Sure Energy announces third quarter 2009 financial and operating results

CALGARY, Nov. 12 /CNW/ - Sure Energy Inc. ("Sure Energy" or the "Company") today announced its financial and operating results for the quarter ended September 30, 2009.

The Company's MD&A and Financial Statements and Notes can be viewed or downloaded at www.sureenergyinc.com or www.sedar.com.

During the third quarter of 2009, Sure Energy accomplished the following:

    
    -   Closed the acquisition of Conifer Exploration Ltd. on August 14, 2009

    -   Third quarter cash flow increased from the second quarter 2009 to
        $408,000 ($0.01/share) despite extremely low natural gas prices

    -   Shot a 13 square kilometer 3D seismic program on our 100% WI acreage
        in SE Saskatchewan that will lead to the drilling of an oil prospect
        in the fourth quarter of 2009

    -   Purchased a 2,560 acre block of 100% WI lands in the Southern Plains
        area of Alberta that has a high impact drillable natural gas prospect


    HIGHLIGHTS                 Three Months Ended          Nine Months Ended
                                     September 30,              September 30,
                                2009         2008          2009         2008
    -------------------------------------------------------------------------
    ($000 except share and per share amounts)
    Financial
    Petroleum and Natural
     Gas Revenues              1,439        1,813         4,572        5,128
    Funds Flow from
     Operations(1)               408          839         1,094        2,078
      Per Share, Basic
       and Diluted              0.01         0.02          0.03         0.06
    Loss                      (1,284)        (176)       (2,932)        (673)
      Per Share, Basic
       and Diluted             (0.03)       (0.00)        (0.07)       (0.02)
    Capital Expenditures       8,600        3,125         9,767       10,168
    Total Assets                                         36,959       35,761
    Net Debt(1)                                          (3,664)       4,963
    Shareholders' Equity                                 30,824       31,692
    Common Shares
     Outstanding
      Basic                                          46,873,962   37,659,208
      Diluted                                        50,020,963   40,374,208
      Fully Diluted with
       Performance
       Rights                                        53,525,962   44,154,208
    Weighted Average
     Common Shares
     Outstanding
      Basic and Diluted   42,166,425   36,086,035    39,178,123   33,726,832

    Share Trading
      High                      0.47         1.20          0.47         1.35
      Low                       0.30         0.63          0.21         0.63
      Close                     0.46         0.66          0.46         0.66
    Trading Volume         1,841,585    1,005,041     4,618,930    7,002,082
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    HIGHLIGHTS                 Three Months Ended          Nine Months Ended
                                     September 30,              September 30,
                                2009         2008          2009         2008
    -------------------------------------------------------------------------
    Operations
    Production
      Natural Gas (Mcf/d)      3,453        2,088         3,505        1,869
      Oil (bbls/d)                53           12            34           13
      NGLs (bbls/d)               28           22            28           19
      BOE/d                      657          382           646          343

    Average Selling Price
      Natural Gas ($/Mcf)       3.07         8.08          3.86         8.66
      Oil ($/bbl)              70.11       126.01         60.74       115.00
      NGLs ($/bbl)             47.34        61.68         41.61        57.18
      BOE ($/BOE)              23.83        51.58         25.93        54.55

    Operating Netback
     ($/BOE)(1)                11.29        29.46         11.52        32.11
    Funds Flow Netback
     ($/BOE)(1)                 6.73        23.84          6.20        22.10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Please refer to Management's Discussion and Analysis for definition
        of Non-GAAP measures.


    OPERATIONAL REVIEW

    Cash expenditures for the period were as follows:


                               Three Months Ended          Nine Months Ended
                                     September 30,              September 30,
    Capital Program Summary     2009         2008          2009         2008
    -------------------------------------------------------------------------
    ($000s)
    Land                         292          173           437          551
    Geological and
     geophysical                 502          180           869          635
    Drilling                      90          858           138        1,163
    Completions                   (9)         535            41          556
    Recompletions and
     workovers                   342            -           613          162
    Production equipment
     and facilities               86        1,271           189        1,955
    Capitalized exploration
     G&A                         145           91           328          273
    -------------------------------------------------------------------------
                               1,448        3,108         2,615        5,295

    Asset disposition              -            -             -         (158)
    Corporate acquisitions     7,152            -         7,152        4,993
    Asset retirement
     obligation                    -           15             -           30
    Other assets                   -            2             -            8
    -------------------------------------------------------------------------
                               8,600        3,125         9,767       10,168
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

The acquisition of Conifer Exploration Ltd. ("Conifer") was the major event in the three months ending September 30 2009. Other capital expenditures in this quarter include the purchase of undeveloped land, seismic expenses, and two workovers of horizontal wells at Redwater.

Sure Energy will be more active in the fourth quarter of 2009 and plans on drilling two or three exploratory wells in Alberta and Saskatchewan as discussed below.

