Bowood Energy Inc.
TSX VENTURE : BWD

Bowood Energy Inc.

April 26, 2011 09:00 ET

Bowood Energy Inc. Announces 2010 Financial and Operational Results

CALGARY, ALBERTA--(Marketwire - April 26, 2011) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. PERSONS.

Bowood Energy Inc. ("Bowood" or the "Company") (TSX VENTURE:BWD) is pleased to announce its financial and operational results for the year ended December 31, 2010 and an operational update on current activity.

2010 Highlights

--  Increased undeveloped land by 300% from 2009, including the acquisition
    of a significant land position in the rapidly emerging Alberta Bakken
    Petroleum System fairway ("Alberta Bakken"). 
--  Increased Total Proved Reserves and Total Proved plus Probable Reserves
    over 2009 by 26% and 10%, respectively. 
--  The Company is well positioned to execute its 2011 capital program with
    $5.6 MM of positive working capital and an unutilized $8.0 MM bank
    credit facility at year-end. 
--  Increased oil weighting of production to 18% in January 2011 from 1% in
    January of 2010. 
--  The Company was named one of the top 50 fastest growing companies on the
    TSX venture exchange. 

In 2010, the Company acquired a significant land position in the Alberta Bakken play, with a combination of freehold and crown leasing (approximately 30,000 additional acres) and the acquisition of a 60,640 acre lease on the Blood Tribe Reserve. In order to accelerate exploration of the these lands, we entered into a farmout and equalization agreement with an industry joint venture partner Legacy Oil + Gas Inc. ("Partner") whereby the Partner paid approximately $8 million for 50% of Bowood's interest in 52 sections of land, and further committed to drill up to 16 wells to earn a 50% working interest in the rest of the Company's Alberta Bakken acreage. With the equalization, Company land holdings on the Alberta Bakken are approximately 100,000 net acres. Total undeveloped land at December 31, 2010 was 143,487 gross (125,966 net) acres.

In 2010, Bowood drilled 8 (5.35 net) wells, 5 of which were in the Armada area. Bowood received Good Production Practice (GPP) approval from the ERCB in the Armada Basal Quartz Q Pool and drilled two follow up successful development wells in the same pool. Both wells came on production in January 2011. A third well resulted in the discovery of a new oil pool at Armada with initial production of over 180 bpd (63 bpd net). Another Armada well discovered a new Mannville gas pool with initial production of over 1 MMCF/d (600 mcf/d net). The 8 gross wells drilled, 5.35 net wells resulted in reserve additions of 383 mboe on a Total Proved basis and 407 mboe on a P+P basis and increased the Company's reserve life index (RLI) from 5.6 years to 7.9 years.

2011 Operational Update

Production

For the first quarter of 2011, field estimated production averaged 520 boed, 19% oil and NGLs. The increase in oil production was a result of starting up four (2.55 net) new wells at Armada in January. This is a 13% increase over Q4 2010 production of 458 boed.

Drilling - Armada Oil Property

The Company licensed two new wells in Q1 2010 at Armada. These wells are anticipated to spud after spring break.

Drilling - Alberta Bakken

The Partner operated Spring Coulee 15-25-3-23W4 well spudded on March 22, 2011. The vertical pilot hole has now reached total depth and four cores were recovered successfully. The pilot hole has now been plugged back and the rig is drilling in the horizontal leg.

A surface lease has been obtained on the Kipp (Blood) 8- 30-8-23W4 horizontal location and licensing is underway. The well is anticipated to spud prior to August 31, 2011.

Financial Highlights

Certain selected financial and operational information for the three months and year ended December 31, 2010 is set out below and should be read in conjunction with Bowood's Financial Statements and Management Discussion and Analysis ("MD & A").

The Company has filed its audited consolidated Financial Statements and related MD & A for the year ended December 31, 2010 with the Canadian securities regulatory authorities on SEDAR. In addition, Bowood will file its Annual Information Form, which includes Bowood's statement of reserves data and other oil and gas information for the year ended December 31, 2010 as mandated by National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators. An electronic copy of these materials will be available under Bowood's issuer profile on SEDAR at www.sedar.com and on the Company's website at www.bowoodenergy.ca.

