Antler Creek Energy Corp.
TSX VENTURE : AFE

December 08, 2009 15:50 ET

Antler Creek Energy Corp. Files Year End Reports

CALGARY, ALBERTA--(Marketwire - Dec. 8, 2009) -

Antler Creek Energy Corp (TSX VENTURE:AFE) ("Antler Creek" or the "Corporation") is pleased to release the audited financial statements, management discussion and analysis and the results of its reserves evaluation for the fiscal year ended July 31, 2009. In accordance with National Instrument 51-101 Standards of Disclosure of Oil & Gas Activities ("NI 51-101"), the Corporation's independent qualified reserve evaluators, Paddock Lindstrom & Associates Ltd. ("PLA") have prepared a report (the "PLA Report") evaluating all of the Corporation's oil, natural gas and natural gas liquids reserves as at July 31, 2009. The reserves data set forth in this news release is derived from the PLA Report.

The Corporation

The Corporation is a junior oil and gas exploration company whose focus is to explore for and develop oil and gas assets in high netback oil resource plays in the Williston Basin using horizontal wells and multistage fracturing completion techniques designed to increase the recovery volumes and rates of recovery beyond conventional recovery methods. Antler Creek's primary stratographic target is the Bakken zone in the Viewfield area of Southeast Saskatchewan. The Bakken zone is a light crude oil resource play produced from a zone which underlies the entire land position. To produce commercially viable volumes of oil and gas substances the payzone requires a horizontal well completed with a multistage sand, water and chemical fracture method.

Recent Corporate History

The Corporation is the resulting entity formed on May 31, 2009 upon the amalgamation of Antler Creek Energy Corp ("ACEC")(after it had changed its name from Testudo Oil & Gas Exploration Ltd. on May 22, 2009) and Batoche Energy Corp. The common shares of Testudo Oil & Gas Exploration Ltd. ("Testudo") were listed and posted for trading on the TSX Venture Exchange ("TSXV") as a Capital Pool Company as defined in TSXV Policy 2.4. On May 25, 2009, ACEC completed its Qualifying Transaction (as defined by the TSXV) by acquiring all of the issued and outstanding common shares of Batoche Energy Corp ("BEC") for the sum of $2,100,000 payable: (a) $550,000 cash; (b) $1,000,000 debenture; and (c) $450,000 by issuance of 1,000,000 common shares at a deemed price of $0.45 per common share. BEC had two subsidiaries: (a) Batoche Energy (Griffen) Corp; and (b) Batoche Energy (Heward) Corp which were wound up effective June 1, 2009.

Overall Performance

The audited financial statements of the Corporation reflect a loss of $375,064 for the fiscal period ended July 31, 2009. The financial statements reflect a deficit of $381,964. The financial statements reflect a negative working capital of $40,751.

Financial Statements

The acquisition of BEC was not accounted for as a reverse takeover of ACEC. The assets, liabilities and share capital of the Corporation are those of ACEC (formerly Testudo) as a legal entity. The financial statements are a continuation of ACEC's business. The operating loss and deficit do not reflect the profitability of BEC prior to acquisition. The operating loss and deficit reflect the transactional costs of Testudo going public and completing a Qualifying Transaction. The taxes payable reflect the unpaid taxes of BEC (and its subsidiaries) as reported for the fiscal period ended January 31, 2009 and May 25, 2009 which were assumed upon the amalgamation on May 31, 2009. The revenue from oil and gas sales reported in the financial statements is for the period from May 25, 2009 to July 31, 2009. By virtue of a provision in the share purchase agreement, the net revenue for the period from February 1, 2009 to May 25, 2009 is reflected in a reduction in the purchase price of the assets. In making the acquisition and completing the amalgamation, Antler Creek Energy Corp was deemed to have acquired the assets of BEC based on the following purchase price allocation: cash $111,104; accounts receivable $293,851; petroleum and natural gas properties and equipment $2,620,699 less: accounts payables of $110,799; income tax payable of $223,123; future income tax liability $525,765; and asset retirement obligations of $65,967.



Summary of Oil & Gas Reserves from PLA Report

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Proved Total Total Total Proved
Producing Proved Probable Plus Probable
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Oil (Mbbl)
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Working Interest before
Royalty 21.5 104.6 337.2 441.8
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Net after Royalty 18.6 85.6 256.9 342.6
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Natural Gas (MMcf)
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Working Interest before Royalty 3.6 3.6 2.2 5.0
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Net After Royalty 3.3 3.3 2.0 5.3
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Natural Gas Liquids (Mbbl)
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Working Interest before Royalty 0.5 0.5 0.3 0.8
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Net After Royalty 0.4 0.4 0.3 0.7
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Oil Equivalent (Mboe)
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Working Interest before Royalty 22.5 105.6 337.9 443.5
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Net After Royalty 19.6 86.6 257 344.1
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Before Tax Present Value ($000)(forecast prices and costs)
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Discounted at
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0% 969.5 3,436.7 13,331.0 16,767.7
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5% 884.6 2,507.1 9,026.2 11,533.3
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10% 814.9 1,911.2 6,534.0 8,445.3
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15% 756.8 1,498.5 4,924.9 6,423.4
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This evaluation does not include the Corporation's 47.5% working interest
in a joint venture which has a 81% interest in 3,200 acres (gross)(2,609
leased acres)(1,239 net acres) of undeveloped lands in Twp 9 and 10
Range 11 W2M ("Fillmore Lands"). All present value figures referred to in
this press release are based on PLA forecast pricing and costs.


