Seaview Energy Inc.

Seaview Energy Inc.

August 19, 2008 21:50 ET

Seaview Energy Inc. Releases Record Financial and Operating Results for the Period Ended June 30, 2008

CALGARY, ALBERTA--(Marketwire - Aug. 19, 2008) -


Seaview Energy Inc. (TSX VENTURE:CVU.A) (TSX VENTURE:CVU.B) ("Seaview" or the "Company") is pleased to announce its financial and operating results for the three and six months ended June 30, 2008.

The financial results for the three and six month period ending June 30, 2008 reflect only five days of operations from the Southeast Saskatchewan properties acquired from Progress Energy Trust on June 26, 2008, and do not reflect any operations from the corporate acquisition of C3 Resources Ltd. as the transaction closed on July 24, 2008 subsequent to the end of the quarter.

Both transactions were highly accretive to Seaview shareholders and significantly grew the Company's production, cash flow, reserves and prospective inventory. Combined with two successful bought deal financings, Seaview remains well positioned to continue executing the Company's balanced growth strategy.

Selected financial and operating summary
Financial Q2 2008(1) Q1 2008 % Change
Petroleum and natural gas sales $ 5,151,800 $ 1,130,240 356%

Funds flow from operations(2) 2,626,583 352,418 645%

Basic and diluted per share(3) 0.09 0.01 800%

Net loss (599,364) (353,357) 70%

Basic and diluted per share(3) (0.01) (0.02) (50%)

Capital expenditures(4) 7,932,153 4,516,294 76%

Corporate acquisitions 29,323,480 - -

Net debt (working capital surplus) 14,204,306 (3,800,952) 421%
Shares Outstanding
Class A 38,214,257 19,073,007 100%

Class B 1,053,540 1,053,540 -
Daily production

Natural gas (mcf/d) 4,446 1,456 205%

Light oil and NGLs (bbl/d) 95 4 2275%
Total production (boe/d) 836 246 240%
Average realized sales price

Natural gas (per mcf) $ 10.83 $ 8.28 31%

Light oil and NGL (per bbl) 106.96 100.81 6%
Netback per boe

Sales price (net of risk
management losses) $ 67.70 $ 50.43 34%

Royalties 13.79 11.83 17%

Operating expenses 10.93 11.23 (3%)

Transportation 0.98 1.25 (22%)
Operating netback $ 42.00 $ 26.12 61%

(1) Seaview acquired C3 Resources Ltd. ("C3") on July 24, 2008, subsequent
to the quarter end. Accordingly, the operating results of C3 are not
included in this information.
(2) The Company uses "funds flow from operations" and "funds flow from
operations per share" which do not have any standardized meaning
prescribed by Canadian GAAP. The term is used to analyze operating
performance and leverage.
(3) Weighted average diluted shares outstanding for the quarter does not
include the impact of the granted options or the conversion of the
Class B shares as these would have been anti-dilutive.
(4) Capital expenditures includes the cash additions for the period, the
cash paid on acquisitions, dispositions and capitalized G&A expense.


Seaview continued executing its balanced strategy of acquiring, exploiting and exploring for high quality natural gas and light oil assets in Western Canada, highlighted by two strategic acquisitions. During the second quarter the Company closed an acquisition of 275 boe/d of long life, light oil reserves and production establishing a new core area in southeast Saskatchewan. Subsequent to the end of the quarter, Seaview closed the corporate acquisition of C3 Resources Ltd. adding an additional 525 boe/d of production within the Company's Peace River Arch core area.

Highlights of the second quarter include the following:

- Average production increased 240% to 836 boe/day, compared to the average production for the first quarter of 2008 of 246 boe/ day. Production per share increased 78% for the second quarter over the first quarter of 2008.

- Cash flow for the quarter increased 645% to $2.7 million from $352,418 in the first quarter of 2008. Cash flow per share increased eightfold to $0.09.

- On April 1, 2008, Seaview closed the corporate acquisition of 1332915 Alberta Ltd ("133Co") for total consideration of $25.8 million, comprised of the assumption of 133Co's net debt position and the issuance of 8,049,250 Seaview Class A shares at $0.87 per share. The acquisition of 133Co was highly accretive on all measures to Seaview, and significantly expanded the Company's reserves, production, cash flow, land and drilling inventory. Subsequent to the closing, 133Co's major shareholder joined Seaview's board of directors.

- On May 29, 2008, Seaview closed a bought-deal financing for gross proceeds of $6 million through the issuance of 2,792,000 Class A shares issued on a "flow-through basis" at a price of $2.15 per share.

- On June 26, 2008, Seaview acquired light oil properties from Progress Energy Trust located in southeast Saskatchewan and issued 8.3 million Class A shares, with an ascribed value of $2.12 per share, to Progress, as well as approximately $5.0 million in cash, for total consideration of $22.5 million. Progress' President & CEO joined Seaview's board of directors.

- On July 10, 2008, Seaview closed a bought-deal financing for gross proceeds of $10 million through the issuance of 2,899,000 Class A shares at a price of $3.45 per share.

- On July 24, 2008, Seaview closed the corporate acquisition of C3 Resources Ltd. ("C3") for total consideration of $38.2 million, comprised of the assumption of C3's net debt position, the issuance of 5,891,925 Class A shares of Seaview at $3.24 per share and approximately $6.3 million in cash. The acquisition added approximately 525 boe/d of predominately natural gas production in Seaview's Peace River Arch core area. C3's President and CEO joined Seaview's board of directors.

