Wild Stream Exploration Inc.
TSX VENTURE : WSX

April 07, 2011 21:16 ET

CORRECTION FROM SOURCE: Wild Stream Exploration Inc. Announces Fourth Quarter and Year End 2010 Operating and Financial Results

CALGARY, ALBERTA--(Marketwire - April 7, 2011) - A correction from source is being issued in regards to the release which was sent out at 20:02 ET on April 7, 2011. The corrected release is as follows:

Wild Stream Exploration Inc. (the "Company" or "Wild Stream") (TSX VENTURE:WSX) is pleased to announce that it has filed on SEDAR its audited financial statements and related Management's Discussion and Analysis ("MD&A") for the three months and year ended December 31, 2010 and 2009. Certain selected financial and operational information is set out below and should be read in conjunction with Wild Stream's audited financial statements and related MD&A. These filings will be available at www.wildsr.com and www.sedar.com.

2010 Financial and Operating Highlights

                    Three months ended                  Year ended   
                           December 31, Percent        December 31, Percent 
                      2010        2009   Change      2010     2009   Change 
                  ----------------------------------------------------------
Financial                                                                   
 (thousands of                                                              
 dollars except                                                             
 share data)                                                                
Petroleum and                                                               
 natural gas                                                                
 revenue            16,135       3,796      325    45,447   11,264      303 
Funds from                                                                  
 operations (1)     10,450         201    5,099    27,494    4,858      466 
 Per share
  - basic             0.26        0.01    2,500      0.74     0.76       (3)
  - diluted           0.22        0.01    2,100      0.64     0.49       31 
Net earnings                                                                
 (loss)              1,816        (629)     389     3,636   (2,638)     238 
 Per share 
  - basic             0.05       (0.03)     267      0.10    (0.41)     124 
  - diluted           0.05       (0.03)     267      0.09    (0.41)     122 
Capital                                                                     
 expenditures,                                                              
 net                45,736      36,127       27   118,910   33,334          
Corporate                                                                   
 acquisitions          322       2,622      (88)    9,424    2,622      259 
Working capital                                                             
 deficiency                                                                 
 (surplus) (4)                                     28,621  (13,735)    (308)
Weighted average                                                            
 shares                                                                     
 (thousands)                                                                
 Basic                                             37,323    6,366      486 
 Diluted                                           42,724    6,366      571 
Shares                                                                      
 Outstanding, end                                                           
 of period                                                                  
 (thousands)                                                                
 Basic                                             42,589   26,414       61 
 Diluted                                           52,012   34,205       52 
Operating (6:1                                                              
 boe conversion)                                                            
Average daily                                                               
 production                                                                 
 Liquids (bbls/d)    2,569         587      338     1,809      494      266 
 Natural gas                                                                
  (mcf/d)            1,122         184      510     1,128      289      290 
 Barrels of oil                                                             
  equivalent                                                                
  (2)(boe/d)         2,756         618      346     1,997      542      268 
Netbacks                                                                    
 Operating                                                                  
  Petroleum and                                                             
   natural gas                                                              
   revenue(4)        63.37       66.81       (5)    62.71    56.91       10 
  Royalties          (6.73)      (7.97)     (16)    (7.90)   (5.63)      40 
  Operating                                                                 
   expenses         (11.29)     (19.22)     (41)   (12.52)  (17.93)     (30)
  Transportation                                                            
   expenses          (1.93)      (2.35)     (18)    (1.85)   (2.12)     (13)
                  ----------------------         -------------------        
 Operating                                                                  
  netback ($/boe)    43.42       37.27       17     40.44    31.23       29 
                  ----------------------         -------------------        
                  ----------------------         -------------------        
 Corporate                                                                  
  netback(3)
  ($/boe)            41.23        3.54    1,065     37.72    24.55       54 
Undeveloped Land                                                            
 (net acres)                                      136,909   50,493      171 
Reserves                                                                    
 Total Proven                                                               
  (mboe)                                           10,123    3,155      221 
 Proven Plus                                                                
  Probable (mboe)                                  15,706    4,811      226 
(1) Management uses funds generated by operations to analyze operating
    performance and leverage. Funds generated by operations as 
    presented do not have any standardized meaning prescribed by
    Canadian GAAP and therefore it may not be comparable with the
    calculation of similar measures for other entities. The
    reconciliation between funds flow from operations and cash flow
    from operating activities can be found in the MD & A.
(2) Boe conversion ratio for natural gas of 1 Boe: 6 Mcf has been
    used, which is based on an energy equivalency conversion method
    primarily applicable at the burner tip and does not necessarily
    represent a value equivalency at the wellhead.
(3) Corporate netbacks are calculated as the operating netback less
    general and administrative expenses, financial charges asset
    retirement obligations and in 2009, the reorganization costs. 
(4) Excludes unrealized risk management contracts and related future
    income taxes. 
2010 Accomplishments
Year ended December 31, 2010
--  Increased net asset value by 92% to $8.87 per share (PVBT 10%) from
    $4.61 per share at December 31, 2009. 
--  Increased average daily production by 268 percent to 1,997 boe/d from
    542 boe/d in 2009. 
--  Increased proved plus probable reserves by 226 percent to 15.7 
    million boe (97% liquids) from 4.8 million boe at December 31, 2009.
--  Increased funds from operations per diluted share by 31 percent to
    $0.64 in 2010 from $0.49 in 2009. 
--  Continued an active drilling program and drilled 55 gross (51.4 net)
    wells resulting in 54 crude oil wells for a success rate of 98
    percent. Incurred exploration and development capital expenditures
    of $117.6 million. 
--  Increased our undeveloped lands by 171% to 136,909 resulting in a
    significant increase to our drilling inventory. 
--  Completed two financings raising a total of $63.5 million in common
    share equity. 
--  Completed corporate and net property acquisitions totaling $34.2
    million. 
2011 First quarter Operations Update 
--  Drilled 16 gross (14.8 net) oil wells with a 100% success rate
    including 12.4 net wells in Shaunavon, 2.0 net wells in Dodsland
    and 0.4 net wells in Garrington. 
--  Acquired Vertex Oil & Gas Ltd., adding 300 boe/d and 42 net drilling
    locations in Dodsland. 
--  Acquired 13.5 net sections of land in the Swan Hills oil fairway,
    with the first 100% well anticipated in the second half of 2011. 
--  Raised $83.5 million through the issuance of 7.7 million shares at a
    price of $10.85 per share. 
--  Exited the quarter with an estimated positive working capital
    position of $25 million in addition to an undrawn credit facility
    of $70 million.

