Mr. Robert Mercier reports
BOWOOD REPORTS 2010 SECOND QUARTER RESULTS, PROVIDES OPERATIONAL AND ALBERTA BAKKEN UPDATE
Bowood Energy Inc. hasreleased its financial and operational results for the three monthsended June 30, 2010.
The Company will file its unaudited FinancialStatements and related Management Discussion and Analysis ("MD &A") for the three months ended June 30, 2010 with the Canadiansecurities regulatory authorities on SEDAR. An electronic copy of thesematerials will be available under Bowood's issuer profile on SEDAR atwww.sedar.com and on the Company's website at www.bowoodenergy.ca.
FINANCIAL AND OPERATING HIGHLIGHTS
Certainselected financial and operational information for the three monthsended June 30, 2010 is set out below and should be read in conjunctionwith the Company's Financial Statements and MD & A.
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Three Months Ended June Six Months Ended June 30,
Financial Highlights 30, 2010 2010
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(all amounts in Cdn $
except common share
data)
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Petroleum and natural
gas revenue 1,325,392 2,960,387
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Per share - basic 0.007 0.016
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- diluted 0.007 0.016
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Funds flow from
operations (65,661) 491,630
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Per share - basic (0.000) 0.003
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- diluted (0.000) 0.003
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Net income (1,616,200) (1,424,580)
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Per share - basic (0.009) (0.008)
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- diluted (0.009) (0.008)
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Capital expenditures 1,692,868 2,239,208
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Net debt (excluding
fixed commodity 2,941,939 2,941,939
contracts)
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Shareholders' equity 23,560,301 23,560,301
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Total assets 34,358,946 34,358,946
Three Months Ended June Six Months Ended June 30,
Operating Highlights 30, 2010 2010
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(6:1 boe conversion)
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Average daily
production
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Natural gas (mcf/d) 2,890 3,153
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Liquids (Oil &
NGLs) (bbls/d) 47 33
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Oil equivalent
(boe/d) 528 558
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Average sales price
(including fixed
commodity
contracts):
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Natural gas ($/mcf) 3.91 4.70
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Liquids (Oil &
NGLs) ($/bbl) 68.27 68.18
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Oil equivalent
($/boe) 27.42 30.57
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Operating cost
($/boe) (15.79) (13.31)
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Operating netback
($/boe) (including
fixed commodity 8.66 14.93
contracts)
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Wells drilled - gross
(net):
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Gas 1 (0.60) 2 (0.80)
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Oil - 1 (0.60)
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Suspended - -
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D & A - -
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Total 1 (0.60) 3 (1.4)
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1. Funds flow from operations and Operating Netbacks as presented do not
have any standardized meaning under Canadian GAAP. Please refer to the
Non-GAAP Measures section of the MD & A for more details.
Due to an early spring breakup, coupled with road bans andsevere weather in southern Alberta, Bowood's operational activities werenegatively impacted during the second quarter of 2010. Weather relateddowntime at third party processing facilities at our Chinook operationsaccounted for virtually the entire 60 boe/day drop in production fromthe first quarter. The unseasonably wet weather extended into the thirdquarter and has continued to provide operating challenges and we havedecided to defer activities until ground and weather conditions weremore favorable.
During the second quarter of 2010 Bowood drilled 1(0.6 net) well in the greater Armada area of southern Alberta. Thiswell has been cased and is prospective for hydrocarbons in two separateformations. Completion and testing operations on this well, and on asecond well at Armada which was cased in the first quarter of 2010, areongoing. We expect to have these wells on production by the end of thethird quarter. Bowood has a capital budget of approximately $2.0 millionfor the remainder of 2010 to be primarily directed towards the drillingof 3 wells in the Company's southern Alberta area. These capitalexpenditures are expected to be funded from cash flow and available banklines.
ALBERTA BAKKEN
During the second quarter of 2010,Bowood continued to strategically add to its land position in thesouthern Alberta "Bakken" play. The Company now holds approximately39,000 net acres (15,600 net hectares) or 60 sections of all P&NGrights, which we believe are on trend and highly prospective forDevonian-Mississippian (Bakken equivalent) oil potential. These landsare located in the McIntyre, Magrath and greater Lethbridge areas.
TheAlberta Basin Bakken is an emerging oil resource play which wasinitiated in Montana and is continuing into southern Alberta. To-date in2010 there has been strong interest in Alberta Crown Land sales in thearea, with industry spending over $108 million at public land offerings.In addition to the recent drilling activity in the Alberta Basin of thenorthern United States, wells have now been licensed in Alberta for theBakken formation.
During the upcoming quarters, Bowood expects toexpand its position in the area and planning is underway for test wellsto evaluate the potential of this oil resource play.
We seek Safe Harbor.