Renegade Petroleum Ltd.
TSX VENTURE : RPL

Renegade Petroleum Ltd.

June 29, 2011 18:00 ET

Renegade Petroleum Ltd. Announces First Quarter 2011 Results and Provides Operational Update

CALGARY, ALBERTA--(Marketwire - June 29, 2011) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES.

Renegade Petroleum Ltd. ("Renegade" or the "Company") (TSX VENTURE:RPL) is pleased to announce it has filed on SEDAR its interim consolidated financial statements ("Financial Statements") and related management's discussion and analysis ("MD&A") for the three months ended March 31, 2011. The three month period ended March 31, 2011 is the first interim period for which the Company has prepared its financial statements under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. Prior year comparative amounts have been restated to reflect results as if Renegade had always prepared its financial results using IFRS. Selected financial and operational information is outlined below and should be read in conjunction with the financial statements and related MD&A which are available for review at www.renegadepetroleum.com or www.sedar.com.

FINANCIAL & OPERATING HIGHLIGHTS

Three Months Ended March 31,
Financial (000's except per share amounts) 2011 2010 %change
Petroleum and natural gas sales 12,666 3,930 222
Funds flow from operations (1) 5,469 1,723 217
Per share - basic 0.09 0.06 50
Per share - diluted 0.09 0.05 80
Net loss (885 ) (2,036 ) (57 )
Per share – basic and diluted(2) (0.02 ) (0.07 ) (71 )
Capital expenditures 16,133 39,487 (59 )
Net debt (surplus) 17,331 (5,662 ) 406
Weighted average shares outstanding
Basic 57,803 30,633 89
Diluted 57,803 30,633 89
Shares outstanding, end of period
Basic 64,732 32,421 100
Diluted 71,731 39,063 84
Operating
Average Daily Production
Crude Oil (bbls/d) 1,680 537 213
Natural Gas (Mcf/d) (3) 505 253 100
Natural gas liquids (bbls/d) 6 2 200
Total (boe/d) 1,771 582 204
Average realized price
Crude oil and Natural Gas Liquids ($/bbl) 83.03 78.91 5
Natural Gas ($/mcf) (3) 1.77 4.05 (46 )
Total ($/boe) 79.47 75.03 6
Netback ($/boe)(3)
Petroleum and natural gas revenues 79.47 75.03 6
Royalties (14.20 ) (7.24 ) 96
Operating Expenses (16.32 ) (10.14 ) 61
Transportation (2.32 ) (2.27 ) 2
Operating Netback 46.63 55.38 (16 )

1. "Funds flow from operations" should not be considered an alternative to, or more meaningful than, cash flow from operating activities as determined in accordance with IFRS as an indicator of Renegade's performance. "Funds flow from operations" represents cash flow from operating activities prior to changes in non-cash working capital, transaction costs and decommissioning provision expenditures incurred. Renegade also presents funds flow from operations per share whereby per share amounts are calculated using weighted average shares outstanding consistent with the calculation of earnings per share.

2. Due to the anti-dilutive effect of Renegade's net loss for the three months ended March 31, 2011 and 2010, the diluted number of shares is equal to the basic number of shares. Therefore, diluted per share amounts of the net loss are equivalent to basic per share amounts.

3. A conversion ratio of 1 barrel of oil equivalent ("boe"): 6 Mcf has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead. Boes may be misleading, particularly if used in isolation.

ACCOMPLISHMENTS

  • Achieved production of an average of 1,771 boe per day for the three months ended March 31, 2011, up 17 percent from the fourth quarter of 2010 and 204 percent from the comparable quarter of 2010. Production for the three months ended March 31, 2011 consisted of 95 percent light oil and natural gas liquids and 5 percent natural gas;
  • Increased funds flow from operations 217 percent to $5.5 million in the first quarter of 2011 from $1.7 million in the first quarter of 2010;
  • Drilled 8.0 gross (5.1 net) wells in the first quarter of 2011 with a 100% success rate including 4.0 gross (3.1 net) in southeast Saskatchewan and Manitoba and 4.0 gross (2.0 net) wells in the Viking in west central Saskatchewan;
  • Completed and brought onto production 8.0 gross (4.9 net) wells in the first quarter of 2011 that were spud in the fourth quarter of 2010 including 3.0 gross (2.5 net) in southeast Saskatchewan and Manitoba and 5.0 gross (2.4 net) in the Viking in west central Saskatchewan;
  • The Company announced the proposed acquisition of all of the issued and outstanding common shares of Petro Uno Resources Ltd. ("Petro Uno") on February 16, 2011. The acquisition closed April 14, 2011 through the issuance of approximately 11.8 million common shares of Renegade;
  • On March 9, 2011, Renegade closed a bought deal financing of 9,904,700 common shares at a price of $4.50 per share for total gross proceeds of approximately $44.6 million ($2.7 million of the $44.6 million closed in April 2011);
  • Increased land position by 20,925 net acres of land in North Dakota, Manitoba, west central Saskatchewan and Southeast Saskatchewan since the beginning of 2011 increasing the Company's total undeveloped land to 95,221 net acres; and
  • On June 1, 2011, Renegade's lender increased the Company's operating facility to $65 million.

