Open Range Energy Corp.
TSX : ONR

Open Range Energy Corp.

March 22, 2011 17:19 ET

Open Range Energy Corp. Announces 2010 Financial, Operating and Reserves Results

CALGARY, ALBERTA--(Marketwire - March 22, 2011) - Open Range Energy Corp. (TSX:ONR) ("Open Range" or "the Company") is pleased to announce its financial and operating results for the year ended December 31, 2010, highlights from its independent reserve evaluation as at December 31, 2010 and highlights from its first-half 2011 capital program to date. The Company has filed its audited financial statements, related management's discussion and analysis and annual information form for the year ended December 31, 2010 on www.sedar.com and on the Company's website at www.openrangeenergy.com.



FINANCIAL AND OPERATING HIGHLIGHTS

Consolidated Highlights

Three Three
months months Year Year
ended ended ended ended
December December December December
(in thousands except per share 31, 31, 31, 31,
amounts) 2010 2009 2010 2009
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Revenue (1) $ 13,791 $ 9,254 $ 47,972 $ 28,203

Funds from operations 9,293 6,243 30,522 15,341
Per basic share 0.15 0.14 0.50 0.50
Per diluted share 0.15 0.14 0.50 0.50
Net earnings (loss) (515) (517) (3,529) (6,137)
Per basic and diluted share (0.01) (0.01) (0.06) (0.20)

Net debt 49,820 37,571 49,820 37,571
Capital expenditures, net $ (357) $ 65,950 $ 42,268 $ 85,778

Weighted average shares
outstanding
- basic and diluted 60,936 44,132 60,935 30,980
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(1) Includes the realized gain or loss on commodity contracts.


Exploration & Production Highlights

Three Three
months months Year Year
ended ended ended ended
December December December December
31, 31, 31, 31,
2010 2009 2010 2009
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Production
Natural gas (mcf per day) 20,467 15,814 20,606 13,293
Oil and NGL (bbls per day) 386 282 349 241
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Total (@ 6:1) (boe per day) 3,797 2,918 3,783 2,457

Realized average sales prices
Natural gas ($ per mcf)(2) 4.24 5.29 4.58 4.88
Oil and NGL ($ per bbl) 64.93 60.09 65.52 51.41
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Combined average ($ per boe) 29.43 34.47 30.99 31.45
Royalties ($ per boe) (1.71) (1.55) (2.78) (3.08)
Operating costs ($ per boe) (4.48) (5.26) (4.73) (5.58)
Transportation costs ($ per boe) (0.97) (0.75) (0.90) (0.96)
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Operating netback ($ per boe) 22.27 26.91 22.58 21.83
G&A costs ($ per boe) (2.40) (1.92) (2.26) (3.09)
Net interest expense ($ per boe) (1.45) (1.75) (1.38) (1.34)
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Corporate netback ($ per boe) 18.42 23.24 18.94 17.40
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Poseidon Concepts Highlights
Three Three
months months Year Year
ended ended ended ended
December December December December
31, 31, 31, 31,
(in thousands except percentages) 2010 2009 2010 2009
----------------------------------------------------------------------------
Fracturing fluid handling tank
rental revenue 3,657 - 5,320 -
Operating costs (485) - (586) -
G&A costs (172) - (225) -
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Operating earnings (EBITDA) 3,000 - 4,509 -
Operating margin 82% - 85% -
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----------------------------------------------------------------------------


HIGHLIGHTS

In the year ended December 31, 2010, Open Range:

- Grew average production to 3,783 boe per day, an increase of 54 percent over 2009 average volumes and net of non-core dispositions;

- Drilled 11 (7 net) wells, including four (3.6 net) gross horizontal wells targeting the Wilrich, Notikewin and Bluesky formations at the Company's core Ansell/Sundance Deep Basin property, as part of its $42 million net capital investment program;

- Grew annual funds from operations to $30.5 million ($0.50 per share), an increase of 99 percent over 2009, and fourth quarter funds from operations to $9.3 million ($0.15 per share), a period-over-period increase of 49 percent;

