Drake Boosts Production, Cash Flow, and Reserves
30 April 2009 - 1:04AM
Marketwired Canada
Drake Pacific Enterprises Ltd. (TSX VENTURE:DPE) increased its average daily
production in 2008, along with cash flow, and reserves while preparing for
uncertain times in 2009.
The Company achieved a 2008 Q4 rate of 194 boes per day, up from 126 in Q4 of
the previous year and, subsequent to the year-end, brought on production which
increased output to over 300 boes per day;
Annual cash flow climbed to $816,993 up from $659,348 for the previous year. The
increase in cash flow reflects higher realized commodity prices in 2008 and
higher production volumes due to drilling and acquisitions.
Reserves improved in volumes and value for the Company. Total reserves increased
from 384,000 boes at the end of 2007 to 744,000 boes by the end of 2008, with a
further increase to 843,000 boes by the end of Q1 2009;
The reserves value at 10% NPV increased from $6,478,000 at the end of 2007 to
$15,076,000 by the end of 2008, with a further increase to $16,650,000 by the
end of Q1 2009.
Drake expects first quarter 2009 production to average 230 BOE per day.
Production for the second quarter of 2009 is expected to average between 260 and
300 BOE per day with the additional production coming from the new Sousa 1112
well awaiting downspacing approval. This may be somewhat offset by well
down-time due to weather and spring break-up.
Going into 2009, Drake is a different company than it was in previous years in
that it now holds key areas established at Sousa and Carmangay. These areas
required considerable time, money and effort to develop over the last year but
now afford Drake a solid cash flow and a number of repeatable, developmental
drilling opportunities which offer lower risk and higher rewards; however,
development of these areas must be carrried out at a controlled and measured
rate until energy prices return to more economic levels.
Drake's strategy will be to capture the value that it has created in its core
areas, capitalize on the changes that have occurred in the oil and gas industry
by aggressively seeking out undervalued assets or distressed companies for
acquisition and also to consider dispositions if they assist the Company in
meeting its long-term goals.
Three months ended
December 31
-------------------------------------------
SUMMARY OF RESULTS %
2008 2007 change
-------------------------------------------
Daily production
Oil and liquids - bbls/day 68 46 47%
Natural gas - mcf/day 757 479 58%
Boe/day - 6:1 194 126 54%
Price
Price/bbl - oil and liquids $ 59.24 $ 74.27 (20%)
Price/mcf - natural gas $ 6.76 $ 5.56 22%
Price/boe $ 48.07 $ 52.83 (9%)
Financial
Operating costs/boe $ 22.07 $ 11.24 96%
Netback/boe $ 13.62 $ 27.16 (50%)
General and administrative/boe
$ 11.44 $ 14.90 (23%)
Revenue $ 856,584 $ 611,552 40%
Cash Flow from operations $ (61,604) $ 119,925 (151%)
Reserves boes - proved
- probable
Total Reserves NPV @10%
discount before tax
Total Reserves NPV @10%
discount before tax per boe
Common Shares -
Basic weighted average 16,988,647 10,649,647
Year ended
December 31
-------------------------------------------
SUMMARY OF RESULTS %
2008 2007 change
-------------------------------------------
Daily production
Oil and liquids - bbls/day 50 49 3%
Natural gas - mcf/day 662 390 70%
Boe/day - 6:1 161 114 41%
Price
Price/bbl - oil and liquids $ 91.42 $ 69.96 31%
Price/mcf - natural gas $ 8.16 $ 6.27 30%
Price/boe $ 62.27 $ 51.80 20%
Financial
Operating costs/boe $ 22.15 $ 12.60 76%
Netback/boe $ 29.57 $ 29.80 (1%)
General and administrative/boe
$ 14.17 $ 14.06 1%
Revenue $ 3,660,493 $ 2,155,501 70%
Cash Flow from operations $ 816,993 $ 659,348 24%
Reserves boes - proved 497,000 255,000 95%
- probable 247,000 129,000 91%
Total Reserves NPV @10%
discount before tax $15,076,000 $ 6,478,000 133%
Total Reserves NPV @10%
discount before tax per boe $ 20.26 $ 16.90 20%
Common Shares -
Basic weighted average 13,213,926 8,834,650
This news release contains forward-looking information. Implicit in this
information are assumptions regarding commodity pricing, production, royalties
and expenses that, although considered reasonable by the Company at the time of
preparation, may prove to be incorrect. These forward-looking statements are
based on certain assumptions that involve a number of risks and uncertainties
and are not guarantees of future performance. Actual results could differ
materially as a result of changes in the Company's plans, commodity prices,
equipment availability, general economic, market, regulatory and business
conditions as well as production, development and operating performance and
other risks associated with oil and gas operations. There is no guarantee made
by the Company that the actual results achieved will be the same as those
forecasted herein. Barrel of oil equivalent ("boe") amounts may be misleading,
particularly if used in isolation. A boe conversion ratio has been calculated
using a conversion rate of six thousand cubic feet of natural gas to one barrel
and is based on an energy equivalent conversion method applied at the burner tip
and does not necessarily represent an economic value equivalent at the wellhead.
Any estimated values disclosed do not represent fair market value.
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