44% of the 2009 net capital expenditures of $4.1 million,
Canext Energy Ltd.
th 660, 639 – 5 Avenue SW Calgary, Alberta T2P 0M9 Phone (403) 263-3232 Fax (403) 234-8773
April 7, 2010 – Canext announces year end results.
Calgary, Alberta - Canext Energy Ltd. (“Canext” or the “Company”) (TSXV – CXZ) is pleased to announce its operating and financial results for the year ended December 31, 2009.
Highlights:
- Production for the full year averaged 985 boe/d,
- Oil and NGL production as a percentage of total production increased to 23% and 34% for the year and three months ended December 31, 2009, respectively,
- Constructed Sweeney battery and solution gas gathering system for $1.8 million, comprising 44% of the 2009 net capital expenditures of $4.1 million,
- Successfully drilled and completed the first open hole horizontal well at Sweeney,
- Finding and Development costs including revisions and changes to future development capital was $12.85/boe Proved and $9.16/boe Proved plus Probable (P + P),
- Finding, Development and Acquisition costs including revisions and changes to future development capital was $6.70/boe Proved and $3.78/boe P + P,
- Operating netback averaged $12.99/boe for the year and $22.13/boe for the three months ending December 31, 2009,
- Recycle ratio (Operating netback/FD&A) was 3.4:1 for P+P reserve additions.
In 2009, Canext greatly reduced its capital expenditures while focusing its efforts on developing the Sweeney oil property. As a result, oil and NGL production increased throughout the year while natural gas production decreased due to property dispositions and minimal capital investments on natural gas properties. The strategic change in direction combined with strengthening oil prices helped improve the financial strength of the Company from prior financial quarters ended in 2009. Approximately 50% of funds from operations for the year ended December 31, 2009 were generated in the fourth quarter of 2009 despite having lower production during this period.
The Company’s year end reserve information was press released on February 26, 2010. As mandated by National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities issued by the Canadian Securities Administrators, detailed information relating to Canext’s reserves and other disclosure documents have now been electronically filed on SEDAR (www.sedar.com).
The following table summarizes some of the key financial results. Audited consolidated financial statements for the year ended December 31, 2009 with accompanying notes along with management’s discussion and analysis have also been filed on SEDAR ( www.sedar.com ).
Year Ended December 31 2009-2008 2009 2008 % change
Average daily production
| Oil and NGL's (bbls/d) | 229 | 170 | 35% |
| Natural gas (mcf/d) | 4,539 | 5,375 | -16% |
| Production (boe/d) | 985 | 1,066 | -8% |
Highlights ($000's)
| Revenue | 11,516 | 21,347 | -46% |
| Funds from operations | 2,732 | 9,656 | -72% |
| Net income/(loss) | (5,218) | (1,376) | 279% |
| Net capital spending | 4,157 | 17,089 | -76% |
Per Common Share
Funds from operations 0.03 0.12 -73% Net income/(loss) (0.06) (0.02) 279%
Balance Sheet at period end (000's)
| Property, plant and equipment | 62,821 | 66,998 | -6% |
| Working Capital Surplus/(Deficit) | (9,545) | (8,120) | 18% |
| Shareholders’ equity | 51,640 | 57,259 | -10% |
| Wt average shares 000's | 87,981 | 82,554 | |
| Shares outstanding at period end | 87,981 | 87,981 | |
| Revenue $/boe | 32.03 | 54.73 | -41% |
| Royalty $/boe | (6.83) | (11.62) | -41% |
| Opcost $/boe | (11.75) | (12.77) | -8% |
| Transportation $/boe | (0.46) | (0.43) | 7% |
| Operating Netback $/boe | 12.99 | 29.91 | -57% |
Operational Update:
Canext drilled three (2.2 net) wells in the first quarter of 2010, resulting in one (0.6 net) horizontal producing oil well, one (1.0 net) capped potential gas well, and one (0.6 net) dry hole. The Corporation also completed, equipped and tied in a 60% working interest horizontal oil well at Sweeney which was drilled late in 2009.
Based on field estimates, Canext expects first quarter 2010 production to average 1,050 boe/d, a 21% increase from the fourth quarter of 2009. Oil and NGL production as a percentage of total production has increased to approximately 45% in the first quarter of 2010, up from 34% in the three months ended December 31, 2009.
Outlook
The Corporation has scheduled a special meeting of shareholders of Canext on April 12, 2010 to vote on a proposed plan of arrangement with TriOil Resources Ltd (formerly known as One Exploration Inc.). The information circular and proxy materials were mailed to shareholders on March 18, 2010.
Reader advisory:
The term “BOE” may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio for natural gas of 6 mscf: 1 bbl has been used which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Investors are cautioned that the preceding statement of the Company may include certain estimates, assumptions and other forward-looking information. The actual future performance, developments and/or results of the Company may differ materially from any or all of the forward-looking statements, which include current expectations, estimates and projections, in all or part attributable to general economic conditions and other risks, uncertainties and circumstances partly or totally outside the control of the Company, including natural gas/oil prices, reserve estimates, drilling risks, future production of gas and oil, rates of inflation, changes in future costs and expenses related to the activities involving the exploration, development and production of gas and oil hedging, financing availability and other risks related to financial activities.
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.
For further information contact: Canext Energy Ltd.
Stephen Kapusta President & CEO (403) 263-3232 [email protected]