Hyperion Exploration Corp.

Hyperion Exploration Corp.

May 30, 2013 17:42 ET

Hyperion Exploration Corp. Announces First Quarter March 31, 2013 Financial and Operating Results

CALGARY, ALBERTA--(Marketwired - May 30, 2013) - Hyperion Exploration Corp. ("Hyperion" or the "Company") (TSX VENTURE:HYX) is pleased to announce operating results for the quarter ended March 31, 2013. Selected financial and operational information is outlined below and should be read in conjunction with Hyperion's unaudited financial statements and related management discussion and analysis which will be available for review under Hyperion's SEDAR profile at www.sedar.com.

Q1 2013 Financial Highlights

The following represents the highlights of Hyperion's first quarter ended March 31, 2013:

  • Average production in Q1 2013 of 1,475 boe/day (61% light oil and NGLs), a 12% increase compared to the Q1 2012 production average of 1,312 boe/day (61% light oil and NGLs);
  • Quarterly funds flow in Q1 2013 of $4.0 million or $0.07/share, a 23% year over year increase;
  • Continued to achieve operating efficiencies with field netbacks of $38.01 per boe in Q1 2013 compared to $32.24 per boe in Q1 2012;
  • In Q1 2013, Hyperion expended total capital, including land acquisitions and work overs of $4.1 million; and
  • As at March 31, 2013 total unused and available credit facilities of over $17.5 million.

Financial Highlights

3 Months Ended March 31
2013 2012 Change
Financial ($000's except per share amounts)
Oil sales (net of financial contract settlements) 5,545 5,334 4%
NGL sales 818 685 19%
Natural gas sales 1014 641 58%
Total Oil, NGL, & Natural gas 7,377 6,660 11%
Funds inflow (outflow) from operations 4,017 3,275 23%
Per common share basic & FD ($) 0.07 0.06 17%
Net earnings (loss)1 (14,228) 173 nm
Per common share basic & FD ($) (0.26) - nm
Capital expenditures including deposits 4,074 26,851 -85%
Working capital (deficit) exit (33,928) (33,871) 0%
Unused credit facilities 17,466 19,479 -10%
Oil (bbls per day) 723 677 7%
NGL (bbls per day) 172 124 39%
Natural gas (mcf per day) 3,480 3,069 13%
Total (boe per day) (6:1) 1,475 1,312 12%
Per 1 million common share basic & FD (boe per day)2 27.219 24.211 12%
Average realized price ($'s - production weighted)
Oil ($ per bbl) 84.63 86.59 -2%
NGL ($ per bbl) 53.01 60.79 -13%
Natural gas ($ per mcf) 3.24 2.29 41%
Average ($ per boe) 55.29 55.77 -1%
Netback ($'s per boe)
Oil, natural gas and NGL sales 55.29 55.77 -1%
Royalties (4.63) (11.29) -59%
Operating and transportation expenses (12.65) (12.24) 3%
Operating netback 38.01 32.24 18%
Common Shares (000's)
Basic and fully diluted common shares o/s, end of period3 54,190 54,190 0%
Weighted average basic and fully diluted common shares o/s3 54,190 54,190 0%
1 Net income includes non-cash asset impairment charges of $15,100
2 Weighted average basic and fully diluted common share count used in calculation. Figures not adjusted for debt or working capital positions.
3 Basic and fully diluted common shares outstanding are considered equivalent prior to Q3 2012 as all dilutive instruments are considered anti-dilutive under IFRS.

Operations Update

Hyperion drilled 1 gross (1 net) Cardium horizontal light oil well in Q1, 2013. In addition, 2 gross (2 net) Cardium horizontal wells were fracture stimulated, equipped and placed on production. Hyperion continued to focus on capital efficiency in Q1, 2013 by using monobore drilling techniques. Such techniques effectively reduced drilling times by approximately 4 days (as compared to setting intermediate casing on the initial wells) and completion flow back time by approximately 3 days.

Hyperion continues to be pleased with the production performance of the Cardium horizontal wells placed on production as detailed in the April 22, 2013 press release. The location selection of the initial drills was driven by land expiries and earning commitments and not based on our best geological opportunities. Future wells will target areas where the geology indicates increased net pay and improved reservoir quality. Based on results achieved, location of future wells and target capital per well (based on a full scale continuous drilling program) we expect rates of return to exceed 70% and payouts of approximately 1.3 years. This asset base contains all the attributes for top tier growth including a low risk, repeatable, drilling profile, and strong internal rate of return. Hyperion currently holds 37,440 gross (34,000net) acres of Cardium rights in the Niton/McLeod area, including the previously announced farm in, with an average working interest of approximately 90%. Total Petroleum Initially In Place ("TPIIP") effective as of April 18, 2013, is internally estimated to be up to 171 MMbbls (net) of light oil with a primary recovery factor of 11.7%. The Niton/McLeod area is characterized by up to 191 gross (172 net) Cardium horizontal drilling locations with recycle ratios of greater than 2.0. At year end 2012, approximately 9.4% of these locations have been drilled or booked with approximately 174 gross (156) net locations remaining as un-booked. These estimates are subject to change with varying economic conditions and future drilling results.

Hyperion is a publically traded, junior light oil and gas company resulting from the recapitalization of Triple 8 Energy Ltd. in July 2010. Hyperion's business strategy is to grow through acquisitions which lead to lower risk, scalable and repeatable, light oil, development drilling projects. Currently Hyperion has 54,190,359 common shares outstanding. The common shares of the Company trade on the TSX Venture Exchange under the trading symbol "HYX".

Forward Looking and Cautionary Statements

This press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements 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, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Hyperion. Undue reliance should not be placed on these forward-looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.

In the interest of providing Hyperion shareholders and potential investors with information regarding the Corporation, including management's assessment of Hyperion's future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on the Corporation's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. By its nature, such forward-looking information involves 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. Hyperion believes 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 contained throughout this press release should not be unduly relied upon. These statements speak only as of the date specified in the statements.

In particular, this press release may contain forward looking statements pertaining to the following:

  • the performance characteristics of the Corporation's oil and natural gas properties;
  • oil and natural gas production levels;
  • capital expenditure programs;
  • the quantity of the Corporation's oil and natural gas reserves and anticipated future cash flows from such reserves;
  • projections of commodity prices and costs;
  • supply and demand for oil and natural gas;
  • expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; and
  • treatment under governmental regulatory regimes.

The material assumptions in making these forward-looking statements include certain assumptions disclosed in the Corporation's most recent management's discussion and analysis included in the material available on this press release.

The Corporation's actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:

  • volatility in market prices for oil and natural gas;
  • liabilities inherent in oil and natural gas operations;
  • uncertainties associated with estimating oil and natural gas reserves;
  • competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel;
  • incorrect assessments of the value of acquisitions and exploration and development programs;
  • geological, technical, drilling and processing problems;
  • fluctuations in foreign exchange or interest rates and stock market volatility;
  • failure to realize the anticipated benefits of acquisitions;
  • general business and market conditions; and
  • changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry.

These factors should not be construed as exhaustive. Unless required by law, Hyperion does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Total Petroleum Initially-in-Place ("TPIIP") - is defined in the Canadian Oil and Gas Evaluation Handbook ("COGEH") as the quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. TPIIP includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered. There is no certainty that it will be economically viable or technically feasible to produce any portion of this TPIIP except for those portions identified as proved or probable reserves.

Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.

Estimated values contained in this press release do not represent fair market value.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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