Novus Energy Inc. announces year end 2009 financial and operational results

/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S./

CALGARY, April 23 /CNW/ - Novus Energy Inc. ("Novus" or the "Company") announces that it has filed its audited financial statements and management's discussion and analysis ("MD&A") as at and for the fiscal year ended December 31, 2009. These may be accessed through the SEDAR website www.sedar.com and at the Company's website www.novusenergy.ca.

The Company changed its fiscal year end from September 30 to December 31 effective October 1, 2008. As a result, the Company's reporting fiscal year is the fifteen month period ending December 31, 2009. Going forward, the new calendar fiscal year will allow the Company to report its results on a basis consistent with its peers in the oil and natural gas business.

Novus was the first public re-capitalization transaction in the Canadian energy industry in 2009. The Company's new management team assumed operations effective April 1, 2009, with a revised slate of Board of Directors elected in June. The Company changed its name to Novus Energy Inc. and completed a 10 to one share consolidation on August 5, 2009. Over the course of its first nine months of operations, Novus was able to grow its production from approximately 255 boe/d in April 2009 to an average rate of approximately 530 boe/d for the month of December 2009, representing a 108% increase. Current production levels are approximately 825 boe/d, with a further 75 boe/d currently shut-in. Novus expects to continue to significantly grow its production and bias towards light oil.

Highlights

    
    -   On October 30, 2009, the Company purchased certain non-producing oil
        and gas assets in the Luseland and Onward areas of Saskatchewan for
        an aggregate cost of $0.3 million.

    -   On November 5, 2009, the Company closed the acquisition of certain
        producing and non-producing assets in the Dodsland and Rocanville
        areas of Saskatchewan for an aggregate cost of $3.75 million.

    -   On November 18, 2009, the Company closed the acquisition of certain
        producing and non-producing assets in the Eight Mile area of
        British Columbia for the assumption of approximately $0.4 million in
        trade payables of the vendor.

    -   On November 24, 2009, pursuant to a private placement financing, the
        Company issued 46.2 million subscription receipts at a price of $0.65
        each for gross proceeds of $30.0 million.

    -   On December 11, 2009, the Company closed the acquisition of
        Ammonite Energy Ltd. whereby the Company acquired all of the issued
        and outstanding common shares of Ammonite pursuant to a Plan of
        Arrangement. The Company issued 0.825 Novus common shares for each
        common share of Ammonite, which resulted in the issuance of
        approximately 32.3 million common shares.

    -   On December 18, 2009 the Company closed the acquisition of two
        separate assets within its core area of Dodsland, Saskatchewan for
        total cash consideration of $0.85 million.

    -   On December 30, 2009 Novus completed the acquisition of 7.5 net
        sections of land in the Dodsland area. Pursuant to this acquisition,
        Novus issued 0.85 million common shares to the vendor and made a cash
        payment of $1.2 million.

    -   Novus' land holdings in Western Canada increased 124% to 27,639 net
        undeveloped acres (43 sections) at the end of 2009, from 12,328 acres
        (19 sections) at the end of 2008.

    -   Proved plus probable reserves increased 39% to 2.51 mmboe, up from
        1.80 mmboe on September 30, 2008, which was the date of the Company's
        last reserve report.

    -   Proved reserves increased 46% to 1.47 mmboe from 1.00 mmboe on
        September 30, 2008.

    -   Production replacement was 476% on a proved plus probable basis and
        312% for proved reserves, based on production since September 30,
        2008.

    -   The net present value of proved plus probable reserves, discounted at
        10%, increased 77% to $42.68 million from $24.07 million at
        September 30, 2008.

    -   The Company participated in the drilling of seven wells (4.5 net)
        with a 100% success rate. All of the wells were drilled during the
        fourth quarter of 2009 and six wells (3 net) were placed on
        production midway into the first quarter of 2010. These six wells
        were drilled horizontally at Dodsland, Saskatchewan targeting the
        Company's Viking oil play.
    

First Quarter 2010 Activities

    
    -   During the first quarter of 2010, Novus participated in the drilling
        of 11 wells (9.5 net) with a 100% success rate. Ten of the wells
        (8.75 net) targeted oil, and of these, six (6 net) were Viking
        horizontal wells in the Dodsland play.

