Centurion Energy International Inc.

Centurion Energy International Inc.

March 27, 2006 09:00 ET

Centurion Announces Financial Results and Reserves Summary for the Year Ended December 31, 2005

CALGARY, ALBERTA--(CCNMatthews - March 27, 2006) - Centurion Energy International Inc. ("Centurion") (TSX:CUX) (AIM:CUX.L)

Centurion announces today that it has filed its annual audited consolidated financial statements and management's discussion and analysis for the year ended December 31, 2005.

Copies of the above described documents are available on the Canadian system for electronic document analysis and retrieval ("SEDAR") at www.sedar.com and on Centurion's website at www.centurionenergy.com.

Highlights include:

- increased total production to 38,000 boe per day at year-end 2005, doubling the 2004 exit rate for Centurion's Egyptian properties

- increased the 2004 average daily production rate of 11,475 boe per day to 22,863 boe per day in 2005

- increased year-end proved plus probable reserves in Egypt to 97 mmboe, more than doubling Centurion's reserve base from year-end 2004 after replacing production

- acquired 1,400 square kilometers of 3-D seismic on existing Nile Delta exploration concessions

- participated in a total of 29 wells (19.9 net), resulting in 13 gas wells (13 net), 7 oil wells (2.1 net), 6 dry wells (3.16 net) with 3 wells (1.6 net) testing at year-end

- entered into a conditional purchase and sale agreement for a private U.S. based company with operations in Egypt and Texas U.S.A.

- purchased an additional 25 percent working interest in the West El Manzala and West El Qantara concession in Egypt. Subsequent to this purchase, Centurion signed a Farm-In and LNG co-operation agreement with two Shell affiliates in respect of these concessions

- awarded a 10% interest (7.5 percent net) in Block 4 of the Nigeria/Sao Tome joint development zone

- completed 500 square kilometers of 2-D seismic in the Kom Ombo Exploration Concession (Block 2 Ganope)

- sold producing properties in Tunisia


2005 marked another successful year for Centurion with several key milestones being achieved. For the second year in a row, both exit and average production rates increased by over 75% from prior year levels and in early January 2006, production surpassed the 40,000 boe per day level for the first time in Centurion's operations. The El Wastani field continues to exceed expectations and constituted the main area of growth in 2005. Further development drilling and step-out wells are expected to keep El Wastani production at current levels for several years. South El Manzala production declined in 2005 as water breakthrough and sand influx into the well bore has limited the productive capability of some wells in the area.


Cash on hand at December 31, 2005 was $27.1 million compared to $37.4 million at December 31, 2004. Centurion had working capital of $28.9 million at December 31, 2005 compared to working capital of $49.3 million at December 31, 2004.

During the fourth quarter of 2005, Centurion revised its credit facility with the Standard Bank. The revised facility has a credit limit of US$150 million, with US$100 million available immediately and an option of an additional US$50 million subject to certain bank restrictions.

Cash Flow and Earnings

Corporate cash flow for 2005 was $65.7 million ($0.75 per share basic, $0.71 per share diluted) compared to $42.1 million in 2004 ($0.54 per share basic, $0.51 per share diluted). Cash flow increased by 56% and cash flow per fully diluted share increased 39% over fiscal 2004. Excluding the impact of the Tunisian properties write-down ($0.17 per share), earnings for 2005 were $23.6 million ($0.27 per share basic, $0.26 per share diluted) compared to $13.4 million in 2004 ($0.17 per share basic, $0.16 per share diluted). Including the impact of this write-down earnings for 2005 were $9.1 million ($0.10 per share basic and diluted).

Performance Indicators 2005 2004 2003

($000s CAD except per share amounts)

Cash Flow - continuing operations 59,244 31,029 10,732
Cash Flow - discontinued operations 6,430 11,036 20,063
Cash flow - corporate 65,674 42,065 30,795
Basic per share - continuing
operations $0.67 $0.40 $0.17
Diluted per share - continuing
operations $0.64 $0.38 $0.16
Basic per share - corporate $0.75 $0.54 $0.48
Diluted per share - corporate $0.71 $0.51 $0.46
Earnings - continuing operations 6,653 10,505 536
Earnings - discontinued operations 2,474 2,895 10,091
Earnings - corporate 9,127 13,400 10,627
Basic per share - continuing
operations $0.08 $0.13 $0.01
Diluted per share - continuing
operations $0.07 $0.13 $0.01
Basic per share - corporate $0.10 $0.17 $0.17
Diluted per share - corporate $0.10 $0.16 $0.16
Net revenue - continuing operations 108,626 54,796 24,425
Net revenue - corporate total 117,605 72,693 52,104
Total assets 253,753 180,657 148,744
Total long-term financial
liabilities 18,865 34,735 33,677
Common shares outstanding 88,577,185 84,055,985 74,351,127

