Petrobank Energy and Resources Ltd.

Petrobank Energy and Resources Ltd.

November 15, 2010 20:53 ET

Petrobank Reports Q3 2010 Funds Flow from Operations of $273 Million and Provides Update for Heavy Oil Business Unit

CALGARY, ALBERTA--(Marketwire - Nov. 15, 2010) - Petrobank Energy and Resources Ltd. ("Petrobank" or the "Company") (TSX:PBG) is pleased to announce our third quarter 2010 financial and operating results, highlighted by a 91 percent increase in funds flow from operations to $273 million ($2.56 per diluted share), and net income of $28 million ($0.25 per diluted share).

Petrobank's results include the financial and operating results of PetroBakken Energy Ltd. ("PetroBakken") (TSX:PBN), 59% owned by Petrobank and Petrominerales Ltd. ("Petrominerales") (TSX:PMG), 65% owned by Petrobank. PetroBakken announced second quarter financial and operating results on November 8, 2010. Petrominerales announced second quarter financial and operating results on November 2, 2010.

All references to $ are Canadian dollars unless otherwise noted.


(Comparisons are third quarter of 2010 compared to the third quarter of 2009.)

- Increased production by 85 percent to 72,762 boepd in the third quarter of 2010.

- Increased funds flow from operations by 91 percent to $273 million ($2.56 per diluted share).

- Achieved net income of $28 million ($0.25 per diluted share) in the third quarter compared to net income of $55 million ($0.56 per diluted share) in the same 2009 period.

- Announced the distribution of our share ownership in Petrominerales to Petrobank shareholders, continuing our long-held corporate goal of enhancing shareholder value by creating strong, independent companies.

Petrobank's Heavy Oil Business Unit ("HBU")

- Completed the strategic acquisitions of the remaining 50 percent working interests in the Kerrobert Phase 1 and Dawson projects for a net cash cost of approximately $15 million to increase our domestic resource portfolio to 81 million barrels of conventional heavy Exploitable-Oil-In-Place ("EOIP") (1), adding to our Conklin/May River 1.8 billion barrels of Best Estimate THAI® Exploitable-Bitumen-In-Place(2).

- While our Phase 1 Kerrobert wells averaged only 78 bopd in Q3 2010 due to low on-stream times caused by pump interventions, production in the month of November has increased as we achieved improved on-stream times and has recently averaged 280 bopd ranging up to 380 bopd in the last week.

- Our Phase 1 Kerrobert wells have now demonstrated economic production rates and we continue to work with McDaniel & Associates Ltd. ("McDaniel") to recognize THAI® reserves for year-end 2010.

- Initiated development of our Kerrobert Phase 1 expansion, incorporating 10 new well-pairs, with initial air injection targeted for end of Q1 2011.

- Received final Alberta Energy Resources Conservation Board ("ERCB") approval of our Dawson project in October 2010 and we anticipate the finalized Alberta Environment ("AENV") approval by the end of November.

- Incurred $23 million of capital expenditures in the third quarter related to our Kerrobert heavy oil project and the Conklin/May River oil sands projects.


- Increased production by 124 percent to 40,095 boepd in the third quarter of 2010, primarily driven by the acquisition of TriStar on October 1, 2009 and drilling activities in the Bakken.

- Generated operating netback (excluding hedging gains) of $43.61/boe.

- Invested in capital expenditures of $241 million in the third quarter, of which $55.5 million related to asset and land acquisitions.

- Drilled 115 (75.0 net) wells with a 99 percent success rate in the third quarter; including 54 (42.9 net) in the Bakken, 33 (12.5 net) in conventional plays in southeast Saskatchewan, and 28 (19.6 net) in the Cardium. At the end of the quarter, 22.8 net wells were waiting to be completed and/or placed on production, the majority of which were associated with our Cardium play.


- Increased crude oil production by 52 percent to 32,667 bopd.

- Generated operating netback of CAD$49.74 per barrel in the quarter, a 6 percent increase.

