Wild Stream Exploration Inc.
TSX VENTURE : WSX

August 23, 2010 16:40 ET

Wild Stream Exploration Inc. Announces Increased 2010 Guidance and Second Quarter 2010 Operating and Financial Results

CALGARY, ALBERTA--(Marketwire - Aug. 23, 2010) - Wild Stream Exploration Inc. ("Wild Stream" or the "Company) (TSX VENTURE:WSX) is pleased to announce that it filed on SEDAR its unaudited financial statements and related Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2010 and updated its 2010 guidance. Certain selected financial and operational information is set out below and should be read in conjunction with Wild Stream's unaudited financial statements and related MD&A. These filings will be available at www.wildsr.com and www.sedar.com.

Financial Highlights

  Three months ended
June 30,
  Percent
Change
  Six months ended
June 30,
  Percent
Change
 
  2010   2009   2010   2009  
Financial (thousands of dollars except share data)                        
                         
Petroleum and natural gas revenue 9,541   2,681   256   16,521   4,956   233  
Funds from operations (1) 5,571   917   508   9,491   3,621   162  
  Per share - basic 0.15   0.50   (70 ) 0.27   1.99   (86 )
    - diluted 0.13   0.47   (72 ) 0.23   1.82   (87 )
Net earnings (loss) 405   (646 ) 163   1,240   (1,562 ) 179  
  Per share - basic 0.01   (0.36 ) 97   0.04   (0.86 ) 105  
    - diluted 0.01   (0.36 ) 97   0.03   (0.86 ) 103  
Capital expenditures, net 17,974   166   n/a   50,064   1,542   n/a  
Corporate acquisitions 1,518   -   100   9,102   -   100  
Working capital deficiency             9,741   20,254   (52 )
Weighted average shares                        
  Basic 36,938   1,818   1,932   35,125   1,818   1,832  
  Diluted 42,347   1,818   2,229   40,458   1,818   2,125  
Shares outstanding, end of period                        
  Basic             37,003   1,818   n/a  
  Diluted             46,687   1,978   n/a  
                         
Operating (6:1 boe conversion)                        
                         
Average daily production                        
  Liquids (bbls/d) 1,515   457   232   1,261   488   158  
  Natural gas (mcf/d) 1,372   424   224   1,102   434   154  
  Barrels of oil equivalent (2)(boe/d) 1,744   528   230   1,445   560   158  
                         
Average sales price                        
  Liquids ($/bbl) 65.64   61.36   7   68.65   52.50   31  
  Natural gas ($/mcf) 3.92   3.32   18   4.27   4.04   6  
  Barrel of oil equivalent ($/boe) 60.12   55.82   8   63.18   48.85   29  
                         
Netbacks                        
  Operating                        
  Petroleum and natural gas revenue(3) 60.80   55.82   9   63.72   50.22   27  
  Royalties (7.92 ) (5.56 ) 42   (8.42 ) (3.66 ) 130  
  Operating expenses (13.20 ) (16.77 ) (21 ) (14.08 ) (18.55 ) (24 )
  Transportation expenses (1.91 ) (1.84 ) 4   (1.80 ) (1.91 ) (6 )
                         
  Operating netback ($/boe) 37.77   31.65   19   39.42   26.10   51  
                         
  Corporate netback (4) ($/boe) 35.10   19.07   84   36.30   15.10   140  

(1) Management uses funds generated by operations to analyze operating performance and leverage. Funds generated by operations as presented do not have any standardized meaning prescribed by Canadian GAAP and therefore it may not be comparable with the calculation of similar measures for other entities.
(2) Boe conversion ratio for natural gas of 1 Boe: 6 Mcf has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead.
(3) Including realized gains on commodity hedges.
(4) Corporate netbacks are calculated as the operating netback less general and administrative expenses and financial charges. Excluded from the 2009 results is the impact of the realized gain on the monetization of the commodity hedge.

Second Quarter Accomplishments

  • Increased P+P reserves (see June 29, 2010 press release) by 122% to 10.7 million boe at June 30, 2010 from 4.8 million boe reported at December 31, 2009.
  • Increased 2010 quarterly average production by 53 per cent to 1,744 boe/d (87 per cent crude oil) from 1,142 boe/d in the first quarter of 2010. 
  • Increased funds from operations to $5.6 million an increase of 43% from $3.9 million reported in the first quarter of 2010.
  • Achieved strong second quarter 2010 operating netbacks of $37.77 per boe.
  • Reduced second quarter operating costs by 15% to $13.20/boe from the $15.46 reported in the first quarter of 2010.
  • Substantially added to the Company's undeveloped land base in our core areas with the addition of approximately 21 net sections. 
  • Reduced G&A by 38% in the second quarter of 2010 to $2.42/boe compared to the first quarter of 2010. 

