Highview Resources Ltd.

Highview Resources Ltd.

March 30, 2007 20:04 ET

Highview Reports Financial and Operating Results for the Year Ended November 30, 2006

CALGARY, ALBERTA--(CCNMatthews - March 30, 2007) - Highview Resources Ltd. (TSX VENTURE:HVW)


The year ended November 30th, 2006 was a challenging year for Highview.

Unsuccessful exploration, combined with operational problems at several of the company's oil and gas properties and lower commodity prices resulted in a significant reduction in both values of the company's oil and gas assets and financial results. In addition, lower commodity prices reduced investor interest in oil and gas equities.

As a result of the foregoing, the Board of Directors of Highview was faced with many challenges and difficult decisions with respect of the future of the company.

In January 2007, the President, John Cassels, and the Vice President of Exploration, Philip Rodd, both left the employ of Highview, and the Board of Directors assumed management responsibilities for the company.

The Board commenced an extensive review process, involving an analysis of numerous strategic alternatives for the company.

As a result of this process, the Company announced on March 29, 2007 that it has entered into an agreement to sell substantially all of its oil and natural gas assets to an unrelated private company in consideration of a sum of $5.0 million. Subsequent to the closing of the Transaction, Highview will have approximately $3.6 million in cash and no financial obligations other than a commitment to expend and renounce approximately $0.8 million of qualified capital expenditures with respect to flow through shares issued in 2006. These expenditures must be incurred prior to December 31, 2007.

The Transaction is subject to the approval of the TSX Venture Exchange and the Company's Shareholders at a meeting anticipated to be held in mid May 2007. The agreement requires the closing of the Transaction no later than May 31, 2007.

The asset sale is the initial step of an ongoing restructuring of the Company, which is planned to include the addition of a new management team and the acquisition of a core property prior to the close of the Transaction.


Oil and gas revenues totaled $2,041,000 for the year ended November 30, 2006 down 30% from $2,916,000 in 2005. Cash flow from operations totaled $194,000 for the year as compared to $1,093,000 in fiscal 2005, an 82% reduction. Highview incurred a net loss of $10,259,000 in fiscal 2006, including excess depletion of $9,896,000 as a result of a significant write down of the net book value of the Company's assets, compared to a $50,000 net loss for fiscal 2005.

Capital expenditures for the year ended November 30, 2006 totaled $4.1 million including $2.5 million for the drilling, completing, testing and equipping of 15 wells.

Summary Information
Year ended November 30,
2006 2005
Total revenue $ 2,040,746 $ 2,916,406
Cash flow from operations $ 194,072 $ 1,093,067
Per share, basic and diluted $ 0.00 $ 0.02
Net loss $ (10,259,084) $ (49,903)
Per share, basic and diluted $ (0.11) $ (0.00)
Capital expenditures $ 4,127,111 $ 8,217,014
Working capital $ (820,343) $ (210,897)
Total shares outstanding, at year end 95,523,472 65,918,393


The production of natural gas in the year ended November 30, 2006 averaged 689 Mcf/d compared to 959 Mcf/d for the same period in 2005. This 28% reduction resulted from production declines at the company's Alexander and Newton fields.

Reserves (proven plus probable)
Natural gas (MMcf) 1,762 2,167
Crude oil (MBbl) 83 26
NGL (MBbl) 9 9
BOE (MBOE) 386 398
Natural gas (Mcf/d) 689 959
Crude oil (Bbl/d) 6 4
NGL (Bbl/d) 1 2
BOE (BOE/dl) 122 166
Product Prices
Gas ($/Mcf) $ 7.57 $ 7.94
Oil ($/Bbl) $ 53.50 $ 40.92
NGL ($/Bbl) $ 60.43 $ 49.89
Land (undeveloped acres)
Gross 80,785 90,497
Net 19,556 20,103


The Board of Directors is pleased that the sale of the company's assets will result in Highview retaining a substantial block of capital, as well as tax pools, as a base from which to rebuild the company.

With the considerably improved outlook for oil and gas pricing through the balance of 2007 the addition of a new management team should permit the recommencement of growth for Highview.

BOE Presentation - the term barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1Bbl 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 in this report are derived by converting gas to oil in the ratio of six Mcf of gas to one Bbl of oil.

Financial Reporting - all numbers are reported in Canadian dollars.

On behalf of the Board of Directors.

R.W. Lamond, Chairman


March 28th, 2007

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.
    R.W. Lamond
    (403) 269-9889
    (403) 269-9890 (FAX)