Expedition Energy Inc.

Expedition Energy Inc.

November 17, 2005 15:15 ET

Expedition Energy Inc. Announces Record Financial and Operating Results for the Third Quarter 2005

CALGARY, ALBERTA--(CCNMatthews - Nov. 17, 2005) - Expedition Energy Inc. (TSX VENTURE:XPD) ("Expedition" or the "Company") is pleased to announce record financial and operating results for the third quarter 2005.


Highlights Three months ended Nine months ended
September 30 September 30
% %
2005 2004 change 2005 2004 change


revenue 1,531,767 172,230 789 2,521,620 418,900 502
Cash flow
operations 861,641 6,557 13,041 1,055,846 (118,440) 991
Per share
(basic) $ 0.04 $ 0.00 7,827 $ 0.05 $ (0.01) 648
Per share
(diluted) $ 0.04 $ 0.00 7,827 $ 0.05 $ (0.01) 648
Net earnings /
(loss) 282,997 (19,207) 1,573 273,748 (316,908) 186
Per share
(basic) $ 0.01 $ 0.00 1,882 $ 0.01 $ (0.02) 150
Per share
(diluted) $ 0.01 $ (0.00) 777 $ 0.01 $ (0.02) 150
Long term Debt 2,101,173 -
Total Assets 12,726,776 8,587,094 48
equity 6,448,116 6,238,809 3
Net capital
expenditures 966,937 1,307,960 (26) 4,966,678 2,117,218 135
outstanding 20,935,999 12,994,630 420 20,889,053 12,985,478 61


Working interest
Crude oil and
liquids (bbls/d) 70.2 26.0 170 61.0 20.1 203
Natural Gas
(mcf/d) 1438.7 201.8 613 834.1 131.7 533
Total oil
(boe/d) 309.9 59.6 420 200.4 42.1 376
Average prices
Oil ($/bbl) $ 49.30 $ 37.15 33 $ 37.91 $ 32.08 18
Gas ($/mcf) $ 9.17 $ 6.39 44 $ 8.29 $ 6.72 23
Cash flow
netback $ 30.21 $ 1.45 1,983 $ 19.31 $(10.28) (288)
costs ($/boe) $ 6.44 $ 6.79 (5) $ 9.11 $ 10.49 (13)
General &
($/boe) $ 7.42 $ 21.90 (66) $ 10.03 $ 27.96 (64)
Wells drilled
Gross 2 3 (33) 9 4 125
Net 1.05 2.15 (51) 6.18 2.65 133

A copy of the Company's Financial Statements for the period ending September 30 2005 and the related Management Discussion and Analysis can be viewed on the SEDAR website at www.sedar.com.

Expedition has continued its growth via the drill bit with increased production, cash flow and earnings. Two (1.05 net) wells were drilled in the third quarter resulting in one (.5 net) horizontal oil well and one (.55 net) dry hole. The period was challenging for the industry in terms of access to field locations caused by an extremely wet spring and summer which in turn increased demand of field services such as drilling rigs, completion and construction services. However as the quarter came to an end services became more readily available to meet our needs.

Financial and Operating Results

Expedition reported increased production volumes in the third quarter of 2005, averaging 310 boe/d which was 81% higher than the 171 boe/d reported in the second quarter of 2005 and 420% higher than the 60 boe/d reported in the same period in 2004. Oil and NGL production averaged 70 boe/d which is 170% increase over the same period 2004. Gas production averaged 1,439 mcf/d for the third quarter, 114% higher than the second quarter and 613% higher than third quarter 2004.

Cash flow from operations of $861,641 was recorded in the third quarter of 2005, a 461% increase over $153,546 recorded in the second quarter and a very significant increase over the $6,557 recorded in the same period in 2004. Cash flow from operations increased primarily due to production increases as well as higher commodity prices. Net earnings of $282,997 were recorded in the third quarter of 2005, as compared to $16,242 in the second quarter of 2005 and a loss of $19,207 in the same period in 2004.

Capital expenditures totaled $966,937 in the third quarter of 2005. The Company spent $519,452 on drilling and completions, $338,378 on facilities and $108,328 on land and seismic.

Current Operations and Outlook

Expedition has a very active drilling program underway consisting of the drilling of 9 wells (6 of which have been drilled, one drilling) with varying interests from 50% to 100%. The program is largely focused on natural gas objectives in Central and West-Central AB.

At Nevis AB, four additional wells have now been drilled and completion and tie-in operations are underway. These wells are expected to be on production by year end. Expedition is very pleased with the performance of the first four CBM wells which have a combined deliverability of approximately 900 mcf/d. Similar results are expected from the new wells. The Company owns and operates 100% of this project.

In West-Central AB, a second Ferrier well is currently drilling. The Company has a 50% operated interest in the Ferrier property. The company was successful at recent land sales in the West Central AB area which sets up several deeper drilling locations for 2006.

In Central AB, a 100% interest well at Three Hills was drilled and cased for CBM and Belly River gas. Two other gas prospects are planned to be drilled in Q4-2005, one in the Erskine area and one near Cessford. The Company is currently in the process of lease construction or acquiring a surface lease for these wells.

In West-Central SK, heavy oil development activity is continuing in the Kerrobert area (Expedition 50% interest). A vertical well has been drilled, 12-31T-32-23W3M and is on production at 40 bbl/d (20 bbl/d net). This well offsets the Company's B5-31 well (drilled in Oct.2004) which produces at approximately 90 bbl/d (45 bbl/d net) with very low water cut. In September 2005, Expedition drilled and cased a horizontal Mannville heavy oil well at 7-21-33-24W3M. The well was completed and commenced production in the first week of October at 50 bbl/d (25 bbl/d net). Additional vertical and horizontal locations are planned for the Kerrobert area in 2006.

Expedition remains on track to meet or exceed its 2005 year end production target of 550 boe/d as current production is approximately 450 boe/d. With new production expected from the Nevis AB and Kerrobert SK areas, year end production will be comprised of approximately 75% natural gas.

This information contains forward-looking statements (forecasts) under applicable securities laws. Forward-looking statements are necessarily based upon assumptions and judgments with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, and the regulatory and legal environment. Many of these factors can be difficult to predict. As a result, the forward-looking statements are subject to known or unknown risks and uncertainties that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. The term barrels of oil equivalent or boe may be misleading, particularly if used in isolation. The boe conversion ratio used by Expedition 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. All boe conversions herein are derived by converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil.

Expedition Energy Inc. is an emerging Alberta based public corporation actively engaged in the exploration, development and production of crude oil and natural gas in Western Canada. The Company continues to follow its strategy of internally developing prospects, securing land in core areas, and growing predominantly through drilling. Selective acquisitions that support core area growth are also considered. The Company strives to maintain a high working interest and operate properties. Expedition's shares are listed for trading on the TSX Venture Exchange under the symbol XPD.

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

Contact Information

  • Expedition Energy Inc.
    Scott St. John
    President and CEO
    (403) 264-1699
    (403) 264-1499 (FAX)
    Website: www.xpdenergy.com
    Expedition Energy Inc.
    725, 435 - 4th Avenue S.W.
    Calgary, Alberta T2P 3A8
    QIS Capital Corp.
    Doren Quinton
    Investor Relations
    (250) 376-8989
    Email info@qiscapital.com