Canadian Superior Energy Inc. ("Canadian Superior" or the
"Company") (TSX: SNG) (NYSE Alternext US: SNG) announced today the
release of its fourth quarter and year-end financial results for
2009. The "Management's Discussion and Analysis" and audited
consolidated financial statements for the year ended December 31,
2009, can be viewed on the System for Electronic Document Analysis
and Retrieval (SEDAR) at www.sedar.com.
In addition Canadian Superior announced it has filed its
statements of reserves data and other oil and gas information for
the year ended December 31, 2009 (the "Statement of Reserves
Data"), as mandated by National Instrument 51-101 - Standards of
Disclosure for Oil and Gas Activities. The Statement of Reserves
Data is included in the annual information form of Canadian
Superior for the year ended December 31, 2009 (the "AIF"). Copies
of Canadian Superior's AIF may be obtained on SEDAR.
Financial and Operating Highlights
- In September, 2009, the Company emerged from protection under
the Companies' Creditors Arrangement Act (Canada) ("CCAA"). A new
board of directors was appointed and the Company obtained a new $25
million line of credit which has since been increased to $40
million.
- In January 2010, the Company completed a private placement for
gross proceeds of approximately $59.5 million and named James H.T.
Riddell to the board of directors.
- Converted all the issued and outstanding Series A Preferred
Shares for an equal number of Series B Preferred Shares and
extended the redemption date from December 31, 2010 to December 31,
2011.
- In consideration of the current industry environment and
market conditions, the Company announced in December 2009 that it
relinquished its Mayflower and Marauder (Nova Scotia offshore
exploration licenses 2406 and 2415). The Company did extend the
Mariner Block (2409) until at least December 31, 2010.
- Effective January 1, 2010, the Company entered into a
financial hedge whereby a Canadian chartered bank will cover 5500
GJ/day for a period January 1, 2010 to December 31, 2010at $5.50
CAD/GJ against AECO monthly average index.
- Western Canada average daily production for the fourth quarter
averaged 3,058 boe/d compared to 2,548 boe/d for the previous
quarter. On a full year basis, average daily production was 3,020
boe/d in 2009 compared to 3,442 boe/d in 2008. The year-over-year
decrease in volumes is primarily due to natural declines combined
with minimal capital expenditures in 2009 imposed during the period
the Company was under CCAA protection.
- The Company's proved plus probable reserves were 9,907 MBOE at
December 31, 2009 compared to 10,585 MBOE for the previous year.
The reduction was due to lack of reserve replacement related to the
lower capital expenditures in 2009.
- Petroleum and natural gas sales decreased from $74.5 million
in 2008 to $33.7 million in 2009. The decrease is mainly due to
significant declines in commodity prices , natural declines in
production volumes in 2009 compared to 2008 and the Company's
inability to tie-in the successful wells from the 2008 drilling
program due to limited capital available during CCAA.
- The Company was forced to postpone the 2009 drilling program
until the Company exited from CCAA protection. The Company drilled
13 gross exploration wells (11.4 net) during November and December
2009 which satisfied the flow through commitment. The Company has
approximately 800 boe/d awaiting tie-in.
- The increased loss in 2009 of $(53.3) million compared to the
loss of $(23.8) million in 2008 is primarily due to decline in
natural gas prices, $18.8 million in restructuring costs related to
the receivership of the Trinidad Block 5 (c) asset and CCAA
proceedings, and the write-down of the Canadian petroleum and
natural gas properties of $57.5 million. The write down was
primarily related primarily to pricing and slightly lower proved
reserves in 2009 compared to 2008. In addition, approximately $40
million of unproved properties were added to the full cost pool,
including $20 million related to East Coast Canada.
- The Company is planning the Zarat North appraisal well to be
drilled in Tunisia. The rig selection process is well underway and
the Company expects to have a contract in place soon. It is
currently anticipated the well will be completed by year end.
- Geotechnical work continues on the 5c Block offshore Trinidad.
The Company, together with its' partner and operator BG, are
working to determine the optimal appraisal and commercialization
strategy for the block. It is currently anticipated that an
appraisal well will be drilled later this year or early next year.
