Pilot Energy Ltd.
TSX VENTURE : PGY

Pilot Energy Ltd.

November 28, 2006 18:00 ET

Pilot Energy Ltd.: Press Release

CALGARY, ALBERTA--(CCNMatthews - Nov. 28, 2006) - Pilot Energy Ltd. (TSX VENTURE:PGY) is pleased to release its financial and operating results for the three and nine month periods ended September 30, 2006.



Highlights
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Three Months Ended Nine Months Ended
September 30 September 30
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2006 2005 % Chg 2006 2005 % Chg
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FINANCIAL
($ thousands, except per share
amounts)

Revenue 4,666 3,541 32 13,140 8,433 56

Funds from operations (1) 1,838 1,453 26 5,240 3,709 41
Per share - basic 0.09 0.08 15 0.27 0.21 24
Per share - diluted 0.09 0.08 15 0.26 0.21 24

Net income 304 450 (32) 1,124 902 25
Per share - basic 0.02 0.03 (39) 0.06 0.05 9
Per share - diluted 0.02 0.02 (39) 0.06 0.05 9

Capital expenditures 4,252 1,541 176 9,796 12,877 (24)
Debt (including working capital) 14,745 10,019 47
Shares outstanding (000's) 19,736 18,070 9

Weighted average shares
outstanding
(000's)
basic 19,736 17,919 10 19,706 17,273 14
diluted 20,006 18,113 10 19,975 17,466 14

OPERATING

Daily production
Oil and NGLs (bbl/d) 732.3 576.2 27 745.6 526.3 42
Natural gas (mcf/d) 381.9 209.7 82 388.6 296.7 31
Oil equivalent (boe/d @ 6:1) 796.0 611.2 30 810.4 575.8 41

Operating netback ($/boe) (2) 33.78 34.59 (2) 31.83 31.39 1

Funds from operations ($/boe) (1) 25.10 25.84 (3) 23.69 23.60 -
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Notes:

(1) Funds from operations is calculated as cash provided by operating
activities from the statement of cash flows, adding change in non-cash
working capital and asset retirement expenditures. Funds from
operations is used to analyze the Company's operating performance and
leverage. Funds from operations does not have a standardized measure
prescribed by Canadian Generally Accepted Accounting Principles and
therefore may not be comparable with the calculations of similar
measures for other companies.

(2) Netback is equal to total oil and natural gas revenue less royalties
and operating costs calculated on a boe basis. Netback does not have
a standardized measure prescribed by Canadian Generally Accepted
Accounting Principles and therefore may not be comparable with the
calculations of similar measures for other companies.


Operations Overview

In the third quarter of 2006, Pilot continued to focus its capital activity on the Company's light oil properties in southeast Saskatchewan and the drilling and completion of a well in the Company's other core area of Chauvin, Alberta. Pilot drilled and completed a total of five wells at a 100 percent success rate, resulting in 3.9 net oil wells. This activity consisted of drilling four Frobisher horizontals in southeast Saskatchewan and one vertical Dina well at Chauvin.

Core Area Review

Southeast Saskatchewan

During the third quarter, Pilot successfully drilled, completed and tied-in four horizontal Frobisher wells, three at Cantal and one at Huntoon. These four wells (2.9 net) added 175 boepd flush production and are expected to add stabilized rates of 65 boepd to the Company's existing production base. The well at Huntoon was identified on seismic and based on our success has led to other development opportunities. Pilot has drilled and is currently completing a well in Weyburn (0.6 net) targeting the Midale formation. In addition, the Company is in the process of licensing several additional horizontal wells that it plans to exploit in 2007.

Pilot has assembled 5,000 net acres of land in the Bakken resource play at Viewfield and based on 160 acre spacing would have up to thirty drilling locations. During this past quarter, other industry players have drilled several Bakken wells with one mile of Pilot's land. Pilot is currently reviewing the different drilling techniques being used in order to determine the best method to exploit its lands.

Chauvin, Alberta

At Chauvin, Pilot drilled one 100 percent working interest well that successfully penetrated the Dina formation, a lower zone which has not been exploited in the immediate area. Pilot completed its acquisition of 3-D seismic and is currently evaluating the data in conjunction with the successful well in order to plan future development drilling opportunities in the Dina formation.

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: 19,736,362

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

Contact Information

  • Pilot Energy Ltd.
    Todd Lemieux
    President
    (403) 514-8115 ext. 226
    or
    Pilot Energy Ltd.
    Douglas Smith
    Chief Financial Officer
    (403) 514-8115 ext. 232
    Email: info@pilot-energy.com