Reserves and Capital Efficiencies

The Company's reserves were evaluated as at December 31, 2010 by the independent engineering firm of Sproule Associates Limited ("Sproule") in accordance with the rules provided by National Instrument 51-101 ("NI 51-101"). The following tables provide summary information presented in the Sproule report effective December 31, 2010 and based on their January 1, 2011 price forecast.

The December 31, 2010 reserve reports were prepared by Sproule utilizing the methodology and definitions as set out under NI 51-101. The year end working interest reserves for 2010 include Wild Stream's working interests excluding royalty interests received before royalties payable. Where amounts and volumes are expressed on a barrel of oil equivalent basis ("boe"), gas volumes have been converted to barrels of oil at 6,000 cubic feet per barrel (6 mcf/bbl).

Summary of Reserves (forecast prices)

                                                   December 31, December 31,
                                                          2010         2009
                                                   ------------ ------------
Proved                                                                      
  Light and medium oil (mbbls)                           9,593        2,885
  Heavy oil (mbbls)                                        112          107
  NGL's (mbbls)                                             83           19
  Natural gas (mmcf)                                     2,009          858
                                                   ------------ ------------
  BOE (mboe)                                            10,123        3,155
Proved plus probable                                                        
  Light and medium oil (mbbls)                          14,858        4,384
  Heavy oil (mbbls)                                        217          198
  NGL's (mbbls)                                            125           29
  Natural gas (mmcf)                                     3,036        1,209
                                                   ------------ ------------
  BOE (mboe)                                            15,706        4,811
Summary of Company Working Interest Oil and Gas Reserves - Forecast Prices
and Costs
                    Light                                                   
                      and                                          Future(1)
                   Medium             Natural                   Development 
                    Crude     Heavy       Gas   Natural             Capital 
December 31,          Oil       Oil   Liquids       Gas     BOE       Costs 
 2010              (mbbls)   (mbbls)   (mbbls)    (mmcf)  (mboe)    ($000's)
                 --------- --------- --------- --------- ------ ------------
Proved                                                                      
- Developed                                                                 
  Producing         4,758       112        68     1,708   5,223         891 
- Developed Non-                                                            
  Producing            48         -         1        28      54         126 
- Undeveloped       4,787         -        14       273   4,846      98,364 
                 --------- --------- --------- --------- ------ ------------
Total Proved        9,593       112        83     2,009  10,123      99,381 
Probable            5,265       105        42     1,027   5,583      24,758 
                 --------- --------- --------- --------- ------ ------------
Total Proved                                                           
 Plus Probable     14,858       217       125     3,036  15,706     124,139 
                 --------- --------- --------- --------- ------ ------------
                 --------- --------- --------- --------- ------ ------------
Note:
1.  Future development costs are costs required by Wild Stream to convert
    proved undeveloped reserves and probable reserves to proved developed
    producing reserves. 
Net Present Value of Reserves - Before Income Taxes (Forecast Prices and
Costs) 
                                                    Discounted at           
                                         -----------------------------------
December 31, 2010(1)      Undiscounted        5%      10%      15%      20% 
 (2)                               (M$)      (M$)     (M$)     (M$)     (M$)
                       ----------------- -----------------------------------
Proved                                                                      
- Developed Producing          236,625   190,418  163,056  144,866  131,732 
- Developed Non-                 2,906     2,370    2,011    1,757    1,569 
