Sure Energy announces first quarter 2009 financial and operating results



    CALGARY, May 13 /CNW/ - Sure Energy Inc. ("Sure Energy" or the "Company")
today announced its financial and operating results for the quarter ended
March 31, 2009.

    
    During the first quarter of 2009, Sure Energy accomplished the following:

    -   Increased production from 463 to 628 BOE/d, an increase of 36 percent

    -   Completed tie-in of a well at its Chinook producing area

    -   Maintained positive working capital of $1.7 million at March 31, 2009

    -   Received approval for an $8.5 million line of credit; unchanged from
        2008

                                                             Three Months
    HIGHLIGHTS                                              Ended March 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    ($000 except share and per share amounts)
    Financial
    Petroleum and Natural Gas Revenues                    1,735        1,432
    Funds Flow from Operations(1)                           314          460
      Per Share, Basic and Diluted                         0.01         0.02
    Loss                                                 (1,258)        (399)
      Per Share, Basic and Diluted                        (0.03)       (0.01)
    Capital Expenditures                                    860        5,610
    Total Assets                                         33,602       26,247
    Working Capital(1)                                    1,671           47
    Shareholders' Equity                                 30,298       23,817
    Common Shares Outstanding
      Basic                                          37,659,208   30,767,210
      Diluted                                        40,898,208   33,482,210
      Fully Diluted with Performance Rights          44,403,208   37,491,210
    Weighted Average Common Shares Outstanding
      Basic and Diluted                              37,659,208   30,271,031

    Share Trading
      High                                                 0.35         0.99
      Low                                                  0.21         0.80
      Close                                                0.31         0.82
    Trading Volume                                    1,348,128    2,981,485
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                                             Three Months
    HIGHLIGHTS                                              Ended March 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Operations
    Production
      Natural Gas (Mcf/d)                                 3,435        1,771
      Oil (bbls/d)                                           29           12
      NGLs (bbls/d)                                          27           20
      BOE/d                                                 628          327

    Average Selling Price
      Natural Gas ($/Mcf)                                  4.99         7.74
      Oil ($/bbl)                                         38.04        89.22
      NGLs ($/bbl)                                        38.64        47.44
      BOE ($/BOE)                                         30.68        48.09

    Operating Netback ($/BOE)(1)                          12.27        28.41
    Funds Flow Netback ($/BOE)(1)                          5.58        15.46
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Please refer to Management's Discussion and Analysis for definition
        of Non-GAAP measures.



    OPERATIONAL REVIEW

    Cash expenditures for the period were as follows:

                                                             Three Months
                                                            Ended March 31,
    Capital Program Summary                                2009         2008
    -------------------------------------------------------------------------
    ($000s)
    Land                                                     52          252
    Geological and geophysical                              227          216
    Drilling                                                 63          170
    Completions                                              51           15
    Recompletions and workovers                             233            -
    Production equipment and facilities                     143           26
    Capitalized exploration G&A                              91           90
    -------------------------------------------------------------------------
                                                            860          769

    Asset disposition                                         -         (158)
    Corporate acquisition                                     -        4,993
    Other assets                                              -            6
    -------------------------------------------------------------------------
                                                            860        5,610
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the three months ended March 31, 2009 Sure Energy did not participate
in any drilling. Capital expenditures in this quarter include the tie-in of
one well at Chinook, a workover of our horizontal well at Redwater and several
suspension and reclamation projects.

    Areas of Activity

    Tweedie
    

    The Company currently produces 1.0 MMcf/d (171 BOE/d) of sweet gas from
shallow Cretaceous reservoirs in this area, located 180 kilometres northeast
of Edmonton. The Company owns an interest in 20,600 acres of undeveloped land,
a 25 percent working interest in the main gas plant and a working interest in
the pipeline infrastructure in the area. To maintain production at Tweedie the
Company plans to drill three to four wells a year in this winter only
accessible area. Sure Energy expects our inventory of 17 gas prospects will
sustain production levels from this property for the next four to five years.
The Company participated in a 2D seismic shoot this winter which it hopes will
firm up two more drilling locations, but did not drill any additional wells
because of unfavourable gas prices.

    Valhalla

    Sure Energy produced 77 BOE/d of production from this area on the Peace
River Arch during this quarter. The production is from various members of the
Charlie Lake formation and is a mix of liquids rich gas and gassy oil. The
Company has five producing wells in the area with working interests varying
from 27 to 75 percent.

    Boundary Lake

    The Company's 10-19 Halfway well came on production in September 2008,
producing into a new gas plant jointly owned by Sure Energy. The gas plant is
currently running at full capacity processing around 1.8 MMcf/d gross,
contributing 53 BOE/d net to Sure Energy's production levels for the current
quarter. This well is producing from a proved plus probable reserve base of 4
BCF and should show only minor declines in the early stages of production.
    Sure Energy has an inventory of three higher risk/high reward prospects
in the Boundary Lake area and is currently actively seeking a partner to
evaluate these prospects, in order to manage the Company's cost exposure.