- In the fourth quarter generated proceeds of $12.6 million through disposition of non-core properties, reducing higher-cost production by just over 300 boe per day and abandonment liabilities by $2.2 million;

- Generated revenues of $5.3 million and EBITDA of $4.5 million in the first seven months of operations of its Poseidon Concepts business unit;

- Exited the year with $49.8 million in net debt, reducing its year-end debt to annualized fourth quarter 2010 funds from operations ratio to 1.3:1;

- Increased proved plus probable reserves to 20.4 million boe and total proved reserves to 12.7 million boe at year-end, representing year-over-year increases of 21 percent and 27 percent, respectively;

- Achieved finding, development and acquisition (FD&A) costs, excluding the change in future development capital (FDC), of $8.67 per boe of reserves added in 2010, and including the change in FDC, of $17.27 per boe of reserves added in 2010. This represents recycle ratios of 2.6 times and 1.3 times for proved plus probable reserves added, respectively; and

- Replaced 2010 production by 3.5 times and increased the Company's reserve-life-index to 15.3 years.

Subsequent to the year ended December 31, 2010, Open Range:

- Initiated and to date conducted the majority of its first-half 2011 capital program, focused at Ansell/Sundance and consisting of four (3.6 net) horizontal wells targeting the Wilrich Formation. All four gross wells have been drilled to date, the first coming on-stream in mid-February and having produced at an initial production (IP) rate over its first 30 days of 3.9 mmcf per day plus approximately 13 bbls of NGL per mmcf, with two others currently on fracturing fluid cleanup and about to come on-stream and one awaiting completion operations;

- Issued 7.0 million common shares at $2.85 per common share in a bought-deal financing that raised gross proceeds of $20 million and closed March 21;

- Announced revised first-half 2011 EBITDA guidance of $9.5 million for the Poseidon Concepts business unit; and

- Remained on-track to meet guidance for first-half 2011 average daily production of 4,200 boe per day, which will generate estimated consolidated funds from operations of $22 million ($0.34 per share) in the six-month period ended June 30, 2011.

2010 IN REVIEW

The past year has been the most successful and important for Open Range since the Company's founding in late 2005. We are larger, financially stronger and more diversified than at any time in our history. Over the past year we were focused on de-risking our Deep Basin horizontal play at Ansell/Sundance, maintaining and reducing our operating costs per boe and launching our Poseidon Concepts business unit. Success in all three areas has improved Open Range's competitive position as a natural gas producer.

The Company's performance accelerated further in the fourth quarter, with excellent initial results in the Wilrich horizontal program and the emergence of the Poseidon business, generating combined funds from operations of $9.3 million for the quarter. Open Range is on a path to becoming an intermediate-sized producer by the end of 2012 through our:

- Base of low-cost Deep Basin production of approximately 4,000 boe per day;

- Repeatable success in our Wilrich horizontal play at Ansell/Sundance with an expanding inventory of horizontal locations;

- Focused operations in one of the highest-quality, liquids-rich natural gas areas of the Western Canadian Sedimentary Basin; and

- Exposure to the strong operating environment for well fracturing services and related equipment from the Poseidon Concepts business unit.

The past year's results reflect the Company's technical focus on continuing to test, assess and prove up its horizontal opportunities. The rapid evolution of horizontal drilling with multi-stage fracturing was changing the exploration and production model in western Canada, offering a step-change in initial productivity, reserve recoveries and well economics. Initial horizontal drilling at Ansell/Sundance in the first half of 2010 added substantial volumes of liquids-rich production.

Strong competitor successes offsetting our lands pointed to the Wilrich as offering the best risk-reward profile. Proving to have highly repeatable per-well productivity, the new Wilrich horizontal play was driving volume growth and delivering great economics, with competitors reporting 90 percent internal rates of return. Open Range had already mapped an extensive Wilrich sand fairway utilizing well control from many of our nearly 50 producing multi-zone vertical wells at Ansell/Sundance.