  Producing                                                                 
- Undeveloped                  174,488   132,113  104,165   84,321   69,488 
                       ----------------- -------- -------- -------- --------
Total Proved                   414,019   324,901  269,233  230,944  202,789 
Probable                       293,786   175,321  119,642   88,768   69,460 
                       ----------------- -------- -------- -------- --------
Total Proved Plus               
 Probable                      707,805   500,222  388,875  319,713  272,248 
                       ----------------- -------- -------- -------- --------
                       ----------------- -------- -------- -------- --------
1.  Utilizing Sproule January 1, 2011 price forecast per below. 
2.  As required by NI 51-101, undiscounted well abandonment costs of $14.2
    million for total proved reserves and $16.9 million for total proved
    plus probable reserves are included in the Net Present Value
    determination. 
3.  It should not be assumed that the estimates of future net revenues
    presented in the table represent the fair market value. 
Net Present Value of Reserves - After Income Taxes (Forecast Prices and
Costs) 
                                                    Discounted at           
                                         -----------------------------------
December 31, 2010(1)       Undiscounted       5%      10%      15%      20% 
 (2)                                (M$)     (M$)     (M$)     (M$)     (M$)
                       ----------------- -----------------------------------
Proved                                                                      
- Developed Producing           223,098  181,467  156,330  139,400  127,067 
- Developed Non-                                                            
  Producing                       2,113    1,716    1,450    1,262    1,122 
- Undeveloped                   125,878   92,590   70,567   54,940   43,295 
                       ----------------- -------- -------- -------- --------
Total Proved                    351,090  275,773  228,347  195,602  171,485 
Probable                        212,312  126,434   85,507   62,685   48,359 
                       ----------------- -------- -------- -------- --------
Total Proved Plus                                                           
 Probable                       563,402  402,206  313,853  258,286  219,844 
                       ----------------- -------- -------- -------- --------
                       ----------------- -------- -------- -------- --------
1.  Utilizing Sproule January 1, 2011 price forecast per below. 
2.  As required by NI 51-101, undiscounted well abandonment costs of $14.2
    million for total proved reserves and $16.9 million for total proved
    plus probable reserves are included in the Net Present Value
    determination. 
3.  It should not be assumed that the estimates of future net revenues
    presented in the table represent the fair market value. 
Summary of Pricing Assumptions as of December 31, 2010 - Forecast Prices
                                                                 Heavy Crude
                                                                         Oil
                      Foreign                            Western   Proxy (12
               WTI   Exchange   Edmonton        AECO      Canada        API)
               Oil       Rate        Oil         Gas      Select At Hardisty
          (US$/bbl) (US$/Cdn$) (Cdn$/bbl)(Cdn$/mmbtu)  (Cdn$/bbl)   $CDN/bbl
        --------------------------------------------------------------------
2011         88.40      0.932      93.08        4.04       80.04       74.46
2012         89.14      0.932      93.85        4.66       80.71       75.08
2013         88.77      0.932      93.43        4.99       78.48       72.87
2014         88.88      0.932      93.54        6.58       76.70       71.09
2015         90.22      0.932      94.95        6.69       77.86       72.16
2016         91.57      0.932      96.38        6.80       79.03       73.25
2017         92.94      0.932      97.84        6.91       80.23       74.36
2018         94.34      0.932      99.32        7.02       81.44       75.48
2019         95.75      0.932     100.81        7.14       82.67       76.62
2020         97.19      0.932     102.34        7.26       83.92       77.78

Annual escalation rate of 1.5%, thereafter

The following reconciliation of Company Interest (note 1) reserves compares changes in the Company's reserves as at December 31, 2009 to the reserves as at December 31, 2010, each evaluated using NI 51-101 definitions and using forecast prices and cost estimates.

