Kootenay Energy Inc.

Kootenay Energy Inc.

June 04, 2007 18:47 ET

Kootenay Energy Inc. Announces First Quarter Results "Revised"

CALGARY, ALBERTA--(Marketwire - June 4, 2007) - Kootenay Energy Inc. (the Corporation) (TSX VENTURE:KTY) wishes to clarify and amend the disclosure set forth in its news release dated May 31, 2007 as follows. Please refer to the corporation's financial statements and MDA for the period ended March 31, 2007.

Kootenay Energy Inc ("Kootenay") is pleased to report on its unaudited interim financial and operating results for the three months ended March 31, 2007.

Three Months
March 31
2007 2006
Financial Results ($000s, except
per share amounts)

Gross Revenue 2,355 1,071
Income (loss) before taxes 87 (145)
Per Share (basic) $ 0.00 $ (0.01)
Per Share (basic) $ 0.00 $ (0.01)
Funds flow from operations 974 (308)
Per Share (basic) $ 0.04 $ (0.01)
Per Share (basic) $ 0.04 $ (0.01)
Capital expenditures 1,695 2,243
Total Assets 23,654 12,324
Working capital (deficiency) (12,041) (3,015)
Asset retirement obligation 856 653

Share Data (000s)
Common Shares (weighted average) 22,203 20,056
Options 1,610 2,010

Sales Volumes
Crude oil and liquids bbls/d 308 198
Natural gas mcf/d 522 270
Average boe/d 395 228

Product Prices
Crude oil $/bbl 69.62 55.56
Natural gas liquids $/boe 36.17 33.00
Natural gas $/mcf 7.67 5.90

Net back analysis ($/boe)
Oil and gas revenue 64.30 52.19
Royalties 12.48 12.86
Operating Costs 11.66 8.14
Net backs 40.16 31.19

Production averaged 395 bodpd over the three months ended March 31, 2007, an increase of 73% over the same period in 2006 and an increase of 15% over the 344 boepd in the fourth quarter of 2006.

The Corporation drilled 3 gross (2.08 net) wells in the first quarter of 2007 resulting in 2 oil wells and 1 gas well. The first well located in the Weyburn field was drilled and cased as a Midale oil well. The well is currently producing 150 barrels of oil per day (Net 12 bbls/d). The second well at 16-21-40-18w4m in the Leahurst field was cased as a Mannville gas well with the Corporation having a 100% working interest. Gas reserves were encountered in three zones within the Mannville. The primary interval production is producing at a rate of 560 mcf/d (94 boe/d). The two secondary zones will be produced following depletion of the primary zone. The well was tied-in and brought on production in May of 2007. An oil well drilled in the Skaro field in central Alberta was completed and brought on production in the first quarter of 2007. The Cooking Lake pool oil well drilled at 15-28-57-19w4m has been tied into the Corporations oil battery and is currently producing 55 bbls/d of 37 degree API oil. The Corporation is presently producing in excess of 550 boe/day.

The calculations of barrels of oil equivalent ("boe") are based on a conversion rate of six thousand cubic feet ("mcf") of natural gas to one barrel of crude oil. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio 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.

The above disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Corporation's control, including: the impact of general economic conditions in Canada, industry conditions, increased competition, the lack of available qualified personnel or management, equipment failures, fluctuations in product prices and in foreign exchange or interest rates and stock market volatility. The Corporation's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Corporation will derive there from.

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

Contact Information

  • Kootenay Energy Inc.
    Jack Marsh
    President and Chief Executive Officer
    (403) 355-9800