/NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES./CALGARY, March 26 /CNW/ - One Exploration Inc. (the "Corporation" or
"OneEx") is pleased to report its financial and operating results for the
quarter and year of operations ended December 31, 2008. Operational and
corporate highlights include:- The Corporation had total proved reserves of 1.537 million boe and
total proved plus probable reserves of 2.710 million boe having
respective present values of future net revenue after tax discounted
at 10 percent of $28.3 million and $48.1 million as at December 31,
2008. The present value of future net revenue after tax discounted at
15 percent is $24.3 million for total proved reserves and
$40.0 million for total proved plus probable reserves.
- Average production in the fourth quarter of 2008 decreased by three
percent to 809 boe per day compared to 835 boe per day in the third
quarter of 2008. The Corporation produced an average of 855 boe per
day during the year ended December 31, 2008, an increase of
77 percent from the 483 boe per day produced during the year ended
December 31, 2007. The Corporation's estimated first quarter 2009
average production rate is approximately 750 boe per day, and the
Corporation forecasts production for the second quarter of 2009 to
average between 750 and 800 boe per day.
- OneEx's drilling program for the year ended December 31, 2008
consisted of 16 gross (9.6 net) wells. Of the wells drilled, 11 gross
(6.0 net) wells were successful, two (1.5 net) are cased and under
evaluation and three (2.1 net) were deemed uneconomic upon completion
and will be abandoned.
- OneEx ended the year with net debt of $3.8 million, and has a
$10.0 million line of credit.
- OneEx has approximately 59 thousand net acres of undeveloped lands
independently valued at $4.4 million.
- OneEx has tax pools of approximately $115 million.
Financial Performance
---------------------The Corporation recorded a net loss of $ 2.0 million ($ 0.04 per Class A
share) for the quarter ended December 31, 2008 and reported a net loss of $1.4
million ($0.03 per Class A share) for the year ended December 31, 2008. Funds
from operations(i) were $ 436 thousand ($0.01 per Class A share) for the
quarter ended December 31, 2008 and $5,691 thousand ($0.14 per Class A share)
for the year ended December 31, 2008.(i) Funds from operations should be considered in conjunction with the
non-GAAP cautionary language in the Corporation's MD&A filed on SEDAR at
www.sedar.com.
Operations update
-----------------The Corporation drilled two (1.0 net) wells during the first quarter of
2009 in the Nig Creek and Bubbles areas of North-eastern British Columbia. Due
to the winter-only access nature of the area, the wells are not anticipated to
produce during 2009. The Corporation has planned total capital spending of
$2.7 million during the first half of 2009, of which $1.5 million is Canadian
Exploration Expense. OneEx will review spending over the balance of 2009 based
on commodity prices and availability of funds. The Corporation has voluntarily
shut in approximately 155 boe/d of production during the first quarter of
2009. Approximately 55 boe/d was shut in at Paddle River due to low commodity
prices, and approximately 100 boe/d shut in at Swan Hills due to unfavourable
third-party processing terms. The Corporation is working on alternatives to
allow the Swan Hills well to produce profitably. The Paddle River wells will
not return to production until commodity prices recover. The Corporation is
currently producing approximately 775 boe/d.Financial and Operating Summary
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Three months ended Year ended
December 31 December 31
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2008 2007 2008 2007
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Operating highlights
Production
Natural gas (mcf per day) 3,988 3,800 4,099 2,472
Crude oil and NGLs (bbls per day) 144 187 172 71
BOE per day (6:1) 809 820 855 483
Average realized price
Natural gas ($ per mcf) 6.99 6.23 8.54 6.03
Crude oil and NGLs ($ per bbl) 46.64 67.42 78.91 65.92
BOE ($ per boe, 6:1) 43.76 44.30 57.69 40.88
Financial highlights ($ 000's
except per share data)
Petroleum and natural gas sales 3,255 3,344 18,062 7,207
Net earnings (loss) (2,002) (698) (1,404) 587
Net earnings (loss) per share
Basic (0.04) (0.02) (0.03) 0.02
Diluted (0.04) (0.02) (0.03) 0.02
Working capital (deficit)
at period end (3,796) (4,098) (3,796) (4,098)
Capital Expenditures(excluding
corporate acquisitions) 4,496 5,872 14,197 27,188
Shares outstanding at period
end (000's)
Class A 44,384 26,383 44,384 26,383
Class B 1,269 1,269 1,269 1,269
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Reserves
--------The following tables provide information on OneEx's petroleum and natural
gas reserves as of December 31, 2008 as evaluated by the Corporation's
independent reserve engineering firms, Sproule Associates Limited ("Sproule")
and Paddock Lindstrom & Associates Ltd. ("Paddock"). The evaluation of OneEx's
petroleum and natural gas reserves was conducted pursuant to National
Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI
51-101"). Sproule evaluated 43 percent of the total proved barrel of oil
equivalent reserves and 53 percent of the total proved plus probable barrel of
oil equivalent reserves. Paddock evaluated the assets consisting of 57 percent
of the total proved barrel of oil equivalent reserves and 47 percent of the
total proved plus probable barrel of oil equivalent reserves.-------------------------------------------------------------------------
Summary of Oil and Gas Reserves
As of December 31, 2008
Forecast Prices and Costs
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Reserves
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Light and Coalbed
Medium Oil Heavy Oil Methane
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Reserve Gross Net Gross Net Gross Net
Category (Mbbl) (Mbbl) (Mbbl) (Mbbl) (MMcf) (MMcf)
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Proved
