/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION
IN THE U.S./ CALGARY, April 12, 2012 /CNW/ - Novus Energy Inc.
("Novus" or the "Company") is pleased to announce that it has filed
its audited financial statements and management's discussion and
analysis ("MD&A") as at and for the fiscal year ended December
31, 2011. These may be accessed through the SEDAR website
www.sedar.com and at the Company's website
www.novusenergy.ca. Novus had a very active and highly successful
year in 2011. The large reserve additions the Company
obtained were almost exclusively generated in its key Viking light
oil resource play in Dodsland, Saskatchewan. Virtually all of
the proved and probable reserve growth the Company achieved came
from organic drilling. The attractive finding, development
and acquisition costs and healthy recycle ratio validate the growth
strategy of assembling a predictable, low risk, multi-year drilling
inventory within a concentrated core area. In 2012 the Company will
continue to demonstrate our ability to generate per share growth in
production, funds flow, reserves and net asset value. Financial
Highlights -- Production revenue increased 163% to $53.1 million
from $20.2 million in 2010. -- Fourth quarter production revenue
increased 166% to $21.2 million from $8.0 million in 2010. -- Funds
flow from operations increased 607% to $26.1 million from $3.7
million a year ago. -- Fourth quarter funds flow from operations
increased 392% to $12.0 million from $2.4 million a year ago. --
Funds flow per share increased 650% to $0.15 from $0.02 per share
in 2010. Funds flow per share for the fourth quarter of 2011 was
$0.07, up 600% from $0.01 recorded in the comparative quarter of
2010. -- Novus achieved operating netbacks of $47.17/boe up 101%
from $23.52/boe recorded in 2010. Operating netbacks in the fourth
quarter of 2011 were a record $55.34/boe. -- The Company's Viking
production achieved impressive operating netbacks of $68.16/boe for
the fourth quarter of 2011. For the twelve month period of 2011,
operating netbacks in the Viking were $63.02/boe. -- The Company
ended 2011 with net debt of $48.3 million against $60.0 million of
credit facilities. Current debt is approximately $40 million.
Operational Highlights -- Production increased 77% to 1,971 boe/d,
weighted 76% towards oil and liquids, from 1,115 boe/d in 2010. --
Fourth quarter production increased 81% to 2,845 boe/d, weighted
83% towards oil and liquids, in 2011 from 1,571 boe/d in the
corresponding quarter of 2010. -- Production per share increased
61% in 2011 compared to the period ending December 31, 2010.
Production per share increased 78% in the fourth quarter of 2011,
compared with the corresponding quarter 2010. -- The Company
drilled 59 wells (57.9 net) in 2011, with 52 wells (51.8 net)
achieving a 100% success rate targeting the Viking play in
Dodsland, Saskatchewan. -- Proved plus probable reserves at
December 31, 2011 increased by 58% to 14.56 million boe, up from
9.24 million boe on December 31, 2010. -- The net present value of
proved plus probable reserves, before income tax and discounted at
10%, increased 102% to $331.3 million up from $164.2 million at
December 31, 2010, representing an increase of $167.1 million --
The Company's fully diluted net asset value per share increased
dramatically to $1.64. -- Novus' operating costs have continued to
materially decrease from $18.20/boe in the first quarter of 2011 to
$12.88/boe in the fourth quarter of 2011. -- The Company's fourth
quarter 2011 operating costs for its Viking production was
$9.02/boe. -- Novus' land holdings in Western Canada increased 16%
to 129,953 net undeveloped acres (203 sections) at the end of 2011,
from 111,656 acres (174 sections) at the end of 2011. -- Results
from the Company's Flaxcombe lands in the Viking play are
continuing to exceed expectations. Novus has identified two
distinct Viking cycles which have been mapped over 10 contiguous
sections. This 10 section sub area has the potential for drilling
up to 320 wells. -- Novus completed construction of a major
pipeline and battery facilities in its Flaxcombe/Whiteside area. A
summary of financial and operational results for the three months
and years ended December 31, 2011 and 2010 are outlined in the
following table. Three months ended Year ended Dec 31,2011 Dec 31,
Dec 31, Dec 31, 2010 2011 2010 Financial (000s, except per share
