Avatar Energy Ltd.
TSX VENTURE : AVG

June 28, 2011 17:46 ET

Avatar Announces First Quarter 2011 Financial Results

CALGARY, ALBERTA--(Marketwire - June 28, 2011) - Avatar Energy Ltd. ("Avatar", "we", "us", "our" or the "Company") (TSX VENTURE:AVG) is pleased to announce its first quarter 2011 financial results. Copies of the financial statements and management discussion and analysis are available for review at www.sedar.com and on our website at www.avatarenergy.ca.

First Quarter 2011 Highlights

  • Increased overall production to 120 barrels of oil equivalent ("BOE") per day, representing a 70% increase from last quarter.
  • Operating netbacks are $20.27 per BOE.
  • Operating costs are $11.61 per BOE.
  • Drilled, completed and tied in our operated horizontal well on our East Pembina Cardium lands.
  • Completed a $300,000 private placement.
  • Doubled our land position in the Pembina area to from 4.5 gross sections (2.38 net) to 8.75 gross sections (6.13 net) thereby increasing our Cardium focused drilling locations to 25.

Outlook

Since Avatar's inception in November of 2010, we have achieved significant growth. We have doubled our production via the drilling of our first two horizontal wells on our Pembina Cardium light oil project. We expect to drill two more horizontal wells on our expanded land base before the end of 2011. We have doubled our prospective land position in the Pembina area and have identified 10 additional locations for a total of 25. With this sizable inventory of horizontal oil locations on our Pembina acreage and a strong oil price environment, we expect to continue to provide successful per share growth in cash flow, production and reserves from the capital program we have laid out to the end of the year.

Avatar is an emerging junior oil and gas company with production in Alberta. The Corporation's area of focus is on properties in the Pembina Cardium light oil play that have long life high quality reserves with repeatable drilling upside.

Forward-Looking Statements

This press release contains forward-looking statements. More particularly, this press release contains statements concerning future drilling plans, proposed acquisition strategies and the likelihood of successful future results. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them 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. The risks to which the Company is subject include, but are not limited to, operational risks inherent in the exploration, development and production of oil and gas; availability of financing; general economic conditions and changes in the capital markets; volatility of oil and gas prices; competition; and changes in legislation and the regulatory environment. 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 required by applicable securities laws.

Avatar converts certain natural gas volumes to BOEs on the basis of one barrel to six thousand cubic feet and daily production is presented as barrels of BOE per day. BOEs may be misleading, particularly if used in isolation. A conversion ratio of one barrel of crude oil or natural gas liquids to six thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent value equivalency at the wellhead.

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

  • Avatar Energy Ltd.
    Mr. Alan D. Jack, P. Eng
    President & Chief Executive Officer
    (403) 517-8818

    Avatar Energy Ltd.
    Ms. Lorie J. Hynes, CA
    Chief Financial Officer
    (403) 517-8818