- During the quarter Seaview announced an upward revision to guidance increasing the Company's 2008 exit production estimate to more than 1550 boe/d, up from 900 boe/d exit target at the end of the first quarter of 2008.


In addition to the material acquisitions completed in the quarter, management focused on preparations for the balance of the 2008 capital program including equip and tie-ins of the wells drilled in the first quarter of 2008.

In Clayhurst, the Montney gas well (1.0 net) has been placed on production at current rates of 800 mcf/d (133 boe/d net). Subsequent to the end of the quarter, Seaview acquired a 100% working interest in the compression facilities and gas gathering system servicing the Clayhurst property allowing Seaview to control and operate that infrastructure. Seaview also acquired an interest in 6 gross (5.8 net) sections of land in Clayhurst. The Company plans to drill an offset location to the Clayhurst discovery on 100% lands in the fourth quarter of 2008.

In Boundary Lake, the dual zone gas well (0.5 net) has been producing at a restricted rate of 1.0 mmcf/d gross (83 boe/d net). Seaview, jointly with the regional operator, will be commencing construction of a pipeline to de-bottleneck the gas gathering system allowing for optimization of the Boundary Lake well. This dual zone discovery well tested at combined rates of 3.2 mmcf/d (1.6 mmcf/d or 265 boe/d net) and is expected to be online in the fourth quarter of 2008 adding 150 - 200 boe/d net to Seaview. The Company plans to drill 2-3 locations in 2008 as follow-ups to the first quarter discovery well targeting uphole zones identified in drilling the first well.

In Valhalla, the Company's multi-zone exploration discovery well is currently on production from the Gething formation (0.47 net). Subsequent to quarter end, Seaview has drilled and cased 4 gross (1.1 net) follow-up locations to the initial Valhalla discovery well with completion operations currently underway. The Valhalla property is prospective in several zones including the Gething, Bluesky, Dunvegan and Doe Creek with several potential follow-up locations remaining to be drilled to fully exploit the property. A second Valhalla well (0.5 net) drilled in Q1-08 targeting Bluesky natural gas was successfully completed and tested and is expected to produce 500 mcf/d (250 mcf/d net or 42 boe/d net) by the fourth quarter.

In Gordondale, the Company's Kiskatinaw discovery well (0.3 net) is currently producing 4.3 mmcf/d (1.3 mmcf/d or 215 boe/d net). Seaview has an extensive inventory of drillable prospects in Gordondale and is planning to drill 7 (2.1 net) wells in 2008 including offsets to the first quarter Kiskatinaw discovery.

In Pouce Coupe, Seaview is participating in the Company's first horizontal well targeting the prolific Montney tight gas sand. Seaview is paying 29% to earn 24% in this operation which is a re-entry of an existing suspended vertical well. Drilling operations are expected to be completed by late August with a completion and evaluation using mutli-frac technology to follow in September. Management is eagerly anticipating the results of this operation as it will set up development of the remainder of Seaview's land position which is now 3.9 net sections of prospective lands in this exciting Montney resource fairway.

The Company currently has three drilling rigs active in the Peace River Arch core area with plans to have one rig remain active throughout the balance of 2008. Management is also planning to drill 1-2 wells in the Southeast Saskatchewan core area.


During the first three quarters of operations, Seaview's management has aggressively positioned the Company for solid future growth through the successful execution of a balanced business strategy of acquiring, exploiting and exploring for high quality natural gas and light oil assets in Western Canada.

Seaview is well positioned to meet or exceed its 2008 guidance.

With the execution of two strategic corporate acquisitions and a material property acquisition adding the southeast Saskatchewan core area, combined with an ongoing successful drilling program, Seaview has now has revised upward its 2008 average production rate and exit rate estimates two times this year. As a result, Seaview now has the following corporate characteristics:

- Forecasted 2008 average daily production estimate of more than 1050 Boe/d, and 2008 production exit rate target of more than 1,550 Boe/d.

- Forecasted annualized cash flow for Seaview of $19.7 million ($0.42 per share) based on fourth quarter annualized cash flow projection, assuming 2008 average AECO gas prices of $8.10/GJ, and US$110/bbl crude oil pricing.

- Forecast debt to fourth quarter annualized cash flow ratio of 0.7 times.

- Expanding land position of 116,916 gross acres (48,143 net acres), including 24,008 net acres of undeveloped lands.

- Extensive drilling inventory of more than 90 locations, including over 70 prospects targeting multi-zone conventional prospects and an expanding inventory of light oil targets in southeast Saskatchewan. Seaview's prospect inventory is not currently reflected in the Company's independent reserve evaluation and therefore provides for significant long term growth potential.

- Exposure to Montney resource play in Pouce Coupe with 3.9 net sections of land in this exciting Montney tight gas play. Seaview is currently participating in drilling the Company's first horizontal test with potentially 12 net horizontal follow-up locations.

- Seaview's available bank line is currently $34 million, with the next review period in May, 2009.

- 47.1 million Class A shares and 1.054 million Class B shares outstanding.


Seaview has filed its financial results for the three and six month period ended June 30, 2008 including the unaudited interim consolidated financial statements and related management's discussion and analysis ("MD&A").

These filings are available in their entirety at and or by contacting the Company directly.

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.

This press release may contain forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, anticipations, expectations, opinions, forecasts, projections, guidance or other similar statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g. 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 production, costs and expenses and health, safety and environmental risks), commodity price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations 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.

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

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