Performance Indicators 2005 2004 2003


Average daily rate (boe/d )
Continued operations 22,250 9,854 4,185
Discontinued operations 613 1,621 2,417
Corporate 22,863 11,475 6,602
Annual production (mboe)
Continuing operations 8,121 3,605 1,528
Discontinued operations 224 594 882
Corporate total 8,345 4,199 2,410
Exit production rate (boe/d) 38,000 21,150 10,500


Sales Price Realizations
(Continuing Operations)

Natural gas ($US per mcf) 2.76 2.70 2.74
Crude oil ($US per bbl) 35.03 28.50 23.46
Condensate ($US per boe) 53.87 38.41 27.77

Centurion also discloses certain financial information (cash flow and cash flow from operations) in this press release that does not have any standardized meaning as prescribed by Canadian GAAP and are therefore considered non GAAP measures. These measures may not be comparable to similar measures presented by other public issuers.

Proved plus Probable Reserves (MMBOE) Constant Prices

Centurion's share of gross reserves was evaluated by Ryder Scott Company as at December 31, 2005 in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. Reserve data provided prior to 2004 was evaluated by Adams Pearson Associates.

Remaining Reserves
Centurion Working Interest

Oil Gas & LPG Combined
(mmstb) (bcf) (mmbbls) (mmboe)(2)
Proved developed 0.70 264.07 12.00 56.71
Proved undeveloped 0.00 2.41 0.12 0.52
Total proved 0.70 266.48 12.12 57.23
Probable 0.23 183.07 9.04 39.78
Proved plus probable 0.93 449.55 21.16 97.01

Cumulative Cash Flow (AIT) ($mm)(1)
Discounted at:

0% 5% 10% 15% 20%
Proved developed 439.4 360.1 301.1 255.9 220.5
Proved undeveloped 0.2 1.7 1.3 0.9 0.6
Total proved 441.6 361.8 302.4 256.8 221.1
Probable 274.2 187.1 132.9 98.0 74.5
Proved plus probable 715.8 548.9 435.3 354.8 295.6

(1) The cash flow amounts were determined on an after-tax basis using a
constant price of US$59.17 Brent per barrel, the price as at
December 31, 2005. The price used for gas in Egypt was based on the
fixed terms of the gas purchase contracts. The corresponding average
gas price over the life of the reserves is approximately US$2.65 per
mcf. Prices for condensates and LPG as of year-end were determined
to be US$56.80 per barrel and US$47.93 per barrel, respectively.
(2) BOE - barrels of oil equivalent, gas converted at 6 mscf = 1 barrel

Reserves additions in Egypt of 59.7 million boe less production of 8.1 million boe resulted in a net reserves increase of 51.6 million boe. The reserves additions replaced production by a factor of 7.4 times. This increase is mainly a result of the application of three dimensional (3-D) seismic and successful drilling results on Centurion's Nile Delta lands. All reserves associated with the Tunisian producing properties were sold on April 26, 2005 and effective January 1, 2005.

Further Annual Disclosure Filings

The filing of Centurion's Annual Information Form which includes National Instrument 51-101 Statement of Reserves Data & Other Information is scheduled to be filed on SEDAR and Centurion's website on Friday March 31, 2006.

Cautionary Statement regarding Forward Looking Information

Certain statements contained in this news release relating to matters that are not historical facts, and statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this news release includes, but is not limited to: statements relating to "reserves" and "resources" as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves described can be profitably produced in the future; development drilling; oil and natural gas prices and demand; expansion and other development trends of the oil and natural gas industry; and the maintenance of existing government, supplier and partner relationships.

All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties and assumptions are difficult to predict and may affect operations, including, without limitation: the risks associated with foreign operations; foreign exchange fluctuations; commodity prices; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas companies to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and natural gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us and other factors, many of which are beyond our control. The foregoing factors are not exhaustive and are further discussed under the heading "Risk Factors" in the Annual Information Form of Centurion filed on SEDAR at www.sedar.com.

Boe's disclosed in this news release may be misleading, particularly if used in isolation. A boe conversion ratio of 6mfc:1 boe is based on an energy equivalency conversation method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The forward-looking information contained herein is expressly qualified by this cautionary statement.

Contact Information

  • Centurion Energy International
    Barry W. Swan
    Senior Vice President and CFO
    (403) 263-6002
    Centurion Energy International
    Scott Koyich
    Investor Relations
    (403) 215-5979
    Website: www.centurionenergy.com
    Citigate Dewe Rogerson, London
    Martin Jackson
    +44 207 638 9571
    Citigate Dewe Rogerson, London
    Kate Delahunty
    +44 207 638 9571