Online Energy Inc. Announces Third Quarter 2011 Financial Results and Provides Operations Update
30 November 2011 - 12:00AM
Marketwired Canada
Online Energy Inc. ("Online" or the "Company") (TSX VENTURE:ONL) announces the
filing of its unaudited interim financial statements and related MD&A for the
three and nine months ended September 30, 2011 (collectively, the "Financial
Statements"). Selected financial and operational information is outlined below
and should be read in conjunction with the Financial Statements. The Financial
Statements are available on the SEDAR website at www.sedar.com and on the
Company's website at www.onln.ca.
Highlights
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Three months ended Nine months ended
In Canadian Dollars, September 30 September 30
except shares 2011 2010 2011 2010
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Petroleum and natural gas
sales 1,367,924 - 3,278,084 -
Net loss (433,538) (19,103) (1,836,642) (19,545)
Per share - basic and
diluted (0.01) (0.02) (0.05) (0.07)
Capital expenditures
Property, plant and
equipment 1,356,349 - 8,501,362 -
Exploration and evaluation 1,678,840 403,565 3,525,141 513,955
Shares outstanding 41,309,890 1,747,691 41,309,890 1,747,691
Working capital 5,395,113 1,868 5,395,113 1,868
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Highlights of the third quarter included:
-- Third quarter production averaged 380 boe/d (39% oil and NGLs);
-- Successfully re-entered and re-completed 2 existing wellbores. Both
wells were placed on production subsequent to the third quarter and will
contribute to the Company's Q4 production;
-- The Online horizontal Paddle River 100/08-31-055-07 W5M well targeting
the Ostracod formation was drilled during the month of September and rig
released on October 3, 2011 (100% working interest);
-- Increased the Company's working interests in certain operated producing
natural gas assets in the Leaman and Niton areas of west-central Alberta
for $525,000 plus a 5% gross overriding royalty on the properties
acquired in the Niton area;
-- Made significant progress assembling a solid platform for future growth
focused in the greater Paddle River area of west-central Alberta. The
Company controls approximately 61,674 net acres (96 sections) of
undeveloped land in this area and continues to accumulate assets through
Crown land sales and third-party acquisitions; and
-- Exited the third quarter of 2011 with $5.4 million of working capital
and no debt.
Operations Update and Outlook
-- The Online horizontal Paddle River 100/08-31-055-07 W5M well was
recently completed. A nitrogen energized foamed water system was used to
fracture stimulate the well in 12 stages using a variety of tonnages and
concentrations of sand per stage. Initial flowback included 30 degree
API oil at rates in excess of 220 bopd. Extended testing was hampered by
an influx of water and wellbore blockages. In order to address these
issues, the ball seats within the horizontal section of the wellbore
were milled-out and an evaluation with a packer assembly was undertaken.
The Company is confident that it has identified and isolated the source
of the water. Despite delays due to availability of equipment, further
evaluation of the well continues and the Company will report additional
results as they become available.
-- The 8-31 well is the first horizontal Ostracod oil well drilled and
fracture stimulated in the Paddle River area. The Company remains
confident that once the well is fully evaluated, the knowledge gained
will further the advancement of the project.
-- The Company has 34.5 net sections of prospective lands on the Ostracod
oil trend in the Paddle River area.
-- Fourth quarter 2011 average production is estimated to be approximately
425 boe/d without considering any potential contribution from the 8-31
well.
An updated corporate presentation will soon be available on the Company's
website at www.onln.ca.
Cautionary Statements:
This press release contains certain forward-looking statements (forecasts) under
applicable securities laws relating to future events or future performance.
Forward-looking statements are necessarily based upon assumptions and judgements
with respect to the future including, but not limited to, the outlook for
commodity markets and capital markets, the performance of producing wells and
reservoirs, well development and operating performance, general economic and
business conditions, weather, the regulatory and legal environment and other
risks associated with oil and gas operations. In some cases, forward-looking
statements can be identified by terminology such as "may", "will", "should",
"expect", "projects", "plans", "anticipates" and similar expressions. These
statements represent management's expectations or beliefs concerning, among
other things, future operating results and various components thereof affecting
the economic performance of Online. Undue reliance should not be placed on these
forward-looking statements which are based upon management's assumptions and are
subject to known and unknown risks and uncertainties, including the business
risks discussed above, which may cause actual performance and financial results
in future periods to differ materially from any projections of future
performance or results expressed or implied by such forward-looking statements.
Accordingly, readers are cautioned that events or circumstances could cause
results to differ materially from those predicted.
In the interest of providing Online shareholders and potential investors with
information regarding the Company, including management's assessment of Online's
future plans and operation, certain statements throughout this press release
constitute forward looking statements. All forward-looking statements are based
on the Company's beliefs and assumptions based on information available at the
time the assumption was made. The use of any of the words "anticipate",
"continue", "estimate", "expect", "may", "will", "project", "should", "believe"
and similar expressions are intended to identify forward looking statements. By
its nature, such forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause actual results or events to
differ materially from those anticipated in such forward looking statements.
Online believes the expectations reflected in those forward looking statements
are reasonable but no assurance can be given that these expectations will prove
to be correct and such forward looking statements contained throughout this
press release should not be unduly relied upon. These statements speak only as
of the date specified in the statements.
In particular, this press release may contain forward looking statements
pertaining to the following:
-- the performance characteristics of the Company's oil and natural gas
properties;
-- oil and natural gas production levels;
-- capital expenditure programs;
-- the quantity of the Company's oil and natural gas reserves and
anticipated future cash flows from such reserves;
-- projections of commodity prices and costs;
-- supply and demand for oil and natural gas;
-- expectations regarding the ability to raise capital and to continually
add to reserves through acquisitions and development; and
-- treatment under governmental regulatory regimes.
The material assumptions in making these forward-looking statements include
certain assumptions disclosed in the Company's most recent management's
discussion and analysis included in the material available on this press
release.
The Company's actual results could differ materially from those anticipated in
the forward looking statements contained throughout this press release as a
result of the material risk factors set forth below, and elsewhere in this press
release:
-- volatility in market prices for oil and natural gas;
-- liabilities inherent in oil and natural gas operations;
-- uncertainties associated with estimating oil and natural gas reserves;
-- competition for, among other things, capital, acquisitions of reserves,
undeveloped lands and skilled personnel;
-- incorrect assessments of the value of acquisitions and exploration and
development programs;
-- geological, technical, drilling and processing problems;
-- fluctuations in foreign exchange or interest rates and stock market
volatility;
-- failure to realize the anticipated benefits of acquisitions;
-- general business and market conditions; and
-- changes in income tax laws or changes in tax laws and incentive programs
relating to the oil and gas industry.
These factors should not be construed as exhaustive. Unless required by law,
Online does not undertake any obligation to publicly update or revise any
forward looking statements, whether as a result of new information, future
events or otherwise.
Barrels of oil equivalent (boe) may be misleading, particularly if used in
isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural
gas to one barrel (bbl) of oil is based on an energy conversion method primarily
applicable at the burner tip and is not intended to represent a value
equivalency at the wellhead. All boe conversions in this press release are
derived by converting natural gas to oil in the ratio of six thousand cubic feet
of natural gas to one barrel of oil. Certain financial amounts are presented on
a per boe basis, such measurements may not be consistent with those used by
other companies.
Estimated values contained in this press release do not represent fair market value.
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