With the respect to the MG Block, the Company has met with
Petrotrin and the Ministry of Energy and has formally requested
that our obligations be transferred to a less environmentally
sensitive and more prospective area. While we are hopeful that our
request will be granted, it is possible that in order to relinquish
the block we will be required to pay some portion of the
performance security referenced in the MG Block Farm-in
agreement.
- The Liberty LNG regassification project is on budget and
moving forward with submission of a construction permit planned for
July of this year. The Company continues to review joint venture
opportunities related to this project.
- Canadian Superior has engaged Parkman Whaling, Alpha Petroleum
Services and Ryder Scott for specific support services in Trinidad
and Tunisia.
Business Overview and Future Strategy
With the Company exiting CCAA in September 2009, constituting a
new board, negotiating a new banking arrangement and completing the
Private Placement in January 2010, the Company is focused on the
maximization of long-term sustainable value to the shareholders
by:
- Hiring a Chief Executive Officer with the skills and strategic
vision to extract value from the Company's assets while pursuing
new areas of growth.
- Increasing the value of the Company's interests in Trinidad
and Tobago, including a realistic and timely development plan for
Block 5(c) with the Company's partner BG;.
- Appraisal, development and production of crude oil and natural
gas from the 7th of November Block. Further, refining the various
exploration prospects identified on the Block and seeking
additional exploration and exploitation opportunities elsewhere in
Tunisia and Libya.
- Developing the Western Canada asset base to increase average
daily production along with replacement of producing reserves on an
economic and cost effective basis by exploitation, full-cycle
exploration and strategic acquisition. The Company is currently
evaluating its entire acreage position in anticipation of an
aggressive, multi-year drilling program commencing in the third
quarter of 2010. Capital expenditures planned for the balance of
2010 will be approximately $25 million with near-term focus on the
Drumheller and Kaybob core areas.
- Evaluating synergistic growth opportunities in North America
focusing on both conventional and unconventional oil projects.
- Re-imaging the Company and continuing to build an ethical and
transparent business culture.
Speaking today, Marvin M. Chronister, Canadian Superior's
Chairman of the Board, said, "While the Company has been through a
very difficult period during 2009, we believe it has emerged and
continues to evolve as a much stronger company than it has ever
been. We are aggressively pursuing our growth strategy and
development of our assets. Therefore, we believe the best is still
to come for our shareholders."
Financial and Operational Review
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December 31 Three Twelve Months
Months Ended
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2009 2008 % 2009 2008 %
Change Change
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Financial
----------------------------------------------------------------------------
($000's except
per share
amounts)
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Petroleum and
Natural Gas
Sales, net of
transportation 9,935 13,213 (25) 33,772 74,463 (55)
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Cash Flow from
(used for)
Operations
before
restructuring
costs 3,666 4,654 (21) (371) 33,901 (101)
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Per Share 0.02 0.03 (33) (0.00) 0.23 (100)
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Net Income (Loss) (63,903) (18,189) 251 (53,321) (23,758) 124
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Basic & Fully
Diluted
Earnings Per
Share (0.32) (0.11) 191 (0.30) (0.16) 88
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Capital
Expenditures 19,360 42,893 (55) 104,597 119,819 (13)
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Nova Scotia
Offshore
Deposits - 15,167 100 - 15,167 100
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Net Surplus (Debt) (9,345) (41,229) 77 (9,345) (41,229) 77
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Shares
Outstanding at
Period End 197,057,716 168,644,716 17 197,057,498 168,644,716 17
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Operating
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Average Production
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Natural Gas (mcf/d) 14,428 15,726 (8) 14,569 16,685 (13)
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Oil and NGL's
(bbls/d) 653 599 9 592 661 (10)
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Boe/d 3,058 3,220 (5) 3,020 3,442 (12)
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Average Selling
Price
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Natural Gas ($/mcf) 4.82 7.22 (33) 4.09 8.58 (52)
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Oil and NGL's ($/bbl) 56.73 50.25 13 55.09 91.32 (40)
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Total ($/boe) 34.87 44.48 (22) 30.52 59.51 (49)
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Gross
Undeveloped
Land (Acres)
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Western Canada 226,119 241,749 (6) 226,119 241,749 (6)
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Offshore
Trinidad and
Tobago 80,890 135,060 (40) 80,980 135,060 (40)
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Offshore Nova
Scotia 27,790 1,234,546 (98) 27,790 1,234,546 (98)
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Offshore
Tunisia/Libya 768,000 768,000 - 768,000 768,000 -
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Wells Drilled
Western Canada
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Gross 13 15 (13) 13 33 (61)
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Net 11.4 10.9 5 11.4 27.5 (59)
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Canadian Superior Energy Inc. is a Calgary, Alberta, Canada
based diversified global energy company engaged in the exploration
and production of oil and natural gas and in the development of a
liquefied natural gas ("LNG") project. Its operations are located
offshore Trinidad and Tobago, Western Canada, North Africa,
offshore Eastern Canada, and offshore Eastern United States. See
Canadian Superior's website at www.cansup.com to review further
detail on Canadian Superior's operations.