The Company's first Wilrich horizontal well spud in August and was drilled to a total measured depth of 4,040 metres, including a 1,060-metre horizontal leg. It was completed using a packer system with 10, 80-120-tonne fractures and came on-stream in mid-October. This exciting result solidified an accelerated Wilrich program for winter 2010-2011.

WINTER 2010-2011 OPERATIONS UPDATE

Encouraged by our initial Wilrich success and continued strong results by competitors offsetting Ansell/Sundance, our current winter program centres on four (3.6 net) Wilrich wells, the first of which spud in December. It was drilled to a total measured depth of 4,200 metres, including a 1,300-metre horizontal leg, and was completed with a packer system over 13, 80-tonne fractures. It replicated the initial well's results, coming on-stream in mid-February at 7.0 mmcf per day plus approximately 90 bbls per day of NGL. Its 30-day average IP was 3.9 mmcf per day plus NGL, and to date it has produced a cumulative 120 mmcf plus 1,550 bbls of NGL.

The second and third wells of the current program have been drilled and completed and fracturing fluid flowback operations are ongoing on both at this time. Initial flow test and production results for both wells are expected shortly. Fracturing of the fourth well is planned for April, and the well could be on-stream before spring breakup.

All four wells were drilled from existing pads with multi-zone vertical producing wells, facilitating quick tie-in of new volumes. Production from three of the wells will be processed at the Company-operated Ansell/Sundance gas plant, with the remaining well to be tied into a Company compressor and processed at a third-party facility. Plans to expand the Company's gas handling capacity at Ansell/Sundance to meet anticipated production growth from an accelerated Wilrich horizontal program are currently underway.

We are pleased with the Wilrich play's results to date and are confident that the Company has a low-risk resource play that can steadily grow volumes for the next two to three years on the recently expanded inventory of 37 net horizontal locations. This inventory is based on well-spacing of no more than two wells per section. The Wilrich may provide down-spacing opportunities to achieve full reservoir drainage where warranted, but we will be disciplined in not over-capitalizing this play.

FINANCIAL REVIEW

The Company's track record of reducing cash costs per unit of production, its production growth - meeting the annual target for the fifth year in a row - and its prudent hedging program drove improved financial results in 2010. The $30.5 million or $0.50 per share in annual funds from operations was nearly double the amount generated in 2009.

Open Range maintained netbacks above $22.00 per boe in 2010 thanks to the low and declining costs of its liquids-rich production at Ansell/Sundance. Operating costs (not including transportation) declined from $5.58 per boe in 2009 to $4.73 per boe in 2010, transportation costs also declined slightly, while overall cash costs declined from $10.97 per boe to $9.27 per boe year-over-year.

Operating netback performance is enhanced by our core property's liquids-rich production. The Ansell/Sundance gas plant enables us to take full advantage, extracting the range of liquids including condensate for separate marketing, and 60 percent of our produced liquids are the premium-priced condensate. In 2010 the Company's NGL represented approximately 10 percent of annual and fourth quarter production but delivered approximately 20 percent of oil and natural gas revenue. In addition, our low royalty structure, averaging 9 percent of revenue in 2010, contributed to our financial performance.

The Poseidon Concepts business unit, discussed below, became material in the second half of 2010, with fracturing fluid system rentals generating revenue of $5.3 million and EBITDA of $4.5 million.

Open Range today is a much stronger company financially. Traction in the Wilrich program has added volumes at high capital efficiency and strong rates of return. Our cost structure continues to improve. Property dispositions in December generated $12.6 million and removed $2.2 million in abandonment liabilities and dozens of low-productivity, higher-cost wellbores. The proceeds reduced long-term debt, freeing up credit capacity sufficient for at least two additional Wilrich wells.

We exited the year with total net debt of $49.8 million on bank lines of $80 million, with no borrowing capacity recognized for Poseidon, and a ratio of net debt to annualized quarterly funds from operations of 1.3:1. We are confident in our current bank line, which is supported by reserve additions offsetting the impact of the lower price deck, and with the possibility of an increase due to Poseidon's growing EBITDA.

