CALGARY, Nov. 29, 2013 /CNW/ - Dixie Energy Trust ("Dixie" or the "Trust") is pleased to report its financial results for the quarter ended September 30, 2013. Dixie's unaudited interim condensed consolidated financial statements for the three months and nine months ended September 30, 2013 and related management's discussion and analysis ("MD&A") have been filed with the applicable securities regulators and are available on the Trust's website at DixieEnergyTrust.com and on SEDAR at www.sedar.com.
Summary of Third Quarter Financial Results
For the quarter ended September 30, 2013, Dixie had oil and natural gas revenues, net of royalties of $308,684, a net loss of $701,481 and a basic and diluted net loss per trust unit of $0.02. The Trust's total comprehensive loss for the period, which included a foreign currency translation gain, was $926,857. The Trust declared no distributions during the period.
As of September 30, 2013 the cash position of the Trust was $3,785,496 with working capital of $5,515,658.
Third Quarter 2013 Highlights
- Dixie completed its previously announced acquisition of additional working interest from one of its joint venture partners for US$5.5 million (the "Fletcher Acquisition"). The Fletcher Acquisition tripled Dixie's net acreage in Maple Branch (Mississippi) to 4,530 acres, increased its net acreage at Strong Field (Mississippi) by 570 acres, and included 985 net acres in Queens Prospect (Alabama).
- Completed the second closing of the private placement financing. In total, Dixie raised gross proceeds of $13.3 million and issued 16.6 million trust units.
- Completed three minor acquisitions for additional oil and gas leases and a gas gathering system in the Black Warrior Basin. Dixie acquired 265 net acres of oil and gas leases in the Star prospect (Mississippi) and acquired a 45% working interest in the McKinley Creek gas gathering system. In conjunction with the McKinley Creek gas gathering system, Dixie acquired 45% of an 80% working interest in four oil and gas wells and approximately 680 net acres of oil and gas leases held by production in the Hamilton & West McKinley Creek field (Mississippi).
- Dixie completed its previously announced acquisition of Dogtooth Investments Ltd. ("Dogtooth") for $9.3 million, comprised of $1.25 million in cash and 10,062,500 non-voting exchangeable shares in the capital of Dixie Energy Holdings (Canada), Ltd.
- The Dogtooth Acquisition increased Dixie's interest in the Maple Branch prospect (Mississippi) to 6,050 net acres and included a 10% working interest in the Holliman 7-13 No.1 and Holliman 7-13 No.2 oil wells; added 120 net acres of oil and gas leases in the Hamilton & West McKinley Creek prospect (Mississippi); a 9.27% working interest in the Amos 36-3 oil well located in the Brooklyn field in Conecuh County, Alabama; and doubled Dixie's net acreage at Brooklyn Queens prospect (Alabama) to 1,970 acres.
- During the third quarter of 2013, Dixie's average oil and gas production was 64 boepd (68% oil) and its netback per boe was US$51.87. Efforts to optimize production from the Holliman 7-13H No. 1 and Holliman 7-13H No. 2 wells during the quarter resulted in increased operating expenses, reduced production days and a decrease in netback. Natural gas production from the wells is currently being flared however Dixie anticipates gas production being tied in early in 2014.
- Dixie and its partners drilled 3 (1.2 net) oil wells (Holliman 7-12 No.1, Holliman 17-6 No. 1 and Holliman 18-5 No. 1) in Maple Branch. The wells are nearing completion and subject to successful completions are expected to come onto production prior to year-end.
- Dixie and its joint venture partners spud the Forest Homes No. 1 well (9.9% working interest) in the White Castle Dome prospect (Louisiana) on June 1, 2013. The Forest Homes No. 1 well, in Louisiana, came on production on August 28, 2013 and averaged 163 boepd (16 boepd net) (100% oil) through to September 30, 2013. On November 5, 2013 the Forest Homes No. 2 well (Louisiana) was spud and drilling operations for the well are ongoing.
For the balance of the year, Dixie and its partners in Maple Branch are planning for the fracture stimulation of the fourth well (Holliman 17-6 No. 1), anticipate finishing the drilling operations of the fifth well (Holliman 18-5 No. 1) and intend to perform fracture stimulation prior to year-end on the fifth well; this will result in a total of five wells drilled and completed in Maple Branch in 2013. Dixie's 2014 capital program is currently under review by management and the board - details will be announced in due course.
About Dixie Energy Trust
Dixie is an energy trust created to provide investors with an oil and gas exploration focused investment. The strategy of Dixie is to acquire, exploit and develop, indirectly through its subsidiaries, long-life crude oil and gas prospects and reserves in the United States gulf coast states, primarily in Mississippi and Alabama. Additional information is available on DixieEnergyTrust.com.
Note regarding non-IFRS financial measures
This press release makes reference to the term "netback" which is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. Management believes that "netback" provides useful information to investors and management since such measures reflect the quality of production and the level of profitability of Dixie's oil and gas operations. Netback is calculated by subtracting royalties, production taxes, transportation and operating costs from gross revenues. Other financial data has been prepared in accordance with IFRS.
Forward Looking Statement Disclaimer
Certain statements included in this news release constitute forward looking statements or forward looking information under applicable securities legislation. Such forward looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Forward looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward looking statements or information in this news release include, but are not limited to Dixie's plan to perform fracture stimulation on the Holliman 17-6 No. 1 well; finish the drilling operation of Holliman 18-5 No. 1 well; perform fracture stimulation on the Holliman 18-5 No. 1 well; the expectation that the three wells nearing completion in the Maple Branch prospect will be placed on production prior to year end; and Dixie's plan to tie-in gas production in early 2014.
Forward looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Dixie 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 Dixie can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this news release, assumptions have been made regarding, among other things: the ability of Dixie to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability of the operator of the projects which Dixie has an interest in to operate the field in a safe, efficient and effective manner; the timely receipt of any required third party and regulatory approvals; the ability of Dixie (or the operator) to secure the necessary infrastructure, facilities and permits to tie in its gas production; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Dixie operates; and the ability of Dixie to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.
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 Dixie and described in the forward looking statements or information. These risks and uncertainties which may cause actual results to differ materially from the forward looking statements or information include, among other things: the risks of the oil and natural gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas and market demand; the risk that Dixie (or the operator) may not be able to tie in the gas production in the time periods currently anticipated (or at all); risks and uncertainties involving the three wells nearing completion in the Maple Branch prospect will be placed on production prior to year end; the ability of Dixie, or the operator of the wells in which Dixie has an interest, to bring production on in a safe, efficient and timely manner; and risks and uncertainties involving geology of oil and natural gas deposits. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties. The forward looking statements or information contained in this news release are made as of the date hereof and Dixie 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 required by applicable securities laws. The forward looking statements or information contained in this news release are expressly qualified by this cautionary statement.
Oil and Gas Disclaimers
"boepd" means barrels of oil equivalent per day.
Boes 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. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
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SOURCE: Dixie Energy Trust
For further information:
David G. Anderson
T: 403 232 1010