- Brought Candelilla-4 well on production from the Guadalupe formation at over 3,000 bopd.

- Commenced drilling the Boa-2 development well on the Corcel Block, and completed drilling and logging of Arion-1.

- Raised US$550 million through a convertible bond issuance in August. The bonds are convertible into common shares of Petrominerales at a conversion price of US$34.746 and have an annual coupon rate of 2.625 percent.


Each of Petrobank, PetroBakken and Petrominerales manage their capital structure independently; they generate their own cash flows, and have the ability to fund their operations through the issuance of secured and unsecured debt as well as equity financing. Petrobank's capital resources are focused on funding corporate activities and our HBU expenditures. At September 30, 2010, independent of PetroBakken and Petrominerales, Petrobank on a standalone basis had no bank debt outstanding and positive working capital of $6.2 million. A $30 million credit facility remains undrawn.

Based on Petrobank's current ownership in PetroBakken, Petrobank expects to receive $105 million of dividends annually paid monthly. Petrobank received $8 million from Petrominerales' Q3 dividend in October and expects to receive the Q4 2010 dividend in January 2011. Petrobank also has the option of raising funds by issuing equity, selling a portion of our ownership in PetroBakken or by issuing additional debt secured by the interest in PetroBakken. We are in discussions with our lead bank and other financial institutions to increase our existing credit facility and extend it to a three year term.

Our current intention is to fund our HBU capital expenditure program with cash on hand, available credit, cash from operations and dividends received from PetroBakken.


Three months ended September 30,
2010 2009 Change
Financial ($000s, except where noted)

Oil and natural gas revenue 469,158 232,471 102
Funds flow from operations (1) 272,787 142,927 91
Per share - basic ($) 2.57 1.55 66
- diluted ($) 2.56 1.42 80
Net income 27,848 54,846 (49)
Per share - basic ($) 0.26 0.59 (56)
- diluted ($) 0.25 0.56 (55)
Capital expenditures
PetroBakken 241,309 107,820 124
Petrominerales 123,858 59,486 108
Heavy Oil Business Unit ("HBU") 49,385 26,737 85
Total Company 414,552 194,043 114
Total assets 7,824,430 2,590,943 202
Common shares, end of period (000s)
Basic 106,042 92,978 14
Diluted (2) 109,979 109,830 -
PetroBakken operating netback ($/boe except
where noted) (1) (3)
Oil and NGL revenue ($/bbl) (4) 68.43 67.65 1
Natural gas revenue ($/Mcf) (4) 3.82 3.55 8
Oil and natural gas revenue (4) 60.63 60.66 -
Royalties 8.64 9.62 (10)
Production expenses 8.38 6.83 23
Operating netback (5) 43.61 44.21 (1)

Petrominerales operating netback ($/bbl) (1)
Oil revenue (4) 67.08 61.96 8
Royalties 9.44 6.06 56
Production expenses 7.90 8.81 (10)
Operating netback 49.74 47.09 6
Average daily production
PetroBakken - oil and NGL (bbls) 33,230 15,185 119
PetroBakken - natural gas (Mcf) 41,193 16,177 155
Total PetroBakken (boe) (3) 40,095 17,881 124
Petrominerales - oil (bbls) (6) 32,667 21,546 52
Total Company conventional (boe) (7) 72,762 39,427 85

