Wild Stream Exploration Inc. Announces Third Quarter 2011 Operating and Financial Results and Re-Affirms 2011 Guidance.
November 23 2011 - 2:13PM
Marketwired Canada
Wild Stream Exploration Inc. (the "Company" or "Wild Stream") (TSX VENTURE:WSX)
is pleased to announce its operating and financial results for the three and
nine months ended September 30, 2011. Selected financial and operational
information is outlined below and should be read in conjunction with the interim
financial statements and the related Management Discussion and Analysis
("MD&A"). These filings will be available at www.wildsr.com and www.sedar.com.
2011 Financial and Operating Highlights
Three months Nine months
ended ended
September 30, September 30,
Percent Percent
2011 2010 Change 2011 2010 Change
-----------------------------------------------
Financial (thousands of
dollars except share data)
Petroleum and natural gas
revenue 37,550 12,791 194 83,606 29,312 185
Funds from operations (1) 20,263 7,492 170 46,854 16,297 188
Per share - basic 0.30 0.21 43 0.81 0.46 76
- diluted 0.29 0.18 61 0.78 0.40 95
Net earnings (loss) 10,427 1,403 643 15,305 2,055 645
Per share - basic 0.16 0.04 300 0.27 0.06 350
- diluted 0.16 0.03 433 0.22 0.05 340
Capital expenditures, net 49,474 23,102 114 305,432 73,077 318
Corporate acquisitions - - - 35,875 8,493 322
Working capital deficiency
(4) 88,290 24,822 256
Shareholders' equity 428,748 149,278 187
Weighted average shares
(thousands)
Basic 67,906 37,111 83 57,630 35,794 61
Diluted 70,133 42,409 65 59,904 40,990 46
Shares Outstanding, end of
period (thousands)
Basic 68,336 37,280 83
Diluted 75,009 46,882 60
Operating (6:1 boe
conversion)
Average daily production
Liquids (bbls/d) 5,595 2,128 163 4,073 1,553 162
Natural gas (mcf/d) 3,566 1,186 201 2,087 1,130 85
Barrels of oil equivalent
(2)(boe/d) 6,190 2,326 166 4,421 1,742 154
Netbacks
Operating
Petroleum and natural gas
revenue(4) 69.56 60.72 15 70.07 62.37 12
Royalties (12.31) (8.66) 42 (11.13) (8.53) 30
Operating expenses (16.69) (12.06) 38 (14.92) (13.17) 13
Transportation expenses (1.52) (1.83) (17) (2.03) (1.81) 12
---------------- ----------------
Operating netback ($/boe) 39.04 38.17 2 41.99 38.86 8
---------------- ----------------
---------------- ----------------
Corporate netback(3)($/boe) 35.58 35.02 2 38.82 34.28 13
Wells drilled
Gross 24 15 60 51 33 55
Net 22.4 14.5 54 47.3 30.7 54
Success 100% 100% - 100% 97% -
(1) Management uses funds generated by operations to analyze operating
performance and leverage. Funds generated by operations as presented do not have
any standardized meaning prescribed by IFRS and therefore it may not be
comparable with the calculation of similar measures for other entities. The
reconciliation between funds flow from operations and cash flow from operating
activities can be found in the MD & A.
(2) Boe conversion ratio for natural gas of 1 Boe: 6 Mcf has been used, which is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not necessarily represent a value equivalency at the
wellhead.
(3) Corporate netbacks are calculated as the operating ntback less general and
administrative expenses, financial charges asset retirement obligations and
transaction costs.
(4) Excludes unrealized risk management contracts.
Highlights
-- Wild Stream increased production by 74% to 6,190 boe/d (90% liquids)
over the second quarter of 3,549 boe/d and a 166 % increase from 2,326
boe/d in the comparable quarter of 2010.
-- Wild Stream has grown production through drilling and optimization on
the recently acquired southwest Saskatchewan assets by 40% to the
current level of 2,500 boe/d from 1,800 boe/d at closing.
-- Funds flow from operations increased 171% to $20.3 million ($0.30 per
share - basic), compared to $7.5 million ($0.21 per share - basic) in
the third quarter of 2010.
-- During the third quarter, Wild Stream incurred capital expenditures of
$49.5 million of which $39.9 million were from drilling and completion
expenditures. The Company drilled 24 (22.4 net) oil wells with a 100%
success rate including 14.4 net wells in Shaunavon, 7.0 net wells in
Dodsland and 1.0 net well in Swan Hills.
-- Wild Stream incurred land expenditures of $1.7 million through
participation at Crown land sales purchasing over 3,000 net acres of
undeveloped land primarily in its core areas of Swan Hills and Shaunavon
to further enhance our drilling inventory. Additionally the Company
incurred acquisition expenditures of $1.6 million consolidating working
interests in its core areas.
-- Net debt increased by $25.7 million to $88.3 million for the period
ending September 30, 2011, which represents approximately 1.0 times
annualized third quarter fund flows from operations. As at September 30,
2011, Wild Stream's balance sheet continues to remain strong with
approximately $72 million of remaining borrowing capacity against its
$160 million credit facility.
Highlights for Wild Stream subsequent to the third quarter of 2011 include:
-- During October Wild Stream's production averaged more than 6,800 boe/d
(92% oil) and we re-affirm our exit guidance of 7,000 boe/d.