POSEIDON CONCEPTS

We have reported on the background and progress of our Poseidon Concepts business unit in several press releases and our third-quarter 2010 report. This unique, Open Range-designed fluid handling system stems from the Company's continual focus on technological and process innovations that can improve capital or operating efficiencies.

The Poseidon system was conceived and designed in-house initially for use in our multi-stage fracturing operations at Ansell/Sundance. The proprietary Poseidon system is a modular, easily transportable and insulated single tank with a very high capacity of 18,000 bbls or 2,900 m3 specifically designed for the larger fracturing jobs common at today's unconventional oil and liquids-rich natural gas plays across North America.

After proprietary testing, the first revenue-generating rental came in June 2010, and the industry's acceptance has been dramatic. By year-end tank rentals had generated $5.3 million in revenue and approximately 25 systems had been manufactured in southern Alberta and deployed in western Canada.

By the end of February 2011 that figure had climbed to 65 systems in western Canada and the United States, where we have a third-party manufacturing facility building systems for that market. We recently introduced an enlarged model, the "Atlantis", with 41,000 bbls (6,500 m3) of fluid storage capacity, more than double the Poseidon model's capacity.

Poseidon Concepts has been structured in a tax-effective manner and is wholly owned by Open Range. EBITDA guidance for the first half of 2011, as recently reported, is $9.5 million. Our December 31, 2010 net asset value does not reflect any value attributable to the Poseidon business, and none of the Company's current borrowing capacity of $80 million is based on value imputed to this business line.

We believe Poseidon has a bright future in the competitive North American service and supply sector. Our plan for 2011 is to continue to execute in Canada, exploiting first-mover advantages, maintaining a high-quality product and service and expanding our market share, while expanding in the United States. We are already active in three states and are aggressively chasing new opportunities. Our immediate goal for the U.S. business is to deploy our product in every major unconventional basin.

RESERVES EVALUATION RESULTS

The Company's proved plus probable reserves growth was solid at 21 percent year-over-year to 20.4 million boe at December 31, 2010, according to the independent reserve evaluation by GLJ Petroleum Consultants Ltd. (GLJ). Our year-end net asset value of $226.3 million or $3.62 per fully diluted share (proved plus probable, 10 percent discount, before tax), illustrates the quality of Open Range's reserves and the compelling value of the Ansell/Sundance asset.

FD&A costs were only $8.67 per proved plus probable boe added in 2010, not including the change in FDC, and $17.27 per proved plus probable boe including the change in FDC. These competitive FD&A costs, along with strong operating netbacks, generated recycle ratios of 2.6 times and 1.3 times with and without FDC, respectively. Open Range extended its record of replacing annual production by several times over, and our reserve-life-index of 15.3 years reflects our long-life, low-decline production.



SUMMARY OF RESERVES (FORECAST PRICES AND COSTS)

----------------------------------------------------------------------------
December 31, 2010 2009
----------------------------------------------------------------------------
Year-over-
% of year % % of
Reserve category (mboe) Total change (mboe) Total
----------------------------------------------------------------------------
Proved
Developed producing 6,055 30% 5% 5,753 34%
Developed non-producing 232 1% 67% 139 1%
Proved undeveloped 6,377 31% 57% 4,062 24%
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Total proved 12,664 62% 27% 9,954 59%
Probable 7,675 38% 12% 6,866 41%
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Total Company gross working
interest reserves - proved
plus probable reserves (1) 20,338 100% 21% 16,820 100%
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Proved plus probable Company
interests in royalties 15 (58)% 36
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Total Company interest
reserves proved plus
probable reserves (2) 20,353 21% 16,856
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NOTE: Table may not add due to rounding.

(1) "Working interest" reserves equate to those reserves that are referred
to as "company gross" reserves by the Canadian Securities Administrators
in National Instrument 51-101.