Increased 2010 Guidance

Based on drilling results that have exceeded management's expectations, we are expanding the Company's exploration and development budget to $80 million from $60-65 million. The increase in capital expenditures will be focused in the Shaunavon area and the revised budget will see 45 gross (42.2 net) net wells drilled. The expansion of the capital program will be funded through our $50 million credit facility and cash flow. 

With current production at approximately 2,400 boe/d, we now expect production to average 1,950 boe/d in 2010, a 10% increase to our previous 2010 average guidance of 1,750 boe/d. Wild Stream is also increasing 2010 exit rate guidance from 2,250 boe/d to more than 2,900 boe/d.

Operational Update

In the second quarter, the Company drilled 5 gross (4.7 net) wells in Shaunavon, 1 gross (1.0 net) well in Dodsland and 2 gross (2.0 net) wells in Coutts resulting in 6 (5.8 net) crude oil wells for a success rate of 86 per cent. The Company spent $11.8 million on drilling, completions and facilities and $8.6 million on land and two minor property acquisitions within our core areas.

Shaunavon area

Year to date, Wild Stream has drilled 13 gross (11.6 net) wells in the area and we anticipate drilling an additional 10 gross (9.4 net) wells for the remainder of the year. Production has grown from 380 bbls/d to the current rate of 1,450 bbls/d.

We continue to see positive performance from the first phase of the Upper Shaunavon waterflood. The first horizontal well drilled in the waterflood area continues to produce in excess of 200 bbls/d of crude oil after 150 days of production. The second and third phases of the Upper Shaunavon waterflood have received government approval and will be operational shortly.

An additional four Upper Shaunavon wells are producing at rates of 170-200 bbls/d and there is one well currently being brought on-stream. 

The three Lower Shaunavon horizontal wells drilled in the first quarter continue to meet expectations for the area and we will be bringing on-stream two recently drilled Lower Shaunavon wells over the next several weeks.

Dodsland area

Year to date, Wild Stream has drilled 10 gross (10.0 net) crude oil wells in the area and we anticipate drilling an additional 4 gross (4.0 net) wells prior to year end. Production has grown to 200 boe/d from 60 boe/d and will continue to rise as the six wells waiting tie-in are brought on production throughout September.

Horizontal well performance to date has met our expectations for this area. We have been successful in reducing capital expenditures per well to $900 thousand from $1.4 million resulting in greatly improved economics for the area.

Garrington and Other areas

Year to date, Wild Stream has drilled 5 gross (3.9 net) wells in other areas and we anticipate drilling an additional 3 gross (3.0 net) wells prior to year end. Combined production is currently 750 boe/d.

Outlook

Our production growth has continued into the third quarter and we have closed two additional property acquisitions and acquired crown lands resulting in an increase of 11 net sections of land in our core areas.

Wild Stream anticipates drilling a total of 27 gross (26 net) wells in the second half of 2010. This includes 13 net wells in the Shaunavon area, 10 net wells in and Dodsland area as well as 3 net wells in other Wild Stream areas including Garrington and Red Coulee. Exploitation activities will also continue with expansion of the waterflood in the Upper Shaunavon formation. The continued success of our drilling and exploitation programs will contribute to our increased exit guidance of 2,900 boe/d.

Wild Stream continues to be a pure play resource oil company. We have in excess of 400 net horizontal drilling locations in inventory representing in excess of $500 million of potential capital expenditures. This multi-year inventory sets the stage for continuing growth for 2011 and beyond.

We remain committed to increasing shareholder value through a combination of exploration, strategic acquisitions and subsequent exploitation while maintaining a conservative approach to balance sheet management.

FORWARD LOOKING STATEMENTS: This press release contains forward-looking statements. More particularly, this press release contains forward-looking statements concerning the expansion of the Shaunavon capital expenditure program, Wild Stream's average production and exit rate for 2010, the Company's growth strategy and it's exploration and development capital program. The forward-looking statements are based on certain key expectations and assumptions made by the Company, including expectations and assumptions concerning the success of optimization and efficiency improvement projects, the availability of capital, the success of future drilling and development activities, the performance of existing wells, the performance of new wells and prevailing commodity prices. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (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 fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in the Company's Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com or Wild Stream's website www.wildsr.com

The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation 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.

Meaning of Boe: When used in this press release, Boe means a barrel of oil equivalent on the basis of 1 Boe to 6 thousand cubic feet of natural gas. Boe per day means a barrel of oil equivalent per day. Boe's may be misleading, particularly if used in isolation. A Boe conversion ratio of 1 Boe for 6 thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Wild Stream Exploration Inc.
    Mr. Neil Roszell
    President and Chief Executive Officer
    (403) 767-1250
    (403) 232-8083 (FAX)
    or
    Wild Stream Exploration Inc.
    Mr. Jerry Sapieha, CA
    Vice President, Finance and Chief Financial Officer
    (403)767-1265
    (403) 232-8083 (FAX)
    www.wildsr.com