Exceed Energy Inc. (TSX VENTURE:EX.A) (TSX VENTURE:EX.B) today announced that it
has filed its unaudited financial statements and management's discussion and
analysis for the period ended June 30, 2007 as well as the Company's 52-109 F2
CEO and CFO Certificates. This press release is meant to be read in concurrence
with the above filed documents. Copies of these documents are available on SEDAR
at www.sedar.com.
Third Quarter Outlook
Exceed Energy Inc. ("Exceed" or the "Company") currently is producing 275 BOE/D
(barrels of oil equivalent). Though the company conducted completion and tie-in
operations in the second quarter, as listed below, most of the production
additions realized from these operations were not realized until the third
quarter. In the third quarter the Company conducted completion and tie-in
operations at its Hussar gas well (35% Working Interest) and expects the well to
begin production in early September.
Second Quarter Operations Summary
In the second quarter the Company conducted field operations at Roxana,
Twinning, Coyote, Bashaw, and Spruce Grove. The second Roxana well (30% Working
Interest) was completed and brought on stream in the third quarter. A third
Roxana well (50% WI) is anticipated this fall. The Twinning well (12.5% WI) was
drilled and abandoned. The 10-18 Coyote well was completed and brought on stream
in the third quarter. The third well (12% WI) at Bashaw in which the Company has
an interest, was completed and put on production in the third quarter. The
recompleted 8-35 Ellerslie well (20% WI) at Spruce Grove was put on stream in
the second quarter.
The Company's second quarter production was significantly impacted by the annual
spring break up and by longer than anticipated gas plant turnarounds. Production
at Roxana was shut in for approximately a month due to break up, and production
at Spruce Grove and Golden Spike was shut in for two to three weeks due to plant
turnarounds. Just west of the Roxana, the Company holds a 30% working interest
in lands in the Culp area. Exceed expects to drill the first well (30% WI) on
these lands in the later half of 2007.
The Company has acquired additional acreage in the Cereal area. The Company has
two drill-ready locations (50 and 100% WI, respectively) identified on Company
lands.
Selected Financial Information
Selected Financial Information
Financial data Three Months Six Months Three Months Six Months
June 30, June 30, June 30, June 30,
2007 2007 2006 2006
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Oil and natural gas
revenue, net of royalties 534,407 1,111,377 609,758 1,253,365
Operating expense 171,748 257,034 152,905 262,999
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Operating netback 362,659 854,343 451,853 990,366
Net loss (264,713) (395,436) (96,605) (522,810)
Per share, basic 0.00 (0.01) (0.01) (0.01)
Per share, diluted 0.00 (0.01) (0.01) (0.01)
Cash flow from operations
(non GAAP) 139,460 482,842 285,458 653,546
Per share, basic
(non GAAP) 0.00 0.01 0.00 0.03
Per share, diluted
(non GAAP) 0.00 0.01 0.00 0.03
Total assets 14,729,474 13,430,632
Total liabilities 3,189,536 5,037,874
Share capital data 30-Jun-07 30-Jun-06
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Number of class A
common shares 41,710,007 35,362,420
Number of class B
common shares 2,333,602 852,125
Number of options
outstanding 2,104,000 2,040,000
Average exercise price 0.21 0.21
Number of options exercisable 744,000 0.00
Number of compensation
warrants exercisable 371,429 0.00
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Exceed Energy Inc.
Balance Sheets
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June 30, 2007 December 31, 2006
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Assets (unaudited) (audited)
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Current assets
Cash and short term investments $ 2,544,182 $ 4,010,890
Accounts receivable 485,512 425,560
Prepaid expenses and deposits 89,951 32,239
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3,119,645 4,468,689
Refundable deposit (Note 3) 143,315 147,342
Property and equipment (Note 4) 11,466,514 10,620,840
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$ 14,729,474 $ 15,236,871
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Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued
liabilities $ 2,323,003 $ 2,415,749
Asset retirement obligation (Note 7) 231,993 174,328
Future income tax 634,540 768,797
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3,189,536 3,358,874
Shareholders' equity
Equity instruments (Note 8) 17,427,059 17,445,682
Contributed surplus (Note 8) 675,087 599,087
Deficit (6,562,208) (6,166,772)
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11,539,938 11,877,997
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$ 14,729,474 $ 15,236,871
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Indemnifications and contingencies
(Note 12)
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Commitments (Note 13)
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Subsequent events (Note 14)
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The accompanying notes are an integral part of these financial statements
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Note: Please refer to the Financial Statements and Management Discussion
and Analysis at www.sedar.com in reference to the note numbers in this
table.
Exceed Energy Inc.
