Drake Energy Ltd. Reports Second Quarter 2009 Results
08 Septiembre 2009 - 1:50PM
Marketwired Canada
Drake Energy Ltd. (formerly Drake Pacific Enterprises Ltd)("Drake" or "the
Company") (TSX VENTURE:DPE) has filed its Unaudited Consolidated Financial
Statements and Management's Discussion and Analysis ("MD&A") for the three and
six months ended June 30, 2009 on SEDAR. These documents can be accessed through
Drake's website at www.drakepacific.com or on SEDAR's site at www.sedar.com.
SUMMARY OF RESULTS
2009 2008 change
------------------------------------
Daily production
Oil and liquids - bbls/day 26 54 (52%)
Natural gas - mcf/day 1,149 712 61%
Boe/day - 6:1 217 172 26%
Price
Price/bbl - oil and liquids $ 64.95 $ 128.58 (49%)
Price/mcf - natural gas $ 3.54 $ 9.81 (64%)
Price/boe $ 26.39 $ 80.53 (67%)
Financial
Operating costs/boe $ 28.49 $ 23.15 23%
Operating costs/boe excluding one-time
charges (Note 1) $ 23.73
Netback/boe $ (5.73) $ 45.68 (113%)
Netback/boe excluding one-time charges
(Note 1) $ (0.97)
General and administrative/boe $ 36.42 $ 10.65 242%
General and administrative/boe excluding
one-time charge (Note 2) $ 16.17
Revenue $ 521,266 $ 1,261,726 (59%)
Cash Flow from operations $ (861,710) $ 546,418 (258%)
Cash flow from operations excluding one-
time charges (Notes 1 and 2) $ (367,710)
Net earnings (loss) $ (804,446) $ 324,682 n/a
Net earnings (loss) excluding one-time
charges (Notes 1 and 2) $ (453,706)
Shares outstanding - basic weighted
average 16,988,647 10,676,779
SUMMARY OF RESULTS
2009 2008 change
------------------------------------
Daily production
Oil and liquids - bbls/day 46 39 18%
Natural gas - mcf/day 1,046 552 90%
Boe/day - 6:1 221 131 68%
Price
Price/bbl - oil and liquids $ 49.49 $ 117.19 (58%)
Price/mcf - natural gas $ 4.18 $ 9.17 (54%)
Price/boe $ 30.19 $ 73.60 (59%)
Financial
Operating costs/boe $ 23.09 $ 22.60 2%
Operating costs/boe excluding one-time
charges (Note 1) $ 20.73
Netback/boe $ 1.69 $ 41.42 (96%)
Netback/boe excluding one-time charges
(Note 1) $ 4.04
General and administrative/boe $ 24.27 $ 12.79 90%
General and administrative/boe excluding
one-time charge (Note 2) $ 14.26
Revenue $ 1,206,295 $ 1,757,170 (31%)
Cash Flow from operations $ (946,385) $ 667,354 (242%)
Cash flow from operations excluding one-
time charges (Notes 1 and 2) $ (452,385)
Net earnings (loss) $(1,287,528) $ 50,150 n/a
Net earnings (loss) excluding one-time
charges (Notes 1 and 2)
Shares outstanding - basic weighted
average 16,988,647 10,663,213
Drake continued to grow its production capabilities and ownership in producing
properties, reaching production capabilities of 300 boed despite exceptionally
low natural gas prices, a stagnant capital market and depressed economy. Due to
very low natural gas prices a considerable amount of production has been shut
-in during Q2 and Q3 to conserve value until higher prices return.
With low gas prices, tough financial markets, and shut-in production, the
Company net-backs and cash flow are weak and place the Company in a difficult
position. Management is taking aggressive and proactive steps to reduce
operating costs and develop high netback oil producing assets to turn this
around. The result of these efforts and a return of higher gas prices certainly
will have a significant positive impact on the Company, as early as Q4.
Note 1
During the second quarter, a company that processes a portion of Drake's natural
gas billed a retroactive charge of $94,000 for 2008 because they reclassified
Drake's natural gas from sweet to sour and tripled the processing costs.
Note 2
During the quarter a joint venture partner went into receivership. As there is
now uncertainty as to the amount that will be collected or settled on the
account of about $800,000, Drake has made an allowance charge in the amount of
$400,000. It is possible that the full amount may be recovered but Drake has
chosen to be prudent in making an allowance for the amount.
This news release contains forward-looking information. Implicit in this
information are assumptions regarding commodity pricing, production, royalties
and expenses that, although considered reasonable by the Company at the time of
preparation, may prove to be incorrect. These forward-looking statements are
based on certain assumptions that involve a number of risks and uncertainties
and are not guarantees of future performance. Actual results could differ
materially as a result of changes in the Company's plans, commodity prices,
equipment availability, general economic, market, regulatory and business
conditions as well as production, development and operating performance and
other risks associated with oil and gas operations. There is no guarantee made
by the Company that the actual results achieved will be the same as those
forecasted herein. Barrel of oil equivalent ("boe") amounts may be misleading,
particularly if used in isolation. A boe conversion ratio has been calculated
using a conversion rate of six thousand cubic feet of natural gas to one barrel
and is based on an energy equivalent conversion method application at the burner
tip and does not necessarily represent an economic value equivalent at the
wellhead.
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