RedWater Announces 2011 Financial and Operating Results
April 30 2012 - 12:22PM
Marketwired Canada
RedWater Energy Corp. ("RedWater") (TSX VENTURE:RED) is pleased to report
financial and operating results for the three months and year ended December 31,
2011. In addition, RedWater reports that it has filed its reserves data and
other oil and gas information for the period ended December 31, 2011 in
accordance with National Instrument 51-101 - Standards of Disclosure for Oil and
Gas Activities. RedWater's audited financial statements and related management's
discussion and analysis for the period ended December 31, 2011 have been filed
and are available on the SEDAR website at www.sedar.com and may also be obtained
on RedWater's website at www.redwaterenergy.com.
Summary
-- Increased average production to 129 barrels of oil equivalent per day
("boepd") or 81% percent higher than the fourth quarter of 2010
-- Significantly increased proved and proved plus probable reserves as per
the December 31, 2011 verses 2010 independent reserve report
-- Proved Reserves
-- Increased 757% to 630,000 boe
-- Net present value discounted at 10% before tax of $13.9 million,
increased 707%
-- Net asset value of $0.43 per share based on net present value
discounted at 10%(1)
-- Proved plus Probable Reserves
-- 133% increase to 1,053,000 boe
-- Net present value discounted at 10% before tax of $24.4 million
(189% increase)
-- Net asset value of $0.75 per share based on net present value
discounted at 10%(1)
-- Proved plus probable reserves are comprised of 68% oil and 32% natural
gas
-- Signed term sheet with ATB to increase credit facility to $5.5 million
with $2.5 million available immediately and additional expansion
available upon tie-in of behind pipe tested production and projected
drilling results. Credit facility was undrawn at December 31, 2011
-- Land holdings of 35,680 net undeveloped acres at December 31, 2011
Note:
(1) - 32.6 million basic outstanding shares
Highlights
Three Months Ended Year Ended
December 31, December 31,
2011 2010 2011 2010
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Operations
Production
Oil (bbls/d) 71 48 57 37
Natural Gas (Mcf/d) 347 136 259 93
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BOEPD 129 71 100 53
Average Selling Price
Oil ($/bbls) $ 76.28 $ 75.01 $ 74.02 $ 72.21
Natural Gas ($/Mcf) 2.60 3.40 3.26 3.70
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BOE ($/BOE) $ 48.99 $ 57.58 $ 50.53 $ 57.54
Operating Netback ($/BOE) $ 5.03 $ 20.10 $ 12.71 $ 24.53
Three Months Ended Year Ended
December 31, December 31,
2011 2010 2011 2010
----------------------------------------------------
Financial
Petroleum and Natural
Gas Revenues, net of
royalties $ 540,890 $ 332,299 $ 1,710,260 $ 1,031,740
Fund Flow from
Operations (204,644) (94,968) (586,999) (383,593)
Per Share, Basic &
Diluted (0.01) (0.01) (0.02) (0.03)
Income (loss) (548,535) (727,828) (176,737) (1,297,786)
Per Share, Basic &
Diluted (0.02) (0.04) (0.01) (0.12)
Capital Expenditures 4,883,704 1,835,381
Total Assets 12,334,721 6,970,167
Shareholders' Equity 8,110,509 5,029,244
Common Shares
Outstanding
Basic 26,552,228 11,121,376
Diluted 26,522,228 11,121,376
Share Trading
High 0.41 0.42 0.55 0.42
Low 0.26 0.33 0.26 0.33
Close 0.34 0.38 0.34 0.38
Trading Volume 683,400 1,774,600 4,817,700 1,774,600
Operational Update:
RedWater is pleased to announce a $6.0 million 2012 capital expenditure program
focusing on Manville, Viking and Keg River light oil in the RedWater and Panny
areas of Alberta. The Company will continue to focus on light oil production
through exploratory and development drilling, reactivations and targeted
acquisitions. The 2012 capital program will be funded with working capital,
operating cash flow and available drawings on its credit facility. The Company
has an additional three years of drilling inventory and will expand its drilling
program upon success and available capital.
RedWater intends to drill 3 (2.25 net) multi-stage fracs horizontal wells in the
Redwater area targeting Viking and Leduc oil. An additional 4 conventional
vertical wells are planned targeting Manville and Viking light oil. Also
included in the 2012 initial capital program are 4 well fracture programs, 2
well re-entries and several well evaluations and work-overs. The primary
developmental focus will continue to be within the Redwater area where the
Company has a substantial undeveloped land position. The risk profile of the
potential Viking oil horizontal drilling prospects has diminished considerably
due to drilling activity within the area. The Company is currently equipping 2
additional oil wells and is accelerating its existing well development program.