Nine months ended September 30,
2010 2009 Change
Financial ($000s, except where noted)
Oil and natural gas revenue 1,575,331 647,653 143
Funds flow from operations (1) 941,333 418,433 125
Per share - basic ($) 9.07 4.82 88
- diluted ($) 8.84 4.44 99
Net income 151,397 87,971 72
Per share - basic ($) 1.46 1.01 45
- diluted ($) 1.36 0.96 42
Capital expenditures
PetroBakken 549,113 216,745 153
Petrominerales 355,123 234,249 52
Heavy Oil Business Unit ("HBU") 83,971 60,465 39
Total Company 988,207 511,459 93
Total assets 7,824,430 2,590,943 202
Common shares, end of period (000s)
Basic 106,042 92,978 14
Diluted (2) 109,979 109,830 -
PetroBakken operating netback ($/boe except
where noted) (1) (3)
Oil and NGL revenue ($/bbl) (4) 71.97 58.67 23
Natural gas revenue ($/Mcf) (4) 4.31 4.21 2
Oil and natural gas revenue (4) 64.71 54.25 19
Royalties 9.17 7.31 25
Production expenses 7.92 6.72 18
Operating netback (5) 47.62 40.22 18
Petrominerales operating netback ($/bbl) (1)
Oil revenue (4) 66.23 53.35 24
Royalties 7.72 5.23 48
Production expenses 6.27 8.03 (22)
Operating netback 52.24 40.09 30
Average daily production
PetroBakken - oil and NGL (bbls) 35,229 17,206 105
PetroBakken - natural gas (Mcf) 39,473 15,761 150
Total PetroBakken (boe) (3) 41,808 19,833 111
Petrominerales - oil (bbls) (6) 38,298 21,621 77
Total Company conventional (boe) (7) 80,106 41,454 93
(1) Non-GAAP measure. See "Non-GAAP Measures" section within this press
(2) Consists of common shares, stock options, deferred common shares,
incentive shares and convertible debentures as at the period end date.
(3) Six Mcf of natural gas is equivalent to one barrel of oil equivalent
(4) Net of transportation expenses and excludes revenue from purchased oil.
(5) Excludes hedging activities.
(6) Actual production sold for the three and nine months ended September 30,
2010 was 34,830 barrels of oil per day ("bopd") and 40,906 bopd,
respectively (2009 - 21,239 bopd and 21,345 bopd). After adjusting for
third party purchased oil and marketed on their behalf, Petrominerales
actual production sold and used in per barrel calculations was 32,696
bopd and 38,121 bopd, respectively.
(7) HBU bitumen volumes are excluded from average daily production as
Conklin and Kerrobert operations are considered to be in the pre-
operating stage and accordingly are capitalized.


Conklin Project

As we previously disclosed, the P1B and P2B production wells have taken longer than anticipated to establish full communication with the combustion zone. This is primarily due to operational constraints placed on the re-drill of these wells, which resulted in the toe of the new wells being placed short of the existing combustion zone. During the third quarter we continued to cycle the wells between steam injection and production, which has progressed communication. P3B has been offline since August 25th to repair a casing vent leak, which affected operations on P1B and P2B due to intermittent plant availability.

Produced oil quality has varied from heavy oil, consistent with the production wells being at the edge of the combustion zone, to upgraded THAI® oil. Production rates averaged 101 bopd with peak rates of 495 bopd during the third quarter. We intend to utilize the Conklin pilot as a platform to test new technologies such as enriched oxygen injection, direct oxidation of H2S into sulphur and other enhancements to the THAI® technology.

Kerrobert Project

Since the second quarter we have been optimizing the performance of the progressive cavity pumps ("PCP") to manage changes in the produced oil characteristics. PCP performance is affected by several factors including: changing API gravity and viscosity as oil quality improves due to THAI® oil volumes increasing, higher temperatures at the pump inlet, and higher volumes of produced gas with CO2. These conditions evolve from startup through to steady state production when the THAI® process has become fully developed, requiring a matching of PCP configuration to production conditions. We have now established a pumping protocol to correspond to these evolving conditions and we are operating in a near-steady state environment with improving well on-stream time.

As we move from the third quarter into the fourth quarter, production has materially increased. The third quarter daily average production was 78 bopd. In October, based on field estimates, average daily production improved to approximately 150 bopd and the production day average was 225 bopd. In October, the number of on-stream days improved to 74 percent and oil cuts averaged 70 percent with several days exceeding 90 percent. Peak production rates of 460 bopd at KP2 and 235 bopd at KP1 were achieved in the last two months. During October we experienced a two week period where the KP2 well averaged 195 bopd and the facility averaged 290 bopd. At these rates we have achieved our economic production threshold and we continue to progress towards our 600 bopd per well target. In-situ oil upgrading has exceeded expectations with average produced oil quality of approximately 18 degrees API compared to the native reservoir quality of 10.3 degrees API. With this level of upgrading we are close to achieving the Lloyd Blend Kerrobert pipeline specification of 20.5 degrees API.

