Border Announces Filing of Quarterly Financials and Operational and Corporate Update
February 28 2013 - 5:31PM
Marketwired Canada
Border Petroleum Corp. ("Border" or the "Corporation") (TSX VENTURE:BOR) today
announces financial results for its third quarter ended December 31, 2012. The
unaudited condensed consolidated interim financial statements and management's
discussion & analysis ("MD&A") have been filed on SEDAR and can be viewed at
www.sedar.com.
HIGHLIGHTS
The following are the highlights of Border's operations for the quarter ended
December 31, 2012:
-- Border drilled, completed, and is currently testing its first long-leg
Slave Point horizontal well.
-- Border acquired and reprocessed 17 square kilometers of 3D seismic
covering the southeast portion of lands under a federal permit granted
to Border (the "Loon Block").
-- Border currently has a positive working capital balance of approximately
$10 million and an unutilized bank line of $3.5 million.
-- Border's current production is approximately 192 boepd (45 percent oil
weighted).
-- Border is currently evaluating certain non-core asset dispositions and
potential joint venture transactions with respect to its Red Earth
assets.
FINANCIAL OVERVIEW
Certain selected financial and operational information for the quarter ended
December 31, 2012 is set out below and should be read in conjunction with the
Corporation's unaudited consolidated financial statements and related MD&A. The
following table provides a summary of key financial results for the nine months
ended December 31, 2012 and 2011:
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2012 2011 2012 2011
--------------------------------------------------------
Financial
Petroleum and
natural gas
revenues $ 730,350 $ 1,501,452 $ 2,196,915 $ 2,617,043
Funds flow from
operations $ (350,808) $ (208,845) $ (1,515,328) $ (1,007,471)
per share - basic
and diluted $ (0.00) $ (0.00) $ (0.01) $ (0.01)
Net loss $ (686,947) $ (859,410) $ (2,263,983) $ (2,077,892)
per share - basic
and diluted $ (0.00) $ (0.01) $ (0.01) $ (0.02)
Capital expenditures $ 8,541,879 $ 4,639,592 $ 10,653,865 $ 25,715,353
Weighted average
shares outstanding
basic and diluted 332,978,953 144,801,746 261,605,059 105,911,056
Operational
Production
Oil and liquids
(bbls/d) 89 131 89 81
Natural gas
(mcf/d) 730 1,435 730 792
Oil equivalent
(boe/d) 211 371 211 213
Sales price per unit
Oil and liquids
($/bbl) 62.75 87.74 68.31 83.51
Natural gas
($/mcf) 3.22 3.34 2.54 3.51
Oil equivalent
($/boe) 37.68 44.04 37.88 44.75
Reserves (Proved
plus probable)
Oil and liquids
(mbbls) 1,795 3,068
Natural gas (mmcf) 2,324 4,617
Oil equivalent
(mboe) 2,182 3,837
RED EARTH UPDATE
Border announces an update with respect to its first long leg Slave Point
horizontal well located at 10-15-85-10W5M (the "10-15 Well") in the Red Earth
area of northern Alberta.
-- The 10-15 Well was successfully drilled, completed, equipped and put on
pump in December 2012 for a total cost of approximately $7 million. The
10-15 Well costs exceeded the pre-drill estimated costs of $5 million
due to the drilling of a longer horizontal leg, which also led to
additional completion costs.
-- On December 23, 2012, the 10-15 Well was put on pump using a pump jack
with a maximum capacity of approximately 125 m3/d (786 bpd) of total
fluid. The pump's maximum rate has proven insufficient to optimally
produce the well's estimated inflow capacity of 257 m3/d (1,616 bpd) of
total fluid as independently assessed by Fekete Associates Inc.
("Fekete") based on field production data to the end of January 2013.
-- To the end of January 2013, a total of 5,866 m3 (36,896 bbls) of fluid
has been intermittently produced from the 10-15 Well consisting almost
entirely of frac fluid and formation water, which is typical of the
early stage production during the clean-up phase of wells in the Red
Earth area.
-- At the beginning of February 2013, Border commenced isolated production
testing to help ascertain inflow rates and water contribution along the
horizontal wellbore. The pump's maximum capacity was insufficient to
optimally handle the inflow capacity from both the heel to the middle of
the horizontal wellbore as well as the toe of the wellbore.
-- Border is currently testing approximately 450 metres at the initial heel
section of the well where porosities averaged approximately 6 percent as
indicated on open-hole logs (porosities along the 1,630 m horizontal
wellbore ranged from 6 percent to 33 percent). Based on field reports
from February 15, 2013 this heel section has produced at an average rate
of approximately 42 m3/d (264 bpd) of total fluid with an oil cut of 10
percent (26 bopd) on February 25, 2013.
