Pearl Exploration and Production Ltd.



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  Mar 1, 2007 - 12:01 ET
Pearl Announces First Quarter 2007 Results

  CALGARY, ALBERTA--(CCNMatthews - March 1, 2007) - Pearl Exploration and Production Ltd. ("Pearl" or the "Company") (TSX VENTURE:PXX) is pleased to announce the results of the first quarter period ended December 31, 2006.

Financial Highlights and Operational Highlights:



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($000s, except December 31, September 30, December 31,
per share data) 2006 2006 2005
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Revenue 5,318 1,924 28
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Net income (loss) (5,263) (1,990) (735)
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Net income (loss) per share basic (0.08) (0.04) (0.03)
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Total assets 640,195 129,067 24,307
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Three months ended December 31, 2006
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Oil - net production, bopd 1,238
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Gas - net production, mcf/day 2,620
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Total net production, boe/d(i) 1,674
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Oil - average selling price per bbl $34.28
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Gas - average selling price per mcf $6.62
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(i)gas production converted at 6:1

 


Production for January 2007 was approximately 7,250 boe/d.

The net loss for the three months ended December 31, 2006 is mainly the result of depletion and additional expenses relating to its oil and gas operations including production costs and higher general and administrative costs in connection with corporate acquisitions.

During the three months ended December 31, 2006, the Company's major accomplishments were as follows:

- October 2006 - the Company announced it had settled the land dispute surrounding the Onion Lake lands that were acquired from Pan-Global Energy Ltd. ("Pan-Global") in April 2006;

- October 2006 - the Company announced that it had entered into an agreement to acquire all of the issued and outstanding shares of Atlas Energy Inc. ("Atlas"), a junior oil and gas company with production of approximately 5,800 BOE/d, and oil and gas interests in Alberta and Saskatchewan;

- October 2006 - the Company announced a $100 million equity financing through an agreement with GMP Securities L.P. The Company subsequently increased the financing to $111 million. The equity financing was comprised of eight million common shares at a price of $4.50/share for gross proceeds of $36 million on a best efforts basis and 14,444,444 subscription receipts for common shares at a price of $4.50/share; and 1,709,401 subscription receipts for flow through shares at a price of $5.85/share. The best efforts financing closed in November 2006; and

- December 2006 - the Company closed the Atlas acquisition and closed the subscription receipts equity financing of $75 million.

- Subsequent to the quarter end, the Company had additional major accomplishments as follows:

- January 2007 - the Company amalgamated Nevarro and Pan-Global with Atlas and renamed the combined subsidiary Pearl E&P Canada Ltd. All the Company's Canadian oil and natural gas properties are now held within one wholly owned subsidiary;

- January 2007 - the Company announced it had entered into a letter of intent with Bayou Bend Petroleum Ltd. ("Bayou"; formerly Kit Resources Ltd.) to transfer its Gulf of Mexico assets and all material contracts related to these assets in exchange for ten million shares of Bayou having a deemed value of $1.20 per share. The Gulf of Mexico assets include the Mustang Island offshore lease plus four Gulf of Mexico offshore leases and the rights to farm into an additional offshore license. The transaction is expected to close in March 2007. On February 26, 2007, the closing price of the Bayou shares on the TSX-Venture Exchange was $1.90;

- January 2007 - the Company announced it had signed a letter of intent to acquire Cipher Exploration Inc. ("Cipher"), a privately-held oil and gas company with heavy oil assets in western Canada for a deemed total gross value of $20 million. The gross purchase price of $20 million will be paid in Pearl common shares and will be reduced by an amount equal to the aggregate of all long- and short-term debt of Cipher outstanding at the closing of the transaction. Cipher's current production averages 350 barrels per day; and

- February 2007 - the Company announced it had closed a credit agreement with Alberta Treasury Branches for a $65 million revolving 364 day extendible term facility and a $10 million demand revolving operating facility.

This is an exciting time for Pearl, and the growth potential of the portfolio the Company has assembled is now beginning to be translated into tangible increases in production, cash flow and reserves. The Company has a portfolio of drilling locations to which much of the recent $111 million financing will be directed towards. Over 200 wells are expected to be drilled in the coming year. These wells will increase our production, improve operating margins, and enable the large assembled resource base to be converted into proven, probable and possible reserves. While our focus in 2007 is on development drilling, additional opportunities to add value continue to be evaluated.

The unaudited financial statements, notes and MD&A are filed on SEDAR (www.sedar.com) and are available on Pearl's website (www.pearleandp.com).

Pearl is a public company focused on delivering disciplined growth by establishing a North American portfolio of oil and gas projects with an emphasis on large resource opportunities. Additional information on Pearl is available on our website at www.pearleandp.com.

All references in this release to boe's are based on a 6 to 1 conversion ratio. Boe's may be misleading, particularly if used in isolation. A boe conversion of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Forward-looking statements: This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans. Actual results may differ materially from those projected by management. For such statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995.


The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

FOR FURTHER INFORMATION PLEASE CONTACT:


Pearl Exploration and Production Ltd.
Keith Hill
President and Chief Executive Officer
(604) 689-7842
(604) 689-4250 (FAX)
Email: khill@namdo.com

or

Pearl Exploration and Production Ltd.
Arlene Weatherdon
Chief Financial Officer
(403) 716-4051
(403) 265-8324 (FAX)
Email: arlene.weatherdon@pxx.ca
Website: www.pearleandp.com

or

Pearl Exploration and Production Ltd.
Sophia Shane
Corporate Development
(604) 689-7842
(604) 689-4250 (FAX)
Email: sophias@namdo.com
 
 

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