amounts) Production $21,187 $7,979 $53,137 $20,209 revenue Funds
flow 12,025 2,442 26,104 3,693 from operations per share 0.07 0.01
0.15 0.02 - basic and diluted Net income (2,176) 3,908 (808)
(7,234) (loss) per share (0.01) 0.02 - (0.05) - basic and diluted
Capital 11,684 18,607 73,110 55,139 expenditures, net Working
(48,257) (1,840) capital (deficit) Weighted 168,974 166,395 169,238
153,847 average shares - basic Weighted 168,974 170,612 169,238
153,847 average shares - diluted Three months ended Year ended
Operational Dec 31, Dec 31, Dec 31,2011 Dec 31, 2010 2011 2010
Production Oil & 2,350 989 1,495 597 liquids (bbls/d) Natural
gas 2,969 3,490 2,854 3,107 (mcf/d) Oil 2,845 1,571 1,971 1,115
equivalent (boe/d) Sales price per unit Oil & 93.65 74.53 90.16
71.59 liquids ($/bbl) Natural gas 3.46 3.73 3.79 4.06 ($/mcf) Oil
80.97 55.21 73.89 49.66 equivalent ($/boe) Reserves (Proved plus
probable) Oil & 11,913 7,730 liquids (mbbls) Natural gas 15,863
9,048 (mmcf) Oil 14,557 9,238 equivalent (mboe) The full text of
the December 31, 2011 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. Key Viking Resource Play Novus has entered
2012 with an extensive light oil development drilling inventory of
more than 600 net locations which represent over eight years of
development potential. This already significant opportunity
base does not reflect the ability to down space from 8 wells 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. Novus shall continue to actively drill its
existing land base, and shall remain focused on expanding its
dominant presence within this large oil resource play. While the
Company is pleased with the results it has achieved throughout the
greater Dodsland area, the Flaxcombe region has emerged as an area
which has exhibited consistent and reliable outperformance.
In addition to delivering higher initial production rates, the
region is exhibiting lower than typical decline rates. In the
Flaxcombe region, Novus has identified two distinct Viking cycles
which have been mapped over at least 10 contiguous sections. These
10 sections have the potential to add 80 future drilling locations
for the Company through the development of both cycles at 8 well
per section spacing. Based on the Company's success in the
area and industry downspacing trends, Novus believes that it may be
able to develop each cycle independently at 16 well per section
spacing, which would provide the potential for drilling up to 320
wells in the Flaxcombe area. Novus has been focused on continually
lowering its drilling and completion costs, employing new
completion techniques to improve the economic performance of its
wells, and building the necessary area infrastructure to support
stable, low operating cost production. Novus has finished
running an emulsion line from its core facility at Whiteside to the
Flaxcombe field and a total of 29 wells in the southern portion of
the area have been tied-in and have their gas production
conserved. This line will be used to tie-in all new wells
drilled in the Flaxcombe area throughout 2012 and will serve to
reduce both downtime and future operating costs. Novus' operating
costs have continued to materially decrease from $18.20/boe in the
first quarter of 2011 to $12.88/boe in the fourth quarter of
2011. The Company's fourth quarter 2011 operating costs for
its Viking production were $9.02/boe, with further reductions
anticipated in 2012 once all facility upgrades are completed. Based
upon the stable production rates, highly economic netbacks,
significant recoverable reserves, and lower 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 in the coming year. Outlook
Novus' strategic direction remains unchanged. The Company is
competitively positioned in the repeatable, low risk, highly
economic Viking oil resource play in West Central Saskatchewan with
121.25 net sections of land and 615 net risked drilling locations
based on 8 well per section spacing and the development of only one
cycle on its Flaxcombe lands. The core of the Company's
development program in 2012 and beyond will focus on further
exploitation of its sizeable opportunity base. With highly
economic operating netbacks from its Viking oil assets, the Company
is generating strong funds flow which will provide it with the
ability to internally fund an aggressive drilling program in 2012.
