Marquee Petroleum Ltd. Announces Its Financial and Operating Results For the Third Quarter
November 22 2011 - 5:30AM
PR Newswire (Canada)
Symbol: MQE: TSX Venture CALGARY, Nov. 22, 2011 /CNW/ -
Marquee Petroleum Ltd. ("Marquee" or the "Company") is pleased to
announce its operating and financial results for the third quarter
ended September 30, 2011. Selected financial and operational
information is outlined below and should be read in conjunction
with the interim financial statements and related management's
discussion and analysis ("MD&A") which have been filed on Sedar
at www.sedar.com. HIGHLIGHTS Highlights for the quarter included:
-- Completion of a $16.8 million equity financing. Including the
full exercise of the agents' 10% over-allotment option, the Company
issued 51,111,750 special warrants at $0.27 per warrant, and
9,375,000 flow-through common shares at $0.32 per share. The
special warrants were automatically converted into common shares.
-- Acquisition of a 100% working interest in 37 sections of crown
land in the Provost area. The acquisition provides a new core area
for the Company containing access to shallow depth Viking and
Mannville oil resource plays. Management has identified numerous
low-risk horizontal drilling locations in an area with extensive
gas gathering and infrastructure in place with year round access
and repeatable characteristics. -- Established a second new core
area with the purchase of oil and natural gas producing properties
at Michichi in East Central Alberta. The acquisition represents
high quality light oil and liquids-rich natural gas production with
a high working interest and more than 25,920 acres of land
prospective for Mannville and Banff light oil horizontal targets.
This acquisition has added net production of approximately 118
boe/d, with an additional 85 boe/d expected to be added by end of
year. Acquisition of a 100% working interest at subsequent land
sales of an additional 33 sections of oil and natural gas rights in
the same East Central Alberta area. -- Growth in production,
resulting in a Q3 exit rate of approximately 200 boe per day. --
Net working capital of $5.6 million at September 30, 2011, plus
available bank credit facilities of $6.4 million provides the
ability to fund production growth through existing cash and bank
lines. -- With the addition of the two new core areas in East
Central Alberta the Company now has more than 53,640 acres of high
working interest operated undeveloped land with resource type
horizontal oil prospects in the Viking, Mannville and Banff
formations. These opportunities are characterized by high rates of
return and short term payouts with horizontal drilling costs
ranging from one to two million dollars. Drilling operations
commenced in November 2011 with a two-well horizontal well program
at Michichi. Additional drilling will commence at Provost in
December, 2011. Marquee expects to provide an operations update on
planned drilling activity and the Company's outlook for 2012 after
the business combination with SkyWest Energy Corp. ("SkyWest") is
completed. Closing for the business combination is scheduled
for early December. FINANCIAL AND OPERATING highlights Three and
Nine Months Three Months Ended Nine Months Ended EndedSeptember 30
2011 2010 2011 2010 Financial ($), except shares outstanding
Production revenue 364,307 72,527 1,208,974 159,337 Operating
netback 237,417 20,388 854,083 (26,746) Funds from operations 7,690
(54,368) 359,477 (253,360) Net earnings (loss) (217,625) (205,447)
(1,451,051) (419,865) Per share, basic and (0.00) (0.01) (0.04)
(0.02) diluted Net working capital 5,569,922 311,017 5,569,922
311,017 Capital expenditures 8,434,541 1,615,801 9,015,016
3,187,641 New equity, net of issues 15,322,929 818,323 16,566,935
2,673,848 costs Total shares outstanding, 96,092,630 23,563,044 end
of period Production Oil and NGL (bbls/d) 30 9 33 7 Natural gas
(mcf/d) 381 55 459 28 Total (boe/d) 94 18 109 12 Total (boe) 8,616
1,657 29,776 3,152 Average realized prices Oil and NGL ($/bbl)
80.72 64.51 78.03 68.03 Natural gas ($/mcf) 4.00 3.95 4.10 4.19
Combined average ($/boe) 42.28 43.78 40.60 50.55 Royalties,
operating costs and netback Royalties ($/boe) 2.68 4.37 2.05 2.25
Operating costs ($/boe) 11.77 27.10 9.87 56.79 Netback 27.83 12.31
28.68 (8.71) ($/boe) PROPOSED BUSINESS COMBINATION WITH SKYWEST
ENERGY CORP. On October 11, 2011 the Company entered into an
Arrangement Agreement (the "Agreement") providing for the
combination of the businesses of Marquee and SkyWest.