Statements of Operations and Deficit
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Three Three Six Six
month month month month
period period period period
ended ended ended ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
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(unaudited) (unaudited) (unaudited) (unaudited)
Revenue
Oil and natural gas sales $ 618,806 $ 822,475 $ 1,418,740 $ 1,733,546
Royalty expense (84,399) (247,701) (307,363) (542,096)
Alberta Royalty Tax Credit - 34,984 - 61,915
Interest and other income 21,265 29,012 53,275 42,844
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555,672 638,770 1,164,652 1,296,209
Expenses
Operating 171,748 157,905 257,034 262,999
General and administrative 244,150 145,129 422,951 279,665
Stock based compensation
(Note 8) 38,000 (27,463) 76,000 92,663
Interest 313 50,278 1,824 99,999
Depletion, depreciation
and amortization (Note 4) 447,256 677,318 923,118 1,426,802
Accretion of asset
retirement obligation
(Note 7) 7,192 15,972 13,418 24,296
Amortization of debenture
issue costs - 11,746 - 23,363
Accretion of debenture
obligation - 22,000 - 43,700
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908,659 1,052,885 1,694,345 2,253,487
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Loss before taxes (352,987) (414,115) (529,693) (957,278)
Taxes
Future tax recovery 88,274 317,510 134,257 434,468
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Net loss for the period (264,713) (96,605) (395,436) (1,391,746)
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Deficit, beginning of
period (6,297,495) (5,208,575) (6,166,772) (4,782,370)
Deficit, end of period $(6,562,208)$(5,305,180) $(6,562,208)$(6,174,116)
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Net loss per common
share (Note 8)
Basic and diluted (0.00)$ (0.01) $ (0.01)$ (0.01)
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The accompanying notes are an integral part of these financial statements
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Note: Please refer to the Financial Statements and Management Discussion
and Analysis at www.sedar.com in reference to the note numbers in this
table.
Exceed Energy Inc.
Statement of Cash Flows
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Three Three Six Six
month month month month
period period period period
ended ended ended ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
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(unaudited) (unaudited) (unaudited) (unaudited)
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Cash provided by (used in)
Operating Activities
Net loss for the period $ (264,713) $ (96,605) $ (395,436) $ (522,810)
Items not requiring cash
Depletion, depreciation
and amortization 447,256 677,318 923,118 1,426,802
Accretion of asset
retirement obligation
(Note 7) 7,192 15,972 13,418 24,296
Accretion of debenture
obligation - 22,000 - 43,700
Amortization of debenture
issue costs - 11,746 - 23,363
Future tax recovery (88,275) (317,510) (134,258) (434,468)
Stock based compensation 38,000 (27,463) 76,000 92,663
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139,460 285,458 482,842 653,546
Change in non-cash
working capital related
to operating activities
(Note 10) 85,697 284,180 (281,277) 234,846
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225,157 569,638 201,565 888,392
Financing Activities
Issue of share capital,
net of costs (18,622) - (18,622) -
Increase in demand loan - - - -
Change in non-cash
working capital
balances related to
financing activities
(Note 10) 26,093 9,779 (45,638) (50,608)
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7,471 9,779 (64,260) (50,608)
Investing Activities
Additions to property
and equipment (775,161) (602,571) (1,767,744) (1,147,542)
Dispositions of property
and equipment 43,200 272,544 43,200 272,544
Increase (Decrease) in
refundable deposit (983) 4,027
Change in non-cash working
capital balances related
to investing activities
(Note 10) 490,780 579,363 116,504 467,059
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(242,164) 249,336 (1,604,013) (407,939)
Decrease in cash and
short-term investments (9,536) 828,753 (1,466,708) 429,845
Cash and short-term
investments, beginning
of period 2,553,718 2,460,153 4,010,890 2,859,061
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Cash and short-term
investments, end of
period $ 2,544,182 $ 3,288,906 $ 2,544,182 $ 3,288,906
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Cash interest payments $ 313 $ 50,278 $ 1,824 $ 99,999
The accompanying notes are an integral part of these financial statements
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Note: Please refer to the Financial Statements and Management Discussion
and Analysis at www.sedar.com in reference to the note numbers in this
table.
Forward Looking Statements
This press release contains forward-looking statements including expectations of
future production, cash flow and earnings. These statements are based on current
expectations that involve a number of risks and uncertainties, which could cause
actual results to differ from those anticipated. These risks include, but are
not limited to: the risks associated with the oil and gas industry (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 projects relating to production, costs and expenses, and health, safety and
environmental risks), commodity price, 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. The Company has
also used certain measures of financial reporting that are commonly used as
benchmarks within the oil and natural gas production industry. The measures
discussed are widely accepted measures of performance and value within the
industry, and are used by analysts and investors to compare and evaluate oil and
natural gas exploration and producing entities. Most notably, these measures
include operating netback and cash flows from operations. Operating netback is a
benchmark used in the crude oil and natural gas industry to measure the
contribution of oil and natural gas sales subsequent to the deduction of
royalties and operating costs. Cash flow from operations is before changes in
non-cash working capital and site restoration expenditures, and is used to
analyze operations, performance and liquidity. These measures are not defined
under GAAP and should not be considered in isolation or as an alternative to
conventional GAAP measures. These measures and their underlying calculations are
not necessarily comparable to a similarly titled measure of another entity. When
these measures are used, they are defined as "non GAAP" and should be given
careful consideration by the reader. The term barrels of oil equivalent ("BOE")
may be misleading, particularly if used in isolation. A BOE conversion ratio for
natural gas of 6:1 has been used by the Company, which is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value of equivalency at the wellhead. All BOE conversions in
this report are derived by converting natural gas to crude oil in the ratio of
six thousand cubic feet of natural gas to one barrel of crude oil. Additional
information on these and other factors that could affect Exceed's operations or
financial results are included in Exceed's reports on file with Canadian
securities regulatory authorities that may be accessed at www.sedar.com or
through the Company's website, www.exceedenergy.com.
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