Developed Producing 63.7 58.3 15.9 28.7 0 0
Developed Non-Producing 69.8 52.6 18.9 17.6 42 36
Undeveloped 24.7 22.4 0.0 0.0 47 40
Total Proved 158.3 133.4 34.8 46.2 89 76
Probable 237.5 163.7 14.0 16.8 138 114
Total Proved Plus
Probable 395.8 297.0 48.9 63.0 227 190
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Natural Gas
(non-associated Natural Gas Natural Gas
& associated) (solution) Liquids
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Reserve Gross Net Gross Net Gross Net
Category (MMcf) (MMcf) (MMcf) (MMcf) (Mbbl) (Mbbl)
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Proved
Developed Producing 5,128 4,179 117 101 196.0 132.3
Developed Non-Producing 985 895 106 90 18.1 13.0
Undeveloped 323 242 0 0 4.8 3.6
Total Proved 6,436 5,315 224 191 218.9 148.9
Probable 4,426 3,339 259 185 118.5 79.4
Total Proved Plus
Probable 10,862 8,655 484 375 337.3 228.3
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Reference: Item 2.2(1) of Form 51-101F1
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Net Present Value of Future Net Revenue
By Production Group
As of December 31, 2008
Forecast Prices and costs
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Future Net Unit Value
Revenue Before Before
Income Taxes Income Taxes
Discounted Discounted
Reserves at 10%/Year at 10%/Year
Category Production Group (M$) $/BOE
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Proved Light and Medium Crude Oil
(including solution gas and
associated by-products) 3,764 24.11
Heavy Oil (including solution
gas and associated by-products) 1,422 23.18
Coalbed Methane 189 15.00
Natural Gas (including
associated by-products) 22,894 22.25
Proved Plus
Probable Light and Medium Crude Oil
(including solution gas and
associated by-products) 10,193 28.58
Heavy Oil (including solution
gas and associated by-products) 1,820 22.34
Coalbed Methane 459 14.53
Natural Gas (including
associated by-products) 35,596 21.50
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Reference Item 2.2(3)(c) of Form 51-101F1; Unit Values are based on net
reserve volumes.
Sproule's escalated price forecast assumptions, used in both the Paddock
report and the Sproule report, as of December 31, 2008 follows:
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Summary of Pricing and
Inflation Rate Assumptions
as of December 31, 2008
Forecast Prices and Costs
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Pent-
Edmonton Cromer Natural anes
Par Medium Gas(1) Plus Butanes
WTI Price 40 29.3 AECO FOB F.O.B.
Cushing degrees degrees Gas Field Field Infl- Exchange
Oklahoma API API Prices Gate Gate ation Rate(3)
($US/ ($Cdn/ ($Cdn/ ($Cdn/ ($Cdn/ ($Cdn/ Rate(2) ($US/
Year bbl) bbl) bbl) MMBtu) bbl) bbl) (%/Yr) $Cdn)
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Forecast
2009 53.73 65.35 58.16 6.82 66.93 51.15 2.0 0.800
2010 63.41 72.78 66.23 7.56 74.54 54.25 2.0 0.850
2011 69.53 79.95 72.76 7.84 81.88 59.59 2.0 0.850
2012 79.59 86.57 79.65 8.38 88.66 64.53 2.0 0.900
2013 92.01 94.97 87.38 9.20 97.27 70.79 2.0 0.950
Thereafter Various Escalation Rates
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(1) This summary table identifies benchmark reference pricing schedules
that might apply to a reporting issuer.
(2) Inflation rates for forecasting prices and costs.
(3) Exchange rates used to generate the benchmark reference prices in
this table.
Notes:
Product sale prices will reflect these reference prices with further
adjustments for quality and transportation to point of sale.
Capital efficiency
------------------
The following Finding, Development & Acquisition ("FD&A") table highlights
the efficiency of OneEx's capital expenditures during 2008 and the two
previous fiscal years.
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Finding, Development & Acquisition ("FD&A") Costs
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Fiscal 2008 Fiscal 2007
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Proved Proved
($ 000's except reserve plus plus
units and unit costs) Proved Probable Proved Probable
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Total capital expenditures (ii) 21,204 21,204 34,212 34,212
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Future capital - period end (iii) 2,989 5,962 889 1,056
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Future capital - period
beginning (iii) 889 1,056 26 476
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Total capital expenditures
including change in future
capital 23,304 26,110 35,075 34,792
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Total reserve additions net
of revisions (mboe) 472 919 1,520 2,174
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FD&A cost ($/boe) 49.43 28.40 23.08 16.00
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Fiscal 2006 Three year average
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Proved Proved
($ 000's except reserve plus plus
units and unit costs) Proved Probable Proved Probable
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Total capital expenditures (ii) 2,746 2,746 58,162 58,162
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Future capital - period end (iii) 26 476 889 1,056
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Future capital - period
beginning (iii) - - - -
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Total capital expenditures
including change in future
capital 2,772 2,772 58,162 58,162
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Total reserve additions net
of revisions (mboe) 48 119 2,989 5,962
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FD&A cost ($/boe) 57.75 27.08 29.98 19.96
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Notes:
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(i) The aggregate of the exploration and development costs incurred in
the most recent financial year and the change during that year in
estimated future development costs generally will not reflect total
finding and development costs related to reserves additions for that
year.