                                                Three Months           Year 
                                                       Ended          Ended 
                                                 December 31,   December 31,
Financial highlights                                    2010           2010 
(all amounts in Cdn $ except common share                                   
 data)                                                                      
Petroleum and natural gas revenue                  1,095,671      5,247,202 
 Per share - basic                                     0.004          0.026 
           - diluted                                   0.004          0.026 
Funds flow from operations                           314,890        898,286 
 Per share - basic                                     0.001          0.004 
           - diluted                                   0.001          0.004 
Net loss                                             (79,242)    (2,761,312)
 Per share - basic                                    (0.000)        (0.014)
           - diluted                                  (0.000)        (0.014)
Capital expenditures                               9,341,004     14,506,098 
Net debt (surplus) (excluding fixed commodity                               
 contracts)                                       (5,552,955)    (5,552,955)
Shareholders' equity                              42,993,541     42,993,541 
Total assets                                      50,784,334     50,784,334 
Common share data:                                                          
 Weighted average basic                          251,326,851    202,649,400 
 Weighted average diluted                        251,326,851    202,649,400 
 Issued and outstanding                          274,283,373    274,283,373 
                                                Three Months           Year 
                                                       Ended          Ended 
                                                 December 31,   December 31,
Operating Highlights                                    2010           2010 
(6:1 boe conversion)                                                        
Average daily production                                                    
 Natural gas (mcf/d)                                   2,522          2,900 
 Liquids (Oil & NGLs) (bbls/d)                            38             38 
 Oil equivalent (boe/d)                                  458            521 
 Production (boe/d) per million shares                     2              2 
Average sales price (including fixed commodity                              
 contracts):                                                                
 Natural gas ($/mcf)                                    4.64           4.83 
 Liquids (Oil & NGLs) ($/bbl)                          70.55          67.59 
 Oil equivalent ($/boe)                                31.39          31.80 
Operating cost ($/boe)                                  9.03          12.65 
Operating netback ($/boe) (including fixed                                  
 commodity contracts)                                  20.03          16.51 
Wells drilled - gross (net):                                                
 Gas                                                 2 (2.00)       4 (2.80)
 Oil                                                      --        4 (2.55)
 Suspended                                                --             -- 
 D & A                                                    --             -- 
 Total                                               2 (2.00)       8 (5.35)

Reserves

Bowood's reserves were evaluated at December 31, 2010 by GLJ Petroleum Consultants ("GLJ"), an independent engineering firm. GLJ's evaluation was conducted in accordance with standards set out in the Canadian Oil and Gas Evaluation Handbook and is compliant with National Instrument 51-101 ("NI 51-101"). All reserve numbers are Company gross(i) before royalties.

Bowood Energy                       Light and                               
2010 Reserves (before                  Medium     Heavy                     
 royalties) (forecast           Gas       Oil       Oil      NGLs     Total 
 prices)                       mmcf     mbbls     mbbls     mbbls      mboe 
----------------------------------------------------------------------------
December 31, 2010                                                           
Proved producing              4,029        97         4        16       788 
Proved developed non-                                                       
 producing                    1,177        58         0         6       261 
Proved undeveloped              488        27         0         2       110 
----------------------------------------------------------------------------
Total Proved                  5,694       182         4        24     1,159 
Probable                      2,697        86         1        15       552 
----------------------------------------------------------------------------
Total Proved plus Probable    8,391       269         6        39     1,711 
----------------------------------------------------------------------------

Note: Columns may not add due to rounding

(i)"Gross" reserves means the Company's working interest (operating and non-operating) share before deduction of royalties payable to others and without including any royalty interest of the Company

Reserve Reconciliation

The following tables provides a reconciliation of the Company's gross reserves of oil, natural gas, and natural gas liquids for the year ended December 31, 2010 versus the year ending December 31 2009.

