CALGARY, May 7 /CNW/ - ("Sabretooth" or the "Company") (TSX: "SAB") is
pleased to provide a financial update on its first quarter 2009 results and
additional details on its 2009 capital budget.
First Quarter Results
In the first quarter of 2009 the Company averaged approximately 1,602
boe/d of production, with a net back price of $22.85 per boe, calculated by
subtracting royalties, operating and transportation costs from revenues.
Sabretooth's net income was $3.4 million and the Company spent approximately
$4.8 million on capital projects and land acquisitions. Cash flow from
operations after G&A and interest expense was $1.9 million. Sabretooth has
filed its financial statements for the three month period ending March 31,
2009 and related management's discussion and analysis on SEDAR
Sabretooth is in a strong financial position in these times of economic
uncertainty. Sabretooth has a working capital deficit of only $11.5 million on
total bank lines of $45 million (does not include ABCP asset or liability
which are both non-current). Sabretooth's cash flow is insulated from North
American low natural gas prices through a hedge that the Company has entered
into. Our hedge of 6,000 GJ/day at a price of $7.85 from April 1, 2009 to
March 31, 2010 currently has a mark to market value of approximately $6.6
million as of the date of this press release. The hedge accounts for
approximately 60% of Sabretooth's current production. Sabretooth's plans in
2009 are to continue to strengthen the Company's balance sheet.
In the first quarter of 2009 Sabretooth, and its 71% owned subsidiary HFG
Holdings Inc. ("HFG"), deepened a vertical well in the Sinclair area to the
Montney formation. Based on prospective pay on logs, this well has been cased
for a future completion. This well held three expiring sections in which the
Company held an interest and earned an interest in an additional two gross
sections of land. Subsequent to the deepening operation a drilling rig was
moved into Sinclair and the next Montney well is anticipated to spud when
weather conditions allow in June. Sabretooth also plans to drill a third
Montney well at Sinclair in 2009.
Sabretooth and HFG finished drilling, completing and testing its first
horizontal Montney well at Red Creek in the first quarter of 2009 as press
released on February 19, 2009. Recorders were run in March for pressure
buildup and will be pulled in May for analysis.
The non-conventional Montney undeveloped land holdings of Sabretooth and
HFG total approximately 40,480 net acres, of which the Companies' northeast
British Columbia Montney land holdings accounting for approximately 80% of
that number. Sabretooth's total consolidated undeveloped land holdings at
March 31, 2009 were approximately 145,250 net acres.
Share Buy Back
In January 2009, Sabretooth purchased 200,000 shares for $84,000 as part
of the Company's normal course issuer bid. These shares were cancelled in the
first quarter of 2009. Sabretooth has renewed its Normal Course Issuer Bid for
2009 and is able to buy back a total of 1,923,025 shares representing
approximately 5% of the issued and outstanding shares of Sabretooth.
Completed Restructuring of ABCP
As a result of the Asset Backed Commercial Paper ("ABCP") restructuring
being completed, Sabretooth and the National Bank of Canada have entered into
a new credit facility. The new facility allows Sabretooth to borrow up to
$18.1 million (75% of the $24.2 million face value of Sabretooth's ABCP). The
new facility has a three year life with Sabretooth having the option to extend
to a seven year life which reflects the expected maturity dates of the ABCP
the Company holds.
Sabretooth now has a $40.0 million operating facility, a $5.0 million
development facility and the $18.1 million ABCP facility.
In the following three quarters of 2009, Sabretooth, through its
subsidiary HFG, plans to drill three Montney exploration wells in the Sinclair
and Mica areas of Alberta and British Columbia. Sabretooth will operate these
wells on behalf of HFG who will hold a 99.9% interest in these wells. The
first wells at Sinclair and Mica will be drilled as pilot holes which will
allow the wells to be drilled out horizontally at a later date if the logging,
testing and other reservoir results are favourable. Sabretooth has moved a
drilling rig into the Sinclair area and anticipates spudding the first well in
June pending weather and surface access conditions.
Sabretooth also plans to drill a development horizontal well at
Gordondale following the results of Sabretooth's Montney success in that area.
About Sabretooth Energy
Sabretooth Energy Ltd. is a public oil and gas exploration and
development company, located in Calgary, Alberta and carrying out operations
in Western Canada. Sabretooth trades on the Toronto Stock Exchange (TSX) under
the symbol "SAB".
Our mandate is to grow through a balanced approach of drill bit
additions, accretive acquisitions and aggressive exploitation of upside.
Note Regarding Forward Looking Statements
This news release contains forward-looking statements relating to the
Company's plans and other aspects of the Company's anticipated future
operations, strategies, financial and operating results and business
opportunities. Forward-looking statements typically use words such as
"anticipate", "believe", "project", "expect", "plan", "intend" or similar
words suggesting future outcomes, statements that actions, events or
conditions "may", "would", "could" or "will" be taken or occur in the future,
or consist of statements regarding the outlook for petroleum prices, estimated
amounts and timing of capital expenditures, the timing, location and extent of
future drilling operations, anticipated timing and results of construction
projects and project tie-ins, estimates of future production, the ability to
realize on investments in asset backed commercial paper, operating costs or
other expectations, beliefs, plans, objectives, assumptions or statements
about future events or performance. Statements regarding reserves are also
forward-looking statements, as they reflect estimates as to the expectation
that the deposits can be economically exploited in the future.
These statements are based on certain factors and assumptions regarding
expected growth, results of operations, performance, business prospects and
opportunities and the ability of the Company to realize on its investments in
asset backed commercial paper. While we consider these assumptions to be
reasonable based on information currently available to us, they may prove to
By their nature, forward-looking statements involve numerous risk and
uncertainties and other factors that contribute to the possibility that the
predicted outcome will not occur, including, without limitation, risks
associated with oil and gas exploration, development, exploitation,
production, marketing and transportation, loss of markets, volatility of
commodity prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, competition from other producers, inability to retain
drilling rigs and other services, incorrect assessment of the value of
acquisitions, failure to realize the anticipated benefits of acquisitions,
delays resulting from or inability to obtain required regulatory approvals and
ability to access sufficient capital from internal and external sources.
Readers are cautioned that the foregoing list of factors is not exhaustive.
Although Sabretooth believes that the expectations represented in such
forward-looking statements are reasonable, there can be no assurance that such
expectations will prove to be correct. As a consequence, actual results may
differ materially from those anticipated in the forward-looking statements and
you should not unduly rely on forward-looking statements. The forward-looking
statements contained in this news release are made as the date of this new
release and the Company 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 may be
required by applicable securities laws.
Note Regarding BOEs
The term barrels of oil equivalent (or boe) may be misleading,
particularly if used in isolation. A conversion ratio for gas of 6 mcf : 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.
For further information:
For further information: Sabretooth Energy Ltd., Doug Swartout, Business
Development, (403) 806-4047, Email: email@example.com, Website:
www.sabretooth.ca or Brookline Public Relations, Inc., Shauna MacDonald, Media
and Investor Relations, (403) 538-5645, Email: firstname.lastname@example.org