-- Wild Stream completed the interim review of its bank facility with its
banking syndicate. The syndicate has confirmed the $160 million
borrowing base until the next review which will occur by May 2012.
-- Expanded our hedge position to include 2,250 bbls/d of oil at a fixed
WTI price of Cdn $96.04/bbl in 2012 and 250 bbls/d at a fixed WCS price
of $75.88 for 2012.
Operations Review
Shaunavon area
During the third quarter, Wild Stream drilled 15 (14.4 net) horizontal oil wells
achieving a 100 percent success rate. Active drilling on our recently acquired
northern lands commenced in late August. To date, we have drilled six Upper
Shaunavon horizontal wells, two Lower Shaunavon horizontal wells and one Cantuar
horizontal well on this acreage.
Upper Shaunavon formation
-- Northern Lands
-- 6 horizontal wells drilled, completed and currently producing.
-- The six wells have tested six seperate Upper Shaunavon pools across
the northern acreage.
-- The initial tests have met our expectations with initial oil
production rates varying between 40 -180 bbls/d.
-- Additional testing throughout the first quarter of 2012 will
continue to define the more prolific areas of the Upper Shaunavon on
our northern lands.
-- Southern Lands
-- Two additional Upper Shaunavon horizontal oil wells are planned for
the fourth quarter in addition to the conversion of 3 additional
injection wells.
Lower Shaunavon formation
-- Our first horizontal well testing the northern extension of the Lower
Shaunavon was drilled in September. This well has been on production for
30 days and preliminary results are below expectations with an average
oil rate of 20 bbls/d and water cut in excess of 90%.
-- Our second horizontal test well on the northern extension of the Lower
Shaunavon has been drilled and is waiting on completion.
Cantuar formation
-- Our first horizontal well testing the Cantuar formation has been drilled
and was placed on production on November 1.
-- Preliminary results after 20 days on-stream demonstrates the well is
currently performing at expectations with oil rates of 80 - 100 bbls/d.
-- A second Cantuar horizontal well is planned for late in the fourth
quarter.
Dodsland area
-- Drilled 7 net horizontal oil wells during the third quarter at a 100%
success rate.
-- Active drilling will recommence in the first quarter of 2012 with 15-20
horizontal wells.
Swan Hills
-- Wild Stream drilled 2 (1.0 net) horizontal wells in the third quarter.
-- Completion activities on both wells have been delayed due to acid supply
shortages.
-- The first well is expected to be on production by the end of November
while the second well is not expected to be completed until January of
2012.
Outlook
Wild Stream continues to successfully execute on its business plan of providing
per share value growth through its combined exploration, exploitation and
enhanced oil recovery strategies. This is demonstrated by our cashflow and
production per share growth which is in excess of 45% over the comparable period
in 2010.
Wild Stream has more than 1,000 net risked drilling locations in our current
inventory. The inventory provides the fuel to grow our reserves, production and
net asset value in the future.
Wild Stream will provide 2012 guidance in late January 2012.
We remain committed to increasing shareholder value through a combination of
exploration, strategic acquisitions and subsequent exploitation while
maintaining a conservative approach to balance sheet management.
Additional corporate information can be found in our November corporate
presentation on our website at www.wildsr.com.
FORWARD LOOKING STATEMENTS: This press release contains forward-looking
statements. More particularly, this press release contains statements concerning
Wild Stream's drilling plans, future growth plans, reserves and values
attributable thereto, per share growth, Wild Stream's growth strategy, the
nature of its assets. In addition, the use of any of the words "guidance",
"initial, "scheduled", "can", "will", "prior to", "estimate", "anticipate",
"believe", "potential", "should", "unaudited", "forecast", "future", "continue",
"may", "expect", "project", and similar expressions are intended to identify
forward-looking statements. The forward-looking statements contained herein are
based on certain key expectations and assumptions made by the Company, including
expectations and assumptions concerning the success of optimization and
efficiency improvement projects, the availability of capital, current
legislation, receipt of required regulatory approval, the success of future
drilling and development activities, the performance of existing wells, the
performance of new wells, Wild Stream's growth strategy, general economic
conditions, availability of required equipment and services and prevailing
commodity prices. Although the Company 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
the Company 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, 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, changes in legislation affecting the oil and gas
industry and uncertainties resulting from potential delays or changes in plans
with respect to exploration or development projects or capital expenditures.
Certain of these risks are set out in more detail in the Company's Annual
Information Form which has been filed on SEDAR and can be accessed at
www.sedar.com or Wild Stream's website www.wildsr.com.
The forward-looking statements contained in this press release are made as of
the date hereof and the Company 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.
Meaning of Boe: When used in this press release, Boe means a barrel of oil
equivalent on the basis of 1 Boe to 6 thousand cubic feet of natural gas. Boe
per day means a barrel of oil equivalent per day. Boe's may be misleading,
particularly if used in isolation. A Boe conversion ratio of 1 Boe for 6
thousand cubic feet of natural gas is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
This press release shall not constitute an offer to sell, nor the solicitation
of an offer to buy, any securities in the United States, nor shall there be any
sale of securities mentioned in this press release in any state in the United
States in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.
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