Equal Energy updates Q2 2010 financial and operating results

EQU: TSX, NYSE

CALGARY, AB, Aug. 13, 2010 /CNW/ - Equal Energy Ltd. ("Equal", "We", "Our" or the "Company") announces its financial and operating results for the three and six months ended June 30, 2010.

Don Klapko, Chief Executive Officer commented, "Q2 2010 is our first quarter reporting as Equal Energy Ltd. as we have now completed our corporate conversion effective May 31, 2010. We worked hard to prepare for our corporate conversion, deploying a more growth oriented business model, re-evaluating our existing properties from a growth perspective and adding new resource plays to our asset base. During Q2, our results were solid as we continue to execute on our stated corporate priorities."

As a result of the success at our oil resource plays, including the Cardium in Alberta and Circus Viola in Oklahoma, Equal's Board of Directors have approved an increase to the Company's capital expenditures to approximately $50 million from the original $40 million. This increase will allow Equal to accelerate the pace of development at its oil resource plays and drill as many as 16 wells in the second half of 2010 which is double the number of wells drilled during the first half of the year.

    
    Q2 and 2010 year-to-date highlights:

    -   Generated funds from operations of $11.4 million for Q2 2010 and
        $25.9 million year-to-date as compared with $8.6 million and $26.5
        million in the same periods for 2009, respectively;

    -   The Company's Bank Syndicate completed a borrowing base review and
        increased the borrowing base to $125.0 million from $110.0 million;

    -   The long-term bank debt was decreased to $66.0 million, a reduction
        of $4.0 million from December 31, 2009 and $1.4 million since the end
        of Q1 2010;

    -   On July 7, 2010, Equal sold non-core assets for net proceeds of $24.3
        million;

    -   On July 9, 2010, Equal completed an equity offering for net proceeds
        of $35.9 million;

    -   Taking into account these two transactions subsequent to the quarter
        end, the revised net debt including the convertible debentures would
        be approximately $114 million which is comprised of working capital
        of $72 million, bank debt of $66 million and convertible debentures
        with a face value of $120 million;

    -   Drilled six successful wells, two of which were tied-in and producing
        by the end of Q2 with the other four tied-in and producing subsequent
        to the Q2 quarter-end; and

    -   Achieved average production of 9,570 boe per day for the quarter,
        compared with 9,507 boe per day in Q1 2010 and 10,059 boe per day in
        Q2 2009.

    -------------------------------------------------------------------------
    Q2 2010
     Financial and
     Operations
     Summary
    (in thousands
     except for
     volumes,          Three months                Six months            Year
     percentages and      ended                      ended              ended
     per share and       June 30                    June 30           Dec. 31
     boe amounts)     2010     2009 Change      2010     2009 Change     2009
    -------------------------------------------------------------------------
    FINANCIAL
    Revenue before
     mark-to-market
     adjustment     35,689   31,208    14%    74,742   73,097    2%  140,506
    Funds from
     operations     11,357    8,561    33%    25,900   26,476   (2%)  46,645
      Per share
       - basic and
       diluted(1)
       ($)            0.52     0.42             1.19     1.29           2.22
    Loss            (4,066) (14,383)          (7,003) (22,881)       (41,282)
      Per share
       - basic and
       diluted(1)
       ($)           (0.19)   (0.69)           (0.32)   (1.11)         (1.95)
    Total assets   445,513  508,588          445,513  508,588        462,272
    Net debt        54,650   36,784           54,650   36,784         35,955
    Convertible
     debentures    115,973  114,315          115,973  114,315        114,863
    Shareholders'
     equity        217,265  259,595          217,265  259,595        219,046
    -------------------------------------------------------------------------
    SHARES
     OUTSTANDING
    Weighted
     average shares
     outstanding
     - basic and
     diluted(1))
     (000s)         21,935   20,760           21,768   20,736         21,119
    Shares
     outstanding at
     period end(1)
     (000s)         21,974   20,842           21,974   20,842         21,701
    -------------------------------------------------------------------------
    OPERATIONS
    Average daily
     production
      Oil (bbls per
       day)          2,345    2,786   (16%)    2,411    2,955   (18%)  2,779
      NGL (bbls per
       day)          2,773    2,039    36%     2,598    1,563    66%   2,156
      Gas (mcf per
       day)         26,711   31,407   (15%)   27,176   32,972   (18%) 29,657
    -------------------------------------------------------------------------
      Total (boe per
       day)          9,570   10,059    (5%)    9,538   10,014    (5%)  9,878
    -------------------------------------------------------------------------
    Exit production
      Oil (bbls per
       day)          2,718    2,766    (2%)    2,718    2,766    (2%)  2,448
      NGL (bbls per
       day)          2,691    2,372    13%     2,691    2,372    13%   2,515
      Gas (mcf per
       day)         27,700   29,232    (5%)   27,700   29,232    (5%) 24,802
    -------------------------------------------------------------------------
      Total (boe per
       day)         10,026   10,010     0%    10,026   10,010     0%   9,097
    -------------------------------------------------------------------------
    Average sales
     price
      Oil ($ per
       bbl)          69.55    63.49    10%     71.59    59.02    21%   62.86
      NGL ($ per
       bbl)          40.34    28.63    41%     43.22    29.48    47%   32.17
      Gas ($ per
       mcf)           4.39     3.43    28%      4.71     5.56   (15%)   4.75
    -------------------------------------------------------------------------
    Cash flow
     netback
     ($ per boe)
      Revenue        40.98    34.09    20%     43.29    40.33     7%   38.97
      Royalties       8.17     5.92    38%      9.11     6.58    38%    7.37
      Production
       expenses      10.50    12.19   (14%)    10.29    12.34   (17%)  10.88
      Transportation
       expenses       0.76     0.78    (3%)     0.72     0.71     1%    0.70
    -------------------------------------------------------------------------
      Operating
       netback       21.55    15.20    42%     23.17    20.70    12%   20.02
      General and
       administrative 5.10     3.61    41%      4.71     3.80    24%    4.36
      Cash interest
       expense        3.52     2.24    57%      3.28     2.29    43%    2.66
      Other cash
       costs         (0.11)       -   100%      0.18        -   100%    0.06
    -------------------------------------------------------------------------
      Cash flow
       netback       13.04     9.35    39%     15.00    14.61     3%   12.94
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Restated to reflect the three for one exchange of trust units for
        common shares.
    

