Standard Lithium Ltd. press release
Result Energy Inc. boosts Q1 production by 40% despite shut-in volumes at Clearhills and Pembina
TSXV - TSX Venture Exchange · Lithium · Bromine · Potash · Sodium · Canada
TSX Venture: RTE
CALGARY, June 6 /CNW/ - Result Energy Inc. ("Result") is pleased to announce the following highlights of operating results for Q1, and an update on 2006 activity:
<< Q1 production averaged 601 boe/d, a 40% increase compared to 428 boe/d for Q1-05. Result managed to boost production despite shut-in volumes at Clearhills and Pembina. Production revenues, net of royalties, increased by 93% to $1,828,354 compared to $945,978 in the Q1-05 period, and cash flow from operations increased by 173% to $992,972 compared to $363,709 for Q1-05.
Summary financial information for the 3-month periods ended % change March 31 2006 2005 from 2005 Revenue $ 2,345,018 $ 1,435,806 63.3 % Less royalties 516,664 489,828 5.5 % Net revenue 1,828,354 945,978 93.3 % Operating expenses 528,969 321,514 64.5 % General & administrative expenses 476,459 331,024 43.9 % Depreciation, depletion and accretion 1,117,235 611,260 82.8 % Interest 50,196 29,758 68.7 % 2,172,859 1,293,556 68.0 % Loss before income taxes (344,505) (347,578) (0.9 %) Tax expense (recovery) (9,451) (310,000) (97.0 %) Net (loss) for the period (335,054) (37,578) (791.6 %) Net (loss) per share basic and diluted (0.01) (0.00) (100.0 %) Cash flow from operations 992,972 363,709 173.0 % Cash flow per share 0.02 0.01 100.0 % Total assets 36,292,332 14,700,654 18.4 % Weighted average number of common shares outstanding for the period 45,648,793 32,020,143 42.6 % >>
The full content of Result's unaudited financial statements and the related Management Discussion and Analysis ("MD&A") for Q1 2006 are available for review on SEDAR and the company's website (www.resultenergy.com). Result also reports the following update on its main exploration and operation activities for the 2006 year-to-date period:
<< Result recently entered into three farm-in agreements totaling over 7,000 acres. These farm-ins, at Worsley and in the Dodsland/Alsask core area, are highly prospective and add several potential locations to the Company's drilling inventory.
at the Clear Hills area in the Peace River Arch, Result and partners drilled 3 (1.1 net) additional gas wells in Q1 targeting a delineation of the Charlie Lake "A" pool. Two of these outpost wells were uneconomic and will be abandoned. The third well was cased and will be completed early in Q3-06. In addition to this standing cased well, Result has interests in 4 (2.1 net) shut-in gas wells in the Clear Hills area.
In Q1 Result commenced construction of a 10 mile, 6 inch gathering pipeline, which was successfully completed prior to spring break-up. This pipeline was subsequently purchased by a third party mid-stream company who are in process of constructing an area gas processing plant, with a planned in-service date of August 31, 2006. Result's production in the Clear Hills area was shut-in in mid 2005 due to third party processing capacity constraints. Result's estimated shut-in production capacity in its Clear Hills area wells is 1,500 mcf/d (net), or 250 boe/d.
in the Worsley area, one additional Leduc gas well (36.4% WI) was drilled in Q1-06. This well has been completed, and is expected to be tied-in and on production in Q2. A second Leduc gas well (50% WI) was drilled and tested in May, and is expected to be tied-in and on production in early Q3. The estimated combined incremental production volumes from these two new wells is 175 boe/d (net).
in the Eureka area east of Worsley, Result acquired additional 3D seismic data in Q1, and acquired 3 additional sections of mineral rights on a Devonian prospect, which is planned to be drilled in Q3.
at the Dodsland area of Saskatchewan, Result drilled an additional 3 (1.5 net) Viking gas development wells in February. In addition, a 2 section pilot project to increase Viking gas infill wells from 2 to 4 per section is expected to commence in Q2. Subject to satisfactory weather conditions and rig availability, Result has an inventory of at least 10 (5.0 net) development and exploration locations to drill in its Saskatchewan core area over the Q2 and Q3 periods.
in the Pembina area, Result awaits a regulatory ruling which will allow a third party compression facility to be commissioned, through which the Company's gas volumes can flow. Result has a 50% (BPO) interest in two completed Viking natural gas wells which should produce at an estimated total of 1,750 mcf/d net, or 300 boe/d net (BPO) once on stream.
Result's current field estimated production volume is approximately 625 boe/d. As noted above, additional productive capability from projects at Clear Hills, Pembina and Worsley of approximately 725 boe/d remains shut-in and is anticipated to come on stream by mid Q3.
the Company's existing bank revolving credit facility has been expanded from $6.5 million to $11.5 million. The facility has an initial limit of $9 million, which is scheduled to increase as the existing backlog of production is brought on stream. This expanded bank facility will give Result flexibility in expanding exploration and development activities, and pursuing potential property acquisitions.
for the balance of 2006, Result's activity plans include drilling a total of up to 20 (10 net) wells, and acquiring new 3D seismic for potential expansion in the Kakwa and Pembina areas. >>
Bill Matheson added in summary "Result has experienced a challenging environment in 2006 owing to soft natural gas prices and tie-in delays. However, with our drillbit success year-to-date and our basket of exploration and development projects in the works, we are very excited about the balance of 2006 and 2007".
Result Energy Inc. is a publicly traded Canadian energy company involved in the exploration and development of oil and gas properties in western Canada, with a current exploration focus in the Peace River Arch region. Result trades on the TSX Venture Exchange under the symbol "RTE".
Investors are cautioned that this news release contains forward looking information. Such information is subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, as no assurances can be given as to future results, levels of activity or achievements. The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions herein are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.
The TSX Venture Exchange does not accept responsibility for the adequacy and accuracy of this release.
%SEDAR: 00012334E