    -   On January 18, 2010 Novus entered into a 0.5 section farm-in
        agreement in the Dodsland area. Novus agreed to drill 3 wells on
        these lands and issued 325,000 of its common shares in conjunction
        with the transaction.

    -   On March 1, 2010 Novus acquired all the issued and outstanding shares
        of a private company by issuing 18.67 million common shares of Novus.
        The private company had approximately 214 boe/d of production,
        1.15 mmboe of proved plus probable reserves (based upon a reserves
        report prepared by Sproule Associates Limited as at December 31,
        2008), positive working capital of $8.0 million and approximately
        16,300 net undeveloped acres (25.5 net sections) of land. The core
        assets acquired are primarily located in Novus' Viking oil resource
        play in Dodsland, Saskatchewan.

    -   On March 4, 2010 Novus acquired all the issued and outstanding shares
        of a private company for the cash consideration of $800,000 and the
        assumption of $125,000 of debt. This transaction encompassed two
        sections of highly prospective lands in the main Dodsland area.

    -   On March 31, 2010 the Company purchased certain interests in the
        Dimsdale/Wembley area of Alberta for the consideration of $950,000.

    -   On April 19 the Company announced that it had closed three separate
        transactions within its core Viking oil resource play at Dodsland,
        Saskatchewan with the acquisition of 4,000 acres (approximately
        6.25 sections) for the consideration of $3.8 million.
    

A summary of financial and operational results for the three months and fiscal years ended December 31, 2009 and September 30, 2008, are outlined in the following table (note that all share and per share amounts have been retroactively adjusted to reflect the 10:1 share consolidation that took place on August 5, 2009).

    

                          Three months ended          Fiscal years ended
                      Dec 31, 2009  Sep 30, 2008  Dec 31, 2009  Sep 30, 2008
    -------------------------------------------------------------------------

    Financial
    (000s, except per
     share amounts)
    -------------------------------------------------------------------------
    Revenue                 $1,156        $2,001        $4,962        $4,924
    -------------------------------------------------------------------------
    Funds flow from
     (used in)
     operations               (829)         (476)       (3,525)          (44)
    -------------------------------------------------------------------------
      per share -
       basic and
       diluted               (0.01)        (0.03)        (0.10)        (0.01)
    -------------------------------------------------------------------------
    Net loss                 2,233         2,080        15,956         3,086
    -------------------------------------------------------------------------
      per share -
       basic and
       diluted                0.04          0.15          0.45          0.43
    -------------------------------------------------------------------------
    Capital
     expenditures &
     acquisitions           33,331        15,062        35,219        16,206
    -------------------------------------------------------------------------
    Working capital
     (deficit)                                          19,423        (3,100)
    -------------------------------------------------------------------------
    Weighted average
     shares
     outstanding            60,687        13,897        35,374         7,103
    -------------------------------------------------------------------------



                          Three months ended          Fiscal years ended
    Operational       Dec 31, 2009  Sep 30, 2008  Dec 31, 2009  Sep 30, 2008
    -------------------------------------------------------------------------

    Production
    -------------------------------------------------------------------------
    Oil & liquids
     (bbls/d)                   92            96            83            53
    -------------------------------------------------------------------------
    Natural gas
     (mcf/d)                 1,405         1,616         1,447         1,138
    -------------------------------------------------------------------------
    Oil equivalent
     (boe/d)                   327           365           324           242
    -------------------------------------------------------------------------

    Sales price per
     unit
    -------------------------------------------------------------------------
    Oil & liquids
     ($/bbl)                 59.52         98.41         49.99         89.31
    -------------------------------------------------------------------------
    Natural gas
     ($/mcf)                  5.03          7.61          4.63          7.71
    -------------------------------------------------------------------------
    Oil equivalent
     ($/boe)                 38.47         59.53         33.47         55.64
    -------------------------------------------------------------------------

    Reserves (Proved
     plus probable)
    -------------------------------------------------------------------------
    Oil & liquids
     (mbbls)                                             1,653           850
    -------------------------------------------------------------------------
    Natural gas (mmcf)                                   5,122         5,711
    -------------------------------------------------------------------------
    Oil equivalent
     (mboe)                                              2,507         1,801
    -------------------------------------------------------------------------

    

The net loss for the fifteen months ended December 31, 2009 was impacted to a large degree by a $7 million ceiling test impairment provision; $637 thousand in reorganization costs associated with the management change; and a $200 thousand provision for doubtful accounts, all of which occurred before the new management was appointed.