As previously reported, we acquired 100 percent working interest of the Phase 1 project lands by purchasing Baytex Energy Ltd.'s 50 percent interest effective September 30, 2010. With this acquisition, we now own 39 million barrels of conventional heavy EOIP resources at Kerrobert and have initiated the planned 10 well-pair expansion. Environmental and enhanced oil recovery approvals from the Saskatchewan Ministry of Energy and Resources were received on August 6, 2010. Construction of pipeline infrastructure began early in the fourth quarter and drilling operations are currently underway. Installation of surface equipment and other infrastructure is scheduled for later in the fourth quarter. Start-up operations for the pre-ignition heating cycle ("PIHC") on the injector wells are planned for early January 2011 and initial air injection and first oil are expected at the end of the first quarter 2011.

May River Project

The May River project is currently in the final detailed engineering phase, and orders have been placed for some long lead time equipment, including power generation and air compression. Upgrades to the existing roads are currently being completed, along with other infrastructure work that can be accomplished prior to receiving final regulatory approval. Draft approval from AENV, which is conditional on receiving ERCB approval, was received on April 12, 2010, however ERCB project approval remains in process and is expected to be granted upon resolution of two Statements of Concern filed by local community groups. If regulatory approval is received in 2010, first oil could occur by late-2012.

We intend to drill 17 oil sands stratigraphic wells this winter to further delineate the broader reservoir, optimize well placements for the 18 well pairs planned for the 10,000 bopd Phase 1 development and further delineates the resource for future expansion phases of the May River project.

Our May River design is CO2 capture ready, incorporates power generation utilizing low energy produced gas, sulphur recovery, and will be a net water producer rather than a net user; making this project a leading edge design for oil sands and conventional heavy oil development. The project utilizes a modular approach that is designed to be readily installed and operated on heavy oil projects world-wide. This design is the foundation of our planned expansion phases at May River and the template for other projects in other reservoirs due to its simple and modular engineering design.

Dawson Project

On October 28, 2010 we received final ERCB approval for our two well initial project, and as previously disclosed, we received initial draft approval from AENV on June 26, 2009 (contingent on receiving final ERCB approval). The final AENV approval is expected during Q4 2010, completing the regulatory cycle for this phase of the project.

The Dawson property is situated on a large Bluesky heavy oil/oil sands fairway in the Peace River region of northwest Alberta. The upper portions of this formation contain 11o API heavy oil, which is comparable to other conventional heavy oil reservoirs throughout Western Canada. Existing conventional cold production typically recovers less than 10 percent of the original-oil-in-place; with THAI® we expect to improve the recovery rate to between 70 and 80 percent. Based on an initial McDaniel evaluation of the resource, the Dawson property was estimated to contain 100 million barrels of conventional heavy Total Petroleum Initially-In-Place ("PIIP")(3), with a corresponding EOIP of 44 million barrels, that is highly suited to THAI® development. Since our acquisition of 100 percent of this property, McDaniel has had an opportunity to reassess the resource potential at Dawson. Based on new 3D seismic data, McDaniel is now assigning 203 million barrels of PIIP. As a result of this acquisition, we now have a 100 percent interest in 31.5 sections of land in the Dawson area.

Dawson will initially consist of two THAI® well pairs plus associated surface facilities. Our full field development plans, based on the initial resource potential, would have supported a 10,000 bopd project. With the increase in the Dawson resource, we now believe that the resource could ultimately support a 25,000 bopd project. The current surface facilities at Kerrobert will be transferred to Dawson since we are able to incorporate our first two Kerrobert wells into the new expansion facilities. We anticipate work on the initial two well project at Dawson to begin during the second quarter of 2011 and PIHC to commence during the third quarter.

