Sea Dragon Reports Third Quarter Results
CALGARY, Nov. 23, 2010 (Canada NewsWire via COMTEX News Network) -- /NOT FOR DISTRIBUTION TO U.S NEWSWIRE OR FOR DISSEMINATION IN THE UNITED STATES/ Highlights of 2010 Q3 Results November 23, 2010
00s, except share and per share information
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| || |Three months ended|| Nine months ended |
| || Prior | September 30 || September 30 |
|_____________||____________|__________________||_____________________|
| || Quarter ( | 2010 | 2009 || 2010 | 2009 |
| || (1)) | | || | |
|_____________||____________|_______|__________||__________|__________|
| ||Restated (()| |Restated (||Restated (|Restated (|
| || (2) ) | | (2)) || (2)) | (2)) |
|_____________||____________|_______|__________||__________|__________|
|FINANCIAL || | | || | |
|_____________||____________|_______|__________||__________|__________|
|Cash, || 5,201 |21,239 | 3,557 || 2,309 | 18,612 |
|beginning of || | | || | |
|period || | | || | |
|_____________||____________|_______|__________||__________|__________|
|Cash, end of || 21,239 |18,759 | 1,836 || 18,759 | 1,836 |
|period || | | || | |
|_____________||____________|_______|__________||__________|__________|
|Working || 23,442 |20,824 | 2,225 || 20,824 | 2,225 |
|capital || | | || | |
|_____________||____________|_______|__________||__________|__________|
|Funds from/ || 668 | 766 | (1,427) || 1,481 | (2,978) |
|(used in) || | | || | |
|operations || | | || | |
|_____________||____________|_______|__________||__________|__________|
||per share || | | || | |
||____________||____________|_______|__________||__________|__________|
|Net loss || 1,352 | 1,742 | 2,017 || 4,858 | 12,362 |
|_____________||____________|_______|__________||__________|__________|
||per share || 0.00 | 0.00 | 0.01 || 0.02 | 0.09 |
||____________||____________|_______|__________||__________|__________|
|Capital || 45,701 | 3,982 | 609 || 51,088 | 9,794 |
|expenditures || | | || | |
|_____________||____________|_______|__________||__________|__________|
|Total assets || 83,011 |83,210 | 8,023 || 83,210 | 8,023 |
|_____________||____________|_______|__________||__________|__________|
|Shareholders'|| 83,049 |79,108 | 7,644 || 79,108 | 7,644 |
|equity || | | || | |
|_____________||____________|_______|__________||__________|__________|
|Common shares|| 375,704 |375,959| 144,509 || 375,959 | 144,509 |
|outstanding || | | || | |
|(000's) || | | || | |
|_____________||____________|_______|__________||__________|__________|
|Warrants || 30,255 |30,000 | 9,088 || 30,000 | 9,088 |
|outstanding || | | || | |
|(000's) || | | || | |
|_____________||____________|_______|__________||__________|__________|
|OPERATIONAL || | | || | |
|_____________||____________|_______|__________||__________|__________|
|Oil || 1,032 | 1,190 | - || 1,003 | - |
|production || | | || | |
|(bopd) || | | || | |
|_____________||____________|_______|__________||__________|__________|
|Brent oil || 79.41 | 76.92 | - || 77.89 | - |
|price ($/bbl)|| | | || | |
|_____________||____________|_______|__________||__________|__________|
|Realized oil || 75.83 | 72.01 | - || 72.57 | - |
|price ($/bbl)|| | | || | |
|_____________||____________|_______|__________||__________|__________|
|Royalties || 40.85 | 38.47 | - || 40.87 | - |
|($/bbl) || | | || | |
|_____________||____________|_______|__________||__________|__________|
|Operating || 10.37 | 7.56 | - || 7.88 | - |
|costs ($/bbl)|| | | || | |
|_____________||____________|_______|__________||__________|__________|
|Netback || 24.62 | 25.98 | - || 23.82 | - |
|($/bbl) || | | || | |
|_____________||____________|_______|__________||__________|__________|
((1)) ( ) (Denotes the three months ended June 30, 2010)
((2)()) (Effective July 1, 2010, the Company changed its reporting
and functional currency from Canadian dollars (CDN$) to
United States dollars (US$), as significant portions of the
Company's revenues, expenses and cash flows are denominated
in US$. The change in reporting currency is to better reflect
the Company's business activities and to improve investors'
ability to compare the Company's financial results with other
publicly traded businesses in the international oil and gas
industry.)