The full text of the December 31, 2009 financial statements and associated MD&A can be found on the Company's website at www.novusenergy.ca and on SEDAR at www.sedar.com.

NON-GAAP FINANCIAL MEASUREMENTS

Included in this press release are references to funds flow from (used in) operations, a financial measure commonly used in the oil and gas industry. This measure has no standardized meaning, is not defined by Canadian generally accepted accounting measures ("GAAP"), and accordingly is referred to as a non-GAAP measure. This supplemental measure is used by management to assess operating results between periods and between peer companies as it provides an indication of the results generated by the Company's principal business activities before the consideration of how these activities are financed or how the results are taxed.

Novus determines funds flow from (used in) operations as cash provided by operating activities prior to changes in non-cash working capital items and asset retirement expenditures. Funds flow from (used in) operations has been presented for information purposes only and should not be considered an alternative to, or more meaningful than, cash flow from operating activities as determined in accordance with GAAP. The Company considers funds flow from (used in) operations to be a key measure as it demonstrates the Company's ability to generate the cash necessary to repay debt and to fund future growth through capital investment. The determination of Novus' funds flow from (used in) operations may not be comparable to similarly titled measures reported by other companies.

OTHER MEASUREMENTS

Reported production represents Novus' ownership share of sales before the deduction of royalties. Where amounts are expressed on a barrel of oil equivalent ("boe") basis, natural gas has been converted at a ratio of six thousand cubic feet to one boe. This ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Boe's may be misleading, particularly if used in isolation. References to natural gas liquids ("liquids") include condensate, propane, butane and ethane and one barrel of liquids is considered to be equivalent to one boe.

Novus Energy Inc. is a well positioned, junior oil and gas company with a proven management team committed to aggressive, cost-effective growth of high netback light oil reserves and production. Novus will continue to grow through a targeted acquisition and consolidation strategy coupled with exploratory and development drilling. Novus' current financial position of having $18 million of cash and unused lines of credit will allow for the exploitation of its drilling inventory and expansion of the Company's opportunity suite through internally generated prospects and strategic light oil acquisitions.

Novus Shares trade on the TSX Venture Exchange under the symbol NVS. Novus currently has 141.2 million common shares outstanding.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release will not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. Such securities have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States, or to a U.S. person, absent registration, or an applicable exemption therefrom.

Advisory Regarding Forward Looking Statements

Certain disclosures set forth in this press release constitute forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believes", "budget", "continue", "could", "estimate", "forecast", "intends", "may", "plan", "predicts", "projects", should", "will" and other similar expressions. All estimates and statements that describe the Company's future, goals, or objectives, including Management's assessment of future plans and operations, may constitute forward-looking information under securities laws. Forward-looking statements involve known and unknown risks and uncertainties which include, but are not limited to: exploration, development and production risks; assessments of acquisitions; reserve measurements; availability of drilling equipment; access restrictions; permits and licenses; aboriginal claims; title defects; commodity prices; commodity markets, transportation and marketing of crude oil, liquids and natural gas; reliance on operators and key personnel; competition; corporate matters; funding requirements; access to credit and capital markets; market volatility; cost inflation; foreign exchanges rates; general economic and industry conditions; environmental risks; Kyoto protocol; and government regulation and taxation.

Forward-looking statements relate to future events and/or performance and although considered reasonable by Novus at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated in the statements made. Novus does not undertake any obligation to publicly update forward-looking information except as required by applicable securities law.

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Novus operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), and at Novus' website (www.novusenergy.ca). The forward-looking statements and information contained in this press release are made as of the date hereof and Novus undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Disclosure provided herein in respect of barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Figures quoted may not add exactly due to rounding.

SOURCE Novus Energy Inc.

For further information: For further information: NOVUS ENERGY INC.: Hugh G. Ross, President and CEO, (403) 218-8895; Ketan Panchmatia, Chief Financial Officer, (403) 218-8876; Julian Din, VP Business Development, (403) 218-8896

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