Skywest Announces Year End Results
18 April 2011 - 3:00PM
Marketwired Canada
SkyWest Energy Corp ("SkyWest", "we", "us", "our" or the "Company") (TSX
VENTURE:SKW) is pleased to announce we have filed on SEDAR our audited financial
statements and related Management's Discussion and Analysis ("MD&A") for the
year ended December 31, 2010. Selected financial and operational information is
outlined below and should be read in conjunction with our audited financial
statements and the related MD&A which are available for review at www.sedar.com.
FINANCIAL AND OPERATING HIGHLIGHTS
Our 2010 year end results include approximately six months of production from
the reverse take-over of EMM Energy Inc. and 15 days of production from the
acquisition of Base Resources Inc. The year-end results also include 5 operated
Cardium horizontal oil wells which were brought on production in 2010 with 4 of
the 5 being brought on in December 2010.
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For the For
For the three three month the twelve
months ended period ended months ended
December 31, December 31, December 31,
($ CDN unless otherwise noted) 2010 2009 2010
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FINANCIAL
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Revenues 2,603,366 - 4,038,265
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Funds from (used in) operations 178,461 (34,113) (517,393)
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Per share (basic) 0.00 (0.02) (0.01)
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Per share (diluted) 0.00 (0.02) (0.01)
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Net income (loss) (573,695) (34,113) (4,621,304)
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Per share (basic) (0.00) (0.02) (0.07)
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Per share (diluted) (0.00) (0.02) (0.07)
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Capital expenditures, net(1) 24,210,202 192,756 31,307,901
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Total Assets 1,272,975 110,541,025
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Shareholders equity 1,068,017 77,772,236
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Working capital (deficiency) 687,871 (1,264,064)
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OPERATIONS
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Production sales
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Oil (bbls/d) 203 - 75
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Natural gas (mcf/d) 2,608 - 1,147
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NGL (bbls/d) 41 - 14
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Total (boe/d @ 6 mcf: 1 bbl) 679 - 280
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Average pricing
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Natural gas ($/mcf) 3.44 - 3.52
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Oil ($/bbl) 83.51 - 84.20
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NGL ($/bbl) 54.76 - 51.45
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Combined ($/boe) 42.23 - 39.46
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Expenses
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Operating expenses ($/boe) 17.06 - 18.89
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Royalty expense ($/boe) 4.53 - 5.07
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Netback Combined ($/boe) 20.64 - 15.50
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Net Cardium sections 35 - 35
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2P reserves (Mboe) 10,963 69 10,963
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Basic Shares Outstanding 201,971,715 2,459,239 201,971,715
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Diluted Shares Outstanding 201,971,715 2,459,239 201,971,715
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Total shares, warrants and
options issued 229,333,224 11,312,493 229,333,224
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(1) Excludes corporate and asset acquisitions
Year in review
2010 was a very successful and exceptional year for us. We began the year with
the new management team in June of 2010 with a focused, well-defined strategy to
increase our exposure to light oil value and growth opportunities in the Cardium
play. Our execution was purposeful and disciplined as we increased our leverage
to oil production as well as assembling an inventory of oil opportunities for
future growth.
As a result, SkyWest drilled nine out of nine successful Cardium wells (100%
success), which had better than expected results, based on our typical type
curves and economic forecast. We have had tremendous growth in both production
and undeveloped acreage in the past 6 months. SkyWest has strategically focused
on the Cardium play and has accumulated three core areas which we feel are some
of the best lands geologically. The areas we are focused on are in the Willesden
Green, Carrot Creek and Pembina areas located in west central Alberta. The
Company has also insured that its product will not be restricted for production
based upon the infrastructure we own or control in each area.
SkyWest started as a private company in December 2009 and completed our reverse
take-over of EMM Energy Inc. on June 21, 2010. Historical production was
approximately 300 boepd with a commodity blend of 75% gas and 25% oil and NGL's.
SkyWest became a publically trading entity on June 22, 2010 and commenced its
drilling operations in August of 2010. The Company has grown from 69 mboe to
10,963 mboe of reserves. SkyWest currently has 130 net Cardium locations in
inventory in our core areas which provided us with a strong foundation from
which to grow and our strong internal performance have provided us with a
substantial amount of development and exploitation upside in areas that are
accessible year round.