Message to Shareholders The Company had a very active Third Quarter (the "Quarter") with production increasing 15 percent from the prior Quarter. During the Quarter the Company drilled three wells (1.5 net) in Kom Ombo and one well (0.1 net) in NW Gemsa with an additional well in Kom Ombo reaching total depth subsequent to Quarter end. In Kom Ombo, the Company is planning on having an active fourth quarter with a remaining work program including the drilling and completion of up to two development wells and one exploration well, and the recompletion and fracturing of up to three wells. In NW Gemsa, water flooding operations are planned for the Al Amir SE field to provide pressure support for significant production and reserve increases in 2011 and 2012. Third Quarter highlights: -- Exited the Quarter 2010 with $20.8 million in working capital,
including cash of $18.8 million;
-- Increased average oil production to 1,190 bopd from 1,032 bopd
from the Prior Quarter;
-- Placed Al Amir SE #6 on production at gross production of 1,100
bopd (110 bopd net) in NW Gemsa;
-- Successfully drilled Al Ola X - 1 well to a total depth of
14,323 feet;
-- Successfully drilled Al Baraka #5, Al Baraka #7, Al Baraka #9,
with #5 and #7 placed on production and #9 awaiting completion;
-- Completed a 475 km 2D seismic program in Kom Ombo to further
delineate previously identified leads and prospects with the
view of drilling an exploratory well outside of Al Baraka
development lease before year-end;
-- Secured a second rig for workover and completions, in order to
accelerate operations in Kom Ombo which is now onsite.
Subsequent to Third Quarter highlights: -- Successfully drilled Al Baraka South East and Al Baraka #12 wells. Financial review The Company incurred a net loss during the Quarter of $1.7 million and generated funds from operations of
.8 million. The Company exited the Quarter with no debt and working capital of $20.8 million including $18.8 million of cash. The Company will have sufficient funds to execute the remaining 2010 capital program from funds from operations and cash on hand. Operations review Kom Ombo Concession (Co-operated, 50% working interest) Production Production for the Quarter averaged approximately 600 bopd gross (300 bopd net) of light sweet oil with an average API of 37°. Drilling and completions Al Baraka #12 Well The well was spud on November 4th and drilled to its total depth of 4,910 feet in the Six Hills Formation. Open hole logs were run and analyzed. The primary objective being the Six Hills "E" Formation was successfully encountered with 20 feet of oil pay. Casing was run and the drilling rig was released on November 14th. The well will be completed shortly using the work over rig. Al Baraka SE Well This step out well was spud on September 15(th) and drilled to its total depth of 8,750 feet in the Kom Ombo Formation. Petrophysical analysis of the open hole logs indicates 46 feet of potential oil pay in the Kom Ombo "A" and "C" Formations. The Kom Ombo "A" Formation was perforated in the intervals 8,499-8,511 feet and 8,448-8,456 feet and the well will be placed on production shortly. The testing of oil in the Kom Ombo sands is very encouraging as it could potentially result in additional development drilling and production from this southeastern extension of the Al Baraka Field. Al Baraka #9 Well The Abu Ballas and Sabaya Formations show 50 feet of potential oil pay. The well will now be recompleted in these formations as the Six Hills "E" sands showed non-commercial quantities of oil. Al Baraka #6 Well Recompletion operations were carried out in this well in the Six Hills "E" sands and the well was returned to production. Seismic During the Quarter, the Company completed a 400 km 2D Seismic program in the Kom Ombo Concession to delineate and firm up eight prospects. Processing has commenced with the view of potentially spudding an exploratory well before year-end. The Company completed an additional 75 km seismic program in the unexplored NW Basin of the Kom Ombo concession. NW Gemsa (Non-operated, 10% working interest) Production Production for the Quarter averaged 8,900 bopd (890 bopd net) of light sweet oil with an average API of 41 degrees. Al Amir SE #6 The Al Amir SE #6 well was completed in the Kareem Shagar Formation in the interval 9,805 ft to 9,835 ft. A flow test followed with a peak production of 4,630 bopd (460 bopd net) and 3.9 mmscf/d (0.4 mmscf/d net) recorded on a 48/64" choke. The well was shut in for a pressure build up and later placed on production at approximately 1,100 bopd (110 bopd net). Al Ola X-1 exploratory well The Al Ola X-1 well was drilled to its total depth of 14,323 feet in the Nukhul Formation. Open hole logs were run and the well was cased to total depth. The shallower Kareem oil producing formation encountered 25 ft of oil pay. The Rahmi member of the Kareem Formation was perforated in the interval 9,780-9,800 feet and placed on test. Preliminary results show a rate of 1,600 bopd on a 32/64" choke. The Lower Rudeis Formation, where strong gas shows were experienced, could not be adequately tested due to mechanical difficulties. |