(2) "Company interest" reserves and values refer to the sum of royalty
interest and working interest reserves before deduction of royalty
burdens payable.


SUMMARY OF OIL, NATURAL GAS AND NATURAL GAS LIQUIDS (NGL) RESERVES
(FORECAST PRICES AND COSTS)

-----------------------------------------------------------------
Light & medium oil Natural gas NGL Total
-----------------------------------------------------------------
At December Gross Net Gross Net Gross Net Gross Net
31, 2010 (mbbls) (mbbls) (mmcf) (mmcf) (mbbls) (mbbls) (mboe) (mboe)
----------------------------------------------------------------------------
Proved
Developed
producing - - 32,872 29,779 576 374 6,055 5,337
Developed
non-producing - - 1,287 1,159 18 11 232 205
Proved
undeveloped - - 35,149 32,511 519 395 6,377 5,813
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Total proved - - 69,309 63,449 1,112 780 12,664 11,355
Probable - - 42,316 38,536 622 425 7,675 6,848
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Total proved
plus probable - - 111,625 101,985 1,734 1,205 20,338 18,203
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NOTE: Table may not add due to rounding.

NET PRESENT VALUE OF FUTURE NET REVENUE (FORECAST PRICES AND COSTS)

------------------------------------------------------------
($ millions) Net Present Value (NPV) of Future Net Revenue (FNR)
------------------------------------------------------------
At December 31, Before Income Taxes - After Income Taxes -
2010 Discounted at (%/yr) Discounted at (%/yr)
----------------------------------------------------------------------------
Reserves
category 0 5 10 15 20 0 5 10 15 20
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Proved
Developed
producing 173.6 130.5 105.2 88.6 77.0 172.4 130.0 105.0 88.5 76.9
Developed
non-producing 5.5 3.4 2.3 1.6 1.2 4.1 2.7 1.9 1.4 1.1
Proved
undeveloped 107.7 60.4 33.5 17.4 7.3 80.9 44.0 23.1 10.4 2.5
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Total proved 286.8 194.3 141.0 107.7 85.4 257.4 176.8 130.0 100.4 80.5
Probable 266.1 131.6 78.4 52.5 37.9 200.0 98.7 58.7 39.3 28.4
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Total proved
plus probable 552.9 325.9 219.4 160.2 123.4 457.4 275.5 188.7 139.7 108.9
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NOTE: Table may not add due to rounding.

PRICING AND INFLATION RATE ASSUMPTIONS (FORECAST PRICES AND COSTS)

-----------------------------------------------------------------------
Oil Natural gas NGL
----------------------------------------------------------------------------
Edmonton Edmonton Edmonton
WTI Par Price Pentanes Butanes
Cushing, 40 degrees Plus FOB FOB
Oklahoma API AECO Price Field Gate Field Gate
Year (US$/bbl) (Cdn$/bbl) (Cdn$/mmbtu) (Cdn$/bbl) (Cdn$/bbl)
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2011 88.00 86.22 4.16 90.54 67.26
2012 89.00 89.29 4.74 91.96 68.75
2013 90.00 90.92 5.31 92.74 70.01
2014 92.00 92.96 5.77 94.82 71.58
2015 95.17 96.19 6.22 98.12 74.07
2016 97.55 98.62 6.53 100.59 75.94
2017 100.26 101.39 6.76 103.42 78.07
2018 102.74 103.92 6.90 106.00 80.02
2019 105.45 106.68 7.06 108.82 82.15
2020 107.56 108.84 7.21 111.01 83.80
2021+ +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr
----------------------------------------------------------------------------