Outlook
SkyWest drilled and completed 3 gross (3 net) Cardium horizontal oil wells in Q1
of 2011 which included 2 earning wells. The 3 wells were all completed with
water based nitrogen foam fluid and averaged approximately 500 boepd per well
over an initial five to seven day test period. SkyWest's current production is
approximately 1,650 boepd (approximately 45% oil and NGLs resulting in 70-75% of
the Company's revenues) and there is currently 900 boepd behind pipe awaiting
tie-in. We anticipate a portion of the behind pipe volumes to be on production
in May and the remainder in July, adding approximately 500 boepd of stabilized
production. SkyWest plans to drill the remainder of its 2011 capital budget on 5
to 6 net Cardium horizontal oil wells, the first of which will be spudded
immediately after break-up with the related production coming on stream in late
Q3 or early Q4 of 2011.
ANNUAL GENERAL MEETING
The Annual and General Meeting of our Shareholders will be held at Livingston
Place, in the Second Floor Conference Centre, 250 - 2nd Street S.W., Calgary,
Alberta on May 26 2011, at 3:00 p.m. (M.S.T.). All shareholders are cordially
invited and encouraged to attend.
Information Regarding SkyWest
SkyWest Energy Corp. is a Cardium focused, public oil and gas exploration and
development company, located in Calgary, Alberta with operations in Alberta.
SkyWest currently trades on the TSX Venture Exchange (TSXV) under the Symbol
"SKW".
Statements herein that are not historical facts may be considered forward
looking statements including management's assessment of future plans and
operations, growth expectations within the Company, expected initial production
rates from certain new wells, timing of completion of wells and of production
additions, expected size of various plays, construction or expansion of
facilities and the timing thereof and expected costs and the effects thereof,
drilling plans and the effects thereof. These forward-looking statements
sometimes include words to the effect that management believes or expects a
stated condition or result. All estimates and statements that describe the
Company's objectives, goals or future plans are forward-looking statements.
Since forward-looking statements address future events and conditions, by their
very nature they involve inherent risks and uncertainties including, without
limitation, risks associated with acquisitions, oil and gas exploration,
development, exploitation, production, marketing and transportation, loss of
markets, volatility of commodity prices, currency fluctuations, imprecision of
reserve estimates, environmental risks, competition from other producers,
inability to retain drilling rigs and other services, failure to realize the
anticipated benefits of acquisitions, delays resulting from or inability to
obtain required regulatory approvals and ability to access sufficient capital
from internal and external sources. As a consequence, SkyWest's actual results
may differ materially from those expressed in, or implied by, the
forward-looking statements.
Forward-looking statements or information are based on a number of factors and
assumptions which have been used to develop such statements and information but
which may prove to be incorrect. Although SkyWest believes that the expectations
reflected in such forward-looking statements or information are reasonable,
undue reliance should not be placed on forward-looking statements because
SkyWest can give no assurance that such expectations will prove to be correct.
In addition to other factors and assumptions which may be identified in this
document, assumptions have been made regarding, among other things: the impact
of increasing competition; the ability of SkyWest to obtain equipment and
services in a timely and cost efficient manner; drilling results; the ability of
the operator of the projects which SkyWest has an interest in to operate the
field in a safe, efficient and effective manner; field production rates and
decline rates; the ability to replace and expand oil and natural gas reserves
through acquisition, development or exploration; the timing and costs of
pipeline, storage and facility construction and expansion; future oil and
natural gas prices; currency, exchange and interest rates; the regulatory
framework regarding royalties, taxes and environmental matters in the
jurisdictions in which SkyWest operates; and the ability of SkyWest to
successfully market its oil and natural gas products.
Readers are cautioned that the foregoing list of factors and assumptions is not
exhaustive. Additional information on these and other factors that could effect
SkyWest's operations and financial results are included in reports on file with
Canadian securities regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com). Furthermore, the forward-looking statements contained
in this news release are made as at the date of this news release and SkyWest
does not undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable securities
laws.
BOEs
Disclosure provided herein in respect of barrels of oil equivalent (boe) may be
misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:
1 Bbl is based on an energy equivalency conversion method primarily applicable
at the burner tip and does not represent a value equivalency at the wellhead.
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