Not for distribution to U.S. news wire services or dissemination in
the U.S. CALGARY, Aug. 14, 2012 /CNW/ - Novus Energy Inc. ("Novus"
or the "Company") announces that it has filed its unaudited
condensed interim financial statements and management's discussion
and analysis ("MD&A") as at and for the three and six months
ended June 30, 2012. These may be accessed through the SEDAR
website www.sedar.com and at the Company's website
www.novusenergy.ca. Novus is pleased to report that its 2012 Viking
oil drilling program continues to progress on schedule. The
Company has drilled, with 100% success, 34 Viking oil wells in the
Dodsland area of Saskatchewan, with 26 completed thus far.
Corporate production should exceed 3,300 boe/d within the next ten
days as newly completed wells are placed on stream. Production will
steadily increase through the balance of the year as additional
wells are drilled and placed on stream. In addition to the 124 net
sections of Viking rights the Company holds in the Dodsland area of
Saskatchewan, Novus has recently amassed 46 net sections of crown
lands prospective for Viking oil in the Provost area of Alberta, on
trend with the Company's existing Dodsland assets. The lands
the Company has acquired are proximate to historical vertical
Viking oil production and recent successful horizontal drilling
activity on both sides of the Alberta/Saskatchewan border targeting
Viking oil. Novus believes the assembled acreage meaningfully
increases the Company's future drilling and development
inventory. Drilling on these lands is planned for early 2013.
FINANCIAL HIGHLIGHTS -- Production revenue for the three months
ended June 30, 2012, increased 102% to $16.74 million from $8.29
million recorded in the comparative period of 2011. For the six
months ended June 30, 2012, production revenue increased 106% to
$35.28 million from $17.16 million recorded in the comparative
period of 2011. -- Funds flow from operations for the three months
ended June 30, 2012, increased 192% to $8.58 million from $2.94
million recorded in the comparative period of 2011. For the six
months ended June 30, 2012, funds flow from operations increased
213% to $19.24 million from $6.15 million recorded in the
comparative period of 2011. -- Net income for the three months
ended June 30, 2012, was $1.09 million versus a loss of $760
thousand recorded in the comparative period of 2011. For the six
months ended June 30, 2012, net income was $3.93 million versus a
loss of $2.09 million recorded in the comparative period of 2011.
-- Net capital expenditures for the three months ended June 30,
2012, were $17.08 million versus $18.13 million recorded in the
comparative period of 2011. For the six months ended June 30, 2012,
net capital expenditures were $35.21 million versus $30.38 million
recorded in the comparative period of 2011. -- At June 30, 2012,
the Company had net debt of $48.29 million. -- At June 30, 2012 the
Company had estimated tax pools of $240.42 million. -- Corporate
operating netbacks for the three months ended June 30, 2012,
increased 5% to $41.95/boe from $40.12/boe recorded in the
comparative period of 2011. For the six months ended June 30, 2012,
corporate operating netbacks increased 27% to $46.71/boe from
$36.90/boe recorded in the comparative period of 2011. -- Viking
operating netbacks for the three months ended June 30, 2012,
decreased 16% to $50.68/boe from $60.61/boe recorded in the
comparative period of 2011. For the six months ended June 30, 2012,
Viking operating netbacks decreased 12% to $56.54/boe from
$64.49/boe recorded in the comparative period of 2011. A summary of
financial results for the three and six month periods ended June
30, 2012, along with the comparative periods, are outlined in the
following table: Three months ended June 30 Six months ended June
30 2012 2011 % 2012 2011 % Change Change Financial (000s, except
per share amounts) Revenue 16,737 8,286 102 35,279 17,157 106 Funds
flow 8,583 2,938 192 19,243 6,146 213 from operations per share
0.04 0.02 100 0.10 0.04 150 - basic and diluted Net income 1,090
(760) n/a 3,934 (2,092) n/a (loss) per share 0.01 - n/a 0.02 (0.01)
