AltaCanada Energy Corp. announces Q2 results



    TSX-V SYMBOL: ANG

    CALGARY, Aug. 28 /CNW/ - AltaCanada Energy Corp. is pleased to present
operating and financial highlights for the second quarter of 2008. Complete
details in the Report to Shareholders are available on our website
(www.altacanada.com), on SEDAR at www.SEDAR.com, or from the Corporation.

    Fort Belknap, Montana

    In the second quarter 2008, we continued to direct substantially all of
our effort and available financial resources to the Fort Belknap Reservation
in Montana. Potential for significant reserves and production additions exist
on our large unexplored acreage position. As a result, no new wells were
drilled and tied in on our existing lands and natural declines continued to
reduce our current production base. We are pleased to report that exploration
success was attained at Fort Belknap with the commitment of limited capital.
In the third quarter, 3 Fort Belknap wells encountered natural gas pay
thicknesses of 92 feet, 48 feet and 34 feet respectively, all from a drilling
depth of less than 1,200 feet. In August, these three wells (1.5 net) tested
at rates of 410 Mcf/d, 310 Mcf/d and 80 Mcf/d of dry gas with other zones
remaining to be completed. Work progresses for a Q4 2008 tie-in of these three
wells along with 6 (3.0 net) previous gas wells and a drilling program
commencing in the fourth quarter.
    We estimate that threshold reserves have now been achieved with fewer
wells than we anticipated to build the connecting pipeline from Fort Belknap
to our gathering system. The total tested rate from 9 wells (4.5 net) is
1.8 MMcf/d which would result in an initial flow rate of 1.5 MMcf/d (0.75
MMcf/d net). We anticipate 6 to 10 development locations on 640 acre spacing
will be drilled in Q4 which could double this initial rate. First year
declines average 35% but provide early payout and subsequent long reserve
life. This first producing area represents only a small portion of the new
lands we control.
    During the second quarter, AltaCanada completed a significant purchase of
an additional 25 percent interest (66,600 net acres) in Fort Belknap
Reservation lands including a 25 percent interest in 6 (1.50 net) gas wells,
for 7,250,000 common shares. This brought our working interest in the
Reservation to a minimum of 50 percent and a maximum of 60 percent across
243,484 gross acres (133,134 net). Our total land position in Montana is now
400,000 gross acres (300,000 net acres) giving the corporation considerable
exploration potential for both our traditional shallow gas play and for
prospective deeper oil and gas zones.
    Like many other gas producers, hedging losses are reported by AltaCanada
for the period ending June 30, 2008. However, in the fifty-seven days
following the close of the quarter our unrealized hedge position has gone from
a loss of $1.7 million to a gain. On August 26, AltaCanada unwound all three
hedging positions for a gain of $216,713. We will continue to evaluate our
risk management strategy while maximizing the amount of capital that we have
for investment in new exploration and development targets.

    Financial Review

    Cash flow from operations was $0.8 million for the six months ended June
30, 2008 a decrease of 60 percent compared to $1.9 million for the six months
ended June 30, 2007, reflecting a decline in sales volumes of 42 percent and a
realized hedging loss of $0.2 million in 2008 compared to a realized hedging
gain of $0.2 million in 2007. On a per share basis, basic and diluted cash
flow from operations in the six months of 2008 was $0.01 per share compared to
$0.03 per share basic and diluted in the second quarter of 2007.
    For the six months ended June 30, 2008, the Corporation had a net loss of
$2.5 million compared to a net loss of $0.7 million for the same period in
2007. Loss per share basic and diluted for the six months ended June 30, 2008
was $(0.04) compared to a basic and diluted loss per share of ($0.01) for the
six months ended June 30, 2007.
    Sales volumes for the six months ended June 30, 2008 averaged 476 BOE/d,
a decrease of 21 percent from the first quarter of 2008 (533 BOE/d). The
average natural gas sales price of $9.00/Mcf for the six months was 24 percent
higher than for the same period in 2007, ($7.23/Mcf in 2007), before the
reported hedging activity.

