CALGARY, Feb. 6, 2012 /CNW/ - Invicta Energy Corp. ("Invicta" or the "Company") (TSXV: VCA) is pleased to announce its $14.0 million 2012 capital expenditure program, a light oil weighted production increase of approximately 200% and update its shareholders on the Company's operations.
Invicta has achieved significant growth since inception and expects continued growth in 2012. The Company has initiated an aggressive development program on its existing 194 gross (104 net) locations, all targeting light oil.
Invicta will continue to deliver on production, reserves, and cash flow per share growth throughout 2012 while continuing to add to its drilling inventory through de-risking Invicta's land holdings, new prospect development and accretive acquisitions.
The Company commenced a 7 gross (4.7 net) well drilling program in November 2011. Two wells were drilled and completed by year end and the third well spud the last week of December. To date all seven wells of the drilling program have been drilled and six of the wells have been completed with multi-stage fracs. The final well will be completed in early February and placed on production. One well has been on production for over 30 days and has had an IP30 production rate of 40 bopd (oil only) with peak rates of 75 bopd and achieves Invicta's Viking horizontal type curve. The remaining 6 wells are in the early stages of recovering frac fluids and the production rates have not yet stabilized. Invicta anticipates the remaining wells to be of similar productivity.
During January 2012, Invicta completed two multi-well facilities and 9 kms of pipeline tie-ins facilitating processing the emulsion and conserving solution gas. Operating cost efficiencies will be realized immediately with the elimination of inter-field trucking. In addition the infrastructure will result in reduced future capital requirements for each new tie-in. Current field production from the Kindersley pool is 350 bopd plus 600 mcfd of conserved solution gas (net 260 boepd). Total corporate net production is expected to reach 350 boepd (70 - 75% oil) when all the new wells have reached stabilized production.
The drilling results have further de-risked Invicta's Kindersley land holdings. The Company's unrisked Kindersley, Saskatchewan locations has increased by 44 gross (24 net) from 150 gross (80 net) to 194 gross (104 net) unrisked locations yet to be drilled on these lands. Invicta currently has 12 gross (6.4 net) sections of operated lands in the Kindersley area. In addition the Company has 55 gross (52 net) sections of undeveloped land in central Alberta and to-date has developed several prospective opportunities on these lands. Through the use of Invicta's growing seismic database over these lands and trends defined by industry success, the Company will add Alberta drilling locations to the inventory in 2012.
2012 CAPITAL EXPENDITURE PROGRAM AND GUIDANCE
Invicta's Board of Directors has approved a $14 million 2012 capital budget to drill 20 gross (10.95 net) Kindersley horizontal wells. Four of these wells have been drilled and plans are underway to survey and license the remaining 16 locations. Drilling will resume in May after spring breakup. Subject to rig availability and timing of spring breakup, Invicta may accelerate resumption of the 2012 drilling program. The Company will finance the 2012 capital program with working capital, funds flow from operations and expected available drawings on its credit facility.
Additional 2012 guidance1:
- 2012 exit production of 675 - 725 boe/d (70 - 75% oil) - approx. 200% increase to the 2011 exit production of 200 - 250 boe/d.
- Funds flow2 of $6.4 million ($0.09/share) - 6X increase from the estimated $0.9 million expected for the year ended December 31, 2011.
- Annualized fourth quarter Funds flow of $10 million ($0.13/share)
- Year end net debt $11 million (less than 1.2:1 annualized fourth quarter Funds flow)
|1based on $95 US WTI oil price, $2.50 CDN AECO gas price and an exchange rate of $0.98CDN:$1US. A $1 USD change in oil price or a $0.01 change in exchange rate has a $100,000 ($0.001/share) impact on the Funds flow forecast.|
|2Funds flow from operating activities ("Funds flow") is a non-IFRS measure that represents earnings (loss) and comprehensive earnings (loss) before non-cash items such as depletion, depreciation, and amortization, accretion expense, share-based compensation, and deferred tax. Per share amounts are calculated using weighted average shares outstanding consistent with the calculation of earnings (loss) per share. Funds flow from operating activities is a key measure as it demonstrates the Company's ability to generate the funds necessary to achieve future growth through capital investment.|
About the Company
Invicta is a Calgary based, emerging junior oil and gas company exploring and developing light oil opportunities in Saskatchewan and Alberta. The Company's current focus is the development of its Viking resource play in Kindersley, Saskatchewan. Invicta's common shares trade on the TSX Venture Exchange under the symbol VCA and the Company has 75.5 million shares outstanding.
This press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Invicta. Undue reliance should not be placed on these forward-looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.
In the interest of providing Invicta shareholders and potential investors with information regarding Invicta, including management's assessment of future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on Invicta's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. By its nature, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Invicta believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements contained throughout this press release should not be unduly relied upon. These statements speak only as of the date specified in the statements.
In particular, this press release may contain forward looking statements pertaining to the following:
- the performance characteristics of Invicta's oil and natural gas properties;
- oil and natural gas production levels;
- capital expenditure programs;
- the quantity of Invicta's oil and natural gas reserves and anticipated future cash flows from such reserves;
- projections of commodity prices and costs;
- supply and demand for oil and natural gas;
- expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; and
- treatment under governmental regulatory regimes.
Invicta's actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:
- volatility in market prices for oil and natural gas;
- liabilities inherent in oil and natural gas operations;
- uncertainties associated with estimating oil and natural gas reserves;
- competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel;
- incorrect assessments of the value of acquisitions and exploration and development programs;
- geological, technical, drilling and processing problems;
- fluctuations in foreign exchange or interest rates and stock market volatility;
- failure to realize the anticipated benefits of acquisitions;
- general business and market conditions; and
- changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry.
These factors should not be construed as exhaustive. Unless required by law, Invicta does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this Press release.
For further information:
Please visit our website at www.invictaenergy.ca or contact the following:
President & CEO
(403) 265-8890 ext 1
Vice President, Finance & CFO
(403) 265-8890 ext 4