SPRY ANNOUNCES RELEASE OF YEAR END FINANCIAL AND OPERATING RESULTS

CALGARY, Oct. 20 /CNW/ - Spry Energy Ltd. is pleased to announce the release of our financial and operating results for our fiscal year ended June 30, 2010.

HIGHLIGHTS

• Our average production rate for the fiscal year decreased ten percent to 1,499 boes per day, down from 1,672 boes per day during the previous year mainly due to our decision to curtail capital spending from November 2008 until May 2009 as a result of economic uncertainty.  We also shut-in a portion of our natural gas production in response to the low commodity price environment.  However, our fourth quarter production rate increased 32 percent to a record 1,820 boes per day up from 1,378 boes per day for the same period in 2009.  This increase was due to our refocusing on light oil prospects and our drilling success at East Pembina.
• Funds from operations decreased 21 percent to $14.1 million for the year ended June 30, 2010 down from $17.8 million for the year ended June 30, 2009 mainly due to the significant decrease in realized financial instrument gains.  Realized gains for the year ended June 30, 2009 were $6.7 million versus $0.8 million for the year ended June 30, 2010.  For the three months ended June 30, 2010 our funds from operations increased 39 percent to $4.5 million up from $3.3 million for the same period in 2009.  The increase was primarily due to the increase in our light oil production from East Pembina and crude oil commodity prices.
• We recorded a net loss of $0.7 million for the year ended June 30, 2010 as compared to net income of $3.2 million for the year ended June 30, 2009.  This decrease was primarily due to the decrease in income derived from financial instruments.  For the three months ended June 30, 2010 we returned to profitability by recording net income of $0.5 million versus a net loss of $3.6 million for the three months ended June 30, 2009.  The change was due to higher revenues from our increase in oil production and changes in financial instrument income. 
• Cash based expenditures for the year were $41.9 million as compared to $17.0 million for the previous year.  Essentially all of the increase can be attributed to activity in our new East Pembina core area where we spent $39.5 million adding over 4,700 net acres to our land position and increasing production from nil to an average of 817 boes per day for the month of June 2010. 
• During the year, we drilled 19 (11.5 net) successful oil wells with 17 (10.5 net) being drilled at East Pembina.  Spry was the operator of 15 of the East Pembina wells and one Wordsworth well that were drilled during the year.  The remaining three wells were non-operated.  All wells were placed on-stream either prior to or subsequent to year end.
• Our year-end proved plus probable reserves increased 73 percent to 9,131,000 boes from 5,273,000 boes due almost entirely to the reserve additions at East Pembina.  For the year ended June 30, 2010, proved plus probable finding and on-stream costs, including future capital, were $22.88 per boe before technical revisions and $24.50 per boe after revisions.
• During the year we completed two equity financings, issuing 2,630,100 common shares for proceeds, net of issue costs of $16.5 million.
• We have approved a base budget for our fiscal year ended June 30, 2011 with approximately $45 million of planned capital expenditures that includes a drilling program of 29 wells.
  

	Three months ended		Year ended
	June 30,		June 30,
	2010	2009	2010	2009
Financial
($ thousands except per share amounts)
Petroleum and natural gas revenue	8,473	4,388	27,256	28,662
Funds from operations	4,523	3,250	14,136	17,821
Basic per share	0.21	0.16	0.68	0.90
Diluted per share	0.20	0.16	0.67	0.88
Net earnings (loss)	445	(3,627)	(749)	3,212
Basic and diluted per share	0.02	(0.18)	(0.04)	0.16
Capital expenditures, cash based	7,017	4,496	41,873	16,990
Working capital deficit, before bank debt	2,654	1,269	2,654	1,269
Bank debt	18,632	8,510	18,632	8,510
Shares outstanding at end of period (000s)	22,701	19,894	22,701	19,894
Weighted average shares outstanding (000s)
Basic	21,910	19,920	20,675	19,869
Diluted	22,344	19,920	20,675	20,175
Diluted - funds from operations^(1)	22,344	19,990	20,998	20,175
Operations
Reserves, proved plus probable
Crude oil & liquids (mbbls)			6,561	2,799
Natural gas (mmcf)			15,417	14,843
Total (mboes)			9,131	5,273
Production
Light/medium oil & liquids (bbls/d)	933	361	674	426
Heavy oil (bbls/d)	117	155	127	242
Natural gas (mcf/d)	4,623	5,168	4,187	6,021
Total (boes/d)	1,820	1,378	1,499	1,672
Prices
Light/medium oil ($/bbl)	72.68	60.26	72.82	67.84
Heavy oil ($/bbl)	57.21	54.95	61.30	57.61
Natural gas ($/mcf)	4.02	3.46	4.25	5.92
Operating netback ($/boe)^(2)	32.89	16.18	30.33	25.23
Realized hedging gains (losses) ($/boe)	(1.88)	15.36	1.39	10.99
Other expenses affecting funds from operations ($/boe)	(3.71)	(5.62)	(5.88)	(7.01)
Funds from operations ($/boe)	27.30	25.92	25.84	29.21

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

Our year-end financial statements and Management's Discussion and Analysis have been filed on SEDAR.  These documents, along with a complete copy of our annual report and other year end documents for the year ended June 30, 2010 can be found on the SEDAR website at www.sedar.com or our website at www.spryenergy.ca.

For further information:

Kenneth J. Bowie
President & CEO
[phone]