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(ii) Future capital expenditures required to convert proved non-producing
and probable reserves to proved producing.
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Outlook
-------The Corporation is positioned financially to weather the current low
commodity price environment. We are planning to maintain a high level of
capital discipline throughout the year to maintain the ability to meet our
estimated remaining Canadian Exploration Expense commitment under our December
2008 flow-through commitment of $2 million. The current environment provides a
significant number of opportunities to the Corporation, and the ability to
spend $2 million of exploration prospects provides the opportunity for
meaningful operational results and growth.
OneEx has filed with Canadian securities regulatory authorities its
audited financial statements for the quarter and year ended December 31, 2008
and the accompanying Management's Discussion and Analysis. These filings are
available for review at www.sedar.com.
OneEx has 44.4 million Class A common shares that trade on the TSX under
the symbol OE.A, 1.3 million Class B common shares that trade on the TSX under
the symbol OE.B and 3.7 million Class A stock options outstanding at March 26,
2009.
This news release does not constitute an offer to sell securities, nor is
it a solicitation of an offer to buy securities, in any jurisdiction. All
sales will be made through registered securities dealers in jurisdictions
where the offering has been qualified for distribution. The securities offered
are not, and will not be, registered under the securities laws of the United
States of America, nor any state thereof and may not be sold in the United
States of America absent registration in the United States or the availability
of an exemption from such registration.Neither the TSX Venture Exchange nor its Regulation Service Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.Natural gas reserves are converted to barrel of oil equivalent at six
thousand cubic feet of natural gas for each barrel of oil equivalent ("boe")
based on the relative heating content of natural gas to crude oil. Readers are
cautioned that the relative values of natural gas and crude oil may differ and
that the barrel of oil equivalent measure may not be representative of the
relative values of natural gas and crude oil. In this press release: boe/d
means boe per day; mcf/d means thousand cubic feet per day; mboe means
thousand boe; mmcf means million cubic feet; bbl means barrel and mmbtu means
million British Thermal Units .
Investors are further cautioned that the preparation of financial
statements in accordance with Canadian generally accepted accounting
principles ("GAAP") requires management to make certain judgments and
estimates that affect the reported amounts of assets, liabilities, revenues
and expenses. Estimating reserves is also critical to several accounting
estimates and requires judgments and decisions based upon available
geological, geophysical, engineering and economic data. These estimates may
change, having either a negative or positive effect on net earnings as further
information becomes available, and as the economic environment changes.
This news release contains certain forward-looking statements, which are
based on OneEx's current internal expectations, estimates, projections,
assumptions and beliefs. Some of the forward-looking statements may be
identified by words such as "expects", "anticipates", "believes", "projects",
"plans" and similar expressions. These statements are not guarantees of future
performance and involve a number of risks and uncertainties, many of which are
beyond OneEx's control. Such forward-looking statements necessarily involve
known and unknown risks and uncertainties, which may cause One's actual
performance and financial results in future periods to differ materially from
any projections of future performance or results expressed or implied by such
forward-looking statements and, accordingly, no assurances can be given that
any of the events anticipated by the forward-looking statements will transpire
or occur, or if any of them do, what benefits OneEx will derive from them. The
risks and uncertainties associated with the forward-looking statements
included in this news release include, among other things, changes in general
economic, market and business conditions; changes or fluctuations in
production levels, unexpected drilling results, commodity prices, currency
exchange rates, capital expenditures, reserves or reserves estimates and debt
service requirements; changes to legislation, investment eligibility or
investment criteria; One's ability to comply with current and future
environmental or other laws; OneEx's success at acquisition, exploration and
development of reserves; actions by governmental or regulatory authorities
including increasing taxes, changes in investment or other regulations; and
the occurrence of unexpected events involved in the exploration for, and the
operation and development of, oil and gas properties. Many of these risks and
uncertainties are described in OneEx's Annual Information Form which is
available at www.sedar.com. Readers are also referred to risk factors
described in other documents OneEx files with Canadian securities authorities.
Copies of these documents are available without charge from the Corporation.
Except as required by applicable law, the Corporation disclaims any
responsibility to update these forward-looking statements.
For further information: Walter Vrataric, President and Chief Executive
Officer, One Exploration Inc., Phone: (403) 781-2752, Fax: (403) 232-8463;
Dennis Ward, Vice President, Finance and Chief Financial Officer, One
Exploration Inc., Phone: (403) 781-2756, Fax: (403) 232-8463