n/a - basic and diluted Capital 17,076 18,130 (6) 35,210 30,382 16
expenditures, net Net debt 48,292 23,849 102 48,292 23,849 102
Weighted average shares outstanding basic 190,985 170,018 12
184,058 169,138 9 diluted 192,893 170,018 13 188,846 169,138 12
OPERATIONAL HIGHLIGHTS -- Average daily production for the three
months ended June 30, 2012, increased 119% to 2,887 boe/d from
1,318 boe/d recorded in the comparative period of 2011. For the six
months ended June 30, 2012, average daily production increased 97%
to 2,816 boe/d from 1,430 boe/d recorded in the comparative period
of 2011. -- Average daily oil and liquids production for the three
months ended June 30, 2012, increased 155% to 2,153 bbls/d from 844
bbls/d recorded in the comparative period of 2011. For the six
months ended June 30, 2012, average daily oil and liquids
production increased 132% to 2,178 bbls/d from 940 bbls/d recorded
in the comparative period of 2011. -- Average daily natural gas
production for the three months ended June 30, 2012, increased 55%
to 4,402 mcf/d from 2,841 mcf/d recorded in the comparative period
of 2011. For the six months ended June 30, 2012, average daily
natural gas production increased 30% to 3,828 mcf/d from 2,940
mcf/d recorded in the comparative period of 2011. -- Above average
precipitation during the second quarter hampered field activity for
over a month. In spite of this, corporate production during the
period increased to 2,887 boe/d, up 5% from 2,745 boe/d recorded in
the first quarter of 2012. -- During the second quarter of 2012,
Novus drilled 13 wells (13.0 net), all of which were Viking
horizontal oil wells in the greater Dodsland area. Eight wells (8.0
net) were completed by June 30, 2012. For the first half of 2012,
Novus drilled 26 wells (26.0 net), all of which were Viking
horizontal oil wells in the greater Dodsland area. Sixteen wells
(16.0 net) were completed by June 30, 2012. -- Corporate operating
costs for the three months ended June 30, 2012, decreased 39% to
$9.96/boe from $16.30/boe recorded in the comparative period of
2011. For the six months ended June 30, 2012, corporate operating
costs decreased 38% to $10.79/boe from $17.32/boe recorded in the
comparative period of 2011. -- Viking operating costs for the three
months ended June 30, 2012, decreased 53% to $7.38/boe from
$15.63/boe recorded in the comparative period of 2011. For the six
months ended June 30, 2012, Viking operating costs decreased 33% to
$7.64/boe from $11.43/boe recorded in the comparative period of
2011. A summary of operational results for the three and six month
periods ended June 30, 2012, along with the comparative periods,
are outlined in the following table: Three months ended June 30 Six
months ended June 30 Operational 2012 2011 % 2012 2011 % Change
Change Production Oil & 2,153 844 155 2,178 940 132 liquids
(bbls/d) Gas (mcf/d) 4,402 2,841 55 3,828 2,940 30 Oil 2,887 1,318
119 2,816 1,430 97 equivalent (boe/d) Sales price per unit Oil
& 81.19 94.36 (14) 85.10 88.38 (4) liquids ($/bbl) Gas ($/mcf)
2.06 4.01 (49) 2.22 3.97 (44) Oil 63.70 69.09 (8) 68.83 66.27 4
equivalent ($/boe) The full text of the June 30, 2012 condensed
interim financial statements and associated MD&A can be found
on the Company's website at www.novusenergy.ca and on SEDAR at
www.sedar.com. OPERATIONAL UPDATE Novus has completed the
installation of the main infrastructure in the Flaxcombe area by
adding 11,000 meters of emulsion lines that tie into the main
transmission line feeding our facility. Thirty-six wells
currently have gas conservation and are tied in, with new wells
tied in as they are completed. Load water recovered is being
handled by our company owned disposal facility. Produced
water coming into the main facility is injected into a second well
tied into the plant while sales gas flows to a sales line, making
it an enclosed system. Additionally, upgrades have been completed
at our main facility. It is now fully enclosed and
electrified with two treaters and treating capacity exceeding
13,000 bbls/d. The facility also has 11,000 bbls of storage.