The 2012 capital budget of $81 million will have 88% of the funds
allocated to drilling and completions and is expected to result in
2012 average production of 3,300 boe/d (84% oil and liquids) which
represents growth of 67% over the 2011 average production
rate. The forecasted 2012 exit production rate is 4,500
boe/d, 85% of which will be oil and liquids. Novus' 2012
capital budget will be entirely funded through internally generated
funds flow, proceeds from the exercise of warrants which expired on
March 31, 2012 and its line of credit. 2012 year end net debt
is estimated to be approximately $59 million, and would result in
Novus having a debt to annualized fourth quarter 2012 funds flow
ratio of approximately 0.8 times. The Company expects to see
positive funds flow from operations of $52 million for 2012.
Funds flow per share in 2012 is forecast to be $0.27 which
represents an 80% increase over 2011. This forecast is based
on an oil price of US $95.00 WTI per barrel, an AECO natural gas
price of CDN $2.50 per mmbtu, and an exchange rate of $1.00 CDN/US.
The Company began its 2012 drilling program on February 1, and has
drilled 13 wells to date. Eight of these wells were completed
and brought on production by mid March with the balance to be
completed subsequent to the end of spring breakup. The
Company will be running two drilling rigs during the second quarter
of 2012 subsequent to the end of spring breakup, and is on track to
drill 73 Viking oil wells during the course of the year. With the
recent exercise and expiry of the Company's warrants on March 31,
2012 Novus now has 191.2 million basic shares outstanding and 211.6
million fully diluted shares. 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
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. Novus determines funds flow from operations as cash
provided by operating activities prior to changes in non-cash
working capital items and decommissioning expenditures. 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. Operating netbacks are calculated by deducting
royalties, field operations and transportation and marketing
expenses from production revenue. 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. Net debt is calculated as current assets less
all current liabilities, including any bank debt. The Company
monitors net debt as part of its capital structure. 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 exploratory and
development drilling. Novus' strong financial position will allow
for the exploitation of its drilling inventory and expansion of the
Company's opportunity suite through internally generated prospects
and strategic light oil acquisitions. Novus Shares trade on the TSX
Venture Exchange under the symbol NVS. Novus currently has 191.2
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 The
information provided above includes references to discovered and
undiscovered oil and natural gas resources. There is no certainty
that any portion of the resources will be discovered. If
discovered, there is no certainty that it will be commercially
viable to produce any portion of the resource. This press release
contains forward-looking statements and forward-looking information
within the meaning of applicable securities laws. The use of any of
the words "expect", "anticipate", "continue", "estimate",
"objective", "ongoing", "may", "will", "project", "should",
"believe", "plans", "intends" and similar expressions are intended
to identify forward-looking information or statements. More
particularly and without limitation, this press release contains
forward looking statements and information concerning the company's
petroleum and natural gas production; reserves; undeveloped land
holdings; business strategy; future development and growth
opportunities; prospects; asset base; future cash flows; value and
debt levels; capital programs; treatment under tax laws; and oil
and natural gas prices. The forward-looking statements and
information are based on certain key expectations and assumptions
made by Novus, including expectations and assumptions concerning
prevailing commodity prices and exchange rates, applicable royalty
rates and tax laws; future well production rates and reserve
volumes; the performance of existing wells; the success obtained in
drilling new wells; the sufficiency of budgeted capital
expenditures in carrying out planned activities; and the
availability and cost of labour and services. Although Novus
believes that the expectations and assumptions on which such
forward-looking statements and information are based are
reasonable, undue reliance should not be placed on the forward
looking statements and information because Novus can give no
assurance that they will prove to be correct. Since forward-looking
statements and information address future events and conditions, by
their very nature they involve inherent risks and uncertainties.
Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include,
but are not limited to, the risks associated with the oil and gas
industry in general such as operational risks in development,
exploration and production; delays or changes in plans with respect
to exploration or development projects or capital expenditures; the
uncertainty of reserve estimates; the uncertainty of estimates and
projections relating to reserves, production, costs and expenses;
health, safety and environmental risks; commodity price and
exchange rate fluctuations; marketing and transportation; loss of
markets; environmental risks; competition; incorrect assessment of
the value of acquisitions; failure to realize the anticipated
benefits of acquisitions; ability to access sufficient capital from
internal and external sources; failure to obtain required
regulatory and other approvals; and changes in legislation,
including but not limited to tax laws, royalties and environmental
regulations. 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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