Equal's complete unaudited consolidated financial statements, accompanying notes and MD&A for the quarter are available on Equal's website at www.equalenergy.ca, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.

Equal will host a conference call and webcast on Friday, August 13, 2010 at 9:00 am MT (11:00 am ET) to discuss Equal's Q2 2010 results. To access the call, please dial 1-888-231-8191 or 647-427-7450. A live audio webcast of the conference call will be available on the home page of Equal's website at www.equalenergy.ca. A replay of the conference call will be available until 11:59 pm, August 20, 2010. The replay may be accessed on Equal's website in the Investor Relations section, or by dialing 1-800-642-1687 or 1-416-849-0833, followed by passcode 89291417 followed by the number sign.

About Equal Energy Ltd.

Equal is an exploration and production oil and gas company based in Calgary, Alberta, Canada with its United States operations office located in Oklahoma City, Oklahoma. Equal's shares and debentures are listed on the Toronto Stock Exchange under the symbols (EQU, EQU.DB, EQU.DB.A) and Equal's shares are listed on the New York Stock Exchange under the symbol (EQU). The portfolio of oil and gas properties is geographically diversified with producing properties located in Alberta, British Columbia, Saskatchewan and Oklahoma. Production is comprised of approximately 54 percent crude oil and natural gas liquids and 46 percent natural gas. Equal has compiled a multi-year drilling inventory for its properties including its new oil play opportunities in the Cardium in west central Alberta and the Circus prospect in southern Oklahoma.

Barrels of Oil Equivalent

Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Forward-Looking Statements

Certain information in this press release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may," "should," "anticipate," "expects," "seeks" and similar expressions. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with oil and gas production; marketing and transportation; loss of markets; volatility of commodity prices; currency and interest rate fluctuations; imprecision of reserve estimates; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions or dispositions; inability to access sufficient capital from internal and external sources; changes in legislation, including but not limited to income tax, environmental laws and regulatory matters. Readers are cautioned that the foregoing list of factors is not exhaustive.

Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

Additional information on these and other factors that could affect Equal's operations or financial results are included in Equal's reports on file with Canadian and U.S. securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), the SEC's website (www.sec.gov), Equal's website (www.equalenergy.ca) or by contacting Equal. Furthermore, the forward looking statements contained in this news release are made as of the date of this news release, and Equal does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

All dollar values are in Canadian dollars unless otherwise stated.

SOURCE Equal Energy Ltd.

For further information: For further information: Don Klapko, President and CEO, (403) 263-0262, or (877) 263-0262, info@equalenergy.ca, www.equalenergy.ca

Organization Profile

Equal Energy Ltd.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890