Areas of Activity

Southern Plains (Chinook)

The Company has had great success exploring for gas in the Southern Plains of Alberta, specifically at Chinook. In the current quarter Sure Energy produced 272 BOE/d from four shallow sweet natural gas wells in the Chinook area, and has one additional location to drill. Using the knowledge gained at Chinook the Company has mapped the producing reservoir regionally and has identified two prospects that it is currently developing, one for sweet gas and one for heavy oil. One of the prospects is planned to be drilled in Q4 of this year, the other in Q1 of 2010.

Peace River Arch

The Company currently produces 109 BOE/d from the Peace River Arch area in Northern Alberta. 45 BOE/d, net to Sure Energy is currently being produced from a Halfway gas pool at Boundary Lake, which is producing from a proved plus probable reserve base of 4 BCF. The Company owns a 25 percent working interest in the pool, gas plant and pipeline infrastructure related to this new pool discovery. At Valhalla the Company produces 64 BOE/d from three Charlie Lake gassy oil wells and one Charlie Lake gas well.

Sure Energy has an inventory of six drillable locations on the Peace River Arch, three of which are new pool prospects. One of these wells was drilled in November and has been cased for potential in multiple zones.

Plains

Although the Company has some minor shallow gas production in the Redwater area, its focus in the area is on an emerging horizontal light oil conventional resource play. Following the acquisition of Conifer, the Company owns 8,300 acres of undeveloped land on a regionally extensive sand fairway in the lower Viking formation. The sand exhibits low permeability but is distributed over several townships and is hydrocarbon bearing across the whole area. Vertical wells in this sand typically produce at 8 - 20 BOE/d, but exhibit very low declines, once stabilized, indicating that they are accessing large reserves. Recent horizontal activity by third parties in the area has proven highly successful at improving production rates; new wells stabilizing between 40 and 80 BOE/d. The Company currently produces 90 BOE/d from 4 gross wells (2.4 net wells) in the area and has an inventory of 9 primary development horizontal locations and a further 34 contingent on their success. The Company anticipates drilling 5 - 6 wells on this play in 2010 and will focus on its lower working interest lands, while learning the most efficient and economic methods of exploiting the reservoir.

SE Saskatchewan

The Company owns 1,725 acres of land on a prospective light oil fairway at Queensdale in SE Saskatchewan. After shooting 13 square kilometres of proprietary 3D seismic the Company has identified two light oil prospects. One of these prospects will be evaluated with a vertical well prior to year end. Should the vertical well be successful the prospect will be exploited using horizontal wells. The Company plans to drill a development horizontal well into the other prospect in 2010. Success with both prospects could lead to up to seven development horizontals.

Tweedie

The Company currently produces 1.0 MMcf/d (169 BOE/d) of sweet gas from shallow Cretaceous reservoirs in the Tweedie area, just northeast of Edmonton. The production is from approximately 35 wells and declines at low rates. Sure Energy has an inventory of 17 locations at Tweedie, all defined by both geology and 2D seismic, but only intends to drill a maximum of 2 to 3 wells in the area per year, to maintain production levels.

West Central

Sure Energy produces 80 BOE/d of low decline, liquids rich gas production in West Central Alberta. The Company owns 12,160 net acres of undeveloped land in the area and has inventory of three drillable prospects.

Production

Production for the quarter by major property is as follows:

    
                                Three Months Ended September 30, 2009
                              -----------------------------------------------
                                 Gas          Oil          NGLs        Total
                               Mcf/d       Bbls/d        Bbls/d        BOE/d
    -------------------------------------------------------------------------
    Peace River                  520            9            13          109
    Plains                        38           37             -           44
    Southern Plains            1,596            -             6          272
    Tweedie                    1,014            -             -          169
    West Central                 285            7             9           63
    -------------------------------------------------------------------------
    Total                      3,453           53            28          657
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

OUTLOOK

Sure Energy plans on ramping up its capital activities in the fourth quarter of 2009 and 2010. In the fourth quarter 2009 the Company plans on drilling three high impact 100% working interest locations in Gordondale, Southern Plains and SE Saskatchewan.

For 2010 the Company has established a base capital budget of $10 million. The 2010 capital activities include the drilling of at least six horizontal wells on its emerging Viking oil play at Redwater.

Sure continues to evaluate numerous acquisition opportunities that can complement our assets and ongoing opportunities.

Sure Energy Inc. is a publicly traded oil and gas exploration and development company listed on the Toronto Stock Exchange under the symbol "SHR".

Forward-looking Information

Certain statements contained in this release constitute forward-looking information. These statements relate to future events or Sure Energy's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on Sure Energy's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, Sure Energy's statements in the section "Outlook" in the MD&A and the Company's stated intentions and expectations for drilling and development on its main producing properties are forward looking information. Sure Energy's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. Sure disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

%SEDAR: 00024118E

SOURCE Sure Energy Inc.

For further information: For further information: please visit our website at www.sureenergyinc.com or contact: Mr. Jeff Boyce, President and CEO, Mr. Lance Wirth, Vice President, Finance and CFO, Phone: (403) 410-3100, Fax: (403) 410-3111, Email: info@sureenergyinc.com

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