Upon reviewing Fekete's analysis of the 10-15 Well's estimated inflow capacity,
combined with the results of its isolated testing discussed above, management
has determined that a minimum 300 m3/d (1,887 bpd) capacity electrical
submersible pump ("ESP") is required to handle the high fluid inflow rate and
optimally produce the 10-15 Well along the entire length of the 1,630 horizontal
wellbore. Management anticipates the installation of a high volume ESP will be
complete within the next 2 weeks which it anticipates may result in increased
oil cuts as experienced in the isolated testing of the heel section of the 10-15
Well.
Border expects to receive Alberta ERCB approval within the next 7 days to
commence the initial steps required to convert a vertical well located on the
10-15 Well site into a water disposal well. Slave Point horizontal wells in the
Red Earth area can produce between 50 to 90 percent water over a majority of
their production life. Accordingly, the ability to dispose of water production
from the 10-15 Well directly on-site, as well as from Border's two short-leg
horizontal wells located at 5-1-85-10-W5 (the "5-1 Well") and 6-36-85-10W5 (the
"6-36 Well"), will reduce Border's current and future operating costs related to
these wells and any future wells in the area.
With respect to Border's 2 short-leg horizontal wells on the Loon Block, for the
6 months ended December 31, 2012, Border's 5-1 Well and 6-36 Well averaged
approximately 15 bopd per well (producing day average). As previously reported,
production from these short horizontal wells has been impeded by wax and
asphaltene build up which Border continues to address using cost effective
remediation efforts. The two wells are currently producing at a combined oil
rate of approximately 25 bopd.
LEDUC UPDATE
Border is currently planning to conduct an acid stimulation on its
13-33-49-26W4M Nisku horizontal oil well with a view to optimizing its current
production base of approximately 114 boepd (15 percent oil weighted). Border has
a high working interest in 6,405 net acres in the Leduc area of central Alberta.
NORRIS UPDATE
Border holds working interests varying from 57.5 percent to 100 percent in 452
net acres at Norris. Border is conducting pump optimization work on a number of
its Mannville wells that has moved production to its current rate of
approximately 32 boepd (75 percent oil weighted).
CORPORATE
Following the payment for the drilling, completion, equipping and testing of the
10-15 Well, acquiring the Loon Seismic, fulfilling its CDE Flow-Through
commitment, and paying off a note related to the acquisition of the Leduc
properties, as at February 14, 2013, Border had a positive working capital
balance of approximately $10 million and an unutilized bank line of $3.5
million.
Border's current total production is approximately 192 boepd (45 percent oil
weighted). With the conversion of the water disposal well at Red Earth, and the
anticipated production adds from the 10-15 Well following installation of an
ESP, Border expects its operating cash flow will be sufficient to cover its
ongoing general and administrative costs. Border also currently holds
approximately $32 million in tax pools as at December 31, 2012.
The management and Board of Directors of Border continue to assess various
options at its disposal to maximize the value for its shareholders. To that end,
the Corporation is currently evaluating certain non-core asset dispositions, as
well as investigating various unsolicited inquiries regarding potential joint
venture transactions with respect to its Red Earth assets.
Forward-Looking Statements
The forward-looking statements contained in this document are based on certain
key expectations and assumptions made by Border. Although Border believes that
the expectations and assumptions on which the forward-looking statements are
based are reasonable, undue reliance should not be placed on the forward-looking
statements because Border can give no assurance that they will prove to be
correct.
Since forward-looking statements address future events and conditions, by their
very nature they involve inherent risks and uncertainties. Actual results could
differ materially from those currently anticipated due to a number of factors
and risks. These include, but are not limited to, the failure to obtain
necessary regulatory approvals, risks associated with the oil and gas industry
in general (e.g., operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or development projects
or capital expenditures; the uncertainty of reserve estimates; the uncertainty
of estimates and projections relating to production, costs and expenses, and
health, safety and environmental risks), commodity price and exchange rate
fluctuations and uncertainties resulting from potential delays or changes in
plans with respect to exploration or development projects or capital
expenditures. A description of assumptions used to develop such forward-looking
information and a description of risk factors that may cause actual results to
differ materially from forward-looking information can be found in Border's
disclosure documents on the SEDAR website at www.sedar.com.
The forward-looking statements contained in this document are made as of the
date hereof and Border undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.
BOE
BOEs 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Border Petroleum Corp.
Kelly Kimbley
President & CEO
(403) 538-8450
www.borderpetroleum.com
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