Bow Valley Energy Ltd. announces 2007 second quarter results



    CALGARY, Aug. 14 /CNW/ - BOW VALLEY ENERGY LTD. (BVX - TSX) announces its
financial and operating results for the six months ended June 30, 2007.

    
    HIGHLIGHTS

    -   The second of the Company's field development projects, the Enoch
        field, began production on May 31, 2007. After some start-up issues
        and constraints, July production from the Enoch field reached peak
        daily rates of approximately 15,000 boe/d gross (1,800 boe/d net).
    -   The successful completion of the initial phases of a gas lift project
        and other mechanical work at the Kyle field has led to an increase in
        July production to peak daily rates of approximately 9,000 boe/d
        gross (1,285 boe/d net), a 66% increase over average Kyle production
        rates for the first six months of 2007.
    -   Production from continuing operations averaged 811 boe/d for the
        first half of 2007, a 16% increase from the first half of 2006.
    -   Sales volumes from continuing operations averaged 783 boe/d in the
        second quarter of 2007, a 41% increase from the second quarter
        of 2006.
    -   Earnings from continuing operations in the second quarter of 2007
        totaled $4.2 million ($0.05 per share), a significant increase from
        earnings in the second quarter of 2006 of $0.02 million ($0.00 per
        share), which reflects the foreign exchange gains recorded in the
        second quarter of 2007.
    -   The operating net back from continuing operations in the second
        quarter of 2007 totaled $3.9 million ($54.61 per boe), a 29% increase
        (decrease of 9% per boe) from the second quarter of 2006.
    -   Funds flow from continuing operations totaled $0.5 million ($0.01 per
        share) for the second quarter of 2007, a decrease of 77% (decrease of
        80% per share) from the second quarter of 2006. Funds flow in the
        second quarter of 2007 was negatively affected by a judgment relating
        to the Company's interest in the Balal (Iran) project of (pnds stlg)
        500,000 plus interest, totaling (pnds stlg)800,000 (C$1.7 million).
    -   In the second quarter of 2007, the Company announced the results of
        its Alaska winter drilling program. The Company participated in two
        (0.4 net) wells, resulting in one (0.2 net) oil well and one
        (0.2 net) dry hole.

    FINANCIAL AND OPERATIONAL HIGHLIGHTS

    On April 30, 2007, the Company entered into an agreement with a third
party for the sale of its Canadian oil and natural gas interests, the sale
closed on May 31, 2007. As a result, the Canadian operations have been
accounted for as discontinued operations and are excluded from the following
financial and operational highlights.


    -------------------------------------------------------------------------
                               Three Months Ended           Six Months Ended
                                          June 30,                   June 30,
                                                %                          %
                           2007     2006   Change     2007     2006   Change
    Financial ($000s
     except as noted)
    Gross Oil and Gas
     Revenue              4,562    3,431       33    9,175    6,703       37
    Funds Flow              491    2,133      (77)   3,461    3,868      (11)
    Basic and diluted
     per share
     ($/share)             0.01     0.03      (80)    0.04     0.05      (18)
    Earnings (loss)       4,203       17       nm    4,732      436      986
    Basic and diluted
     per share
     ($/share)             0.05     0.00       nm     0.06     0.01      891
    Debt and Working
     Capital
     (Deficiency)       (91,023) (15,182)     500  (91,023) (15,182)     500
    Capital
     Expenditures
    Alaska                2,234        -        -   12,539        -        -
    United Kingdom      111,595   13,674      716  135,506   20,444      563
                       ------------------------------------------------------
    Total               113,829   13,674      732  148,045   20,444      624
    Shares
     Outstanding (000s)
    Basic                84,541   69,495       22   84,541   69,495       22
    Weighted Average
     (000s)
    Basic                80,741   69,370       16   76,915   69,327       11
    Diluted              82,501   72,259       14   78,946   72,077       10

    Operating
    Sales
    Crude oil (bbl/d)       498      445       12      542      451       20
    Natural gas
     (mcf/d)              1,710      654      161    1,558      765      104
                       ------------------------------------------------------
    Oil equivalent
     (boe/d) (6:1)          783      554       41      802      579       39

    Prices
    Crude oil ($/bbl)     76.58    77.14       (1)   71.17    73.29       (3)
    Natural gas
     ($/mcf)               7.02     5.24       34     7.76     5.20       49
                       ------------------------------------------------------
    Oil equivalent
     ($/boe) (6:1)        74.92    73.08        3    72.61    69.22        5

    Drilling Activity
     (gross)
    Oil                       2        1      100        2        1      100
    Abandoned                 -        -        -        -        1     (100)
    Natural gas
     suspended                1        -        -        1        -        -
                       ------------------------------------------------------
    Total drilling
     activity (gross)         3        1      200        3        2       50

    Drilling Activity
     (net)
    Oil                     0.3      0.2       60      0.3      0.2       60
    Abandoned                 -        -        -        -      0.1     (100)
    Natural gas
     suspended              0.2        -        -      0.2        -        -
                       ------------------------------------------------------
    Total drilling
     activity (net)         0.5      0.2      160      0.5      0.3       73
    -------------------------------------------------------------------------
    

