SPRY ANNOUNCES FIRST QUARTER FINANCIAL AND OPERATING RESULTS
CALGARY, Nov. 24 /CNW/ - Spry Energy Ltd. is pleased to announce the release of our financial and operating results for the three months ended September 30, 2010.
HIGHLIGHTS
- Our average production rate for the quarter increased 65 percent to
1,953 boes per day, up from 1,182 boes per day from the comparative
quarter last year. Light/medium oil and NGL production increased to
1,049 barrels per day, up from 437 barrels per day over the same
quarter last year, as a result of our drilling success at East
Pembina. Natural gas production for the quarter increased to
4,690 mcf per day as compared to 3,677 mcf per day for the same
quarter. This increase was due to placing previously shut-in natural
gas back on-stream and from the conservation of solution gas,
associated with our oil production, at East Pembina. Heavy oil
production remained relatively flat for the comparative periods.
- Production from East Pembina averaged of 838 boes per day for the
three months ended September 30, 2010 as compared to nil for the same
period in 2009. Light/medium oil and NGL production was 754 barrels
per day and the balance of production was solution gas. Although East
Pembina was only 43 percent of our total production, East Pembina
accounted for 73 percent of our operating net back (petroleum and
natural gas revenues, less royalties, transportation and operating
expenses).
- Funds from operations increased 96 percent to $5.2 million for the
three months ended September 30, 2010 up from $2.6 million for the
three months ended September 30, 2009 mainly due to the increase in
light/medium oil and NGL production and commodity prices. Realized
gains on financial instruments for the three months ended
September 30, 2010 was $nil versus $1.4 million for the three months
ended September 30, 2009.
- For the three months ended September 30, 2010, we recorded a net loss
of $0.6 million versus a net loss of $0.7 million for the three
months ended September 30, 2009. Higher revenues from higher
production during the current quarter were offset by lower income
from financial instruments as well as higher royalties and expenses
- Cash based capital expenditures for the quarter were $8.6 million as
compared to $6.4 million for the previous year. Substantially all of
the activity was attributed to our East Pembina core area where we
spent $8.2 million on drilling, completion and equipping operations.
- During the quarter, we drilled eight (3.4 net) successful oil wells
with six (2.9 net) being drilled at East Pembina and two (0.5 net) at
Wordsworth, Saskatchewan. Both Wordsworth wells were placed on-stream
during the quarter, however, due to extremely wet conditions in
August and September, all of the wells drilled at East Pembina during
the quarter were placed on-stream in November.
- Subsequent to September 30, 2010, we have drilled four (3.1 net)
successful oil wells at East Pembina and we plan to drill two
(2.0 net) additional light oil wells at East Pembina and two
(1.7 net) heavy oil wells at Northminster prior to the end of
December 2010.
- During and subsequent to the end of the quarter, we entered into
several crude oil hedging contracts to provide a level of certainty
for our capital program. As a result of these additional contracts,
we now have 800 barrels per day of production hedged from October 1,
2010 to December 31, 2010 with an average floor US$75 and
1,000 barrels per day of production hedged from January 1, 2011 to
June 30, 2011 with an average floor US$78.
Three months ended
September 30,
2010 2009
-------------------------------------------------------------------------
Financial
($ thousands except per share amounts)
Petroleum and natural gas revenue 9,188 4,432
Funds from operations(1) 5,156 2,631
Basic per share 0.23 0.13
Diluted per share (2) 0.22 0.13
Net loss (586) (659)
Basic and diluted per share (0.03) (0.03)
Capital expenditures, cash based 8,568 6,360
Working capital deficit, before bank debt 4,898 4,055
Bank debt 20,020 9,733
Shares outstanding at end of period (000s) 22,701 19,974
Operations
Production
Light/medium oil & liquids (bbls/d) 1,049 437
Heavy oil (bbls/d) 122 132
Natural gas (mcf/d) 4,690 3,677
Total (boes/d) 1,953 1,182
Prices
Light/medium oil ($/bbl) 72.17 66.43
Heavy oil ($/bbl) 57.88 59.99
Natural gas ($/mcf) 3.64 3.04
Operating netback ($/boe)(3) 33.03 20.30
Realized hedging gains ($/boe) - 13.10
Funds from operations ($/boe) 28.70 24.19
-------------------------------------------------------------------------
(1) Funds from operations is a non-GAAP measure and may not be
comparable with similar measures for other companies. Funds from
operations is defined as cash flow from operating activities before
changes in non-cash working capital.
(2) Diluted weighted average shares outstanding used for funds from
operations is a non-GAAP measure and it may differ from diluted
weighted average shares outstanding used to calculate earnings per
share.
(3) 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, 2010 along with the CEO and CFO certifications of interim filings can be found on the SEDAR website at www.sedar.com. Information regarding Spry can also be found at Spry's website at www.spryenergy.ca.
For further information: Kenneth J. Bowie, President & CEO, (403) 984-6352
Share this article