Orleans Energy Ltd.

Orleans Energy Ltd.

May 14, 2009 08:45 ET

Orleans Energy Announces First Quarter 2009 Results

CALGARY, ALBERTA--(Marketwire - May 14, 2009) - Orleans Energy Ltd. ("Orleans" or the "Company") (TSX:OEX) announces financial and operating results for the first quarter ended March 31, 2009 with the highlights as follows:

Financial Highlights Three Month Period Ended,
(6:1 oil equivalent conversion) March 31, 2009 March 31, 2008 % Change
(amounts in Cdn.$ except share
Petroleum and natural gas
revenue (4) 12,980,232 19,036,171 (32)
Per share - basic 0.27 0.49 (45)
- diluted 0.27 0.49 (45)
Cash flow from operations (1) 3,925,887 9,382,715 (58)
Per share - basic 0.08 0.24 (67)
- diluted 0.08 0.24 (67)
Operating netback (2) ($/boe) 13.31 31.02 (57)
Corporate netback (2) ($/boe) 10.43 27.24 (62)
Net loss (4,242,384) (3,582,219) 18
Per share - basic (0.09) (0.09) -
- diluted (0.09) (0.09) -
Net debt (3)- period end 55,242,097 31,158,355 77
Weighted average basic and diluted
shares 47,933,706 39,035,932 23
Issued and outstanding shares (5) 52,959,706 44,596,372 19
Operating Highlights
Average daily production:
Natural gas (mcf/d) 20,056 18,070 11
Liquids (Oil & NGLs) (bbls/d) 838 773 8
Oil equivalent (boe/d) 4,181 3,784 10
Average sales price (net hedging) (4):
Natural gas ($/mcf) 5.37 8.09 (34)
Liquids (Oil & NGLs) ($/bbl) 43.54 81.57 (47)
Oil equivalent ($/boe) 34.50 55.28 (38)
E&D capital expenditures ($) 18,233,341 15,516,814 18
Total capital expenditures ($) 18,856,761 16,206,666 16

Table Notes:

(1) Cash flow from operations does not have any standardized meaning
prescribed by Canadian generally accepted accounting principles
("GAAP"). Please refer to the Company's MD&A for definition of cash flow
from operations.
(2) Operating netback represents average sales price (includes realized
hedging gains or losses) less royalties, operating costs and
transportation expenses. Corporate netback represents Operating netback
less interest expense and general and administrative costs (excluding
non-cash stock-based compensation expense). These netback measures are
not recognized measures under Canadian GAAP.
(3) Net debt refers to outstanding bank debt plus working capital deficit
(excludes current unrealized amounts pertaining to risk management
commodity contracts). Net debt is not a recognized measure under
Canadian GAAP.
(4) Petroleum and natural gas revenue and pricing includes realized
hedging gains or losses from commodity contract settlements.
(5) As of May 14, 2009, common shares outstanding are 52,959,706.

The Company's interim financial statements and associated Management's Discussion and Analysis ("MD&A") for the three months ended March 31, 2009 will be available on Orleans' website at www.orleansenergy.com located within "Investor Relations" under "Financial Reports". Additional, these documents will be filed, in due course, on the System for Electronic Document Analysis and Retrieval ("SEDAR"). These documents can be retrieved electronically from the SEDAR system by accessing Orleans' public filings under "Search for Public Company Documents" within the "Search Database" module at www.sedar.com.

Orleans Energy Ltd. is a Calgary, Alberta-based emerging crude oil and natural gas company, with common shares trading on the Toronto Stock Exchange under the symbol "OEX". Orleans is a team of dedicated, experienced professionals focused on the creation of shareholder value via acquisition, exploration and development of crude oil and natural gas assets in Alberta, Canada.

The information in this news release contains certain forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions. These statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control, including: the impact of general economic conditions; 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; fluctuations in commodity prices and foreign exchange and interest rates; stock market volatility and market valuations; 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; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry ; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves; and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, such 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 that the Company will derive from them. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements.

In this news release, reserves and production data are commonly stated in barrels of oil equivalent ("boe") using a six to one conversion ratio when converting thousands of cubic feet of natural gas ("mcf") to barrels of oil ("bbl") and a one to one conversion ratio for natural gas liquids ("NGLs" or "ngls"). Such conversion may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

As an indicator of the Company's performance, the term cash flow from operations or operating cash flow contained within this news release should not be considered as an alternative to, or more meaningful than, cash flow from operating, financing or investing activities, as determined in accordance with Canadian generally accepted accounting principles ("GAAP"). This term does not have a standardized meaning, nor is it a financial measure, under GAAP. Cash flow from operations is widely accepted as a financial indicator of an exploration and production company's ability to generate cash which is used to internally fund exploration and development activities and to service debt. This measure is widely used by shareholders and investors in the valuation, comparison and investment recommendations of companies within the natural gas and crude oil exploration and production industry. Cash flow from operations, as disclosed within this news release, represents cash flow from operating activities before any asset retirement obligation cash expenditures and before changes in non-cash operating activities working capital. The Company presents cash flow from operations per share whereby per share amounts are calculated consistent with the calculation of earnings per share. Additionally, net debt refers to outstanding bank debt plus working capital deficit (excludes current unrealized amounts pertaining to risk management commodity contracts) plus long-term accounts receivables. Net debt is not a recognized measure under Canadian GAAP.

Any references in this news release to initial test production rates and/or "flush" production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will commence production and decline thereafter. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company.

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