Drake Pacific Enterprises Ltd.
TSX VENTURE : DPE

Drake Pacific Enterprises Ltd.

June 01, 2009 16:50 ET

Drake Pacific Enterprises Ltd. Reports First Quarter 2009 Results

CALGARY, ALBERTA--(Marketwire - June 1, 2009) -

Attention Business/Financial Editors:

Drake Pacific Enterprises Ltd. ("Drake" or "the Company") (TSX VENTURE:DPE) has filed its Unaudited Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") for the first quarter ended March 31, 2009 on SEDAR. Notice of the Annual General Shareholders' Meeting set for June 26 2009, as well as the Information Circular and related documents have also been filed on SEDAR. These documents can be accessed through Drake's website at www.drakepacific.com or on SEDAR's site at www.sedar.com.

HIGHLIGHTS OF Q1 2009

The year of 2009 has started off on a harsh note for the oil and gas industry. The depressed commodity prices, particularly the natural gas prices, have been difficult to bear. Furthermore, it appears that the industry will have to endure at least one and maybe two more quarters of these low prices. Prices for next winter appear to be moving into a reasonable price range and that will relieve some of the pressure on the industry. The challenge will be to maintain liquidity and to try and capitalize on the down markets.

In addition to the price issues, Drake's results were also hurt by the six weeks delay in restarting the Sousa production. There were problems with the pipeline that was buried in December that resulted in freeze up of the pipeline. It then took several weeks to identify, locate and repair the problem.

Drake has been able to reduce all of its costs on a per boe basis and continues to press forward on its cost reduction efforts.

The good news is that Drake exited the quarter at about 260 boes per day. A new well was drilled and tied in at Sousa and was brought on in April. There is some water associated with its production and the Company is currently putting a program in place to deal with the water economically.

OUTLOOK

Drake has taken steps to ensure that the Company is well positioned for the future by selling a non-operated property, the proceeds of which will strengthen the balance sheet and provide liquidity for the periods ahead until prices improve. At the same time the Company is looking for attractive opportunities to acquire additional interests in properties.



SELECTED INFORMATION Three months ended March 31
--------------------------------
%
2009 2008 change
--------------------------------
Daily production
Oil and liquids - bbls/day 67 25 169%
Natural gas - mcf/day 943 391 141%
Boe/day - 6:1 224 90 149%

Price
Price/bbl - oil and liquids $ 43.52 $ 92.82 (53%)
Price/mcf - natural gas $ 4.97 $ 7.99 (38%)
Price/boe $ 33.91 $ 60.38 (44%)

Financial
Operating costs/boe $ 17.81 $ 21.55 (17%)
Netback/boe $ 8.94 $ 33.30 (73%)
General and administrative/boe $ 12.38 $ 16.89 (27%)

Revenue $ 685,029 $ 495,444 38%
Cash Flow from operations $ (84,675) $ 120,936 (170%)
Net earnings (loss) $ (483,082) $ (274,532) (76%)

Basic weighted average 16,988,647 10,649,647


Drake Pacific Enterprises Ltd. is active in oil and gas exploration and development in Alberta and Saskatchewan. Headquartered in Calgary, Alberta, Canada, the Company is publicly traded on the Toronto Stock Exchange Venture Board under the stock symbol DPE.V.

This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein. Barrel of oil equivalent ("boe") amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel and is based on an energy equivalent conversion method application at the burner tip and does not necessarily represent an economic value equivalent at the wellhead.

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

Contact Information

  • Drake Pacific Enterprises Ltd.
    Neil Orr
    V.P., Business Development
    (403) 263-2173, Ext - 785
    (403) 263-8254 (FAX)
    Email: norr@drakepacific.com