CALGARY, Aug. 13 /CNW/ - ("HFG" or the "Company") (TSXV: "HFG") is
pleased to provide its second quarter results, an operational update and
additional details on its future activities. The unaudited financial
statements and notes, as well as management's discussion and analysis
pertaining to the period are available on SEDAR at www.sedar.com
FINANCIAL AND OPERATING HIGHLIGHTS
HFG recorded a net loss of $144,296 for the three months ended June 30,
2009 and net income of $159,138 for the six months ended June 30, 2009. A
future income tax recovery of $481,011 resulted in positive earnings for six
months ended June 30, 2009.
As the company is in a start up phase, revenue, positive cash flow or
earnings are not expected in the near future. There was no commercial
production in the second quarter while the company continued to incur fixed
operating charges and general and administrative expenses.
As of June 30, 2009, the company has positive working capital of $11.4
million. These funds will be used to fund the, majority of the remaining flow
through share commitment of approximately $11.9 million.
Drilling activity in the second quarter was limited due to spring break
up. The company resumed drilling in July with a vertical test well at
Sinclair. The well was spud on July 4, 2009, and cased at the end of July
after drilling to the Belloy zone for a total depth of 2,780m. The estimated
costs of drilling and casing the well of approximately $1.8 million were
within the original budgeted amount. The well validated acreage which was set
to expire in early July and is now continued. The well encountered pay in both
the Lower Montney and Lower Doig formations. A completion operation is being
considered for the Lower Montney with the potential for a subsequent
horizontal re-entry in the Lower Doig.
The Red Creek horizontal Montney well flow tested gas at a rate of
approximately 0.5 mmcf/d and is currently standing. Tie-in options are
currently being evaluated.
HFG's existing undeveloped land base totals approximately 44,000 net
acres, of which approximately 80% would be considered prospective for Montney
exploration and development. Any material expiring lands have either been
drilled to retain or have a strategy in place ensuring continuation of the
rights which will allow for further development potential and value creation.
On July 30, 2009, HFG's controlling shareholder, Sabretooth Energy Ltd.,
completed reorganization transactions that included the replacement of
management and the majority of the board of directors, a name change to
Cequence Energy Ltd. ("Cequence"). The proceeds of the reorganization
transactions and subsequent subscription receipt financing are approximately
$65 million. Following the completion of the reorganization transactions,
HFG's Chief Executive Officer, Marshall Abbott and Chief Financial Officer,
Joseph McFarlane resigned and were replaced by Howard Crone and David Gillis.
Mr. Crone is the current Chief Executive Officer of Cequence and Mr. Gillis is
the current Chief Financial Officer of Cequence. One of HFG's directors, John
Campbell, resigned July 24, 2009 and has been replaced by Brent Perry who is
currently a director of Cequence. The new management of HFG will execute the
current mandate of the Company to pursue Montney exploration on its existing
land base while fulfilling its remaining CEE flow-through share commitment of
approximately $11.9 million.
For the balance of 2009, HFG will participate in the drilling of two
Montney exploration wells, one horizontal re-entry, and one well deepening in
the Sinclair area of Alberta.
About HFG Holdings
HFG Holdings Inc. is a public oil and gas exploration and development
company, located in Calgary, Alberta and carrying out operations in Western
Canada. HFG trades on the TSX Venture Exchange (TSXV) under the symbol "HFG".
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 , 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. While we consider these assumptions to be reasonable based on
information currently available to us, they may prove to be incorrect.
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 HFG 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: HFG Holdings Inc., Howard Crone, President &
CEO, (403) 229-3050, email@example.com, www.cequence-energy.com