    COMPANY UPDATE

    UNITED KINGDOM
    --------------
    The second quarter marked first production from the second of the
Company's field development projects. The Enoch field achieved first
production on May 31, 2007 and after some start-up issues and constraints,
July production reached peak daily rates of approximately 15,000 boe/d gross
(1,800 boe/d net). The remaining field developments are progressing towards
first production. The Blane field is expected to reach first production in
mid-August, the installation of the Floating Production, Storage and Offload
Vessel at the Chestnut field is anticipated in late 2007 with production
start-up shortly thereafter and the Ettrick field is expected to reach first
production in mid-2008. Work is continuing on a field development plan for the
recently acquired Peik field.
    At the Kyle field, the initial phases of a gas lift project were
successfully completed in the second quarter, along with other mechanical
work, which has allowed the two currently producing wells to move from
alternating production to concurrent production. In addition, a third well was
brought back on production and it is expected that the fourth Kyle well will
be brought back on production in the fall of 2007. These changes resulted in
peak daily production in July of approximately 9,000 boe/d gross (1,285 boe/d
net); an increase of approximately 66% over average production for the first
six months of 2007.
    Sales volumes for the second quarter averaged 783 boe/d, up 41% from the
same period of 2006. Sales were higher due to the Company receiving its share
of two liftings from the Kyle field in the quarter, compared to one lifting in
the year-ago period. No oil sales from the Enoch field were recorded in the
second quarter, due to the timing of finalizing an oil sales contract. Enoch
natural gas sales of 29,120 mcf were recorded in the second quarter. At the
end of the second quarter, the Company owned approximately 30,000 barrels of
oil in inventory.
    Operating netbacks continue to be robust, averaging $54.61 per boe, down
9% year-over-year due to slightly lower realized prices. Operating costs per
barrel were down 3% year-over-year to average $6.99 per boe in the quarter.
    Bow Valley anticipates participating in two exploration prospects in the
fourth quarter of 2007. A non-operated well in the Ettrick area (12% working
interest) is scheduled to test a Jurassic prospect targeting Buzzard and
Ettrick reservoir sands. The second prospect, on Block 9/28b, which represents
the Company's first operated exploration well is scheduled to spud in November
of 2007 targeting Jurassic Brae reservoir sands. The Company has committed to
a drilling rig for the 9/28b prospect and will retain a 75% working interest.
The Company also expects to drill a third exploration well on Block 16/27a
North in the first quarter of 2008.

    ALASKA
    ------
    In the second quarter, the Company announced the results of its winter
drilling program in Alaska. The Company participated in the drilling of two
(0.4 net) wells, resulting in one (0.2 net) oil well and one (0.2 net) dry
hole. The co-venturers are currently evaluating plans for the 2007/2008 winter
program, including testing and potentially developing the oil discovery,
further exploration drilling and the acquisition of additional 3-D Seismic.

    CANADA
    ------
    In the second quarter, the Company closed the previously announced sale
of its Canadian oil and natural gas interests.

    OUTLOOK AND 2007 BUDGET
    -----------------------
    With initial production being achieved from the Enoch field and first
production imminent from the Blane field, revenue, cash flow and earnings are
expected to grow significantly over the third and fourth quarters. The U.K.
debt associated with the capital expenditures to bring the field developments
to first production has increased quarter-over-quarter and year-over-year. It
is management's belief that the Company's strong balance sheet, combined with
its growing cash flow base, positions the Company to pursue international oil
and natural gas projects.
    Capital expenditures for the remainder of the year are expected to total
approximately $50 - 55 million, which includes capital expenditures associated
with two exploration wells in the fourth quarter of 2007. The estimate of
capital expenditures for the full year 2007 has increased due to the
acquisition of an interest in the Peik field, additional spending at the Kyle
field, slightly higher capital expenditures on the Company's development
projects and an increase to the forecast exploration expenditures.
    Copies of the 2007 second quarter financial statements and related MD&A
are available by request from the Company, on the Company website at
www.bvenergy.com, as well as on the SEDAR website at www.sedar.com

    Bow Valley Energy Ltd. is an international oil and natural gas
exploration, development and production company with operations in the U.K.
sector of the North Sea and Alaska. The common shares of the Company trade on
the Toronto Stock Exchange under the symbol BVX.

    Certain statements included or incorporated by reference in this news
release constitute forward-looking statements or forward-looking information
under applicable securities legislation. Forward-looking statements or
information typically contain statements with words such as "anticipate",
"believe", "expect", "plan", "intend", "estimate", "propose", or similar words
suggesting future outcomes or statements regarding an outlook. Although the
Company believes that the expectations reflected in such forward-looking
statements or information are reasonable, undue reliance should not be placed
on forward-looking statements because the Company can give no assurance that
such expectations will prove to be correct. Forward-looking statements or
information are based on current expectations, estimates and projections that
involve a number of risks and uncertainties which could cause actual results
to differ materially from those anticipated by the Company and described in
the forward-looking statements or information. The forward-looking statements
or information contained in this news release are made as of the date hereof
and the Company 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. The forward-looking statements or information contained in
this news release are expressly qualified by this cautionary statement.
    Where amounts are expressed on a barrel of oil equivalent (boe) basis,
natural gas volumes have been converted to barrels of oil equivalent at six
thousand cubic feet to one barrel of oil equivalent (6 mcf = 1 boe). This
conversion ratio is the conversion used in the oil and natural gas industry
and 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 use of boe's may be misleading, particularly if used in isolation.

    %SEDAR: 00008379E




For further information:

For further information: Bow Valley Energy Ltd., Robert G. Moffat,
President and Chief Executive Officer; Matthew L. Janisch, Vice President
Finance & Chief Financial Officer, Phone (403) 232-0292, website:
www.bvenergy.com

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BOW VALLEY ENERGY LTD.

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