Bengal Energy Announces Results for Q2 2010 - Company Sets Stage for Growth
in India

CALGARY , Nov. 13 /CNW/ - Bengal Energy Ltd. (TSX: BNG) ("Bengal" or the "Company") today announced its financial and operating results for the three and six months ended September 30, 2009 .

Bengal continues to set the stage for material growth through exploration and exploitation opportunities on large-scale, high-impact plays in India and Australia . In October 2009 , Bengal was provisionally awarded a 100% working interest in a 340,000-acre offshore block in the Cauvery Basin of India in what is the third large exploration block awarded to the Company in a proven, producing basin in the last 12 months. In March 2009 , Bengal was awarded a 100% working interest in exploration permit AC/P47, a 861,000-acre block in the Timor Sea. In December 2008 , Bengal was awarded a 30% working interest in the 234,000 acre onshore India block at CY-ONN-2005/1.

The new offshore block at CY-OSN-2009/1 in the Gulf of Mannar in the Cauvery Basin was provisionally awarded to Bengal by India's Directorate General of Hydrocarbons at the recent New Exploration Licensing Policy bid round in New Delhi , India . Oil companies operating in the basin have already committed to incur $215 million of exploration expenses within 50 kilometers of Bengal's new block over the next four years.

Bengal's new block is in the shallow water of the southern Cauvery Basin stretching seven to 16 kilometers offshore. More than 60% of the block is in depths of less than 100 meters of water with 85% of the block in depths of less than 500 meters. Bengal will hold 100% interest in the block and be the operator. At least one seismically defined feature on the new block identified from existing seismic data could be as much as 16,000 acres. The committed capital expenditures on the block are estimated to be US$2,020,000 (about $6 /acre) for the four year Phase I exploration program. Bengal expects to sign a production sharing contract with the Government of India in early 2010, which would change the provisional award of the block into a formal agreement.

The new block solidifies India as a core area for Bengal and is consistent with the Company's strategy of pursuing high working interests and operatorship in areas with large identifiable features based on existing seismic data.

In addition to Bengal's recent progress in India , a Native Title Agreement was executed during the second quarter of 2009 with the Boonthamurra People on Authority to Prospect (ATP) 732P in Australia . Exploration activities are expected to commence in the first quarter of 2010 on this 654,000-acre block where Bengal has farmed-in to earn a 35% interest by incurring $3.0 million in exploration expenses over three years.

The recent developments in India and Australia are consistent with Bengal's strategy of seeking out areas and partnerships with national oil companies that involve low exploration capital commitments in the initial years with high-impact potential.

In order to accelerate the development of its high-impact prospects in India and Australia , Bengal raised $2.1 million during the second quarter of fiscal 2009 through the disposition of non-core, non-operated production assets in the Kaybob region of Alberta. The Kaybob assets contributed approximately $58,000 to Bengal's net operating income and 59 barrels of oil equivalent per day (boe/d) of production over the last six months. As a result of the disposition, Bengal had working capital of $4.0 million and no debt as at September 30, 2009 .

Bengal believes its extensive inventory of 1.9 million net undeveloped acres of land in India and Australia , its balanced portfolio of production, exploitation and exploration opportunities and its strong technical focus all position the Company for growth.

