Eagle Rock Reports Second Quarter 2008 Results



    CALGARY, Aug. 15 /CNW/ - Eagle Rock Exploration ("Eagle Rock" or "the
Corporation") (TSXV: ERX) has filed its Unaudited Financial Statements and
Management's Discussion and Analysis ("MD&A") for the second quarter ended
June 30, 2008 on SEDAR. The documents can be accessed through SEDAR's website
at www.sedar.com, or on Eagle Rock's site at www.eaglerockexploration.com.

    Selected Quarterly Information

    The following table provides a summary of key financial results.

    
                                      Three      Three        Six        Six
                                     months     months     months     months
                                      ended      ended      ended      ended
                                    June 30    June 30    June 30    June 30
                                       2008       2007       2008       2007

    $000's except production
     and per share amounts          $ 000's    $ 000's    $ 000's    $ 000's
    -------------------------------------------------------------------------
    Average daily production - boed     403        549        444        556
    Petroleum and natural gas
     revenue before hedging losses    3,929      2,887      7,456      5,539
    Cash flow from operating
     activities (includes working
     capital change)                  2,295      1,229      3,467      2,043
    Funds flow from operations        2,060      1,174      3,736      1,982
    Income (loss) for the period       (613)      (412)      (488)    (1,197)
    Basic and diluted income (loss)
     per share                        (0.01)     (0.01)     (0.01)     (0.03)
    Capital expenditures-excluding
     share based acquisitions         4,560      4,193      6,929      6,501
    Total assets                     35,432     31,966     35,432      6,501
    Net (debt) cash                  (7,290)    (9,222)    (7,290)    (9,222)
    Common shares outstanding
     - basic                         54,001     39,662     54,001     39,662
    Common shares outstanding
     - fully diluted                 59,678     43,339     59,041     43,199
    Weighted average common
     shares outstanding              54,001     39,662     54,001     39,662
    


    Average daily production decreased due to the sale of Eagle Rock's
non-operated Antelope Lake property effective April 1, 2008 for $6.9 million
dollars. These funds are being directed to development and production in Eagle
Rock's operated areas. Eagle Rock's production remains heavily weighted to
oil, comprising 95% of production in Q2 2008 from oil. Current production is
in excess of 500 bbls/d and Eagle Rock has recently completed and is currently
testing three wells in Saskatchewan and two wells in Alberta which are
awaiting pipeline connection.
    Funds flow from operations increased by 75 percent to $2,060,000
($0.04 per basic share) in Q2 2008 from $1,174,000 ($0.03 per basic share) in
the same period of 2007. A combination of higher commodity prices and improved
operational efficiency contributed to this increase. The operating netback for
Q2 2008 more than doubled from Q2 2007 to $80.00 per barrel or $73.00 per
barrel after deducting the actual loss incurred on the calendar 2008 hedging
collar; $73.00 per barrel represents a 135 percent increase from the Q2 2007.
    The net loss for Q2 2008 before income tax recovery was $796,463 which
includes the unrealized mark to market loss on hedging contracts of
$1,361,800. Without the hedging loss ERX would have earned profit before
income taxes of $565,337.
    Bank lines of credit have recently been increased to $12.5 million in
light of higher production and increased cash flows. Eagle Rock's risk
management activities including a contract for a calendar 2009 collar for
100 bbls/d with a floor of US $100/bbl and a ceiling for US $200/bbl also
assisted in obtaining higher credit limits.
    The capital budget for 2008 has been increased in light of recent
operational successes and strengthening cash flows. CAPEX for 2008 will be in
the range of $15 to $18 million from the previously announced range of $9
to $12 million. Of this new budget $8 to $11 million will be spent in the
second half of the year and will be financed from cash flow and existing bank
lines of credit. Eagle Rock's cash flows for 2008 are benefiting from high
benchmark oil prices, low differentials on medium gravity oil and improving
operating efficiency as production increases.

    About Eagle Rock

    Eagle Rock 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's common shares trade on the TSX Venture Exchange
under the symbol "ERX".

    
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.
    

    Forward-looking Information

    This press release includes forward-looking statements and assumptions
respecting Eagle Rock's strategies, future operations, expected financial
results, financial sources, commodity prices, costs of production and quantum
of oil and natural gas reserves and discusses certain issues, risks and
uncertainties that can be expected to impact on any of such matters. 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. 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. 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.

    %SEDAR: 00019108E




For further information:

For further information: please visit the Company's website at
www.eaglerockexploration.com or contact: Jim Silye, President and Chief
Executive Officer, Tel: (403) 269-4040, Fax: (403) 261-1978, E-mail:
jimsilye@eagler.ca

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EAGLE ROCK EXPLORATION LTD.

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