OPERATIONAL UPDATE

West Central Saskatchewan

Due to favourable surface access conditions in the latter part of spring in west central Saskatchewan, Renegade, following the acquisition of Petro Uno, was able to begin drilling and completion operations targeting the Viking light oil resource play in the Dodsland area on May 17th. Since that date, Renegade has drilled 17 gross (16.5 net) horizontal Viking oil wells. The Company has also completed, by way of fracture stimulation, 10 of the 17 horizontal wells, 7 of which are producing with the remainder anticipated to be on production in July. Renegade continues to drill on an ongoing basis with two drilling rigs contracted in the area and has secured access to two fracture stimulation crews for continued completion of the Company's Viking wells. Renegade plans to continue drilling at an aggressive pace through the duration of 2011.

North Dakota

In the fourth quarter of 2010, Renegade, along with its partners, drilled a wildcat vertical test well to the Bakken Formation in Renville County North Dakota. The vertical stratigraphic test was then kicked off horizontally and drilled into the Bakken Formation. The subsequent fracture completion was performed in May, 2011. This well is currently being equipped to begin production testing in early July, 2011 to be followed by a 30-60 day production test. Renegade and its partners plan to drill a second Bakken horizontal test well in the area later this year. Should these wells prove to be capable of producing oil in commercial quantities, Renegade and its partners plan to further delineate the potential new light oil resource fairway throughout 2012. Renegade and its partners currently hold 46,568 gross (23,284 net) undeveloped acres across this prospective Bakken fairway.

Southeast Saskatchewan and Manitoba

Major flooding conditions continue in southeast Saskatchewan, southwest Manitoba and North Dakota. Although an extended breakup period was anticipated and budgeted for by Renegade, heavy rainfall throughout May and June has continued to hamper surface access in several of the Company's operating areas. More recently, conditions have been improving, and Renegade anticipates commencing drilling operations in select areas in early to mid July. The Company anticipates drilling activity to occur in the Wordsworth and Huntoon areas of southeast Saskatchewan, as well as in Waskada in southwest Manitoba. Each area is being monitored daily by field personnel for acceptable surface access. The Company has up to two rigs contracted to commence drilling once conditions permit

Renegade continues to focus on light oil resources plays with large original oil in place that can be exploited through multi stage fractured horizontal wells, with an emphasis on Saskatchewan, Manitoba, and North Dakota. The oil recovery in these resource plays will continue to be enhanced through improved completion technology, down spacing, and eventual water flooding. Renegade currently holds 95,221 undeveloped acres throughout its oil prone operating areas.

CORPORATE INFORMATION

Renegade's common shares trade on the TSX Venture Exchange under the symbol RPL. Renegade currently has approximately 77.3 million shares outstanding and 84.5 million fully-diluted shares.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements. More particularly, this press release contains statements concerning Renegade's capital expenditure program, Renegade's drilling plans and the expected ability of Renegade to execute on its exploration and development program.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Renegade, including: (i) with respect to capital expenditures, generally, and at particular locations, the availability of adequate and secure sources of funding for Renegade's proposed capital expenditure program and the availability of appropriate opportunities to deploy capital; (ii) with respect to drilling plans, the availability of drilling rigs, expectations and assumptions concerning the success of future drilling and development activities and prevailing commodity prices; (iii) with respect to Renegade's ability to execute on its exploration and development program, the performance of Renegade's personnel, the availability of capital and prevailing commodity prices; and (iv) with respect to anticipated production, the ability to drill and operate wells on an economic basis, the performance of new and existing wells and accounting risks typically associated with oil and gas exploration and production.

Although Renegade believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, reliance should not be placed on the forward-looking statements because Renegade can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures).

The forward-looking statements contained in this document are made as of the date hereof and Renegade undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Renegade Petroleum Ltd.
    Michael Erickson
    President & CEO
    (403) 355-8922

    Renegade Petroleum Ltd.
    Alex Wylie
    Vice-President, Finance & CFO
    (403) 410-3376