THAI® Reserves

Petrobank continues to work with McDaniel in the evaluation of the THAI® resource extraction technology. McDaniel had conducted a comprehensive evaluation of the performance of THAI® at Conklin and from this evaluation McDaniel concluded that the THAI® process is technically proven. McDaniel initially assigned a 17 percent greater exploitable resource base at Conklin compared to steam assisted gravity drainage extraction. The ability to assign exploitable resource is the first step in recognizing THAI® reserves. To complete the reserve recognition process, McDaniel indicated that we would need to achieve sustainable threshold economic production rates over a period of several months.

Now that our Kerrobert project has demonstrated sustained production at economic rates, McDaniel is evaluating these results as a basis for assigning THAI® reserves. With continued sustained production, we expect that THAI® reserves may be assigned by year-end 2010. Kerrobert can then be used as the "analogue" for assigning reserves for current and future THAI® projects.

Archon Technologies

In the third quarter, Archon filed our eighth THAI®-related patent. This patent improves early THAI® oil production rates and further increases the level of in-situ oil upgrading. Archon's single-well modified THAI® patent was issued in another six countries during the same period. This is the sixth THAI® related patent issued to Archon and it has the potential to eliminate the need for a separate air injection well, thus reducing drilling and completion requirements to a single horizontal well and also dramatically reducing the surface footprint.

Archon is pursuing two additional enhancements to the overall THAI® process: oxygen enriched air injection and direct oxidation of H2S. The direct oxidation of H2S will be beneficial on a stand-alone basis for small scale projects and in conjunction with our CrystaSulf(C) process for large scale projects. We have matured these technologies and will be testing them at a field scale level at our Conklin pilot facility in 2011.

While the process to license our technology to major international third parties has been protracted we have made progress during the third quarter and overall there continues to be considerable interest in THAI® and related technologies. Third party international licensing has progressed to the point where we have two final agreements that may be executed prior to year-end.


On November 2, 2010, Petrobank and Petrominerales announced a corporate reorganization that will see Petrobank shareholders receive Petrobank's proportionate interest in Petrominerales (the "Reorganization"). Pursuant to the Reorganization, a new Alberta corporation will be formed ("New Petrominerales") which will, through a series of transactions under the Reorganization, directly or indirectly acquire all of the outstanding shares of Petrominerales. The Board of Directors of each company, after having received a recommendation from an independent committee of its directors, have unanimously recommended that their shareholders approved the Reorganization.

Petrobank shareholders will receive approximately 0.62 shares of New Petrominerales and one replacement common share of Petrobank for each Petrobank common share held. Following the Reorganization, Petrobank will continue to own all existing assets, other than Petrominerales, including the heavy oil and bitumen assets, Archon Technologies Ltd. including the THAI® and other related technologies, and ownership of 109.8 million shares of PetroBakken.

This transaction is designed to enhance long-term value for Petrobank and Petrominerales shareholders. The Reorganization is consistent with our long-held corporate goal of enhancing shareholder value by creating strong, independent companies. Benefits of the Reorganization include:

- Petrobank shareholders will receive direct ownership in the shares of New Petrominerales;

- All new and existing Petrominerales shareholders will directly receive future dividends from New Petrominerales;

- Canadian individual shareholders of New Petrominerales will receive dividends eligible for the Canadian dividend tax credit;

- New Petrominerales' public float will increase, providing additional liquidity to shareholders;

- New Petrominerales is expected to qualify for inclusion in the S&P/TSX Composite Index following the Reorganization;

- Increased valuation for Petrobank and New Petrominerales may result from the reduction or elimination of any holding company and parent company share price trading discounts; and

- The expected date of the Reorganization of December 31, 2010 may allow U.S. Petrobank shareholders to benefit from a lower tax rate on the transaction as the receipt of the New Petrominerales shares are expected to be treated as "qualified dividends", eligible for lower tax rates in 2010 compared to the ordinary income tax rates that are expected in 2011.

