CALGARY, April 23 /CNW/ - Eagle Rock Exploration Ltd. ("Eagle Rock" or
the "Company", TSXV: ERX) announces that it filed its audited financial
statements and related management's discussion and analysis ("MD&A") for the
year ended December 31, 2008. Certain selected financial and operational
information for the year ended December 31, 2008 and the year ended December
31, 2007 is set out below and should be read in conjunction with Eagle Rock's
audited financial statements and related MD&A. In addition Eagle Rock has
filed its Annual Information Form which contains Eagle Rock's reserves data
and other oil and gas information for the year ended December 31, 2008 as
mandated by National Instrument 51-101 Standards for Disclosure for Oil and
Gas Activities of the Canadian Securities Administrators (NI "51-101"). These
filings will be available in their entirety at www.eaglerockexploration.com
Selected financial and operational results for the year are summarized in
the following table:
3 months ended 12 months ended
$000's except production and December 31 December 31
per share amounts 2008 2007 2008 2007
Average daily production - boe/d 523 489 487 546
Petroleum and Natural Gas Revenue 2,512 2,942 15,210 11,936
Operating netback per boe 27.86 39.59 57.14 34.72
Cash flow from operating activities 1,988 1,797 8,492 5,265
Net Profit (Loss) 354 (174) 2,073 (1,587)
Profit (Loss) per basic and
diluted share 0.01 (0.00) 0.04 (0.04)
Capital expenditures 8,730 4,299 23,322 13,113
Total assets 55,078 38,211
Net debt (20,854) (9,970)
Shareholder's equity 25,426 24,415
Common shares outstanding - basic 54,543 54,001
Note: Six mcf of natural gas is considered equivalent to 1 barrel of oil
(boe). See "Forward-looking Information" below.
- Earned a net profit of $2.1 million for the 12 months ended
December 31, 2008 compared to a loss of $1.6 million for the
12 months ended December 31, 2007.
- Reported a gain of $1.8 million (before income tax) on hedges, a
major contributor to the Company's profit for the year.
- Produced 487 boe/d in 2008, an 11% decrease from the 2007 average of
546 boe/d. The sale of the Antelope Lake property for $6.9 million
was effective April 1, 2008 and accounts for the decrease.
- Generated gross revenue of $15.2 million in 2008, an increase of 27%
over 2007 gross revenues of $11.9 million. The increase is
attributable to higher oil prices as the Company averaged $85.33 per
boe in 2008 compared to $59.90 in 2007.
- Generated cash from operating activities of $8.5 million, a 61%
increase over 2007 cash flow of $5.3 million, again attributable to
higher oil prices.
- Acquired three private companies in December 2008, adding a battery
facility in Saskatchewan, production of approximately 90 boe/d and
338 mboe of reserves (Proved + Probable - as described in Eagle
Rock's reserves data and other oil and gas information for the year
ended December 31, 2008, dated March 20, 2009, prepared by GLJ
Petroleum Consultants in accordance with NI 51-101, utilizing GLJ's
January 1, 2009 price forecast and cost assumptions, as summarized in
Eagle Rock's Annual Information Form available on SEDAR).
- Incurred capital expenditures of $23.3 million, which includes the
cost of drilling 14 wells of which 9 are producing.
- Accepted terms of forbearance proposed by the local office of the
Company's Bank, which are now subject to approval by the Bank's
credit committee. The forbearance agreement was the result of a
breach of the working capital covenant (failed to maintain the
required working capital ratio of 1:1) in the credit facility
agreement with the Bank.
Q4 2008 Highlights
- Earned operating netbacks of $27.86 per boe in Q4 2008 compared to
$39.59 in Q4 2007. The decrease is a result of lower oil prices and
higher operating costs.
- Increased average daily production to 523 boe/d in Q4 2008
representing a 7% increase over Q4, 2007, which averaged 489 boe/d.