All of these initiatives have enabled the Company to realize some
of the lowest operating costs in the area, which will continue to
decrease as we develop our sizeable inventory. Corporate operating
costs have continued to materially decrease, falling to $9.96/boe
in the most recent quarter, a decline of 39% from $16.30/boe
recorded in the second quarter of 2011. The Company's second
quarter 2012 operating costs for its Viking production were
$7.38/boe. Based upon the stable production rates, high economic
netbacks, significant recoverable reserves, and attractive drilling
and completion costs in the Dodsland area the Company has
experienced to date, Novus plans on maintaining an aggressive
drilling program on its current acreage and will continue its
efforts to further consolidate and expand its position within the
area through acquisitions. With a strong technical team and
continual evolution by industry and the Company in lowering costs
and improving production in the Viking light oil play, Novus is
once again poised to exhibit strong growth through the balance of
the year. VIKING ACREAGE EXPANSION Novus has recently assembled 46
net sections of crown lands prospective for Viking light oil in the
Provost area of Alberta. This new core area is a
complementary extension to the Company's existing Dodsland assets
and provides the Company with a significant opportunity base, on
trend to its existing Viking oil assets. The lands the
Company acquired are near existing vertical Viking oil production
and recent successful horizontal drilling activity on both sides of
the Alberta/Saskatchewan border targeting Viking oil. The
Company believes that the expertise it has acquired in developing
its Viking oil assets in Saskatchewan will be directly transferable
to its new Alberta based acreage. Novus believes the
assembled acreage meaningfully increases the Company's future
drilling and development inventory. Drilling on these lands
is planned for early 2013. The Company intends on releasing
further details concerning the location of its acreage on its
website (www.novusenergy.ca) in the latter part of August. OUTLOOK
Novus continues to implement management's business strategy of
creating per share growth in reserves, production and funds flow
through acquiring, exploiting and drilling its core Dodsland Viking
light oil play. The Company has 625 net high quality risked Viking
oil drilling locations on its 124 net sections of land in Dodsland
based on an eight well per section drilling density. This
already significant opportunity base does not reflect the ability
to down space from eight to 16 wells per section or the future
potential to water flood the reservoir. Novus believes that
the development of the Viking resource is in its early stages and
that there is further significant upside to recovery factors by
applying secondary recovery methods. The 625 Viking locations
do not include potential locations on the Company's recently
acquired Alberta Viking lands. Novus has existing credit facilities
of $65 million and will have the limit reviewed again by October 1,
2012, once its third quarter capital program has been
completed. The Company believes it is prudent to review its
borrowing base in light of the significant level of capital
activity thus far in 2012, and the increase in reserves and
associated production. Novus will continue to actively drill its
existing land base and remain focused on expanding its presence
within this large oil resource play. The Company's extensive
Viking acreage position and the predictable and economic nature of
its production will allow Novus to continue to drive production and
funds flow growth through future development of this repeatable
resource play. Novus remains optimistic about its future prospects.
