Excelsior Energy Limited (TSX VENTURE:ELE) ("Excelsior" or the "Company") is
pleased to report results for the three and nine month periods ended September
30, 2008. The financial statements and associated management's discussion and
analysis can be found online at www.sedar.com. 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. Excelsior's plans to
submit a 10,000 bbl/d SAGD demonstration project application at Hangingstone
("the Project Application") in the summer of 2009.
"The Company continues to make good progress on its Project Application. We have
high quality bitumen resource, in close proximity to infrastructure which will
drive the project cycle-time and capital efficiency" said Dr. David Winter,
Excelsior's President and Chief Executive Officer. "We look forward to a
successful winter core and seismic program and we anticipate submitting our
project application next summer. We will continue to be conservative and
cautious in our capital deployment and we are fully funded through 2009 into
2010".
Third Quarter Highlights
- As announced on July 29, 2008, an independent engineering report on the
Hangingstone asset was completed by McDaniel and Associates in July 2008, ("the
Report"). The Report assigned 119 mmbbls of Contingent Resources which were
further sub-classified as economic. The Report also assigned 1.58 billion
barrels of Discovered Resource (Petroleum initially in place) and a further 86
mmbbls of Prospective Resource. The Report indicates that the Contingent
Resources support an economically feasible commercial project.
- In August 2008 the Company announced an equity financing to fund the 2008/2009
winter drilling program. The financing was completed on September 3, 2008 for
gross proceeds of $11,286,848. The proceeds from this financing contributed to
working capital of $14,454,765 at September 30, 2008. The Company is fully
funded for the Hangingstone seismic, drilling and Project Application related
work. As a result Excelsior does not anticipate a requirement for financing over
the next 12 months. Management will continue to monitor financial markets during
this period to evaluate access to capital
- Excelsior commenced its planning and engineering studies to support its
application for a 10,000 bopd demonstration project. A qualified environmental
and engineering company has been contracted to assist in regulatory application
and environmental assessments for the Project Application. Field work commenced
in August 2008.
- The Company completed a 28 km infill seismic program in October in the focus
area in support of winter core drilling operations. The 2D program was
interpreted and integrated into mapping in November and used to target winter
drilling locations.
Fourth Quarter Outlook
- Excelsior continues to progress its program to submit a 10,000 bopd Project
Application to the Alberta Government targeted for the end of Q2 2009. Planning
and engineering studies for the Project Application have commenced.
-- An Environmental Consultant and Submission Coordinator has been engaged to
complete an environmental impact assessment at Hangingstone. The environmental
work commenced in August and will continue through the winter and spring.
Constraint mapping was completed in October for the proposed site of the SAGD
central processing facility.
-- A water source has been identified within the focus area and mapped using
well and seismic data. Existing well data indicates that the water is saline and
likely available for industrial use. The water source aquifer will be flow
tested in December 2008 as part of the winter drilling program.
-- A cap rock integrity evaluation has commenced with an evaluation of wellbore
image logs across the seal formation. This work indicates that the cap rock
shales are thick (50 - 70 meters) with very few natural fractures indicating cap
rock integrity to be high. This will be confirmed by core tests which will be
obtained in December as part of the drilling program.
-- Excelsior has engaged an engineering company with extensive oil sands and
SAGD experience to prepare the front end engineering and design for the
development project application. This contractor expects to finalize the Project
Application in Q2 2009 when the results of the 2008/2009 drilling program have
been evaluated.
-- Active consultation with all stakeholders has begun. Excelsior will continue
to fulfill its obligations regarding stakeholders consultation as operations
progress.
- Alberta Energy Resources Conservation Board has approved the Company's
Exploration Activities Permit and Excelsior has commenced operations for the
2008/2009 winter drilling program to delineate the focus area identified for the
Project Application in the south eastern portion of the Hangingstone asset.
The following information should be read in conjunction with the management
discussion and analysis and unaudited interim consolidated financial statements
for the three and nine months ended September 30, 2008, available online at
www.sedar.com.
Selected Information
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Nine Months Nine Months Three Months Three Months
Ended Ended Ended Ended
($'s except weighted Sept 30, Sept 30, Sept 30, Sept 30,
average shares) 2008 2007 2008 2007
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Gas sales 97,520 76,357 15,408 16,537
Royalties (15,531) (16,830) (3,070) (2,894)
Operating expenses (26,225) (10,721) (8,159) (2,456)
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Net gas sales 55,764 48,806 4,179 11,187
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Interest and other
income 243,335 243,021 51,388 188,683
General and
administrative expense 1,111,375 811,834 407,453 316,607
Net loss and
comprehensive loss (2,078,999) (3,654,264) (666,845) (3,303,554)
Loss per share (basic
and diluted) (0.02) (0.07) (0.01) (0.03)
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Capital expenditures
Petroleum and natural
gas properties - cash 11,659,794 28,412,026 403,090 19,457,407
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Cash flows
Cash flows from (used in)
operations (686,336) (763,217) (396,652) (190,641)
Cash flows used in
investing (12,942,898) (25,088,095) (601,375) (16,209,836)
Cash flows from
financing 12,589,426 37,039,800 10,477,701 1,192,624
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Change in cash and
cash equivalents (1,039,808) 11,188,488 (9,479,674) (15,207,853)
Cash and cash
equivalents, beginning
of period 15,848,648 3,965,957 5,329,166 30,362,298
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Cash and cash
equivalents, end of
period 14,808,840 15,154,445 14,808,840 15,154,445
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Weighted average number
of shares outstanding 112,251,793 54,812,486 119,244,452 93,971,291
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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 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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