Canadian Energy Exploration Inc.
TSX VENTURE : XPL

Canadian Energy Exploration Inc.

November 28, 2011 18:22 ET

Canadian Energy Exploration Inc. Third Quarter 2011 Highlights and Update

CALGARY, ALBERTA--(Marketwire - Nov. 28, 2011) - Canadian Energy Exploration Inc. ("Canadian Energy" or the "Company") (TSX VENTURE:XPL) announces financial and operating results for the third quarter ended September 30, 2011 and an update of current activities. The unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2011, together with the notes thereto; and management's discussion and analysis of financial condition and results of operations as at and for the for the three and nine months ended September 30, 2011 can be accessed electronically on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

Third Quarter and Nine Months Ending September 30, 2011 Highlights

  • During the nine months ended September 30, 2011, cash used in investing activities increased from $201,208 to $5,459,248 during the same period 2010.

  • Average production during the third quarter 2011 was lower at 7.8 versus 14.8 Boe per day; inclusive of an average NGL production during the third quarter 2011 of 0.4 Boe per day for the same period in 2010.

  • Petroleum and natural gas sales gross revenue was $28,742, and net loss was $417,619 for the three months ended September 30, 2011.

Operational Update

  • On the Company's Hardy Southeast Saskatchewan prospect, the Company has earned or has under option 53.50 sections (~13,857 hectares) and has acquired at Crown sales another six sections (~1,554 hectares.) The Company has expended a total of $6,799,596 exploring the lands to-date, including $5,528,123 for the nine months ended September 30, 2011.

  • The Company has drilled and evaluated four wells (three Devonian-depth wells and one Mississippian-depth well.) Nine separate formations were evaluated and three wells warranted equipping and production testing.

  • Currently two wells remain on production testing in the Bakken formation and the Company intends to license one new horizontal drilling location, while seeking a joint venture partner for that operation. The Company received permission from the Saskatchewan regulatory bodies to convert its vertical wells in the Hardy area to horizontal well licenses. The Company has obtained a horizontal survey to change its vertical well at Hardy 12-4-5-21W2 to CEEI HARDY HZ 4B12-4-4B5-33-4-21W2 and intends to apply for a license to drill same for Bakken. It is the Company's intention to seek a joint venture farmin partner for the drilling of the well expected to cost $2.75 million (drilled, completed and equipped). The Company has also licensed an additional Ratcliffe well at 13-36-5-21W2 on lands due to expire in March 2016.

  • The 2011 drilling program has not had economic results but the Company is encouraged enough to continue testing and evaluation, believing a horizontal wellbore is required to unlock ultimate potential. Our activity has extended the expiry of lands with all petroleum and natural gas rights held to the end of March 2012 on 12.75 sections (~3,302 hectares). The Company has applied for continuation of another 40.75 sections (~10,554 hectares) to the end of March 2012.

  • Third parties have licensed seven wells on offsetting lands along what the Company interprets as similar structural trends identified on 3D seismic, under license to the Company. They have drilled and are producing four horizontal Bakken wells but well information has not been completely released to the public.

  • As at September 30, 2011 the Company has $4,254,890 uncommitted cash on hand and expects to fund additional capital requirements by joint ventures, reducing Company participation to conserve capital and reduce risk.

  • The Company intends to license a re-entry of a vertical well on a new focus property in Pembina Alberta in anticipation of re-entering this wellbore and completing a potential light oil bearing zone. This activity could begin in Q4 2011 and would be conducted 100% by the Company.

  • The Company continues to look at all opportunities available to it including, but not limited to, high potential resource plays using low-cost wellbore re-entries. Further, should the potential of such resource plays be established, the Company intends to pursue additional financing to develop these plays. The Company is currently restricted by the rules of the TSX Venture Exchange in raising additional financing below $0.05, and as such the Company is also looking at mergers or corporate acquisitions. With approximately $4,000,000 cash on hand, the Company has taken steps to reduce its expenses and conserve capital.

In this Press Release the calculation of barrels of oil equivalent (Boe) is calculated at a conversion rate of six thousand cubic feet (Mcf) of natural gas for one barrel (Bbl) of oil based on an energy equivalency conversion method. Boe's may be misleading particularly if used in isolation. A Boe conversion ratio of 6 Mcf: 1Bbl is based on an energy equivalency conversion method primarily applicable to the burner tip and does not represent a value equivalency at the wellhead.

Forward-Looking Statements:

This press release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including statements regarding Canadian Energy's business, such as the review of strategic alternatives and licencing and drilling new wells, seeking a joint venture partner(s), which by their nature are forward-looking statements and which are subject to numerous risks and uncertainties, some of which are beyond Canadian Energy's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, operational risks in exploration and development, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although Canadian Energy believes that the expectations in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking information. As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements. The forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Canadian Energy does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

About Canadian Energy Exploration Inc.

Canadian Energy Exploration Inc. is a junior oil and gas company engaged in the exploration for and development and production of natural gas and oil reserves. Canadian Energy has 135,497,209 common shares outstanding and an aggregate of 16,292,937 unexercised warrants.

The Company's common shares are listed to trade on the TSX Venture Exchange under the symbol "XPL".

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

  • Canadian Energy Exploration Inc.
    Larry Buzan
    President and Chief Executive Officer
    (403) 229-2800
    buzan@cdnenergy.com