Bowood Energy Inc.

Bowood Energy Inc.

November 26, 2010 09:00 ET

Bowood Reports 2010 Third Quarter Results, Provides Operational and Alberta Bakken Update

CALGARY, ALBERTA--(Marketwire - Nov. 26, 2010) - Bowood Energy Inc. (TSX VENTURE:BWD) ("Bowood" or the "Company") announces its financial and operational results for the three months ended September 30, 2010 and financial and operational highlights subsequent to quarter end.

The Company will file its unaudited Financial Statements and related Management Discussion and Analysis ("MD & A") for the three months ended September 30, 2010 with the Canadian securities regulatory authorities on SEDAR. An electronic copy of these materials will be available under Bowood's issuer profile on SEDAR at and on the Company's website at


On Oct 25th, 2010, subsequent to the end of the third quarter, Bowood closed its previously released 22.0 MM$ financing and the acquisition of 94.75 contiguous sections of highly prospective Alberta Bakken lands with the Blood First Nations. Additionally, the Company focused on continued acquisition of other freehold lands which are also highly prospective. With the closing of the financing, Bowood has been able to continue with its greater Armada development early in the fourth quarter, while reducing the net debt to approximately $500,000. With a strong balance sheet, a material land position in the emerging Alberta Bakken oil resource fairway and excellent results from third quarter development at Armada, the Company is well positioned for continued growth.

Certain selected financial and operational information for the three months ended September 30, 2010 is set out below and should be read in conjunction with the Company's Financial Statements and MD & A.

Financial highlights Three Months Ended September 30, 2010 Nine Months Ended September 30, 2010
(all amounts in Cdn $ except common share data)    
Petroleum and natural gas revenue 1,194,460 4,154,848
  Per share - basic 0.006 0.022
    - diluted 0.006 0.022
Funds flow from operations 91,767 583,396
  Per share - basic 0.000 0.003
    - diluted 0.000 0.003
Net income (1,257,490) (2,682,070)
  Per share - basic (0.007) (0.014)
    - diluted (0.007) (0.014)
Capital expenditures 2,925,886 5,165,094
Net debt (excluding fixed commodity contracts) 5,767,557 5,767,557
Shareholders' equity 22,520,549 22,520,549
Total assets 36,381,393 36,381,393
Common share data:    
  Weighted average basic 186,268,699 186,245,278
  Weighted average diluted 186,289,659 186,304,108
  Issued and outstanding 186,283,373 186,283,373
Operating Highlights Three Months Ended September 30, 2010 Nine Months Ended September 30, 2010
(6:1 boe conversion)    
Average daily production    
  Natural gas (mcf/d) 2,779 3,027
  Liquids (Oil & NGLs) (bbls/d) 49 38
  Oil equivalent (boe/d) 512 543
  Production (boe/d) per million shares 3 3
Average sales price (including fixed commodity contracts):    
  Natural gas ($/mcf) 5.28 4.88
  Liquids (Oil & NGLs) ($/bbl) 64.55 66.61
  Oil equivalent ($/boe) 34.83 31.92
Operating cost ($/boe) 14.47 13.68
Operating netback ($/boe) (including fixed commodity contracts) 16.76 15.51
Wells drilled - gross (net):    
  Gas -- 2 (0.80)
  Oil 3 (1.95) 4 (2.55)
  Suspended -- --
  D & A -- --
  Total 3 (1.95) 6 (3.35)
  1. Funds flow from operations and Operating Netbacks as presented do not have any standardized meaning under Canadian GAAP. Please refer to the Non-GAAP Measures section of the MD & A for more details.


Production of 512 boe/d for the period is down slightly from the second quarter (528 boe/d). Bowood has a high deliverability natural gas well in the Chinook area which is in competitive drainage and as a result has dropped off considerably. The well produced approximately 200 boe/d net to the Company in the second quarter and produced less than 50 boe/d in the third quarter. Despite this loss of production Bowood has held its production more or less constant from second quarter to third quarter. The production additions which offset the loss of natural gas production at Chinook, have been added in the in the greater Armada area of southern Alberta.

Bowood has delayed some of its capital expenditures associated with natural gas exploration and development, and has chosen instead to focus capital in continuing to acquire land and seismic in the Southern Alberta Bakken fairway. As a result of this redeployment of capital resources, Bowood has materially increased its southern Alberta land position but has reduced its expected 2010 exit production estimate to 675 boe/d. However most of the company's second half of 2010 capital has targeted oil prospects, which will result in the production mix being approximately 30 % oil, and 70 % gas, a significant change from the first half of 2010 (approximately 95% natural gas).

During the third quarter of 2010, Bowood drilled 3 wells (1.95 net) wells in the greater Armada area of southern Alberta, all of which have subsequently been completed. The three wells are currently being tied in and are anticipated to be on production in December. Two of the wells were completed for oil and the third has been completed for gas. Bowood is very encouraged by the success in the five well drilling program at Armada in 2010 and anticipates further follow up development in this area in 2011. 

Prior to the 2010 year end, the Company plans to drill an additional two (2 net) wells, to be located in the Majorville and Enchant areas of southern Alberta. Both wells will have Mannville targets.

In addition to its drilling activities, during the third quarter Bowood completed a number of strategic land acquisitions and farmin arrangements in the greater Armada area. The Company now holds 23,707 net acres in the Armada area and Bowood's total land holdings consist of 166,000 net acres, of which 130,000 are undeveloped.


During the third quarter of 2010, Bowood continued to strategically add to its land position in the southern Alberta Bakken play. Of most significance, the Company entered into a leasing arrangement (previously announced) with the Blood Tribe First Nation ("Blood Tribe") to acquire an interest in 94.75 sections (60,640 net acres) of lands located on the Blood Tribe Reserve in southern Alberta. This transaction closed subsequent to the end of the third quarter and Bowood now holds a total of 184 sections (117,800 net acres) of petroleum and natural gas rights on trend and highly prospective within the emerging Alberta Bakken oil resource play.

Industry activity on the Alberta Bakken play in Canada has recently increased as over 8 wells have been licensed and a number these have commenced drilling operations. In order to evaluate the potential of this oil resource play, Bowood anticipates it will drill a minimum of 2 horizontal Bakken oil wells in 2011.

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. Projects are currently situated in the Provinces of Alberta and Saskatchewan.

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, capital expenditures and the sources and timing thereof, expected timing and results from operations, expected prospectivity of recent land acquisitions, and expectations regarding expansion of the Company's land position. These forward looking statements 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. Readers are cautioned that the foregoing list of factors is not exhaustive. 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. 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, 2009, on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website ( 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: or contact the persons listed below.

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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