    Chinook

    During the quarter, Sure Energy produced 1.8 MMcf/d (310 BOE/d) from
three wells in the Chinook area. The Company has one additional prospect to
drill in the immediate Chinook area. This well is scheduled to be drilled in
mid 2009.

    Redwater

    The Company has some minor shallow gas production in the Redwater area,
but its focus has shifted to an emerging horizontal light oil play in the
area. Sure Energy owns 7 3/4 sections of 100 percent land immediately on trend
with new production in the Viking formation. This new production is from
multi-leg horizontal wells, which are exhibiting early rates of up to 150
BOE/d. Sure Energy's land is offset by a short lateral horizontal well which
has been producing at around 10 BOE/d since 1993 indicating that it is
accessing an indefinable large oil reserve. Sure Energy drilled its first
multi-leg horizontal well adjacent to this producer late in 2008 but
encountered problems while drilling the well. The resultant horizontal well is
currently producing at 10 BOE/d from an open hole section of around 850
meters. Recent horizontal activity adjacent to Sure Energy's land will help
evaluate the upside potential of Sure Energy's land block.

    Southeast Saskatchewan

    The Company owns 2 3/4 sections of land on a prospective light oil
fairway in Saskatchewan. After shooting a 2D line in the second quarter of
2008 to define the trajectory for a horizontal well the Company became aware
of significant complexities in the prospect and has decided to shoot a 3D
prior to testing it by drilling. The prospect is adjacent to prolific
horizontal production in the Mississippian formation, and if it is successful
could yield an inventory of 7 follow-up locations.

    Production

    Production for the period by major property is as follows:

    
                                          Three Months Ended March 31, 2009
                                      ---------------------------------------
                                           Gas       Oil      NGLs     Total
                                         Mcf/d    Bbls/d    Bbls/d     BOE/d
    -------------------------------------------------------------------------
    Tweedie                              1,027         -         -       171
    Valhalla                               268        15        18        77
    Chinook                              1,803         -         9       310
    Boundary                               314         -         -        53
    Redwater                                23        14         -        17
    -------------------------------------------------------------------------
    Total                                3,435        29        27       628
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    OUTLOOK

    Sure Energy limited its capital spending in the first quarter due to low
commodity pricing, especially in natural gas. The Company maintained positive
working capital of $1.7 million at the end of the quarter and this capital
along with an undrawn line of credit of $8.5 million gives the Company the
ability to act in the acquisition market. The Company is currently evaluating
numerous acquisition opportunities and expects many more to be coming onto the
market in the near future.
    Despite lower commodity pricing and much higher royalties the Company is
maintaining a positive cash flow. However, it does anticipate further
softening of gas prices before any significant recovery, which is not
anticipated until later in the year.
    Sure Energy views this as a time of opportunity for a small oil and gas
company. Land sale prices have dropped significantly allowing the Company to
be more aggressive in its land acquisition strategy. Farm-in opportunities are
also more available. Decreasing drilling and service company costs are
allowing the Company to consider more and varied drilling opportunities.
    The Company has $960,000 of flow through funds to spend on exploration
prospects by year end and would like to use this capital to earn into
project-based prospects, with associated land and seismic.
    In summary the Company will preserve its current prospect inventory,
while attempting to add new prospects/projects in a cost effective manner. If
the right acquisition becomes available the Company is in a position to act,
thereby further increasing the upside potential to be exploited when commodity
prices improve.

    Sure Energy Inc. is a publicly traded oil and gas exploration and
development company listed on the Toronto Stock Exchange under the symbol
"SHR".

    Forward-looking Information

    Certain statements contained in this release constitute forward-looking
information. These statements relate to future events or Sure Energy's future
performance. The use of any of the words "could", "expect", "believe", "will",
"projected", "estimated" and similar expressions and statements relating to
matters that are not historical facts are intended to identify forward-looking
information and are based on Sure Energy's current belief or assumptions as to
the outcome and timing of such future events. Actual future results may differ
materially. In particular, Sure Energy's stated intentions and expectations
for drilling and production levels on its main producing properties are
forward looking information. Sure Energy's Annual Information Form and other
documents filed with securities regulatory authorities (accessible through the
SEDAR website www.sedar.com) describe the risks, material assumptions and
other factors that could influence actual results and which are incorporated
herein by reference. Sure disclaims any intention or obligation to publicly
update or revise any forward-looking information, whether as a result of new
information, future events or otherwise, except as may be expressly required
by applicable securities laws.

    %SEDAR: 00024118E




For further information:

For further information: please visit our website at
www.sureenergyinc.com or contact: Mr. Jeff Boyce, President and CEO, Mr. Lance
Wirth, Vice President, Finance and CFO, Phone: (403) 410-3100, Fax: (403)
410-3111, Email: info@sureenergyinc.com

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