One Exploration Inc. announces 2009 1st quarter results


    CALGARY, May 29 /CNW/ - One Exploration Inc. (the "Corporation" or "One
Ex") announces its financial and operating results for the three month period
ended March 31, 2009 and provides an update on its current operations.

    Financial and Operating Summary

                                                 Three months ended March 31
                                                       2009          2008
    Financial highlights ($)
    Petroleum and natural gas sales                  2,125,210     4,048,217
    Net earnings (loss)                             (1,623,455)      751,187
    Net earnings (loss) per share (i)
    - basic & diluted                                    (0.03)         0.02
    Cash flow                                         (394,119)      898,970
    Cash flow per share (i)
    - basic & diluted                                    (0.01)         0.02
    Working capital (deficit) at period end         (6,257,593)   (7,742,757)
    Capital expenditures (excluding corporate
     acquisitions)                                   2,005,084     4,560,617
      Natural gas (mcf per day)                          3,475         3,987
      Crude oil and NGLs (bbls per day)                    141           164
      BOE per day (6:1)                                    721           828
    Average realized price
      Natural gas ($ per mcf)                             5.10          8.06
      Crude oil and NGLs ($ per bbl)                     40.95         74.39
      BOE ($ per boe, 6:1)                               32.77         53.71
    (i) Class B common shares are converted to Class A common shares using a
        ratio of $10 divided by the greater of the period end Class A common
        share price and $1. At March 31, 2009 and 2008, the closing Class A
        common share price was $0.25 and $0.95 respectively and as such
        Class B common shares were converted at $1 for all periods presented.

    First Quarter Overview

    -   Average production decreased 107 boe per day to 721 boe per day for
        the first quarter of 2009 compared with 828 boe per day realized in
        the first quarter of 2008. During the first quarter of 2009, One Ex
        shut-in approximately 55 boe/d of production from high operating cost
        wells and had approximately 90 boe/d shut in at Swan Hills.

    -   Low natural gas prices resulted in negative cash flow from operations
        of $394,119.

    -   Operating netbacks for the first quarter of 2009 were $5.16 per boe,
        a decrease of 75 percent from $20.73 per boe realized in the first
        quarter of 2008.

    -   Capital spending totaled $2.0 million for the three months ended
        March 31, 2009 and was directed to drilling 2 (1.0 net) wells in
        North East British Columbia.

    Second Quarter Update

    -   One Ex entered into an agreement with a private Canadian company
        whereby One Ex will receive funding to acquire up to $3.0 million of
        undeveloped Crown lands in exchange for a gross overriding royalty on
        the acquired lands.

    -   Production from the Swan Hills oil well was restored in mid-April at
        a rate of 90 boe/d upon successful negotiation of a processing
        agreement with a third-party processor. Production averaged 809 boe/d
        for April 2009 based on field estimates.

    -   One Ex entered into a $7.5 million revolving operating demand loan
        with a Canadian Chartered bank, replacing the Corporation's existing
        $10 million revolving term credit facility.

    Operations Review

    Production decreased to 721 boe per day in the first quarter, an 11
percent decrease compared to the fourth quarter of 2008. The decrease in
production was attributable to declines including One Ex's Northville 07-28
well which began experiencing high water cuts in the fourth quarter of 2008.
In addition, One Ex shut-in production at its highest operating costs
    Capital expenditures totaled $2.0 million for the first quarter of 2009.
One Ex drilled two (1.0 net) wells in North East British Columbia. The wells
are currently under evaluation and will not be tied in during 2009.

    Financial Review

    As a result of low natural gas prices, a cash outflow of $0.4 million was
incurred for the first quarter. Management is focused on reducing the
Corporation's cost structure and implemented the following strategies during
the first quarter of 2009:

    -   Production from high operating cost properties has been shut-in;

    -   Contract operating agreements and third-party processing agreements
        have been renegotiated at more favorable terms; and

    -   General and administrative expenses have been reduced through the
        sublet of office space assumed on the assumption of Cruiser Oil and
        Gas Ltd., a reduction in contractor provided services, the
        elimination of quarterly auditor reviews and a reduction in employee

    Management will continue to assess additional opportunities to reduce the
Corporation's overall cost structure to restore positive cash flow from
operations in a low commodity price environment.


    A continuation of the low commodity prices experienced in the first
quarter of 2009 will make for a challenging second quarter. The cost-cutting
measures implemented to date are expected to have a more significant impact on
cash flows in the second and future quarters.
    In order to preserve cash, One Ex will limit second and third quarter
2009 capital expenditures to $0.7 million which includes drilling one (0.1)
net exploratory well. In addition, One Ex will access a portion of the $3.0
million land fund to add to its inventory of prospects.

    Reader Advisory

    This news release does not constitute an offer to sell securities, nor is
it a solicitation of an offer to buy securities, in any jurisdiction. All
sales will be made through registered securities dealers in jurisdictions
where the offering has been qualified for distribution. The securities offered
are not, and will not be, registered under the securities laws of the United
States of America, nor any state thereof and may not be sold in the United
States of America absent registration in the United States or the availability
of an exemption from such registration.

    Neither the TSX Venture Exchange nor its Regulation Service Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release.

