Wild Stream Exploration Inc.
TSX VENTURE : ERX

November 30, 2009 20:23 ET

Wild Stream Exploration Inc. Announces Third Quarter 2009 Operating and Financial Results

CALGARY, ALBERTA--(Marketwire - Nov. 30, 2009) - Wild Stream Exploration Inc. (formerly Eagle Rock Exploration Ltd.) (TSX VENTURE:ERX) (the "Company") 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 nine months ended September 30, 2009 and 2008. 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. Please note that the numbers presented below are representative of the operations of the Company prior to the material subsequent events as described in the section below.

Highlights                       
 
  Three months ended         Nine months ended      
  September 30,         Percent    September 30,        Percent
  2009  2008         Change    2009 2008        Change
Financial (thousands of dollars except share data)                      
 
Petroleum and natural gas revenue 2,513  5,242 (52) 7,468 12,698  (41)
Funds from operations (1)1,035  3,245 (68) 4,657 6,981  (33)
     Per share - basic (4)0.56  1.86 (67) 2.56 3.87  (31)
                             - diluted 0.55  1.86 (67) 2.49 3.85  (18)
Net earnings (loss) (4472,207 (120) (2,009) 1,718  (217)
     Per share - basic (4)(0.251.21 (125) (1.11) 0.95  (233)
                             - diluted (0.251.21 (125) (1.10) 0.95  (233)
Capital expenditures, net (1,7137,662 (122) (171) 7,711  (102)
Working capital (deficiency)           (17,523) (10,26171
Weighted average shares (thousands) (4)                      
     Basic           1,818 1,806  1
     Diluted           1,834 1,811  1
 
Operating (6:1 boe conversion)                      
 
Average daily production                       
 Natural gas (mcf/d)108  119 (9) 324 121  168
 Liquids (bbls/d)413  517 (20) 463 455  2
 Barrels of oil equivalent (2) (boe/d)431  536 (20) 517 475  9
 
Average sales price                       
 Natural gas ($/mcf)3.05  8.13 (62) 3.93 8.63  (54)
 Liquids ($/bbl)65.32  108.17 (40) 56.35 99.33  (43)
 Barrel of oil equivalent ($/boe)63.34  106.33 (40) 52.93 97.56  (46)
 
Netbacks                       
 Operating netback ($/boe)39.17  77.39 (49) 44.58 67.99  (34)
 Corporate netback (3) ($/boe)26.13  65.84 (60) 33.00 53.67  (39)
  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. Corporate netbacks are calculated as the operating netback less general and administrative expenses and financial charges. Also included in the nine months ended September 30, 2009 is the monetization of a commodity hedge
  4. All share and per share amounts reflect the approved share consolidation on a thirty for one basis.

2009 Third Quarter Highlights

The three months ended September 30, 2009 mark the start of a Wild Stream transformation to a resource focused high growth oil and gas junior exploration company:

  • During the third quarter, continuing from the first six months of 2009, the Company restricted capital expenditures to preserve capital and focus on managing bank debt. A total of $1.7 million of net property dispositions occurred during this quarter.
  • On September 23, 2009 the Company announced a recapitalization and change of management team and Board of Directors.

Subsequent Events

  • October 7, 2009 – announced that shareholder consent had been received for the recapitalization and that the management team, board of directors and $14.6 million private placement had been completed.
  • October 15, 2009 – announced southwest Saskatchewan acquisitions of 235 bbls/d of production and approximately 17,600 net acres of land on two key resource oil prospects in the Shaunavon and Dodsland areas. In conjunction with the acquisitions, a $54.5 million bought deal financing was announced.
  • November 6, 2009 – announced closing of the southwest Saskatchewan acquisitions and bought deal financing that was announced on October 15, 2009.
  • November 16, 2009 – announced the consolidation of the shares on 30 for 1 basis, a name change to Wild Stream Exploration Inc. and began trading under the symbol WSX on the TSXV.
  • November 25, 2009 – announced a corporate and asset acquisition of 300 boe/d of production and approximately 35,000 undeveloped acres, providing the Company a third core area, that being in the Garrington area of west central Alberta

Operations

As the new management team assumed operations early in the fourth quarter there was very little operational activity to report on during the actual third quarter period. Since October 7, 2009, the southwest Saskatchewan acquisitions have closed and active operations have commenced.

The fourth quarter will see approximately 4 gross (4 net) wells drilled late in the quarter. The balance of the activities in the fourth quarter are revolving around facilities optimizations, workovers and preparations including surveying and licensing for what is expected to be a very active first quarter in 2010.

Outlook; Upward Revision to Guidance

The acquisitions which were announced on October 15, 2009 and subsequently closed on November 6, 2009 have resulted in an upward revision to the 2009 exist production rate from 450 boepd to more than 700 boepd. This upward revision does not include the additional acquisitions that were announced on November 25, 2009. These transactions are expected to close in January 2010.

Upon closing of all acquisitions it is expected that Wild Stream will be in a surplus working capital position of approximately $5 million. This balance sheet strength, combined with strong anticipated 2010 cashflow will allow us to participate in an aggressive capital program throughout 2010.

The first quarter of 2010 is anticipated to be very active with the current budget anticipating the drilling of 13 gross (11 net) wells. This first wave of drilling will be focused on multi-stage fractured horizontal wells that will begin to delineate both the lower Shaunavon and Dodsland Viking plays. Activity in the Garrington area is not expected to ramp up until the third quarter of 2010 due to the timing associated with the regulatory approvals required to begin drilling our horizontal well program.

Additional guidance for 2010 will be forthcoming in December.

The Wild Stream team has developed an enviable drilling inventory in the short time since the new management team has assumed operations. To date, we have an inventory of in excess of 200 net oil drilling locations of which 85% are concentrated on our three key resource oil plays. This multi year inventory combined with our commitment to prudent fiscal management will allow your company to see meaningful per share growth for the foreseeable future. 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 statements concerning the anticipated impact of workovers and repairs, the anticipated impact of the Private Placement or bought deal financing and the anticipated timing of the release of the Company's 2010 capital expenditure budget. 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