    
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    Financial Summary
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    $000s except per share,            Three Months Ended   Six Months Ended
     volumes and netback    -------------------------------------------------
     amounts                09/30/09  09/30/08  06/30/09  09/30/09  09/30/08
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    Revenue
      Natural gas            $   218   $   476   $   219   $   437   $ 1,237
      Natural gas liquids         67       138        56       123       343
      Oil                        220       868       299       519     1,854
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      Total                      505     1,482       574     1,079     3,434
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    Royalties                     74       258        65       139       614
      % of revenue              14.8      17.4      11.3      12.9      17.9
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    Operating & transportation   230       373       246       476       651
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    Netback(1)                   201       851       263       464     2,169
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    Cash flow from (used in)
     operations:                (263)    1,094      (628)     (893)    1,719
      Per share ($)
       (basic & diluted)       (0.01)     0.06     (0.03)    (0.05)     0.09
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    Funds from (used in)
     operations:(2)             (295)      367      (298)     (593)    1,226
      Per share ($)
       (basic & diluted)       (0.02)     0.02     (0.02)    (0.03)     0.07
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    Net (loss):               (1,848)     (812)     (865)   (2,713)   (1,163)
      Per share ($)
       (basic & diluted)       (0.10)    (0.04)    (0.05)    (0.15)    (0.06)
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    Capital expenditures     $  (426)  $ 3,823   $   154   $  (272)  $ 5,374
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    Property disposition
     proceeds                $ 2,111   $     -   $     -   $ 2,111   $     -
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    Working capital          $ 3,970   $ 3,767   $ 1,764   $ 3,970   $ 3,767
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    Operating Summary
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    Volumes
      Natural gas (mcf/d)        787       609       684       736       672
      Natural gas liquids
       (boe/d)                    17        15        15        16        19
      Oil (bbl/d)                 36        69        43        40        71
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      Total (boe/d @ 6:1)     184       186       172       179       202
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    Netback ($/boe)
      Revenue                $ 29.70   $ 86.53   $ 36.54   $ 32.99   $ 92.81
      Royalties                 4.39     15.05      4.11      4.26     16.60
      Operating &
       transportation          13.54     21.73     15.64     14.55     17.56
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      Total                  $ 11.77   $ 49.75   $ 16.79   $ 14.18   $ 58.65
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    Realized Prices ($ CAD)
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                                      Three Months Ended    Six Months Ended
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                            09/30/09  09/30/08  06/30/09  09/30/09  09/30/08
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    Natural gas ($/mcf)      $  3.01   $  8.48   $  3.51   $  3.24   $ 10.06
    Oil ($/bbl)                65.53    136.22     75.80     71.09    142.13
    NGLs ($/bbl)               42.72     98.08     40.24     41.56     98.88
    Total ($/boe)            $ 29.70   $ 86.53   $ 36.54   $ 32.99   $ 92.81
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    (1) Netback is a non-GAAP measure. Netback per boe is calculated by
        dividing the revenue and costs in total for the company by the total
        production of the company measured in boe.

    (2) Funds from operations is a non-GAAP measure. The comparable GAAP
        measure is cash flow from operations. A reconciliation of the two
        measures can be found in the table on page 1 of Bengal's management's
        discussion and analysis for the second quarter of fiscal 2010.
    

Copies of the consolidated interim Financial Statements and Management's Discussion & Analysis in respect thereof for the three and six months ended September 30, 2009 are being filed with Canadian securities regulators today and will be available on SEDAR at www.sedar.com or by visiting Bengal's website at www.bengalenergy.ca.

About Bengal

Bengal Energy Ltd. is an international junior oil and gas exploration and production company based in Calgary , Alberta. The Company is committed to growing shareholder value through international exploration, production and acquisitions. Bengal trades on the TSX under the symbol BNG. Additional information is available at www.bengalenergy.ca.

Disclaimers

This news release contains certain statements which constitute forward-looking statements or information, including the execution of production sharing contracts, required work commitments, work program capital expenditure requirements and the approximate size and nature of seismically defined features. Although the Company believes the expectations reflected in its forward-looking statements are reasonable, the forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. As such, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. The Company has provided these forward-looking statements or information in reliance on certain assumptions that it believes are reasonable at this time, including: the ability to meet the work commitments and work program capital expenditure requirements and timing of receipt of final Government of India approval. Risks include, but are not limited to: uncertainties and other factors that are beyond the control of the Company, risks associated with the oil and gas industry, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, and specific risks associated with the ability to complete the execution of the production sharing contract such as delays in obtaining or failure to obtain final Government of India approval, ability to meet the work commitments, Bengal's ability to meet the capital expenditures, estimated size of any seismic features and whether additional geosciences work will progress to defining drillable locations. The Company assumes no obligation to update any forward-looking statements or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in filings of the Company with Canadian securities regulators, which are available under the Company's profile at www.sedar.com.

Barrels of oil equivalent - When converting natural gas to barrels of oil equivalent (boe), Bengal uses the widely recognized standard of 6 thousand cubic feet (Mcf) of natural gas to one barrel of oil (bbl). Bengal cautions that 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.

For further information: Bengal Energy Ltd., Bradley Johnson, Chief Executive Officer, Chayan Chakrabarty, President, [phone], Email: [email protected], Website: www.bengalenergy.ca