Spry announces first quarter financial and operating results

CALGARY, Nov. 26 /CNW/ - Spry Energy Ltd. is pleased to announce our financial and operating results for the three months ended September 30, 2009.

HIGHLIGHTS

    
    -   We currently own or have control of over 19 sections (12,160 acres)
        of land in our new Pembina core area. We are the operator of the
        majority of these lands at an average working interest of
        approximately 60 percent. We have identified 76 (46 net) drilling
        locations on these lands.

    -   We drilled four (2.0 net) successful oil wells during the quarter,
        placing one (0.3 net) of the four on-stream at our Wordsworth core
        area. The other three (1.7 net) wells were drilled at our new core
        area at Pembina, Alberta. Our first Pembina well was placed on
        production on October 6, 2009, averaging 295 barrels per day during
        the month. Our second well came on production on November 1, 2009
        averaging 170 (57 net) barrels per day and our first well is still
        averaging over 200 barrels per day. The third well is scheduled to be
        placed on production in December.

    -   Subsequent to the end of the quarter, we successfully drilled one
        (0.4 net) oil well at Pembina which is also scheduled to be placed
        on-stream in December. This well is expected to have production rates
        similar to our first two wells. We are currently drilling two
        additional (0.7 net) Pembina wells.

    -   Net debt was $13.8 million which equated to 1.3 times annualized
        first quarter cash flow and well within our $23.0 million credit
        facility. Subsequent to the end of the quarter, our credit facility
        was renewed at the existing borrowing limit.

    -   Production rates for the quarter averaged 1,182 boes per day, a
        decrease of 35 percent over the average production rates of 1,813
        boes per day for the same quarter ended in 2008. The decrease was
        mainly attributed to our decision to shut-in the majority of our
        natural gas due to low commodity prices and from the decrease in
        heavy oil production due to the watering out of three Marwayne wells.

    -   Funds from operations during the quarter decreased 56 percent to
        $2,631,000 from $5,988,000 during same period last year due mainly to
        the decrease in both production volumes and commodity prices.

    -   Net loss for the quarter was $659,000 versus net earnings of
        $5,131,000 for the same period in 2008. Lower production volumes and
        commodity prices were the main contributors to the decrease.


                                                      Three months ended
                                                  September 30, September 30,
                                                          2009          2008
    Financial
    ($ thousands except per share amounts)
    Petroleum and natural gas revenue                    4,432        11,746
    Funds from operations                                2,631         5,988
      Basic and diluted per share                         0.13          0.30
    Net income (loss)                                     (659)        5,131
      Basic per share                                    (0.03)         0.26
      Diluted per share                                  (0.03)         0.25
    Capital expenditures, cash based                     6,360         7,019
    Working capital deficit, excluding bank debt        (4,055)        6,029
    Bank debt                                           (9,733)        3,368
    Shares outstanding at end of period (000s)          19,974        19,812

    Operations
    Production
      Natural gas (mcf/d)                                3,677         6,443
      Light and medium oil (bbls/d)                        437           436
      Heavy oil (bbls/d)                                   132           304
      Total (boes/d)                                     1,182         1,813
    Prices
      Natural gas ($/mcf)                                 3.04          7.86
      Light and medium oil ($/bbl)                       66.43        111.35
      Heavy oil ($/bbl)                                  59.99         93.75
    Operating netback ($/boe)(1)                         20.30         43.62
    Realized financial instrument gains (losses)
     ($/boe)                                             13.10         (3.05)
    Other expenses affecting funds from operations
     ($/boe)                                             (9.21)        (4.67)
    Funds from operations ($/boe)                        24.19         35.90

    (1) Operating netback is petroleum and natural gas revenues less;
        royalties, operating expenses and transportation expenses.
    

A complete copy of the interim report for the three months ended September 30, 2009 along with the CEO and CFO certifications of interim filings can be found on the SEDAR website at www.sedar.com

SOURCE SPRY ENERGY LTD.

For further information: For further information: Kenneth J. Bowie, President & CEO, (403) 984-6352

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SPRY ENERGY LTD.

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