-----------------------------------------------------------------------
Inflation
----------------------------------------------------------------------------
Edmonton
Propane FOB Inflation Exchange
Field Gate Rate Rate
Year (Cdn$/bbl) (%/Yr) (US$/Cdn$)
----------------------------------------------------------------------------
2011 54.32 2.0 0.980
2012 56.25 2.0 0.980
2013 57.28 2.0 0.980
2014 58.56 2.0 0.980
2015 60.60 2.0 0.980
2016 62.13 2.0 0.980
2017 63.87 2.0 0.980
2018 65.47 2.0 0.980
2019 67.21 2.0 0.980
2020 68.57 2.0 0.980
2021+ +2.0%/yr 2.0 0.980
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RECONCILIATION OF COMPANY NET RESERVES BY PRINCIPAL PRODUCT TYPE
(FORECAST PRICES AND COSTS)

----------------------------------------------------------
Associated and
Light & medium oil non-associated natural gas
----------------------------------------------------------
Proved Plus Proved Plus
Proved Probable Probable Proved Probable Probable
Factors (mbbls) (mbbls) (mbbls) (mmcf) (mmcf) (mmcf)
----------------------------------------------------------------------------
Dec. 31, 2009 11 5 16 53,748 37,296 91,043

Extensions 100 25 124 22,987 6,536 29,523

Technical - - - 1,846 (475) 1,371
Revisions

Acquisitions - - - 505 148 653

Dispositions (103) (29) (132) (2,025) (891) (2,916)

Economic - - - (302) (298) (600)
Factors

Production (9) - (9) (7,450) - (7,450)

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Dec. 31, 2010 - - - 69,309 42,316 111,625
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----------------------------------------------------------------------------

----------------------------------------------------------
NGL Total
----------------------------------------------------------
Proved Plus Proved Plus
Proved Probable Probable Proved Probable Probable
Factors (mbbls) (mbbls) (mbbls) (mboe) (mboe) (mboe)
----------------------------------------------------------------------------
Dec. 31, 2009 985 646 1,630 9,954 6,866 16,820

Extensions 404 115 518 4,335 1,228 5,563

Technical (99) (110) (209) 209 (189) 20
Revisions

Acquisitions 7 2 9 91 27 118

Dispositions (58) (26) (85) (499) (204) (703)
Economic (7) (4) (11) (57) (54) (111)
Factors

Production (119) - (119) (1,369) - (1,369)
----------------------------------------------------------------------------
Dec. 31, 2010 1,112 622 1,734 12,664 7,675 20,338
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----------------------------------------------------------------------------
NOTE: Table may not add due to rounding.


RESERVE-LIFE-INDEX
----------------------------------------------------------------------------
Production (December 2010 average) 3,643 boe/d
----------------------------------------------------------------------------
Proved reserves (mboe) 12,675
Proved reserve-life-index (years) 9.5
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Proved plus probable reserves (mboe) 20,353
Proved plus probable reserve-life-index (years) 15.3
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FINDING, DEVELOPMENT AND ACQUISITION (FD&A) COSTS
----------------------------------------------------------------------------
Change
(thousands in future Total
except per Capital development capital Reserve FD&A costs
boe amounts) costs costs costs additions (per boe)
----------------------------------------------------------------------------
Excluding future
development
costs
Proved $ 42,268 - $ 42,268 4,075 $ 10.37
Proved plus
probable $ 42,268 - $ 42,268 4,878 $ 8.67
----------------------------------------------------------------------------
Including future
development
costs(1)
Proved $ 42,268 $ 37,044 $ 79,312 4,075 $ 19.46
Proved plus
probable $ 42,268 $ 41,953 $ 84,221 4,878 $ 17.27
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(1)Net of drilling credits.


RESERVES REPLACEMENT

----------------------------------------------------------------------------
Proved plus
Proved Probable
----------------------------------------------------------------------------
Reserves replacement of 2010 production (1,381 mboe) 3.0 times 3.5 times
----------------------------------------------------------------------------


NET ASSET VALUE PER SHARE

----------------------------------------------------------------------------
As at December 31, 2010 Discounted Discounted
(thousands except per share amounts) at 10% at 15%
----------------------------------------------------------------------------
Present value of reserves (P+P) $ 219,419 $ 160,192
Stock option proceeds, in-the-money amount 2,684 2,684
Undeveloped acreage(1) 54,100 54,100
Working capital deficiency (49,820) (49,820)
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Estimated value $ 226,383 $ 167,156
Fully diluted shares outstanding(2) 62,467 62,467
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Estimated NAV per diluted share $ 3.62 $ 2.68
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(1)Based on independent land evaluation as of December 31, 2010.
(2)Options to purchase 1.5 million common shares were included in the
computation of fully diluted shares outstanding as they were dilutive at
December 31, 2010.