The Company is opportunity driven and is confident that it can
continue to grow its production base by building on its current
large inventory of development prospects. Novus is in the
midst of a significant level of development activity and is pleased
with the progression of its drilling and completion operations to
date. The Company expects to see material increases in its
production levels in the second half of the year. NON-IFRS
FINANCIAL MEASUREMENTS Included in this press release are
references to certain financial measures commonly used in the oil
and natural gas industry, such as funds flow from operations,
operating netbacks and net debt. These measures have no
standardized meanings, are not defined by International Financial
Reporting Standards ("IFRS"), and accordingly are referred to as
non-IFRS measures. The determination of these measures may
not be comparable to the same as reported by other companies and
should not be considered an alternative to, or more meaningful
than, cash provided by operating, investing and financing
activities or net income as determined by IFRS as an indicator of
the Company's performance or liquidity. The Company considers funds
flow from operations to be a key measure as it demonstrates the
Company's ability to generate the cash necessary to repay debt and
to fund future growth through capital investment. Novus
determines funds flow from operations as cash provided by operating
activities prior to changes in non-cash working capital items and
decommissioning expenditures. Operating netbacks are used by
management to assess operating results between periods and between
peer companies as they provide an indication of results generated
by the Company's principal business activities before the
consideration of how these activities are financed or how the
results are taxed. Operating netbacks are calculated by
deducting royalties, field operations and transportation and
marketing expenses from production revenue. The Company monitors
net debt as part of its capital structure. Net debt is
calculated as current assets less all current liabilities,
including any bank debt. OTHER MEASUREMENTS Reported production
represents Novus' ownership share of sales before the deduction of
royalties. Where amounts are expressed on a barrel of oil
equivalent ("boe") basis, natural gas has been converted at a ratio
of six thousand cubic feet to one boe. This ratio is based on
an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. Boe's may be misleading, particularly if used in
isolation. References to natural gas liquids ("liquids")
include condensate, propane, butane and ethane and one barrel of
liquids is considered to be equivalent to one boe. Novus Energy
Inc. is a well positioned, junior oil and gas company with a proven
management team committed to aggressive, cost-effective growth of
high netback light oil reserves and production. Novus will continue
to grow through a targeted acquisition and consolidation strategy
coupled with development and exploration drilling. Novus' common
shares trade on the TSX Venture Exchange under the symbol NVS.
Novus currently has 190 million common shares outstanding. Neither
the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release. This news release will not constitute an offer to sell or
the solicitation of an offer to buy the securities in any
jurisdiction. Such securities have not been registered under the
United States Securities Act of 1933 and may not be offered or sold
in the United States, or to a U.S. person, absent registration, or
an applicable exemption therefrom. ADVISORY REGARDING FORWARD
LOOKING STATEMENTS Certain disclosures set forth in this press
release constitute forward-looking statements. Any statements
contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. Forward-looking
statements are often, but not always, identified by the use of
words such as "anticipate", "believes", "budget", "continue",
"could", "estimate", "forecast", "intends", "may", "plan",
"predicts", "projects", "should", "will" and other similar
expressions. All estimates and statements that describe the
Company's future, goals, or objectives, including Management's
assessment of future plans and operations, may constitute
forward-looking information under securities laws.
Forward-looking statements involve known and unknown risks and
uncertainties which include, but are not limited to: exploration,
development and production risks; assessments of acquisitions;
reserve measurements; availability of drilling equipment; access
restrictions; permits and licenses; aboriginal claims; title
defects; commodity prices; commodity markets; transportation and
marketing of crude oil, liquids and natural gas; reliance on
operators and key personnel; competition; corporate matters;
funding requirements; access to credit and capital markets; market
volatility; cost inflation; foreign exchanges rates; general
economic and industry conditions; environmental risks; and
government regulation and taxation. Forward-looking statements
relate to future events and/or performance and although considered
reasonable by Novus at the time of preparation, may prove to be
incorrect and actual results may differ materially from those
anticipated in the statements made. Novus does not undertake
any obligation to publicly update forward-looking information
except as required by applicable securities law. Readers are
cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could affect
Novus operations or financial results are included in reports on
file with applicable securities regulatory authorities and may be
accessed through the SEDAR website (www.sedar.com), and at Novus'
website (www.novusenergy.ca). The forward-looking statements and
information contained in this press release are made as of the date
hereof and Novus 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. Novus Energy Inc. CONTACT:
NOVUS ENERGY INC.Hugh G. RossPresident and CEO(403) 218-8895Ketan
PanchmatiaChief Financial Officer(403) 218-8876Julian DinVP
Business Development(403) 218-8896
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