Drake Energy Ltd.
TSX VENTURE : DPE

November 26, 2009 17:37 ET

Drake Energy Ltd. Looks to Strong Oil Prospects to Drive Its Recovery

CALGARY, ALBERTA--(Marketwire - Nov. 26, 2009) - Drake Energy Ltd. (formerly Drake Pacific Enterprises Ltd)("Drake" or "the Company") (TSX VENTURE:DPE) has filed its Unaudited Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2009 on SEDAR. These documents can be accessed through Drake's website at www.drake-energy.com or on SEDAR's site at www.sedar.com.



SUMMARY OF RESULTS
Three months ended
September 30 2009
-------------------------------------
%
2009 2008 change
-------------------------------------
Daily production
Oil and liquids - bbls/day 10 55 (81%)
Natural gas - mcf/day 713 785 (9%)
Boe/day - 6:1 129 186 (30%)

Price
Price/bbl - oil and liquids $ 83.49 $ 91.13 (8%)
Price/mcf - natural gas $ 3.04 $ 8.11 (63%)
Price/boe $ 23.48 $ 61.22 (62%)

Financial
Operating costs/boe $ 24.38 $ 21.59 13%
Netback/boe $ (1.94) $ 29.65 (107%)
General and administrative/boe $ 23.64 $ 18.94 25%

Revenue $ 279,194 $ 1,046,739 (73%)
Cash Flow from operations $ (324,241) $ 211,243 (253%)
Net earnings (loss) $ (513,231) $ 65,134 n/a
Shares outstanding - basic weighted
average 17,494,058 14,558,973

SUMMARY OF RESULTS
Nine months ended
September 30 2009
-------------------------------------
%
2009 2008 change
-------------------------------------
Daily production
Oil and liquids - bbls/day 34 45 (23%)
Natural gas - mcf/day 934 630 48%
Boe/day - 6:1 190 150 27%

Price
Price/bbl - oil and liquids $ 52.96 $ 106.39 (50%)
Price/mcf - natural gas $ 3.89 $ 8.72 (55%)
Price/boe $ 28.65 $ 68.44 (58%)

Financial
Operating costs/boe $ 23.38 $ 22.18 5%
Netback/boe $ 0.85 $ 36.51 (98%)
General and administrative/boe $ 24.12 $ 15.36 57%

Revenue $ 1,485,489 $ 2,803,909 (47%)
Cash Flow from operations $ (1,270,626) $ 878,597 (245%)
Net earnings (loss) $ (1,801,028) $ 115,284 n/a
Shares outstanding - basic weighted
average 17,158,969 11,962,267


With average production down from 217 Boed in Q2 to 129 Boed in Q3 (primarily due to gas well shut ins) and gas prices for the quarter averaging near $3/mcf, the Company's cashflow remains the critical issue. To address this, the Company has hedged some of its gas production at stronger prices ($4.30/mcf), dramatically reduced fixed operating costs (by as much as $90,000/quarter) and is looking to drill/re-enter three oil wells which could generate strong cash flows (Net backs approximately $50/ Bbl).

In Q3, Drake also continued to acquire assets and develop its core areas while pursuing oil opportunities and raising capital, despite exceptionally low natural gas prices, a stagnant capital market and depressed economy. Drake has successfully completed each of these tasks and is continuing to push ahead in the 4th quarter.

During the 3rd quarter and into the 4th, Drake acquired additional land at Enchant which includes a number of oil prospects. It also has made preparations to pursue oil prospects at both Enchant and Sousa late in Q4. Any one of these three opportunities could significantly increase the value of the Company.

This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein. Barrel of oil equivalent ("boe") amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel and is based on an energy equivalent conversion method application at the burner tip and does not necessarily represent an economic value equivalent at the wellhead.

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

Contact Information