The Company will begin its workovers and reactivations post break-up with
drilling to follow. An additional re-entry and a Keg River horizontal drill is
planned for January 2013 in the Panny area.
Finally, RedWater has shut-in the majority of its natural gas production early
in the first quarter due to lower natural gas prices. Management believes it
prudent to focus available resources on light oil development. The wells will be
evaluated for re-activation as natural gas prices increase.
We look forward to 2012 being an exciting year for RedWater as we continue to
expand production and cash flow with a focus on light oil development in the
Redwater area.
Business of RedWater Energy Corp.
RedWater Energy Corp. is an emerging oil and gas exploration and development
company. RedWater is engaged in the acquisition, enhancement and exploration of
conventional oil and gas projects in Western Canada with a focus on developing
high working interest light oil opportunities. RedWater's core properties are
located in Redwater, Panny, Westlock, Fairydell-Bon Accord, and Long Coulee
areas of Alberta.
Cautionary Statements
Forward-looking information and statements
This news release contains certain forward-looking information and statements
within the meaning of applicable securities laws. The use of any of the words
"expect", "anticipate", "continue", "estimate", "may", "will", "project",
"should", "believe", "plans", "intends" and similar expressions are intended to
identify forward-looking information or statements. In particular, but without
limiting the forgoing, this news release contains forward-looking information
and statements pertaining to the following; the timing for completion and
equipping of wells; the volume and product mix of RedWater's oil and gas
production and its ability to develop RedWater's oil resource properties, the
use of the RedWater's cash flow from operations and expanded credit facilities;
the number of wells to be drilled and potential development drilling and number
of potential oil development locations.
In addition, forward-looking statements or information are based on a number of
material factors, expectations or assumptions of RedWater which have been used
to develop such statements and information but which may prove to be incorrect.
Although RedWater believes that the expectations reflected in such
forward-looking statements or information are reasonable, undue reliance should
not be placed on forward-looking statements because RedWater can give no
assurance that such expectations will prove to be correct. In addition to other
factors and assumptions which may be identified herein, assumptions have been
made regarding, among other things: results from drilling and development
activities consistent with past operations; the continued and timely development
of infrastructure in areas of new production; continued availability of debt and
equity financing and cash flow to fund RedWater's current and future plans and
expenditures; the impact of increasing competition; the general stability of the
economic and political environment in which RedWater operates; the timely
receipt of any required regulatory approvals; the ability of RedWater to obtain
qualified staff, equipment and services in a timely and cost efficient manner;
drilling results; the ability of the operator of the projects in which RedWater
has an interest in to operate the field in a safe, efficient and effective
manner; the ability of RedWater to obtain financing on acceptable terms; field
production rates and decline rates; the ability to replace and expand oil and
natural gas reserves through acquisition, development and exploration; the
timing and cost of pipeline, storage and facility construction and expansion and
the ability of RedWater to secure adequate product transportation; future
commodity prices; currency, exchange and interest rates; regulatory framework
regarding royalties, taxes and environmental matters in the jurisdictions in
which RedWater operates; the ability of RedWater to successfully market its oil
and natural gas products that all necessary regulatory approvals will be
obtained as and when required, that there will be no material adverse change in
RedWater's affairs or laws, rules or regulations relating to RedWater, its
securities or business, there will be no regulatory proceedings involving
RedWater or any of its directors or officers, or any cease trade or other order
prohibiting or restricting trading in RedWater's securities, no major national
or international event will have occurred that has or would reasonably be
expected to have a material adverse effect on financial markets or the business,
operations or affairs of RedWater.
The forward-looking information and statements included in this news release are
not guarantees of future performance and should not be unduly relied upon. Such
information and statement, including the assumptions made in respect thereof,
involve known and unknown risks, uncertainties and other factors that may cause
actual results or events to defer materially from those anticipated in such
forward-looking information or statements including, without limitation: changes
in commodity prices; changes in the demand for or supply of RedWater's products;
unanticipated operating results or production declines; changes in tax or
environmental laws, royalty rates or other regulatory matters; changes in
development plans of RedWater or by third party operators of RedWater's
properties, increased debt levels or debt service requirements; inaccurate
estimation of RedWater's oil and gas reserve and resource volumes; limited,
unfavorable or a lack of access to capital markets; increased costs; a lack of
adequate insurance coverage; the impact of competitors; and certain other risks
detailed from time-to-time in RedWater's public disclosure documents,
(including, without limitation, those risks identified in this news release and
RedWater's public company documents filed on SEDAR).
The forward-looking information and statements contained in this news release
speak only as of the date of this news release, and RedWater does not assume any
obligation to publicly update or revise any of the included forward-looking
statements or information, whether as a result of new information, future events
or otherwise, except as may be expressly required by applicable securities laws.
BOE Equivalent
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.