- Incurred capital expenditures of $8.7 million in this quarter which
was higher than expected due to cost over runs on wells spudded in
As of March 2009 the Company has suspended its capital program and will
apply its available cash flow (after royalties, operating expenses and general
and administrative expenses) from approximately 600 boe/d to debt reduction.
General and administrative expenses have been reduced primarily by way of
employee reductions. It has also placed three Alberta properties (Coutts,
Enchant and Conrad) for sale through an agent, Sayer Energy Advisors, with the
proceeds to be applied to debt reduction and to meet the proposed terms of
forbearance with the Bank.
Under the terms of the proposed forbearance, the Bank will not enforce
its rights in respect of Eagle Rock's indebtedness under its credit facilities
until August 31, 2009. The Bank will consolidate the revolver loan and
development loan facilities into one credit facility having the maximum
availability of $18.2 million. Eagle Rock is to make monthly principal
payments of $175,000 and remedy the working capital ratio on its June 30, 2009
financial statements as submitted to the Bank by August 29, 2009.
Eagle Rock's current indebtedness to the Bank under the credit facilities
is approximately $18 million.
Eagle Rock's annual shareholder meeting will be held at 1:30 p.m. on June
5, 2009 in the Company's Boardroom at 300, 340 12th Avenue S.W., Calgary,
About Eagle Rock
Eagle Rock Exploration Ltd. is a publicly traded energy company involved
in the exploration and development of low to medium risk oil and gas
properties in Western Canada. Eagle Rock Exploration Ltd. trades on the TSX
Venture Exchange under the symbol ERX.
For more information please visit us at www.eaglerockexploration.com
Certain information contained in this news release constitutes
forward-looking information or statements including, without limitation,
information and statements respecting its credit facility with the Bank, as
proposed to be amended by the terms of forbearance, anticipated capital
expenditures, production forecasts, production and reserves additions from
Eagle Rock's historical and future capital programs or acquisitions, operating
expenses, G&A, royalties, expected timing of the tie-in of wells, expected
timing of the receipt of regulatory approvals and expected timing of the
completion of facilities projects.
Statements relating to "reserves" and "resources" are forward-looking
information as they involve the implied assessment, based on certain estimates
and assumptions that the reserves and resources described exist in the
quantities predicted or estimated and can profitably be produced in the
Forward-looking information and statements are often, but not always,
identified by the use of words such as "anticipate", "seek", "believe",
"expect", "hope", "plan", "intend", "forecast", "target", "project",
"guidance", "may", "might", "will", "should", "could", "estimate", "predict"
or similar words or expressions suggesting future outcomes or language
suggesting an outlook. By their nature, forward-looking statements are subject
to numerous risks and uncertainties that can significantly affect future
results. Actual future results may differ materially from those assumed or
described in such forward-looking statements as a result of the impact of
issues, risks and uncertainties whether described herein or not, which Eagle
Rock may not be able to control. By their very nature, forward-looking
statements involve inherent risks and uncertainties, both general and
specific, and risks that forward looking statements will not be achieved.
These factors may be found under the heading "Risk Factors" in Eagle Rock's
Annual Information Form for the year ended December 31, 2008. The reader is
therefore cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements contained in this news release are
made as of the date hereof and Eagle Rock undertakes no obligation to update
publicly or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by applicable
securities laws. The forward-looking statements contained in this news release
are expressly qualified by this cautionary statement.
In addition, the term boe or boe's may be misleading, particularly if
used in isolation. In accordance with NI 51-101, a boe (barrel of oil
equivalent) conversion ratio of 6 Mcf per one (1) boe is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as
the term is defined in the Policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
For further information:
For further information: Jim Silye, President and Chief Executive
Officer, Steven J. Glover, Vice-President, Finance, and Chief Financial
Officer, TEL: (403) 269-4040, FAX: (403) 261-1978, Email: Jim Silye
(firstname.lastname@example.org) OR Steven J. Glover (email@example.com)