Churchill Energy Inc.

Churchill Energy Inc.

November 28, 2006 17:56 ET

Churchill Announces Q3 Results

CALGARY, ALBERTA--(CCNMatthews - Nov. 28, 2006) - Churchill Energy Inc. (TSX VENTURE:CEI) ("Churchill") is pleased to announce operational and financial results for the nine months ended September 30, 2006. Comparative numbers are for Outback Exploration Ltd. ("Outback") as a result of the acquisition of Outback in December 2005 being accounted for as a reverse takeover.


Three Months Ended Nine Months Ended
September 30, September 30,
$ 2006 2005 2006 2005 Change

Oil and gas revenues,
net of royalties 1,923,182 1,011,924 5,173,566 2,188,162 136%
Funds from
operations(1) 889,437 516,110 1,992,095 851,875 134%
Per Unit - Basic
and diluted
($ per share) 0.03 0.05 0.08 0.09 (11%)
Net Income (loss) (208,441) (141,546) 339,842 (920,183) (137%)
Per Unit - Basic
and diluted
($ per share) (0.01) (0.01) 0.01 (0.10) (114%)
Capital Expenditures,
net of
dispositions 5,356,788 3,028,698 20,011,364 4,245,253 371%
Total assets 53,036,580 14,919,501 53,036,580 14,919,501 255%
Working deficiency
excluding bank
debt 1,921,159 749,959 1,921,159 749,949 156%
Bank debt 5,276,292 1,306,338 5,276,292 1,306,338 304%
Weighted Average
Common shares
issued and
Basic 27,842,797 10,075,231 25,767,892 9,285,032 178%
Diluted 27,998,408 11,221,065 25,993,028 10,419,875 149%


Average Daily
Crude oil and NGLs
(bbls/d) 178 65 162 28 478%
Natural gas
(mcf/d) 1,732 908 1,568 988 59%
Barrels of oil
equivalent (BOE/d) 467 217 423 193 119%
Average Product
Prices Received
Crude oil and NGLs
($/bbl) 59.98 56.64 57.13 55.73 6%
Natural gas ($/mcf) 5.74 9.55 6.26 8.05 (22%)
Combined ($/BOE) 44.17 57.10 44.92 49.43 (9%)
Netback 26.56 32.61 25.74 24.76 4%
Wells Drilled
Gross 11 - 21 2 950%
Net 5.78 - 7.71 0.75 928%
Success 83% - 79% 50% 29%

Undeveloped land
(net acres) 57,078 - 57,078 18,209 213%

(1) References to funds from operations throughout this report are based on
cash flow from operating activities before changes in non-cash working
capital and expenditures on site restoration and reclamation.


Highlights for Q3 as follows:

- Drilled 11 (5.78 net working interest) wells during the quarter, resulting in six (4.15 net) oil wells, three (0.53 net) natural gas wells and one (0.10 net) salt water disposal well, for an overall success rate, based on net wells of 83%.

- Production volumes increased 115% over the same three month period in 2005 to 467 boe/d, which is also an 11 boe/d increase from the previous quarter.

- Oil and gas revenues, net of royalties increased 90% to $1,923,182 in the three months ended September 30, 2006.

- Funds from operations increased 72% over the third quarter of 2005 to $889,437 reflecting the amalgamation that occurred in the fourth quarter of 2005, increase in production volumes offset by weaker natural gas prices.

The Company has commenced its winter drilling program in the Smoky Area of Alberta and is currently participating in the drilling of one (.125 net) well and expects to spud an operated well (.725 net) later this week.

Churchill will be filing its quarterly report for the three months ended September 30, 2006 including the financial statements, accompanying notes and MD&A on SEDAR ( and on the company's website at Churchill is a Calgary-based junior oil and natural gas company with operations in Alberta and Saskatchewan. The common shares of Churchill are listed on the TSX Venture Exchange and trade under the symbol "CEI".

Forward Looking Statements: Certain information regarding Churchill in this news release including management's assessment of future plans and operations, production estimates, drilling inventory and wells to be drilled, timing of drilling and tie-in of wells, productive capacity of new wells, capital expenditures and the timing thereof, may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing 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, the timing and length of plant turnarounds and the impact of such turnarounds and the timing thereof, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence Churchill's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur, or, if any of them do so, what benefits Churchill will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could effect Churchill's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (, at Churchill's website ( Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Churchill 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.

BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio 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.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

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