                                        Total          Total   Total Proved 
                                       Proved       Probable  plus Probable 
                               ---------------------------------------------
                                        (mboe)         (mboe)         (mboe)
Balance December 31, 2009               3,155          1,656          4,811 
  Technical revisions                    (461)          (487)          (948)
  Exploration discoveries                  43             28             71 
  Acquisitions                            963            276          1,239 
  Dispositions                           (135)           (74)          (209)
  Drilling extensions and                                                   
   infill drilling                      7,183          3,961         11,144 
  Economic factors                         11              8             19 
  Improved recoveries                      93            215            308 
  Production                             (729)             -           (729)
                               ---------------------------------------------
Balance December 31, 2010(2)           10,123          5,583         15,706 
                               ---------------------------------------------
                               ---------------------------------------------
Note:
1.  Company Interest reserves means, our working interest (operating and
    non-operating) share before deduction of royalties and including any
    royalty interest of the Company. 
2.  May not add due to rounding. 

Net Asset Value

At December 31, 2010, Wild Stream had a before tax net asset value of $8.87 per diluted share at a 10 percent discount using total proved plus probable reserves as evaluated by Sproule under the standards of NI 51-101 and an internal assessment of undeveloped land value. The net asset value is a point in time calculation and is based on various assumptions, including commodity prices and foreign exchange rates that vary over time. It should not be assumed that the net asset value represents the fair market value. Forecast prices used in this assessment were the Sproule price forecast as of January 1, 2011. No value was assigned for the Company's proprietary seismic.

The calculation of net asset value per diluted share is outlined in the following table:

($ thousands)                                    5%         10%         15% 
                                           discount    discount    discount 
----------------------------------------------------------------------------
Net present value of proved plus probable                                   
 reserves (1)                               500,222     388,875     319,713 
Undeveloped land (2)                         75,000      75,000      75,000 
Net (debt) surplus                          (28,621)    (28,621)    (28,621)
Proceeds from exercise of stock options &                                   
 warrants                                    26,337      26,337      26,337 
----------------------------------------------------------------------------
Total                                       572,938     461,591     392,429 
Fully diluted shares at December 31, 2010                                   
 (thousands) (3)                             52,012      52,012      52,012 
Net asset value per diluted share            $11.02       $8.87       $7.54 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1.  Net present value of reserves evaluated by Sproule as of December 
    31, 2010, in accordance with the standards of NI 51-101 using
    forecasted prices and costs, discounted at five, ten and fifteen
    percent before taxes. 
2.  The undeveloped lands of 136,909 net acres were internally
    evaluated by management in accordance with the standards of
    NI 51-101. 
3.  Fully diluted shares are calculated including outstanding warrants
    and stock options.  
Capital Program Efficiency
The efficiency of the Company's capital program for the year ended December
 31, 2010 is summarized below:
                             December 31, 2010         December 31, 2009    
                         ------------------------- -------------------------
                                       Proved plus               Proved plus
                               Proved     Probable       Proved     Probable
                         ------------ ------------ ------------ ------------
Capital expenditures ($                                                     
 thousands)                                                                 
 Exploration and                                                            
  development(1)              117,628      117,628        5,625        5,625
 Acquisitions - corporate                                                   
  and property (2)             34,282       34,282       34,943       34,943
 Change in future                                                           
  development capital          85,767       99,882        8,499        9,860
                         ------------ ------------ ------------ ------------
 Total costs                  237,677      251,792       49,067       50,428
                         ------------ ------------ ------------ ------------
Reserve additions (mboe)                                                    
 Exploration and                                                            
  development                   6,869       10,594          557          919
 Acquisitions - corporate                                                   
  and property, net               828        1,030        1,366        1,589
------------------------------------- ------------ ------------ ------------
------------------------------------- ------------ ------------ ------------
Finding and development                                                     
 costs ($/boe)                                                              
 Finding and development                                                    
  costs without change in                                                   
  future capital                17.12        11.10        10.10         6.12
 Finding and development                                                    
  costs with change in                                                      
  future capital                29.61        20.53        25.36        16.85
Acquisition costs ($/boe)                                                   
 Finding and development                                                    
  costs                         41.40        33.28        25.58        21.99
Finding, development and                                                    
 acquisition costs                                                          
 ($/boe)(3)                                                                 
 Finding and development                                                    
  costs without change in                                                   
  future capital                19.74        13.07        21.10        16.18
 Finding and development                                                    
  costs with change in                                                      
  future capital                30.88        21.66        25.52        20.11
------------------------------------- ------------ ------------ ------------
------------------------------------- ------------ ------------ ------------
Recycle Ratio                                                               
 Operating netback                                                          
  ($/boe)                       40.44        40.44        31.23        31.23
 Finding and development                                                    
  costs ($/boe)                 30.88        21.66        25.52        20.11
 Recycle ratio                   1.31         1.87         1.22         1.55
------------------------------------- ------------ ------------ ------------
------------------------------------- ------------ ------------ ------------
Reserves                                                                    
 Reserves additions                                                         
  including revisions                                                       
  (mboe)                        7,697       11,624        1,923        2,508
 Total production 2010                                                      
  (mboe)                          729          729          198          198
 Reserves replacement           10.6x        15.9x         9.7x        12.7x
------------------------------------- ------------ ------------ ------------
------------------------------------- ------------ ------------ ------------
Reserve Life Index                                                          
 Total Company Interest                                                     
  reserves (mboe)              10,123       15,706        3,155        4,811
 December 2010 production                                                   
  (mboe)                           99           99           25           25
 Annual 2010 production                                                     
  (mboe)                          729          729          198          198
------------------------------------- ------------ ------------ ------------
------------------------------------- ------------ ------------ ------------
 RLI based on December                                                      
  2010 annualized                                                           
  production (years)              8.5         13.2         10.8         16.5
 RLI based on 2010 annual                                                   
  production (years)             13.9         21.5         15.9         24.3
1.  Total capital expenditures exclude non-cash asset retirement
    obligations, future income tax allocations and stock-based
    compensation.
2.  Total capital expenditures included in corporate and property
    acquisitions are net of the proceeds on property dispositions. 
3.  In all cases, the FD&A number is calculated by dividing the 
    identified capital expenditures by the applicable reserve additions.

