Pilot Energy Ltd.
TSX VENTURE : PGY

Pilot Energy Ltd.

August 29, 2005 16:46 ET

Pilot Energy Ltd. Announces its 2005 Second Quarter Results

CALGARY, ALBERTA--(CCNMatthews - Aug. 29, 2005) - Pilot Energy Ltd. (TSX Venture:PGY)



Financial and Operating Highlights

Three Months Six Months
(unaudited) ended June 30 ended June 30
------------------------------------------------------------------------
2005 2004 2005 2004
$ $ $ $
------------------------------------------------------------------------
Petroleum and natural
gas sales 2,687,915 59,283 4,891,672 115,576
Royalties (485,451) (5,301) (874,610) (12,380)
Production expenses (586,243) (30,509) (1,016,825) (57,884)
------------------------------------------------------------------------
Field netback 1,616,221 23,473 3,000,237 45,312
------------------------------------------------------------------------
Other income - 7,250 971 17,110
General and administrative (207,999) (79,164) (375,187) (131,905)
Interest (141,661) - (280,407) (26)
Current income tax (75,000) - (75,000) -
Part XII.6 tax (6,683) - (15,037) -
------------------------------------------------------------------------
Funds from operations 1,184,878 (48,441) 2,255,577 (69,509)
------------------------------------------------------------------------
Depletion, depreciation
and accretion (879,699) (20,522) (1,584,891) (35,975)
Debenture finance charge (9,565) - (19,132) -
Compensation expense (19,103) - (38,206) -
Future income (tax)
recovery (54,784) 26,806 (161,357) 33,106
------------------------------------------------------------------------
Net income (loss) 221,727 (42,157) 451,991 (72,378)
------------------------------------------------------------------------

Funds from operations 1,184,878 (48,441) 2,255,577 (69,509)
Per share - basic(1) 0.07 (0.00) 0.13 (0.01)
Per share - diluted(1) 0.07 (0.00) 0.13 (0.01)
Net income (loss) 221,727 (42,157) 451,991 (72,378)
Per share - basic(1) 0.01 (0.00) 0.03 (0.01)
Per share - diluted(1) 0.01 (0.00) 0.03 (0.01)

Debt (included in current
liabilities) 7,819,435 - 7,819,435 -

Daily average
production (boe/d) 591.9 12.8 557.8 13.1

Total assets 22,810,513 3,059,743 22,810,513 3,059,743

Shareholders' equity 7,456,561 2,342,236 7,456,561 2,342,236

------------------------------------------------------------------------
Weighted average common
shares outstanding
- basic 17,890,212 11,224,807 16,958,858 10,493,799
- diluted 18,224,076 11,224,807 17,292,722 10,493,799
------------------------------------------------------------------------
Total common shares
outstanding - end
of period 17,890,212 11,746,547 17,890,212 11,746,547
------------------------------------------------------------------------
------------------------------------------------------------------------


The results for the second quarter for 2005 represent the third consecutive quarter of profitable growth for Pilot.

Some key second quarter highlights are:

- Cash flow from operations of $1,184,878

- Average daily production of 592 boe per day

- Completion of a 130 - 140 boe per day acquisition

- Addition of 4,677 acres of undeveloped land

In the second quarter Pilot completed drilling two wells in the Innes area of Saskatchewan. Both wells are currently being brought on production but no rates have been included in the second quarter production numbers. With the combination of high oil and natural gas prices and success with the first two drills, Pilot has expanded its operated drilling program from five to eight wells (100 percent working interest).

Drilling activity will include of a Viking oil test in southern Alberta, a third horizontal well in the Innes area of southeastern Saskatchewan, two gas wells in the Grand Forks area of Alberta as well as two additional horizontal wells in southeastern Saskatchewan over the fall/winter season.

Pilot will focus on optimizing its current production base and lowering overall operating costs as well as increasing its inventory of drillable prospects in its existing areas of operation. We will continue to pursue acquisition opportunities in our areas of focus and in new areas where we see year-round access and multi-zone potential.

Pilot has filed its unaudited financial statements and accompanying notes for the Six Months Ended June 30, 2005 and 2004 and related Management's Discussion and Analysis with the securities regulatory authorities in Canada.

Reader Advisory

Barrels of oil equivalent ("boe") amounts mentioned herein have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. This conversion conforms to National Instrument 51-101 - Standards for Oil and Gas Activities of the Canadian Securities Administrators (NI 51-101). The term "boe" may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Certain statements in this press release are forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by Pilot 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, many of which are beyond the control of Pilot. There is no representation by Pilot that actual results achieved during the forecast period will be the same, in whole or in part, as forecast.

Pilot's disclosure documents can be viewed under the Company's SEDAR profile at www.sedar.com or copies can be obtained by e-mailing the Company at info@pilot-energy.com.

Issued and Outstanding Common Shares: 17,890,212

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

Contact Information

  • Pilot Energy Ltd.
    Todd A. Lemieux
    President and C.E.O.
    (403) 514-8115 ext. 226
    or
    Pilot Energy Ltd.
    Douglas K. Smith
    Chief Financial Officer
    (403) 514-8115 ext. 232
    Website: www.pilot-energy.com