OUTLOOK

The Company's first-half 2011 capital program is substantially complete with the drilling of the four (3.6 net) Wilrich horizontal wells. The program also included participation in a Hoadley Glauconitic Deep Basin horizontal well. We remain on-track to average 4,200 boe per day in the first half of 2011, and we have hedged approximately one-third of our 2011 natural gas volumes at a minimum floor price of $3.80 per mcf.

This month we conducted our first equity issue in nearly 18 months. The bought-deal financing closed yesterday and raised gross proceeds of $20 million ($19 million net). This complements our expanded cash flow base and available credit to provide the resources for a strong second-half drilling program.

With greater funds from operations, including EBITDA from the Poseidon business unit, available debt capacity and the recent equity proceeds, Open Range has the financial resources for accelerated second-half activity. It will continue to be tightly focused on the Wilrich, which continues to unfold around Ansell/Sundance as an exciting and profitable liquids-rich play. The Wilrich play is continuing to show low variance in initial productivity, predictable initial decline curves and fast payout thanks to the strong potential to recover 1 bcf or more in the first year.

Over the years we have had a good track record of efficient and timely drilling and completions operations, thanks to our experienced technical team and relationships with key suppliers. We continue working to sustain our access to high-quality and timely services and equipment as we expand our Wilrich horizontal activities.

Our medium-term goal continues to be to grow Open Range organically to 10,000 boe per day within two years. The Company expects to announce details of its second-half capital program plus full-year guidance prior to its 2011 annual general meeting. The meeting will be held at 9 a.m. MDT, June 2, 2011, in the Strand/Tivoli Room of The Metropolitan Centre, 333-4th Avenue S.W., Calgary, Alberta.

OPEN RANGE ENERGY CORP. IS A PUBLICLY TRADED CANADIAN ENERGY COMPANY WITH FOCUSED OPERATIONS IN THE DEEP BASIN REGION OF ALBERTA.

OPEN RANGE HAS APPROXIMATELY 68.0 MILLION COMMON SHARES ISSUED AND OUTSTANDING, WHICH TRADE ON THE TSX UNDER THE SYMBOL "ONR".

Reader Advisory

This news release contains certain forward-looking statements, which include assumptions with respect to (i) production; (ii) future capital expenditures; (iii) funds from operations; (iv) cash flow; (v) debt levels; and (vi) the results of operations of the Poseidon Concepts business unit. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Open Range's control. Such risks and uncertainties include, without limitation, risks associated with oil and natural gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, dependence on manufacturers of the Poseidon Concepts tank systems; operating risk liability; demand for Poseidon Concepts' tank systems; levels of competition in the fracturing fluid storage industry; the ability of Poseidon Concepts to attract and retain clientele; the ability of Poseidon Concepts to fund its ongoing capital requirements; Poseidon Concepts' limited operating history; delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada and the United States, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities.

Open Range'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, what benefits, including the amount of proceeds, Open Range will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Open Range or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Open Range does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Disclosure provided herein in respect of barrel(s) of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 barrel 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 TORONTO STOCK EXCHANGE HAS NEITHER APPROVED NOR DISAPPROVED OF THE INFORMATION CONTAINED HEREIN.

Contact Information

  • Open Range Energy Corp.
    A. Scott Dawson, P.Eng.
    President and Chief Executive Officer
    403-205-3704
    or
    Open Range Energy Corp.
    Lyle D. Michaluk, CA
    Vice President, Finance and Chief Financial Officer
    403-262-9280
    www.openrangeenergy.com