    Outlook

    The acquisition of the additional 25% working interest completed in the
second quarter of 2008 strengthened our Fort Belknap land position and doubled
our working interest position.
    AltaCanada now controls a huge block on the Reservation and after
drilling successes encountered on 9 of 11 Reservation wells, all on the
northernmost portion of the block, we are moving forward with pipeline plans
and are targeting bringing new production on stream in the fourth quarter of
2008.
    Significant new gravity data was recorded in the second quarter over
parts of the 5 northernmost townships (75,000+/- gross acres). Following the
July drilling successes, 30 miles of new 2-D seismic is being shot in August
and will lead to additional fourth quarter drilling, likely 6 to 10 wells. In
the fourth quarter our pipeline plans include 6.5 miles of 6 inch steel line
tieing to our existing facilities. We will also lay significant gathering
lines to individual wells over this large area.

    
    THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
    RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

    BOEs MAY BE MISLEADING, PARTICULARLY IF USED IN ISOLATION. A BOE
    CONVERSION RATIO OF 6 MCF : 1 BBL IS BASED UPON AN ENERGY EQUIVALENCY
    CONVERSION METHOD PRIMARILY APPLICABLE AT THE BURNER TIP AND DOES NOT
    REPRESENT A VALUE EQUIVALENCY AT THE WELLHEAD.
    

    The corporate information contained in this news release may contain
forward-looking forecast information. The reader is cautioned that assumptions
used in the preparation of such information, although considered reasonably
accurate by AltaCanada Energy Corp. at the time of preparation, may prove to
be incorrect. The actual results achieved during the forecast period will vary
from the information provided herein and the variations may be material.
Consequently there is no representation by AltaCanada Energy Corp. that actual
results achieved during the forecast period will be the same in whole or in
part as those forecast.

    
    HIGHLIGHTS

                                      Three Months             Six Months
    Period ended June 30            2008        2007        2008        2007
    -------------------------------------------------------------------------
    FINANCIAL

    Petroleum and Natural
     Gas Revenue (*) ($)       2,444,673   3,090,333   4,682,961   6,459,614
    Cash Flow from
     Operations ($)              253,467   1,019,306     754,743   1,903,873
      Per Common Share
       ($ - Basic/Diluted)          0.00        0.02        0.01        0.03
    Net Earnings (Loss) ($)   (1,360,164)    459,763  (2,549,060)   (729,473)
      Per Common Share ($)
       - Basic/Diluted)            (0.02)       0.01       (0.04)      (0.01)
    Capital Expenditures ($)   2,696,811   1,158,577   3,260,875   2,387,143
    Net Debt ($) at June 30                           11,408,365  10,298,506
    Shareholders' Equity ($)
     at June 30                                       25,221,454  24,069,665
    Total Assets ($)
     at June 30                                       41,780,695  40,285,808
    Common Shares - (weighted
     average for the quarter)
      Basic                                           67,957,912  60,230,745
      Diluted                                         67,957,912  60,565,791
    Common Shares -
     (outstanding -at June 30)                        74,381,538  60,230,745
    -------------------------------------------------------------------------
    OPERATIONS

    Average Daily Oil and
     Gas Sales
      Natural Gas (Mcf/d)          2,482       4,938       2,823       4,908
      Oil and NGLs (BOIs/d)            6           5           6           5
      Total (BOE/d)                  420         828         476         823
      % Gas/Oil Ratio               99/1        99/1        99/1        99/1
    Average Prices:
      Natural Gas ($/Mcf)          10.69        6.85        9.00        7.23
      Oil and NGLs ($/Bbls)        55.90       32.04       55.44       39.10
      Total ($/BOE)                64.03       41.04       54.03       43.38
    -------------------------------------------------------------------------
    WELLS DRILLED

      Gross                            -           5           1           8
      Net                              -         3.5        0.25         4.1
    -------------------------------------------------------------------------
    (*) Including royalty income and excluding hedge revenue (loss)
    




For further information:

For further information: Don Foulkes, President, Telephone: (403)
265-9091 (ext 248), Fax: (403) 256-9021, Email: info@altacanada com

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ALTACANADA ENERGY CORP.

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