SkyWest Energy Corp. Announces Third Quarter 2010 Results
25 Novembre 2010 - 10:52PM
Marketwired Canada
SkyWest Energy Corp. ("SkyWest" or the "Company") (TSX VENTURE:SKW) is pleased
to announce it has filed on SEDAR its unaudited consolidated financial
statements and related Management's Discussion and Analysis ("MD&A") for the
three and nine months ended September 30, 2010 and 2009.
Message to Shareholders
As an early stage emerging E&P Cardium oil focused company, we have experienced
tremendous growth since becoming publicly traded only five months ago. We have
now executed four acquisitions, are closing in on a $100 million dollar market
cap, have amassed 32 quality net sections of Cardium acreage and have drilled 6
Cardium horizontal wells which have exceeded our expectations.
-- Our first well, which was drilled in Pembina south at an I.P. of 530 and
has a 60-day average production rate of approximately 185 boepd. SkyWest
currently has a 43.75% working interest in this well and after closing
the proposed private company acquisition we will have a 77.50% working
interest in the well.
-- Our second well at Willesden Green (100% working interest) was drilled
in late August of 2010 and results were better than expected. The well
had an I.P. of 948 boepd and it is anticipated to be on stream December
1, 2010. SkyWest expects this well to produce at approximately 400 to
700 boepd for a 30-day average.
-- Our third well at Willesden Green also commenced drilling in September
of 2010 (100% working interest). The well was successfully stimulated
and had an I.P. of 985 boepd. This well is expected to be on production
in December 2010.
-- Our fourth well (25% working interest), was drilled in October in
Pembina south, was also recently successfully stimulated and had an
I.P. of 570 boepd. After closing the proposed private company
acquisition we will have a 70% working interest in this well.
-- SkyWest has completed drilling operations on 2 additional Cardium
horizontal wells, one in the Carrot Creek area and the other in the
Pembina south property, these wells will be completed in the next few
weeks. Wells seven and eight will also be underway shortly.
SkyWest has just recently announced two new acquisitions, which we are very
excited about. One was an asset purchase, which closed on November 19, 2010,
whereby SkyWest acquired 6 gross sections (2.175 net) of operated Cardium
acreage along with a 30 Mmcf/day operated gas facility in the Willesden Green
area. Willesden Green is a very active area and this fits right into SkyWest's
core area and strategic plan. The second acquisition was a private oil & gas
company. The proposed private company acquisition consists of 400 boepd of
production (50% oil and NGLs). On a combined basis, the acquisitions will add
another 7.2 net sections and 28 net locations of Cardium focused acreage in our
core areas.
As a result of the successful horizontal drilling program and the two
acquisitions, we have revised our guidance to exit 2010 with approximately 1400
to 1600 boepd. SkyWest plans to continue our aggressive drilling program into
2011.
SkyWest is very pleased with our better than expected results and we look
forward to continued success throughout 2010 and into 2011. SkyWest's focus on
the Cardium will create value and growth through organic drilling and strategic
acquisitions. I would like to thank all of our shareholders for their tremendous
support and would also like to thank our Board of Directors for their invaluable
wisdom and knowledge.
On behalf of the Board of Directors
Mr. Lawrence Urichuk, President and Chief Executive Officer
Selected financial and operational information is outlined below and should be
read in conjunction with SkyWest's unaudited consolidated financial statements
and related MD&A which are available for review at www.sedar.com.
The figures for the nine month period ended September 30, 2010 include only 3
months and 8 days of production from EMM Energy and 3 months and 13 days of
production from Stratosphere.