Net Asset Value or "NAV"

The net asset value of the Corporation is $1.28 per common share. The determination is based on: (a) the proved plus probable reserves of the Corporation discounted at 10% ($8.23M)(see table above); (b) less debt ($1.73M); and (c) divided by the fully diluted number of common shares (5,221,934). The future capital cost of $7.26M has been deducted in determining the Present Value of Reserves on a non-discounted basis.

No Comparative Operating Data

Because of: (a) the timing of the recent acquisition; (b) because the fiscal period of the Corporation (July 31) not matching the fiscal period of BEC (January 31); and (c) because BEC, as a private corporation, did not prepare certain statistical information, it is not possible to report comparative figures for increases of NAV, reserve volumes, finding development and acquisition costs ("FD&A"), changes to future development capital ("FDC"), recycle ratios (which measures the return potential for every dollar reinvested given stable netbacks). Certain operational data will be presented for the period from February 1, 2009 to July 31, 2009.

Operational Update

Production from the lands acquired by the Corporation averaged 49.53 boe/d (90% oil) for the period from February 1, 2009 to July 31, 2009. The Corporation has non-operated working interests in 6 Bakken wells producing from 1,280 gross acres (280 net acres). Four wells are operated by Crescent Point Energy Corp ("Crescent Point") and two by Aldon Oils Ltd. ("Aldon"). Natural gas and NGL's were flared from 2 wells in Section 13-8-11-W2M and 2 wells in S 1/2 Section 5-9-9-W2M. Cumulative gas production to July 31, 2009 from the 2 wells on Section 13-8-11-W2M was 68,915 mcf. The production for the first quarter ending October 31, 2009 is expected to be lower and then will rise again in the second quarter due to drilling activity. The decline in production in the first quarter will be a result of natural declines on base production.

The following table sets forth prices received from operators for the period February 1, 2009 to July 31, 2009:



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Operator category February March April May June July
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Aldon Oils
Ltd. oil cm 266 343 329 364 431 393
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bbl 42.28 54.53 52.30 57.86 68.52 62.48
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Crescent
Point Energy
Corp oil bbl 48.01 62.00 59.93 65.24 74.46 68.20
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cm 302 390 377 410.4 468.4 429
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gas e3m3 193 174.8 137.00 142.00 120.00 114.40
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Prices have
been averaged, bbl 33.00 30.00 30.30 31.61 35.00 33.20
rounded and NGL c/m 260 225 231 250.00 277.00 248.30
expressed in bbl 41.33 35.77 36.72 39.74 44.03 39.42
Cdn $
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The following table sets forth operating netbacks received from operators
for the period February 1, 2009 to July 31, 2009:

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Cdn $ Aldon Oils Ltd. Crescent Point Energy Corp
1/2 Section 5-9-9-W2M (2 wells) Section 13-8-11-W2M (2 wells)
W 1/2 Section 31-8-9-W2M (2 wells)
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Per boe Per cm Per boe Per cm
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Agg Volume Oil 3,591
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Agg Volume Gas 439
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Agg Volume NGL's - 346
-------
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Total Volume 9,913 1,576 27,525 4,376
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Aggregate Price $56.61 $356.00 $57.80 $363.56
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Royalty (15%) 7.93 49.88 (10%) 4.85 30.50
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GOR (5%) .32 8.30 - 0 -
----------- -------- ----------- ---------
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Subtotal $47.36 $297.90 $52.95 $333.56
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Equipment
rentals (1) 3.03 (1) 19.04 0 0
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Supervision (1) 1.13 (1) 7.17 0 0
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Operators fees (1) 0.60 (1) 3.81 (1) 0.26 (1) 1.65
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Admin fees (1) 0.33 (1) 2.10 (1) 0.24 (1) 1.51
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Treatment (1) 2.58 (1) 16.28 (1) 0.80 (1) 4.98
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Trucking (oil,
water and
hauling) (1) 9.16 (1) 57.62 1.80 11.32
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Disposal 1.18 7.40 0.54 3.40
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Other Expenses 1.54 9.69 1.40 8.81
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Gas Processing - 0 - 0 (1) 1.41 (1) 8.87
------- -------- -------- ---------
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Total Expenses $19.58 $123.13 $ 6.45 $ 40.58
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Gross Profit
before
workovers and
G&A 27.80 174.86 46.50 292.45
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Workovers/AFE 7.43 46.76 1.48 9.25
------- -------- ------- --------
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Operating
Netback $20.35 $128.00 $45.02 $283.18
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Note (1) Denotes non arms length charges.


