Online Energy Inc.
TSX VENTURE : ONL

November 29, 2011 09:00 ET

Online Energy Inc. Announces Third Quarter 2011 Financial Results and Provides Operations Update

CALGARY, ALBERTA--(Marketwire - Nov. 29, 2011) - Online Energy Inc. ("Online" or the "Company") (TSX VENTURE:ONL) announces the filing of its unaudited interim financial statements and related MD&A for the three and nine months ended September 30, 2011 (collectively, the "Financial Statements"). Selected financial and operational information is outlined below and should be read in conjunction with the Financial Statements. The Financial Statements are available on the SEDAR website at www.sedar.com and on the Company's website at www.onln.ca.

Highlights
In Canadian Dollars, Three months ended
September 30
Nine months ended
September 30
except shares 2011 2010 2011 2010
Petroleum and natural gas sales 1,367,924 - 3,278,084 -
Net loss (433,538 ) (19,103 ) (1,836,642 ) (19,545 )
Per share - basic and diluted (0.01 ) (0.02 ) (0.05 ) (0.07 )
Capital expenditures
Property, plant and equipment 1,356,349 - 8,501,362 -
Exploration and evaluation 1,678,840 403,565 3,525,141 513,955
Shares outstanding 41,309,890 1,747,691 41,309,890 1,747,691
Working capital 5,395,113 1,868 5,395,113 1,868
Highlights of the third quarter included:
  • Third quarter production averaged 380 boe/d (39% oil and NGLs);
  • Successfully re-entered and re-completed 2 existing wellbores. Both wells were placed on production subsequent to the third quarter and will contribute to the Company's Q4 production;
  • The Online horizontal Paddle River 100/08-31-055-07 W5M well targeting the Ostracod formation was drilled during the month of September and rig released on October 3, 2011 (100% working interest);
  • Increased the Company's working interests in certain operated producing natural gas assets in the Leaman and Niton areas of west-central Alberta for $525,000 plus a 5% gross overriding royalty on the properties acquired in the Niton area;
  • Made significant progress assembling a solid platform for future growth focused in the greater Paddle River area of west-central Alberta. The Company controls approximately 61,674 net acres (96 sections) of undeveloped land in this area and continues to accumulate assets through Crown land sales and third-party acquisitions; and
  • Exited the third quarter of 2011 with $5.4 million of working capital and no debt.
Operations Update and Outlook
  • The Online horizontal Paddle River 100/08-31-055-07 W5M well was recently completed. A nitrogen energized foamed water system was used to fracture stimulate the well in 12 stages using a variety of tonnages and concentrations of sand per stage. Initial flowback included 30 degree API oil at rates in excess of 220 bopd. Extended testing was hampered by an influx of water and wellbore blockages. In order to address these issues, the ball seats within the horizontal section of the wellbore were milled-out and an evaluation with a packer assembly was undertaken. The Company is confident that it has identified and isolated the source of the water. Despite delays due to availability of equipment, further evaluation of the well continues and the Company will report additional results as they become available.
  • The 8-31 well is the first horizontal Ostracod oil well drilled and fracture stimulated in the Paddle River area. The Company remains confident that once the well is fully evaluated, the knowledge gained will further the advancement of the project.
  • The Company has 34.5 net sections of prospective lands on the Ostracod oil trend in the Paddle River area.
  • Fourth quarter 2011 average production is estimated to be approximately 425 boe/d without considering any potential contribution from the 8-31 well.

An updated corporate presentation will soon be available on the Company's website at www.onln.ca.

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 Online. 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 Online shareholders and potential investors with information regarding the Company, including management's assessment of Online's future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on the Company'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. Online 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 Company's oil and natural gas properties;
  • oil and natural gas production levels;
  • capital expenditure programs;
  • the quantity of the Company'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 Company's most recent management's discussion and analysis included in the material available on this press release.

The Company'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, Online 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.

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.

Contact Information

  • Online Energy Inc.
    Steve Dabner
    President & Chief Executive Officer
    (403) 262-1901 ext. 228
    sdabner@onln.ca

    Online Energy Inc.
    Thomas Love
    Chief Financial Officer
    (403) 262-1901 ext.227
    tlove@onln.ca
    www.onln.ca