The Reorganization is subject to the approval of the shareholders of each of Petrobank and Petrominerales. It is anticipated that a joint-management information circular containing additional information with respect to the Reorganization will be mailed to each Petrobank and Petrominerales shareholder this week and meetings of the shareholders of each of Petrobank and Petrominerales will be held in mid-December, 2010. The Directors of each Company, upon considering the recommendations of their respective independent committee, have unanimously recommended that their shareholders approve the Reorganization. Pending approvals from the shareholders of each Company, approval of applicable courts, receipt of appropriate regulatory approvals and satisfaction of other customary closing conditions, including the receipt of relevant tax rulings, the transaction is scheduled to become effective on December 31, 2010.

The Reorganization is expected to be non-taxable to Petrobank and Petrominerales as well as Canadian resident shareholders of both companies. For U.S. shareholders of Petrobank, this transaction will be treated as a taxable dividend according to U.S. tax laws. It is expected that the dividend will be considered a "qualified dividend" for U.S. tax purposes, subject to the reduced tax rates applicable to long-term capital gains for individuals, provided shareholders meet the holding-period requirements. For U.S. shareholders of Petrominerales, this transaction is expected to be non-taxable. Tax information will be published on the websites of both Petrobank and Petrominerales in the near future; however shareholders are encouraged to seek the advice of their own tax professionals.

Petrobank Energy and Resources Ltd. is a Calgary-based oil and natural gas exploration and production company with operations in western Canada and Latin America. The Company operates high-impact projects through three business units and a technology subsidiary. The Canadian Business Unit, operated by Petrobank's 59% owned TSX-listed subsidiary, PetroBakken Energy Ltd. (TSX:PBN), is a premier light oil production company combining, high growth, long-life Bakken reserves and production with legacy conventional light oil assets, delivering industry leading operating netbacks, strong cash flows and production growth. PetroBakken is applying leading edge technology to a multi-year inventory of Bakken and Cardium light oil development locations, along with a significant inventory of opportunities in the Horn River and Montney gas resource plays in northeast BC. PetroBakken's strategy is to deliver accretive production and reserves growth, along with an attractive dividend yield. The Latin American Business Unit, operated by Petrobank's 65% owned TSX listed subsidiary, Petrominerales Ltd. (TSX:PMG), is a Latin America-based exploration and production company producing oil in Colombia with 17 exploration blocks covering a total of 2.1 million acres in the Llanos and Putumayo Basins and five exploration blocks in Peru covering a total of 9.4 million gross (5.4 million net acres in the Ucayali and Titicaca Basins. Whitesands Insitu Partnership, a partnership between Petrobank and its wholly-owned subsidiary Whitesands Insitu Inc., owns 104 net sections of oil sands leases in Alberta, 36 sections of oil sands licenses in Saskatchewan and 4 net sections of petroleum and natural gas rights in Kerrobert, Saskatchewan, and operates the Whitesands project which is field-demonstrating Petrobank's patented THAI® heavy oil recovery process. THAI® is an evolutionary in-situ combustion technology for the recovery of bitumen and heavy oil that integrates existing proven technologies and provides the opportunity to create a step change in the development of heavy oil resources globally. THAI® and CAPRI® are registered trademark of Archon Technologies Ltd., a wholly-owned subsidiary of Petrobank Energy and Resources Ltd., for specialized methods for recovery of oil from subterranean formations through in-situ combustion techniques and methodologies with or without upgrading catalysts. Used under license by Petrobank Energy and Resources Ltd.