There is a significant difference between the operating netbacks on the 6 Bakken wells between two operators. The wells were drilled roughly at the same time and have the same maintenance, treatment, trucking and disposal requirements. Differences can be explained as follows: (a) Crescent Point has tied in 2 of 4 wells it operates by pipe to a central battery (W 1/2 Section 31-8-9-W2M); and (b) rates charged for non arms length services provided to the joint venture partners.

Drilling Plans for 2010

On December 3, 2009, Aldon fracced Aldon Heward 1D8-6-2D8 5-9-9-W2M (a 1400m horizontal Bakken well which Antler Creek has a 25% working interest). Crescent Point has issued an AFE to drill a 1400m horizontal Bakken well HZ S 2A2-24-3A2 13-8-11-W2M. Antler Creek has a 20% working interest and the expected capital cost to drill, case and complete is estimated at $2,000,000. Crescent Point has issued an AFE to drill a 1,400m horizontal Bakken well HZ S 1B3-24-4B4 13-8-11-W2M. Antler Creek has a 20% working interest and the expected capital cost to drill, case and complete is estimated at $2,000,000. The two Crescent Point wells should be drilled and completed by January 31, 2010.

Antler Creek has farmin rights to 75% of the oil and gas mineral rights under SW, SE and NE Section 13-9-9-W2M. It is expected that Antler Creek will be the operator. Assuming all pre-conditions can be met, Antler Creek will drill, case and complete a 1,400m horizontal Bakken well named Antler Creek HZ S 2A2-24-3A2 13-9-9-W2M. The expected cost is estimated at $2,000,000. It is expected that Antler Creek will drill, case and complete a 600m bi-lateral horizontal Bakken well named Antler Creek HZ S 1B12-13-4B4 13-9-9-W2M. The wells should be competed by June 2010 or sooner if arrangements can be worked out with all mineral rights holders. Antler Creek is seeking to pool the entire section.

Private Placement

Antler Creek expects to close a private placement being the sale of common shares (with and without flow through attributes) to raise $7,200,000. The transaction will be non-brokered and on sold on a best efforts basis. Antler Creek is prepared to pay a finders fee of 5-7% cash (or maximum permitted by the Exchange) to persons who introduce qualified accredited investors plus a warrant equivalent to 10% of the shares sold. The warrant will entitle the finder to acquire Antler Creek common shares at any time up to 2 years from the date of closing of the financing. The Antler Creek common shares issued as part of the financing and the Antler Creek common shares issued upon exercise of any warrants issued as part of the the placement will be subject to a 4 month hold period from the date of closing.

ON BEHALF OF THE BOARD

ANTLER CREEK ENERGY CORP

Gus B. Coolidge, President

BOE Conversion. The term boe referes to barrel of oil equivalent. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of six mcf per one barrel 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 news release contains forward-looking statements that are expressly qualified in their entirety, by this caption. Such statements include all disclosure concerning the plans, intentions or expectations of the Corporation or its management in future periods, Although, the Corporation believes that these forward looking statements are reasonable, undue reliance should not be placed on them as they are inherently uncertain, based on estimates and assumptions, and subject to substantial known and unknown risks and uncertainties, many of which are beyond the Corporation's control. Forward-looking statements are not guarantees of future outcomes. There can be no assurance that the plans, intentions or expectations contained in the forward-looking statements or upon which they are based will in fact occur or be realized, and actual results, performance or achievements may differ from those expressed or implied in the forward-looking statements. The differences may be material.

Statements related to "reserves" are forward looking statements, as they involve an implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and can be profitably be produced in the future.

In making the foreward-looking statements contained in this press release, the Corporation has made several assumptions regarding, amongst other things: future oil and natural gas prices; future capital requirements; the accessability and cost of capital (including credit); the Corporation's ability to economically produce oil and gas from its properties and the timing and cost to do so; and its ability to obtain qualified staff; equipment and supplies in a timely and cost efficient manner.

All forward looking statrmetns contained in this press release and any subsequent forward-looking statements whether written or oral, attributable to the Corporation or persons acting on its behalf are qualified in their entirety by these cautionary statements. Further, the included forward-looking statements are made as of the date of this press release and the Corporation undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provide (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Antler Creek Energy Corp.
    Gus B. Coolidge
    President
    (403) 265-4122
    (403) 265-4138 (FAX)
    or
    Antler Creek Energy Corp.
    1510, 777 - 8th Avenue S.W.
    Calgary, Alberta T2P 3R5