Outlook

South West Saskatchewan experienced record snow pack over the first quarter which will result in a prolonged breakup. As a result we are not anticipating the re-start of our drilling activities in Shaunavon and Dodsland until early June. Although second quarter production volumes may be nominally impacted we do not expect any impact to our average 2011 guidance of 4,100 boepd.

Currently the company has $95 million of undrawn bank lines and positive working capital which positions us well for executing an aggressive capital program this year.

Wild Stream's multiyear inventory, proven execution abilities and commitment to prudent fiscal management should allow your company to see meaningful per share growth for the foreseeable future. We remain committed to increasing shareholder value through a combination of exploration, strategic acquisitions and subsequent exploitation while maintaining a conservative approach to balance sheet management.

Additional corporate information can be found in our April corporate presentation on our website at www.wildsr.com.

FORWARD LOOKING STATEMENTS: This press release contains forward-looking statements. More particularly, this press release contains statements concerning Wild Stream's drilling plans, future growth plans, reserves and values attributable thereto, per share growth and Wild Stream's growth strategy. In addition, the use of any of the words "guidance", "initial, "scheduled", "will", "prior to", "estimate", "anticipate", "believe", "potential", "should", "unaudited", "forecast", "future", "continue", "may", "expect", "project", and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained herein are based on certain key expectations and assumptions made by the Company, including expectations and assumptions concerning the success of optimization and efficiency improvement projects, the availability of capital, current legislation, the success of future drilling and development activities, the performance of existing wells, the performance of new wells, Wild Stream's growth strategy, general economic conditions, availability of required equipment and services and prevailing commodity prices. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in the Company's Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com or Wild Stream's website www.wildsr.com.

The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Meaning of Boe: When used in this press release, Boe means a barrel of oil equivalent on the basis of 1 Boe to 6 thousand cubic feet of natural gas. Boe per day means a barrel of oil equivalent per day. Boe's may be misleading, particularly if used in isolation. A Boe conversion ratio of 1 Boe for 6 thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

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

  • Wild Stream Exploration Inc.
    Mr. Neil Roszell
    President and Chief Executive Officer
    403-767-1250
    403-232-8083

    Wild Stream Exploration Inc.
    Mr. Jerry Sapieha, CA
    Vice President, Finance and Chief Financial Officer
    403-767-1265
    403-232-8083
    www.wildsr.com