DeeThree Exploration Ltd.

DeeThree Exploration Ltd.

February 03, 2010 12:42 ET

DeeThree Exploration Ltd. Announces Year-End Corporate Reserves and 2010 Capital Budget and Guidance

CALGARY, ALBERTA--(Marketwire - Feb. 3, 2010) -


DEETHREE EXPLORATION LTD. ("DeeThree" or the "Company") (TSX VENTURE:DTX) is pleased to release its oil and gas reserves as of December 31, 2009, as evaluated by DeeThree's independent reserve engineering firm, Sproule Associates Ltd. The evaluation of DeeThree's petroleum and natural gas reserves was conducted pursuant to National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook (COGEH) reserves definitions.

The Company's 2009 capital activities resulted in the following year-end highlights:

- The Company increased its proved plus probable reserves by 75 percent to 2.060 million barrels of oil equivalent ("boe") as at December 31, 2009 as compared to 1.178 million boe booked at December 31, 2008. The Company also increased its proved reserves by 80 percent to 1.713 million boe as at December 31, 2009 as compared to 0.952 million boe booked at December 31, 2008.

- DeeThree executed a strategic capital investment program which resulted in estimated finding and development ("F&D") costs of $9.02 per proved plus probable boe and $10.16 per proved boe, including in both cases the change in undiscounted future development capital.

- Of DeeThree's total reserves as at December 31, 2009, 83 percent are classified as proved and 65 percent are classified as proved developed producing. DeeThree anticipates that all of its current proved reserves will be on-stream by the end of the first quarter of 2010.

- All additions to DeeThree's reserves through 2009 were a result of DeeThree's successful 10 well drilling program and positive revisions to DeeThree's existing producing asset base.

Corporate Reserves Information

December 31, 2009 Reserves Summary (Company interest before royalties)
Natural Crude Oil Oil
Gas & NGLs Equivalent
(columns may not add due to rounding) (MMcf) (Mbbls) (Mboe) (6:1)
Proved developed producing 7,827 21.5 1,332.8
Proved developed non-producing - - -
Proved undeveloped 2,283 - 380.5
Total Proved 10,109 21.5 1,713.2
Probable 2,029 6.4 346.6
Total Proved plus probable 12,138 27.9 2,059.9

Capital Efficiency

The finding and development costs table set out below highlights the efficiency of DeeThree's capital expenditures during 2009.

Amounts in $000s except reserve units and unit costs
Proved plus
Proved probable
Total capital expenditures (1) $8,750 $8,750
Future capital -- ending period (2) 2,365 2,365
Future capital -- beginning period (2) (1,335) (1,335)
All in total, including change in future capital (3) 9,780 9,780
Total reserve additions (mboe) 963 1,084
F&D cost ($/boe) $10.16 $9.02

(1) Total capital expenditures for fiscal 2009 are estimated and unaudited.
Total capital expenditures exclude non-cash asset retirement obligation
and capitalized stock-based compensation.
(2) Future capital expenditures required to convert proved non-producing
and probable reserves to proved producing.
(3) The aggregate of the exploration and development costs estimated to be
incurred in the most recent financial year and the change during that
year in estimated future development costs generally will not reflect
total finding and development costs related to reserve additions for
that year.

2010 Capital Budget and Market Guidance

DeeThree's 2010 capital budget is approximately $20 million. This budget is directed towards the development of DeeThree's core area of Lethbridge, Alberta and provides for a 20 well (20.0 net) drilling program and the acquisition and processing of two townships of 3D seismic data. Based on this capital budget, DeeThree anticipates an average daily production rate of 1,300 - 1,500 boe/d for 2010 with a 2010 exit rate of 1,800 - 2,000 boe/d generating projected cash flow of approximately $8.0 - $9.0 million based on a natural gas price $5.07 per gigajoule at AECO. The Company's unutilized credit facility of $8.0 million, is currently under review. DeeThree anticipates an increase to its credit facility that will be sufficient to fund its 2010 capital program along with its internally generated cash flow.

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; uncertainties associated with DeeThree's ability to obtain additional financing on satisfactory terms; 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. . Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements.

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.

We seek Safe Harbor.

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