Highview Resources Ltd.
TSX VENTURE : HVW

Highview Resources Ltd.

November 01, 2005 19:05 ET

Highview Announces Third Quarter Results and Updates Operations

CALGARY, ALBERTA--(CCNMatthews - Nov. 1, 2005) - During the third quarter of 2005, Highview (TSX VENTURE:HVW) was extremely active on the operational side of the business. At the same time the Company reported record production revenues and cash flow. In addition, Highview completed a thorough geological and geophysical review of the substantial block of acreage acquired through the Arctos transaction.

Financial

Oil and gas revenues for the first nine months ended August 31, 2005 totaled $2.1 million up substantially from the $431,000 reported for the nine months ended August 31, 2004. Cash flow from operations reached almost half a million dollars for 2005 as compared to a cash flow deficiency of $65,000 for last year. Capital expenditures for the nine months totaled $6.2 million including $2.8 million pertaining to the acquisition of properties from Arctos.

Operations

The Company's production increased for the nine months ended August 31, 2005 to an average of almost 180 BOE/d compared with 40 BOE/d in 2004. Highview's Q3 target for an exit production rate was 542 BOE per day. This target was not met as a result of the following:

At Strachan, Highview drilled a multi zone gas well (WI 25%) despite very difficult drill site and access road conditions resulting from the wettest spring and summer on record. The testing phase is almost complete. This well will not be tied-in until Q2 of next year.

At Newton the two wells drilled during the winter (WI 25%), have yet to be tied-in by the operator due to surface land access problems. The two wells are expected to produce 1.5 MMcf/d when they come on-stream. One well will be on stream in November and the second in February of 2006.

At Alexander the construction of a battery facility for an oil well acquired from Arctos Petroleum was completed during the summer. This well was forecast to produce 350 BOE/d (May 10, 2005 press release). Once the battery was completed and the well tied-in it was unable to produce oil without a very high water cut. Another gas zone present in this well and one other well were tested to establish production from the Ellerslie zone. These wells will be tied-in during Q1 of 2006. During the summer, Highview shot a 3D seismic survey over five sections in the area and identified six drillable locations. In addition, the Company negotiated two additional farm-outs which will involve the drilling of two additional wells this winter.

At Wood River, Highview completed and tied-in a dual-zone oil and gas well (WI 50%). The well went on-stream in August at an initial production rate of 1 MMcf/d. The well has declined since then to 0.5 MMcf/d. The Company plans to produce the natural gas until it is depleted, at which time Highview will move to the productive oil zone for completion and tie-in.

At Morningside, Highview drilled a dual-zone gas well (WI 50%) which is currently awaiting completion.

Outlook

Highview's focus is now entirely on the winter drilling season ahead. The Company has completed a comprehensive evaluation of our extensive undeveloped land position in our core areas taking into account the financial resources available to us.



HIGHLIGHTS
Nine months ended August 31, 2005 August 31, 2004
FINANCIAL
Total revenue 2,145,621 431,177
Cash flow from operations 472,617 (65,029)
Per share .01 (.00)
Net income (loss) (176,328) 242,135
Per share (.00) .02
Capital expenditures 6,232,987 334,367
Working capital (deficiency) (210,897) (96,949)
OPERATIONS
Production
Natural Gas - Per Day (Mcfd) 1,036 224
Crude Oil - Per Day (Bopd) 3 3
NGL - Per Day (Bopd) 2 -
BOE - Per Day (BOEd) 178 40
Product Prices
Gas ($/Mcf) 7.23 6.42
Oil ($/Bbl) 40.49 28.68
NGL ($/Bbl) 46.90 -
Total shares outstanding 65,899,893 15,791,667


BOE's (or McfGE's or other applicable units of equivalency) may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl (or an McfGE conversion ration of 1 bbl: 1 Mcf) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Forward-looking statements - statements included in this press release that are not historical facts may be considered "forward-looking statements." All estimates and statements that describe the Company's objectives, goals or future plans are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties where actual results could differ materially from those currently anticipated.

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

Contact Information

  • Highview Resources Ltd.
    John H. Cassels
    President & CEO
    (403) 269-9889
    (403) 269-9890 (FAX)
    or
    Highview Resources Ltd.
    Robert W. Lamond
    Chairman
    (403) 269-9889
    (403) 269-9890 (FAX)