(1) Exploitable Oil-In-Place is the estimated volume of oil, before any production has been removed, which is contained in a subsurface stratigraphic interval that meets or exceeds certain reservoir characteristics considered necessary for the application of known recovery technologies. Examples of such reservoir characteristics include continuous net pay, porosity, and mass bitumen content.
(2) Best Estimate THAI® Exploitable Bitumen In Place: McDaniel defines the Best Estimate (P50) of a potentially THAI®-exploitable interval as containing a minimum thickness of ten metres of substantially clean, continuous, predominantly bitumen-saturated sand, net of non-reservoir, with log porosity and mass bitumen content (ratio of bitumen to water and mineral matter) meeting a minimum of 27 and 8 percent, respectively, and with both competent top and lateral reservoir containment. The THAI® exploitable interval includes a greater portion of the reservoir than the SAGD exploitable interval due to the assumption that the THAI® process will access reservoir that would not be accessible in a conventional SAGD process.
(3) Total Petroleum Initially-In-Place (PIIP) is that quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It 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.

Non-GAAP Measures: This press release contains financial terms that are not considered measures under Canadian generally accepted accounting principles ("GAAP"), such as funds flow from operations and operating netback. These measures are commonly utilized in the oil and gas industry and are considered informative for management and shareholders. Management considers operating netback important as it is a measure of profitability per barrel of production. Operating netbacks may not be comparable to those reported by other companies nor should they be viewed as an alternative to net income or other measures of financial performance calculated in accordance with GAAP.

The following table shows the reconciliation of funds flow from operations to cash flow from operating activities for the periods noted:

Three months ended Nine months ended
September 30, September 30,
2010 2009 Change 2010 2009 Change
Funds flow from
Non-GAAP 272,787 142,927 91% 941,333 418,433 125%
Changes in
non-cash working
capital (41,631) (8,900) 368% (112,696) (52,008) 117%
Cash flow from
activities: GAAP 231,156 134,027 72% 828,637 366,425 126%

Forward-Looking Statements. Certain information provided in this press release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Specifically, this press release contains forward-looking statements relating to financial results, results from operations, anticipated production rates, timing for completion of the Reorganization, timing of mailing of shareholder materials and holding of shareholder meetings, payment of future dividends, expected tax treatment of the Reorganization, and the timing and scope of certain projects. Forward-looking statements are necessarily based upon assumptions and judgments with respect to the future including, but not limited to, the receipt of required shareholder and regulatory approvals and satisfaction of other conditions to the Reorganization, the outlook for commodity markets and capital markets, success of future evaluation and development activities, the successful application of technology, prevailing commodity prices, the negotiation of future licensing arrangements, 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. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. You can find a discussion of those risks and uncertainties in our Canadian securities filings. Such factors include, but are not limited to: general economic, market and business conditions; fluctuations in oil prices; the results of exploration and development drilling, risks associated with the development and application of technology, recompletions and related activities; timing and rig availability, outcome of exploration contract negotiations; fluctuation in foreign currency exchange rates; the uncertainty of reserve estimates; changes in environmental and other regulations; risks associated with oil and gas operations; and other factors, many of which are beyond the control of the Company. There is no representation by Petrobank that actual results achieved during the forecast period will be the same in whole or in part as those forecast. Except as may be required by applicable securities laws, Petrobank assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Barrels of Oil Equivalent: Disclosure provided in this press release in respect of barrels of oil equivalent ("boe") units may be misleading, particularly if used in isolation. A boe conversion relationship of 6 mcf to 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 well head.


Management of Petrobank will be holding a conference call for investors, financial analysts, media and any interested persons on Tuesday, November 16, 2010 at 9:00am (Mountain time) (11:00 a.m. Eastern Time) to discuss Petrobank's third quarter financial and operating results. The investor conference call details are as follows:

Live call dial-in numbers: 416-340-8527 / 877-240-9772

Replay dial-in numbers: 416-695-5800 / 800-408-3053

Replay pass code: 7266801

The live audio webcast link is: and is also available on our website at:

Contact Information

  • Petrobank Energy and Resources Ltd.
    John D. Wright
    President and Chief Executive Officer
    (403) 750-4400
    Petrobank Energy and Resources Ltd.
    Chris J. Bloomer
    Senior Vice President and Chief Operating Officer, Heavy Oil
    (403) 750-4400
    Petrobank Energy and Resources Ltd.
    Peter Cheung
    Vice President Finance and Chief Financial Officer
    (403) 750-4400