Non-GAAP Measures - This document contains terms such as cash
flow from operations and operating netback, which are non-GAAP
financial measures that do not have any standardized meaning
prescribed by GAAP and are, therefore, unlikely to be comparable to
similar measures presented by other issuers. Management believes
cash flow from operations and operating netback are relevant
indicators of the Company's financial performance, ability to fund
future capital expenditures and repay debt. Cash flow from
operations and operating netback should not be considered an
alternative to or more meaningful than cash flow from operating
activities, as determined in accordance with GAAP, as an indicator
of the Company's performance. These measures have been described
and presented in this document in order to provide shareholders and
potential investors with additional information regarding the
Company's liquidity and its ability generate funds to finance its
operations.
Boe Presentation - Production information is commonly reported
in units of barrel of oil equivalent ("boe"). For purposes of
computing such units, natural gas is converted to equivalent
barrels of oil using a conversion factor of six thousand cubic feet
to one barrel of oil. This conversion ratio of 6:1 is based on an
energy equivalent conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. Such disclosure of boes may be misleading, particularly
if used in isolation. Readers should be aware that historical
results are not necessarily indicative of future performance.
This news release contains "forward-looking information" (within
the meaning of applicable Canadian securities laws) and "forward
-looking statements" (within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995). Such statements or
information are identified with words such as "anticipate",
"believe", "expect", "plan", "intend", "estimate", "propose",
"project" or similar words suggesting future outcomes or statements
regarding an outlook. Such statements include, among others, those
concerning our anticipated strategic and operational plans
including the development and drilling program in Trinidad, future
construction plans at the Liberty LNG regassification project, the
proposed development, production, refining and further exploration
in Tunisia and Libya, our development program in Western Canada and
potential growth opportunities and strategy of the Company, the
hiring of a Chief Executive Officer, future capital expenditures,
our expected financial performance, and the expectation of
successful future results.
Such forward-looking information or statements are based on a
number of risks, uncertainties and assumptions which may cause
actual results or other expectations to differ materially from
those anticipated and which may prove to be incorrect. Assumptions
have been made regarding, among other things, operating conditions,
availability of capital, and capital and other expenditures. Actual
results could differ materially due to a number of factors,
including, without limitation, risks affecting the Company's
ability to execute projects and market oil and natural gas, risks
inherent in operating in foreign jurisdictions, the ability to
attract key personnel, including the hiring of a Chief Executive
Officer, and the inability to raise additional capital. Additional
assumptions and risks are set out in detail in the Company's Annual
Information Form, available on SEDAR at www.sedar.com., and the
Company's annual reports on Form 40-F or Form 20-F on file with the
U.S. Securities and Exchange Commission.
Although the Company believes that the expectations reflected in
the forward-looking information or statements are reasonable,
prospective investors in the Company's securities should not place
undue reliance on forward-looking statements because the Company
can provide no assurance that such expectations will prove to be
correct. Forward-looking information and statements contained in
this news release is as of the date of this news release and the
Company assumes no obligation to update or revise this
forward-looking information except as required by law.
Contacts: Canadian Superior Energy Inc. Investor Relations (403)
294-1411 (403) 216-2374 (FAX) www.cansup.com Canadian Superior
Energy Inc. Suite 3200, 500 - 4th Avenue S.W. Calgary, Alberta,
Canada T2P 2V6