The transaction will establish a well capitalized, resource play
focused, exploration and development company targeting primarily
high netback oil production in east central and southern
Alberta. Under the terms of the Agreement and the plan of
arrangement (the "Arrangement"), Marquee will amalgamate with a
wholly-owned subsidiary of SkyWest and Marquee shareholders will
receive 1.35 SkyWest common shares ("SkyWest Shares") for each
Marquee common share ("Marquee Shares"). Upon completion of the
Arrangement, the shares of the combined company ("New Marquee")
will be consolidated on an 8:1 basis, and the name of SkyWest will
be changed to Marquee Energy Ltd. Pro forma the Transaction,
New Marquee expects to have current production of approximately
2,000 boe/d, net debt of approximately $18 million and
approximately 41.5 million common shares outstanding
post-consolidation. After completion of the Transaction, New
Marquee will be led by the current management team of
Marquee. The full details of this proposed transaction are
available in the joint management information circular of SkyWest
and the Company dated November 4, 2011, which can be viewed on
SEDAR at www.sedar.com or on the Company's website at
www.marqueepl.com. The combination has been approved by the Boards
of both Marquee and SkyWest, and requires the approval of the
shareholders of both companies, as well as the option holders and
warrant holders of Marquee. The meeting for the Marquee
security holders vote will occur on December 5, 2011. Marquee
Petroleum Ltd. is a Calgary based emerging oil and gas company,
focused on the development of light oil and liquids rich natural
gas reserves in the Western Canadian Sedimentary basin. The
Company's new areas of focus are operated light oil properties with
resource development potential in at Michichi and Provost in East
Central Alberta and at Coutts in Southern Alberta. FORWARD-LOOKING
STATEMENTS Certain information regarding the Company set forth in
this press release and in the documents incorporated by reference
herein, including management of the Company's ("Management")
assessment of the Company's future plans and operations contains
forward-looking statements that involve substantial known and
unknown risks and uncertainties. The use of any of the words
"plan", "expect", "forecast", "project", "intend", "believe",
"anticipate", "estimate" or other similar words, or statements that
certain events or conditions "may" or "will" occur are intended to
identify forward-looking statements. Such statements represent
Marquee's internal projections, estimates or beliefs concerning,
among other things, future growth, results of operations,
production, future capital and other expenditures (including the
amount, nature and sources of funding thereof), competitive
advantages, plans for and results of drilling activity,
environmental matters, business prospects and opportunities. These
statements are only predictions and actual events or results may
differ materially. Although Management believes that the
expectations reflected in the forward-looking statements are
reasonable, it cannot guarantee future results, levels of activity,
performance or achievement since such expectations are inherently
subject to significant business, economic, competitive, political
and social uncertainties and contingencies. Many factors could
cause the Company's actual results to differ materially from those
expressed or implied in any forward-looking statements made by, or
on behalf of, Marquee. In particular, forward-looking statements
included in this release and in the documents incorporated by
reference herein include, but are not limited to the completion and
results of the business combination with SkyWest Energy Corp.; the
impact of the East Central acquisition on the Company's operations,
inventory and opportunities; statements with respect to the
performance characteristics of the Company's oil and natural gas
properties; supply and demand for oil and natural gas; treatment
under governmental regulatory regimes and tax laws; financial and
business prospects and financial outlook; results of operations,
production, future costs, reserves and production estimates;
drilling plans; activities to be undertaken in various areas
including the fulfillment of exploration commitments; timing of
drilling, completion and tie in of wells; tax horizon; access to
infrastructure; timing of development of undeveloped reserves;
planned capital expenditures, the timing thereof and the method of
funding; financial condition, access to capital and overall
strategy; development and drilling plans for the assets and
transportation and infrastructure availability for the Company's
properties; the performance characteristics of the Company's crude
oil properties and for the Company's properties and the Company's
oil and natural gas production levels and production levels
associated with the Assets. BOE's can be misleading, particularly
if used in isolation. A BOE conversion ratio of 6 mcf: 1bbl
is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the wellhead. Marquee Petroleum Ltd. CONTACT:
Marquee Petroleum Ltd.Richard Thompson Roy EvansPresident and Chief
Executive Officer VP Finance & CFO(403) 384-0000 (403)
384-0000richardt@marqueepl.com roye@marqueepl.comor visit the
Company's website at www.marqueepl.com.ca.
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