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For the For the For the
three months fourteen For the nine 3 1/2 month
ended days ended months ended period ended
($ CDN unless September September September December
otherwise noted) 30, 2010 30, 2009 30, 2010 31, 2009
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FINANCIAL
Gross revenue 1,285,143 - 1,434,899 -
Funds from
operations(1) (176,033) (1,118) (695,854) (35,122)
Per share (basic) (0.01) (1,118.00) (0.02) (0.01)
Per share (diluted) (0.01) (1,118.00) (0.02) (0.01)
Net income (loss) (920,693) (1,118) (4,047,609) (35,231)
Per share (basic) (0.01) (1,118.00) (0.08) (0.01)
Per share (diluted) (0.01) (1,118.00) (0.08) (0.01)
Capital
expenditures,
cash, excluding
business
combinations. 5,909,150 - 7,097,699 189,315
Total assets 40,854,404 39 40,854,404 1,272,975
Bank debt at
period end - - - -
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OPERATIONS
Production sales
Oil (bbls/d) 83 - 31 -
Natural gas (mcf/d) 1769 - 655 -
NGL (bbls/d) 13 - 5 -
Total (boe/d @ 6
mcf: 1 bbl) 391 - 145 -
Average pricing
Natural gas
($/mcf) 3.49 - 3.62 -
Oil ($/bbl) 87.43 - 85.71 -
NGL ($/bbl) 40.02 - 41.73 -
Combined ($/boe) 35.70 - 36.18 -
Expenses
Operating expenses
($/boe) 22.56 - 22.32 -
Royalty expense
($/boe) 5.89 - 6.01 -
Netback Combined
($/boe) (2) 6.97 - 8.05 -
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(1) Funds from operations is calculated as cash flow from operating
activities before the change in non-cash working capital and is a non-
GAAP measurement.
(2) Netback is a non-GAAP measurement equal to revenue less operating costs,
transportation and royalties. See "Non-GAAP Measures" note under Basis
of Presentation in the Company's MD&A
Information Regarding SkyWest
SkyWest Energy Corp. is a public oil and gas exploration and development
company, located in Calgary, Alberta with operations in Alberta. SkyWest
currently trades on the TSX Venture Exchange (TSXV) under the Symbol "SKW".
Statements herein that are not historical facts may be considered forward
looking statements including management's assessment of future plans and
operations, growth expectations within the Corporation, expected initial
production rates from certain new wells, timing of completion of wells and of
production additions, expected size of various plays, construction or expansion
of facilities and the timing thereof and expected costs and the effects thereof,
drilling plans and the effects thereof. These forward-looking statements
sometimes include words to the effect that management believes or expects a
stated condition or result. All estimates and statements that describe the
Corporation's objectives, goals or future plans are forward-looking statements.
Since forward-looking statements address future events and conditions, by their
very nature they involve inherent risks and uncertainties including, without
limitation, risks associated with oil and gas exploration, development,
exploitation, production, marketing and transportation, loss of markets,
volatility of commodity prices, currency fluctuations, imprecision of reserve
estimates, environmental risks, competition from other producers, inability to
retain drilling rigs and other services, failure to realize the anticipated
benefits of acquisitions, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from internal and
external sources. As a consequence, SkyWest's actual results may differ
materially from those expressed in, or implied by, the forward-looking
statements.
Forward-looking statements or information are based on a number of factors and
assumptions which have been used to develop such statements and information but
which may prove to be incorrect. Although SkyWest believes that the expectations
reflected in such forward-looking statements or information are reasonable,
undue reliance should not be placed on forward-looking statements because
SkyWest can give no assurance that such expectations will prove to be correct.
In addition to other factors and assumptions which may be identified in this
document, assumptions have been made regarding, among other things: the impact
of increasing competition; the ability of SkyWest to obtain equipment and
services in a timely and cost efficient manner; drilling results; the ability of
the operator of the projects which SkyWest has an interest in to operate the
field in a safe, efficient and effective manner; field production rates and
decline rates; the ability to replace and expand oil and natural gas reserves
through acquisition, development or exploration; the timing and costs of
pipeline, storage and facility construction and expansion; future oil and
natural gas prices; currency, exchange and interest rates; the regulatory
framework regarding royalties, taxes and environmental matters in the
jurisdictions in which SkyWest operates; and the ability of SkyWest to
successfully market its oil and natural gas products.
Readers are cautioned that the foregoing list of factors and assumptions is not
exhaustive. Additional information on these and other factors that could effect
SkyWest's operations and financial results are included in reports on file with
Canadian securities regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com). Furthermore, the forward-looking statements contained
in this news release are made as at the date of this news release and SkyWest
does not undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable securities
laws.
BOEs
Disclosure provided herein in respect of barrels of oil equivalent (boe) may be
misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:
1 Bbl is based on an energy equivalency conversion method primarily applicable
at the burner tip and does not represent a value equivalency at the wellhead.
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