Spitfire Energy Earns $212,000 on Record Cash Flow in Fiscal 2008



    CALGARY, July 17 /CNW/ - Spitfire Energy Ltd. (TSX-V: SEL) achieved
record production, revenue and cash flow for the fiscal year ending March 31,
2008. Compared with fiscal 2007, the company increased its proved reserves to
1.215 million barrels of oil equivalent (mmboe), its proved plus probable
reserves to 2.028 mmboe, its average production 9% to 306 boe per day, its oil
and gas revenues 24% to $5.97 million and its cash flow from operations 65% to
$ 2.021 million.
    The following table provides a summary of Spitfire's results for the
12-month period ending March 31, 2008 and 2007.

    
    -------------------------------------------------------------------------
                                                  Year Ended March 31
    -------------------------------------------------------------------------
                                            2008         2007       % change
    -------------------------------------------------------------------------
    Financial
    -------------------------------------------------------------------------
    Petroleum and natural gas sales
    -------------------------------------------------------------------------
      Crude oil and NGLs              $4,904,825    $3,346,947            47
    -------------------------------------------------------------------------
      Natural gas                     $1,065,679    $1,462,826           -27
    -------------------------------------------------------------------------
    Net revenue                       $5,970,504    $4,809,773            24
    -------------------------------------------------------------------------
    Cash flow from operations         $2,021,212    $1,196,407            69
    -------------------------------------------------------------------------
      Per share basic                      $0.04         $0.05
    -------------------------------------------------------------------------
      Per share diluted                    $0.04         $0.04
    -------------------------------------------------------------------------
    Net earnings (loss)                 $211,851     ($381,802)          155
    -------------------------------------------------------------------------
      Per share basic and diluted          $0.01        ($0.01)
    -------------------------------------------------------------------------
    Capital expenditures              $3,060,872    $9,648,197           -68
    -------------------------------------------------------------------------
    Net debt                          $1,725,314    $7,215,044           -76
    -------------------------------------------------------------------------
    Total assets                     $20,080,331   $18,902,617             6
    -------------------------------------------------------------------------
    Shareholders equity (deficit)    ($1,078,459)  ($1,290,310)          -16
    -------------------------------------------------------------------------
    Weighted average outstanding      38,247,744    26,996,506            42
    -------------------------------------------------------------------------
    Common shares outstanding         41,246,244    29,363,744            40
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating
    -------------------------------------------------------------------------
    Realized prices
    -------------------------------------------------------------------------
      Crude oil and NGLs ($/bbl)          $58.81        $52.10            13
    -------------------------------------------------------------------------
      Natural gas ($/mcf)                  $6.24         $6.44            -3
    -------------------------------------------------------------------------
    Total ($/boe)                         $53.46        $47.06            14
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Average production
    -------------------------------------------------------------------------
      Crude oil and NGLs (bbls/d)            229           176            30
    -------------------------------------------------------------------------
      Natural gas (mcf/d)                    468           622           -25
    -------------------------------------------------------------------------
    Total (boed)                             306           280             9
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Reserves                                 BOE         PV 5%        PV 10%
    -------------------------------------------------------------------------
    Constant Pricing (GLJ April 1, 2008)
    -------------------------------------------------------------------------
      Total proved                     1,252,000   $44,113,000   $33,976,000
    -------------------------------------------------------------------------
      Total proved plus probable       2,079,000   $66,908,000   $48,632,000
    -------------------------------------------------------------------------
    Reserve Life Index - 12.4 years (P+P)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Forecast Pricing (GLJ April 1, 2008)
    -------------------------------------------------------------------------
      Total proved                     1,215,000   $24,575,000   $19,114,000
    -------------------------------------------------------------------------
      Total proved plus probable       2,028,000   $39,689,000   $28,461,000
    -------------------------------------------------------------------------
    Reserve Life Index - 12.1 years (P+P)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Price Assumptions                              Natural Gas     Crude Oil
    (GLJ April 1, 2008)                       (NYMEX $US/mmbtu) (WTI $US/bbl)
    -------------------------------------------------------------------------
    March 31, 2008 Constant Prices                       $9.39       $101.54
    -------------------------------------------------------------------------
    2008 (full year)                                     $9.08        $97.41
    -------------------------------------------------------------------------
    2009                                                 $9.00        $90.00
    -------------------------------------------------------------------------
    2010                                                 $8.75        $86.00
    -------------------------------------------------------------------------
    2011                                                 $8.60        $85.00
    -------------------------------------------------------------------------
    2012                                                 $8.66        $85.00
    -------------------------------------------------------------------------
    

    Spitfire focused its energy and capital resources in fiscal 2008 on
strengthening the company's financial house, controlling its expenditures and
raising the funds for growth. The Company raised $7.29 million by issuing
13.482 million shares. Spitfire also acquired 1.67 million shares through a
Normal Course Issuer Bid at a cost of $540,000. Despite operating on a strict
cash flow budget in fiscal 2008, Spitfire drilled three wells and added
233,690 boe of reserves at a cost of $22.81 per boe. Spitfire's three-year
weighted average finding, development and acquisition cost is $15.72 per boe.
The Company's drilling program in fiscal 2008 resulted in two (1.5 net)
natural gas wells. One of the successful gas wells is awaiting tie-in and is
expected to come on stream in August 2008.
    The quality of Spitfire's assets is high with a 12.1 year reserve life
index (RLI). These assets are expected to offer Spitfire's shareholders a base
of cash flow for years to come. The strength of Spitfire's proved reserves
also allows for the conservative use of debt to leverage the company's growth.
Spitfire does not plan to increase its debt beyond 1.5 times cash flow and it
is currently at 0.8 times cash flow.
    Spitfire has now initiated a six-well drilling program announced in May
2008, with plans to drill three (2.5 net) wells in search of new pools and
three (2.7 net) development wells in existing pools operated by Spitfire.
    Spitfire's audited financial statements, management's discussion and
analysis and detailed information regarding Spitfire's reserves for the fiscal
year ended March 31, 2008 have been electronically filed and can be accessed
on SEDAR at www.sedar.com and on the company website at
www.spitfireenergy.com.

    Spitfire Energy Ltd. is a junior oil and gas company engaged in the
exploration, development and production of natural gas and crude oil reserves.
Spitfire's common shares trade on the TSX Venture Exchange under the symbol
"SEL".

    This press release contains forward-looking statements that are based on
current expectations. There are a number of risks and uncertainties associated
with the oil and gas industry that could cause actual results to differ
materially from those anticipated. A barrel of oil equivalent, derived by
converting gas to oil using a ratio of six thousand cubic feet of gas to one
barrel of oil, may be misleading, particularly if used in isolation. A boe
conversion is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
wellhead.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of the contents of this press release.

    %SEDAR: 00016881E




For further information:

For further information: Keith N. Chase, President and Chief Executive
Officer, (403) 205-3400 x224; or Danny Zivkusic, Chief Financial Officer,
(403) 205-3400 x228

Organization Profile

SPITFIRE 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