
weighted average Six Months Six Months Three Months Three Months
shares) Ended Ended Ended Ended
June 30, 2008 June 30,2007 June 30, 2008 June 30, 2007
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Gas sales 82,112 59,820 45,074 27,866
Royalties (12,461) (13,936) (6,410) (4,877)
Operating costs (18,066) (8,265) (10,020) (6,437)
----------------------------------------------------------------------------
Net gas revenue 51,585 37,619 28,644 16,552
----------------------------------------------------------------------------
Interest and
other income 191,947 54,338 51,418 28,269
General and
administrative
expense 703,922 495,227 424,894 258,786
Net loss and
comprehensive
loss (1,412,154) (623,710) (834,659) (319,607)
Loss per share
(basic and
diluted) (0.01) (0.01) (0.01) (0.01)
----------------------------------------------------------------------------
Capital
expenditures
Petroleum and
natural gas
properties - cash 11,256,704 8,954,619 416,799 6,565,998
----------------------------------------------------------------------------
Cash flows
Cash flows from
(used in)
operations (289,684) (572,576) 117,474 (354,183)
Cash flows used
in investing (12,341,523) (8,878,259) (5,644,061) (6,050,631)
Cash flows from
financing 2,111,725 35,847,176 1,000,000 32,890,043
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Change in cash
position (10,519,482) 26,396,341 (4,526,587) 26,485,229
Cash and cash
equivalents,
beginning
of period 15,848,648 3,965,957 9,855,753 3,877,069
----------------------------------------------------------------------------
Cash and cash
equivalents, end
of period 5,329,166 30,362,298 5,329,166 30,362,298
----------------------------------------------------------------------------
Weighted average
number of shares
outstanding 107,917,809 34,699,258 108,824,891 41,110,964
----------------------------------------------------------------------------
Clarification
The Company would like to clarify that Mssr. Jeffrey, a member of the Audit
Committee, is not considered by the Company to be independent for the purposes
of National Instrument 52-110 contrary to the disclosure contained in the
Management Information Circular of the Company dated May 20, 2008.
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 75% 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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