    Natural gas volumes are converted to barrel of oil equivalent at six
thousand cubic feet of natural gas for each barrel of oil equivalent ("boe")
based on the relative heating content of natural gas to crude oil. Readers are
cautioned that the relative values of natural gas and crude oil may differ and
that the barrel of oil equivalent measure may not be representative of the
relative values of natural gas and crude oil. In this news release: boe/d
means boe per day; mcf/d means thousand cubic feet per day; mboe means
thousand boe; mmcf means million cubic feet; bbl means barrel and mmbtu means
million British Thermal Units .
    Investors are further cautioned that the preparation of financial
statements in accordance with Canadian generally accepted accounting
principles ("GAAP") requires management to make certain judgments and
estimates that affect the reported amounts of assets, liabilities, revenues
and expenses. Estimating reserves is also critical to several accounting
estimates and requires judgments and decisions based upon available
geological, geophysical, engineering and economic data. These estimates may
change, having either a negative or positive effect on net earnings as further
information becomes available, and as the economic environment changes.
    The terms "funds from operations", "operating netbacks" and "net debt"
are not recognized measures under GAAP. One Ex's method of calculating these
measures may differ from other companies, and accordingly these measures may
not be comparable to measures used by other companies. The Corporation
determines its funds from operations as cash flow from operating activities
before changes in non-cash working capital. Funds from operations per share
are calculated using the weighted average basic and diluted shares used in the
calculation of earnings per share. Management believes that in addition to
cash flow from operating activities, funds from operations is a useful
supplemental measure as it demonstrates One Ex's ability to generate cash
necessary to repay debt or fund future growth through capital investment
before changes in non-cash working capital balances. Investors are cautioned
that funds from operations should not be construed as an alternative to cash
flow from operating activities determined in accordance with GAAP. Operating
netback per boe is the net result of the Corporation's revenue, royalty, lease
operating and transportation expenses as found in the accompanying financial
statements divided by total sales volumes in the period. Management considers
operating netback an important measure as it demonstrates its property level
profitability on a unit of production basis. Net debt is the net result of
deducting the Corporation's current assets from its total bank debt and
current liabilities.
    This news release contains certain forward-looking statements, which are
based on One Ex's current internal expectations, estimates, projections,
assumptions and beliefs. Some of the forward-looking statements may be
identified by words such as "expects", "anticipates", "believes", "projects",
"plans" and similar expressions. These statements are not guarantees of future
performance and involve a number of risks and uncertainties, many of which are
beyond One Ex's control. In particular, forward-looking statements included in
this news release include, but are not limited to, statements with respect to
average production and projected exit rate; areas of operations; spending and
increase in capital budget; availability of funds for One Ex's capital
program; the size of, and future net revenues from, reserves; the focus of
capital expenditures; expectations regarding the ability to raise capital and
to continually add to reserves through acquisitions and development;
projections of market prices and costs; the performance characteristics of One
Ex's properties; One Ex's future operating and financial results; capital
expenditure programs; supply and demand for oil and natural gas; average
royalty rates; and amount of general and administrative expenses. In addition,
statements relating to "reserves" or "resources" are deemed to be forward
looking statements, as they involve the implied assessment, based on certain
estimates and assumptions, that the resources and reserves described can be
profitably produced in the future .These forward-looking statements are
subject to numerous risks and uncertainties, certain of which are beyond One
Ex's control, including the effect of acquisitions; changes in general
economic, market and business conditions; changes or fluctuations in
production levels; unexpected drilling results, commodity prices, currency
exchange rates, capital expenditures, reserves or reserves estimates and debt
service requirements; changes to legislation, investment eligibility or
investment criteria; One Ex's ability to comply with current and future
environmental or other laws; One Ex's success at acquisition, exploration and
development of reserves; actions by governmental or regulatory authorities
including increasing taxes, changes in investment or other regulations; the
occurrence of unexpected events involved in the exploration for, and the
operation and development of, oil and gas properties; competition from other
producers; the lack of availability of qualified personnel or management;
changes in income tax laws or changes in tax laws and incentive programs
relating to the oil and gas industry; hazards such as fire, explosion,
blowouts, cratering, and spills, each of which could result in substantial
damage to wells, production facilities, other property and the environment or
in personal injury; stock market volatility; and ability to access sufficient
capital from internal and external sources. Many of these risks and
uncertainties are described in One Ex's Annual Information Form which is
available at Readers are also referred to risk factors
described in other documents One Ex files with Canadian securities
authorities. With respect to forward-looking statements contained in this news
release, One Ex has made assumptions regarding: current commodity prices and
royalty regimes; availability of skilled labour; timing and amount of capital
expenditures; future exchange rates; the price of oil and natural gas; the
impact of increasing competition; conditions in general economic and financial
markets; availability of drilling and related equipment; effects of regulation
by governmental agencies; royalty rates and future operating costs. Management
has included the above summary of assumptions and risks related to
forward-looking information provided in this news release in order to provide
shareholders with a more complete perspective on One Ex's future operations
and such information may not be appropriate for other purposes. One Ex's
actual results, performance or achievement could differ materially from those
expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any of them do
so, what benefits that the One Ex will derive there from. Readers are
cautioned that the foregoing lists of factors are not exhaustive. These
forward-looking statements are made as of the date of this NEWS RELEASE and
One Ex disclaims any intent or obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or results or otherwise, other than as required by applicable
securities laws.

For further information:

For further information: Walter Vrataric, President and Chief Executive
Officer, One Exploration Inc., Phone: (403) 781-2752, Fax: (403) 232-8463;
Dennis Ward, Vice President, Finance and Chief Financial Officer, One
Exploration Inc., Phone: (403) 781-2756, Fax: (403) 232-8463

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