DeeThree Exploration Inc.

DeeThree Exploration Inc.

August 31, 2009 09:00 ET

DeeThree Exploration Inc. Announces Financial and Operating Results for Second Quarter 2009

CALGARY, ALBERTA--(Marketwire - Aug. 31, 2009) -


DEETHREE EXPLORATION INC. (DeeThree) (TSX VENTURE:DTX) is pleased to release its financial and operational results for the three and six months ended June 30, 2009. DeeThree has filed its unaudited Consolidated Financial Statements for the period ended June 30, 2009, and related Management's Discussion and Analysis ("MD&A"), with Canadian securities regulatory authorities. DeeThree's materials may be viewed on

Operational Highlights

- Daily average production for the six months ended June 30, 2009 was 558 boe/d

- Drilled and cased first five wells of a planned 10 well program in Lethbridge

- Increased tested behind pipe gas production capability to 350 boe/d

- Identified additional deeper exploration prospects, thereby increasing drilling inventory

Certain selected financial and operational information for the three and six months ended June 30, 2009 and the 2008 comparatives are set out below and should be read in conjunction with DeeThree's Consolidated Financial Statements and MD&A.

Three Six
Months Ended Months Ended
June 30, June 30,
2009 2008 2009 2008
(000s, except per share
amounts) ($) ($) ($) ($)
Oil and gas revenues 1,040 297 2,635 403
Funds from operations (1) 95 144 695 113
Per share - basic and diluted 0.01 0.01 0.05 0.01
Net income (loss) (1,079) 66 (1,569) 10
Per share - basic and diluted (0.08) - (0.12) -
Capital expenditures 1,823 2 2,494 195
Working capital (deficiency) 1,511 (545) 1,511 (545)
Shareholders' equity 20,780 (63) 20,780 (63)
(000s) (#) (#) (#) (#)
Share Data (2)
At period-end 13,465 12,965 13,465 12,965
Weighted average
Basic 12,992 12,965 13,006 12,965
Diluted 13,099 12,965 13,112 12,965
Natural gas (mcf/d) 3,150 321 3,247 227
Crude oil & NGLs (bbls/d) 15 1 17 1
Total (boe/d) 541 55 558 39
Average wellhead prices
Natural gas ($/mcf) 3.33 9.90 4.20 9.44
Crude oil & NGLs($/bbl) 58.29 118.68 54.30 108.65
Total ($/boe) 21.13 60.22 26.09 57.70
Operating cost ($/boe) 7.88 12.98 8.45 20.19
Operating netback ($/boe) 9.90 33.05 14.13 25.91
Gross (net) wells drilled (#)
Gas 2 (2.0) - (-) 2 (2.0) - (-)
Oil - (-) - (-) - (-) - (-)
Standing 3 (3.0) - (-) 3 (3.0) - (-)
Dry and abandoned - (-) - (-) - (-) - (-)
Total 5 (5.0) - (-) 5 (5.0) - (-)
Average working interest (%) 100 - 100 -

(1) Funds from operations and funds from operations per share are not
recognized measures under Canadian generally accepted accounting
principles. Refer to the Management's Discussion and Analysis for
further discussion.
(2) Shares outstanding have been adjusted to reflect the reverse takeover
as described in note 1 to the consolidated financial statements as if
it occurred at the beginning of the period.
(3) For a description of the boe conversion ratio, refer to the commentary
at the beginning of the Management's Discussion and Analysis.

DeeThree drilled and cased five wells within its Lethbridge property in the second quarter of 2009, which are now in varying stages of evaluation. All wells were drilled deeper than the primary target to help evaluate the multi-zone potential of the land base. In order to begin to appraise DeeThree's large landholdings of over 220,000 net acres, several different play types, both development and exploration, were tested with these first five wells.

Management is extremely pleased with drilling results to date, and with the additional opportunities the new test information presents. The positive results have confirmed DeeThree's geological and geophysical models of the area. DeeThree has an extensive 3D seismic database, and has identified numerous additional seismic anomalies within its landholdings. Highlights of the drilling program include a high deliverability new pool natural gas discovery at the southernmost end of our land base that was drilled based on interpretation of company-owned 3D seismic. Additionally, two oil bearing zones (in addition to the successful gas target) were encountered in one of the wells drilled, and these shows have lead to the identification of potential optimized follow up locations using 3D seismic. One such follow up location will be drilled early in the fourth quarter of 2009.

Preparatory work such as surveying pipeline rights-of-way and obtaining required regulatory approvals is underway or complete for five separate tie-in projects. DeeThree will continue to monitor natural gas prices and will complete the tie-in projects in a prudent manner.

With the success of its drilling program Deethree will continue to focus capital into our exploration and development drilling program. Drilling in Q3 2009 is expected to consist of two followup locations in Lethbridge, with at least three additional drilling locations planned for early in Q4 2009. DeeThree has also commenced work on a 36 square mile 3D seismic project in the Lethbridge area. Field work is expected to start after harvest season is complete, and interpretation should commence prior to year end.

Martin Cheyne, DeeThree's President and Chief Executive Officer, commented, "We are very pleased with our drilling results to date. Initial success has confirmed our expectations and G&G models for the Lethbridge area, and we are confident that we will be able to take full advantage of the available capacity in our extensive 100%-owned gas gathering and processing infrastructure."

This new release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this press release may constitute forward-looking statements. These statements relate to future events or the DeeThree's future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. DeeThree believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon by investors. These statements speak only as of the date of this press release and are expressly qualified, in their entirety, by this cautionary statement.

In particular, this press release contains forward-looking statements, pertaining to the following: projections of market prices and costs, supply and demand for oil and natural gas, the quantity of reserves, oil and natural gas production levels, capital expenditure programs, treatment under governmental regulatory and taxation regimes, expectations regarding DeeThree's ability to raise capital and to continually add to reserves through acquisitions and development, and projections of market prices and costs.

With respect to forward-looking statements contained in this press release, DeeThree has made assumptions regarding, among other things: the legislative and regulatory environments of the jurisdictions where DeeThree carries on business or has operations, the impact of increasing competition, and DeeThree's ability to obtain additional financing on satisfactory terms.

DeeThree's actual results could differ materially from those anticipated in these forward-looking statements as a result of risk factors that may include, but are not limited to: volatility in the market prices for oil and natural gas; uncertainties associated with estimating reserves; geological, technical, drilling and processing problems; liabilities and risks, including environmental liabilities and risks, inherent in oil and natural gas operations; incorrect assessments of the value of acquisitions; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel.

This forward-looking information represents DeeThree's views as of the date of this document and such information should not be relied upon as representing its views as of any date subsequent to the date of this document. DeeThree has attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimates expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

BOE Presentation

References herein to "boe" mean barrels of oil equivalent derived by converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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

  • DeeThree Exploration Inc.
    Martin Cheyne
    President and Chief Executive Officer
    (403) 263-9130