                          Light and                                         
                             Medium                       Natural           
                              Crude             Natural       Gas           
                                Oil Heavy Oil       Gas   Liquids       BOE 
                          --------------------------------------------------
                              (Mbbl)     Mbbl     (MMcf)    (Mbbl)    (Mboe)
Proved                                                                      
----------------------------------------------------------------------------
Balance at Dec. 31, 2009         64         2     5,060        11       921 
 Extensions and Improved                                                    
  Recovery                       79         -       397         3       147 
 Technical Revisions              2         4       223         8        48 
 Discoveries                     47         -     1,096         6       236 
 Acquisitions                     -         -         2         -         0 
 Dispositions                     -         -         -         -         - 
 Economic Factors                 -         -       (25)        -        (4)
 Production                      (9)       (1)   (1,058)       (3)     (190)
                          --------------------------------------------------
Balance at Dec. 31, 2010        182         4     5,694        24     1,159 
                          --------------------------------------------------
                          --------------------------------------------------
                          Light and                       Natural           
                             Medium             Natural       Gas           
                          Crude Oil Heavy Oil       Gas   Liquids       BOE 
                          --------------------------------------------------
                              (Mbbl)     Mbbl     (MMCF)    (Mbbl)    (Mboe)
Proved plus Probable                                                        
----------------------------------------------------------------------------
Balance at Dec. 31, 2009        193         3     8,019        24     1,557 
 Extensions and Improved                                                    
  Recovery                       19         -       182         -        49 
 Technical Revisions             (1)        4      (409)        9       (57)
 Discoveries                     66         -     1,695         9       358 
 Acquisitions                     -         -         3         -         - 
 Dispositions                     -         -         -         -         - 
 Economic Factors                 -         -       (40)        -        (7)
 Production                      (9)       (1)   (1,058)       (3)     (190)
                          --------------------------------------------------
Balance at Dec. 31, 2010        269         6     8,391        39     1,711 
                          --------------------------------------------------
Note: Columns and rows may not add due to rounding                          
      NET PRESENT VALUES OF FUTURE NET REVENUE AS OF DECEMBER 31, 2010      
                         (Forecast Prices and Costs)                        
                                      Before Income Tax ($000s)             
                          --------------------------------------------------
                                            Discounted at                   
Reserve Category                  0%        5%       10%       15%       20%
----------------------------------------------------------------------------
Proved                                                                      
 Developed Producing         13,892    12,052    10,654     9,566     8,700 
 Developed Non-Producing      6,055     5,055     4,306     3,731     3,280 
Proved Undeveloped            1,844     1,491     1,220     1,007       839 
Total Proved                 21,791    18,598    16,180    14,305    12,819 
Probable                     14,161    10,088     7,572     5,916     4,771 
Total Proved and Probable    35,953    28,686    23,752    20,221    17,590 
                                       After Income Tax ($000s)             
                          --------------------------------------------------
                                            Discounted at                   
Reserve Category                  0%        5%       10%       15%       20%
----------------------------------------------------------------------------
Proved                                                                      
 Developed Producing         13,892    12,052    10,654     9,566     8,700 
 Developed Non-Producing      6,055     5,055     4,306     3,731     3,280 
Proved Undeveloped            1,844     1,491     1,220     1,007       839 
Total Proved                 21,791    18,598    16,180    14,305    12,819 
Probable                     12,532     8,882     6,659     5,212     4,219 
Total Proved and Probable    34,323    27,479    22,839    19,517    17,038 
Note: Columns may not add due to rounding                                   
It should not be assumed that the undiscounted and discounted future net    
revenues estimated by GLJ which are set forth above represent fair market  
value.                                                                     
GLJ's reserves evaluation is based upon the following price forecast        
(effective January 1, 2011)                                                
       Medium and Light Crude Oil      Natural Gas        NGL              
     ------------------------------------------------------------          
           WTI                                                             
       Cushing  Edmonton    Cromer   Alberta                               
      Oklahoma Par Price    Medium       Gas                               
            40        40        29 Reference                               
       degrees   degrees   degrees     Price  AECO - C Pentanes   Exchange 
           API       API       API Plantgate      Spot     Plus       Rate 
Year  (US$/bbl)   ($/bbl)   ($/bbl) ($/MMBtu) ($/MMBtu)  ($/bbl) ($US/$Cdn)
---------------------------------------------------------------------------
2011     88.00     86.22     82.78      3.89      3.92    90.54       0.98 
2012     89.00     89.29     83.04      4.37      4.51    91.96       0.98 
2013     90.00     90.92     83.64      4.91      5.06    92.74       0.98 
2014     92.00     92.96     84.59      5.35      5.52    94.82       0.98 
2015     95.17     96.19     87.54      5.80      5.97    98.12       0.98 
2016     97.55     98.62     89.75      6.09      6.28   100.59       0.98 
2017    100.26    101.39     92.26      6.31      6.50   103.42       0.98 
2018    102.74    103.92     94.57      6.45      6.65   106.00       0.98 
2019    105.45    106.68     97.08      6.60      6.80   108.82       0.98 
2020    107.56    108.84     99.04      6.75      6.95   111.01       0.98 
Escalated at 2.0% per year thereafter.                                     

Annual General Meeting

Bowood Oil and Gas Inc. has scheduled its Annual General and Special Meeting for Friday June 3rd, at 3:00 pm MST at the Calgary Petroleum Club.

About Bowood Energy Inc.

With operations based in Calgary, Alberta, Bowood Energy Inc. is a TSX-V Tier 2 corporation. Through its wholly owned subsidiary, Bowood Energy Ltd., the Company is engaged in the acquisition, exploration, development, and production of oil and gas resources. Current projects are in the Province of Alberta.

Bowood Energy Inc.

Robert Mercier, President & CEO

Reader Advisories

Forward-Looking Statements: This news release contains certain forward-looking statements, including but not limited to, management's assessment of future plans and operations, the anticipated spudding dates of various wells, capital expenditures and the timing thereof and expected timing and results from operations, that involve substantial known and unknown risks, uncertainties and assumptions, certain of which are beyond the Company's control. Such risks, uncertainties and assumptions include, without limitation, those associated with oil and gas exploration, development, exploitation, production, marketing, processing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in reports, including the Company's annual information form for the financial year ended December 31, 2010, on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

BOE may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

For more information on Bowood Energy Inc. (TSX VENTURE:BWD) and to see the updated corporate presentation please visit our website at: http://www.bowoodenergy.ca.

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 news release.

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