Rival Energy Ltd.

Rival Energy Ltd.

June 01, 2005 10:19 ET

Rival Energy Ltd. Updates First Quarter Activity and Files Financial Results on SEDAR

CALGARY, ALBERTA--(CCNMatthews - June 1, 2005) - RIVAL ENERGY LTD. (TSX VENTURE:RGY) is pleased to release its operating and financial performance for the first three months of 2005. For this most recent quarter, Rival Energy's oil and natural gas revenues rose to a record $3.2 million, a 20% increase over the first quarter of 2004. Over this same time period, and considering the timing of its completion and tie-in work, the Company still realized a 4% increase in average daily production, averaging 781 barrels of oil equivalent versus 750 for the first quarter of 2004. Rival Energy's cash flow per share was $0.07, a 17% increase for this most recent quarter and keeps the Company on track to meet its forecasted growth and performance targets for fiscal 2005.

Highlights Table
Three Months Ended March 31
2005 2004 Change %
Financial ----------------------------------
Oil & gas sales $3,179,288 $2,645,725 20
Cash flow from operations 1,309,279 1,130,169 16
Net income 117,423 76,298 54
Cash flow from operations per share 0.07 0.06 17
Net income per share 0.01 0.00 54
Average shares outstanding (000) 19,121 19,183 0

Operating (6:1 BOE)
Average daily production
Natural gas (mcfd) 3,052 2,956 3
Oil and NGL (bblsd) 273 257 6
Barrels of oil equivalent (boe) 781 750 4

Average Sales Price
Natural gas ($/mcf) $ 6.98 $ 6.35 10
Oil and NGL ($/bbl) 49.93 39.68 26

Rival Energy remains on track to achieve record corporate performance in 2005. The Company's targets of averaging 1,000 barrels of oil equivalent per day (boe/d) for calendar 2005 and generating cash flow per share of $0.34 remain achievable.

Rival Energy's first quarter activities were almost exclusively focused upon the completion, tie-in and placing on-production the nine successful wells the Company participated in during the fourth quarter of 2004. At the same time, however, Rival was also successful in the one exploration well it drilled in the Sedalia area of southeastern Alberta. This shallow natural gas well was also completed and placed on-stream by the end of March this year.

As the Company's second quarter unfolded, Rival completed the sale of its Suffield, Saskatchewan oil property (production and undeveloped land) for $950,000 to an independent third party. The proceeds from this sale were applied to the Company's bank line. Rival's second quarter drilling activity is currently underway and the Company has cased the first two wells in its Robsart, Saskatchewan shallow natural gas drilling program. This program will see a minimum of three and a maximum of five wells drilled this quarter. At the same time, the Company has also cased the first of a two well drilling program in Killam and the second well will spud within the next week. These wells will see the Company expand its new pool oil discovery which has been producing steadily at a daily rate of 120 barrels of water-free clean oil - 100 bopd net to Rival (84%) - since mid-February this year. Success with these two wells will have a significant impact on corporate production volumes and will expand our development program for this pool into the third quarter.

Third quarter activity will be focused on the further delineation of the Killam discovery, the completion and testing of a prospective new oil pool in the Bellshill lake area and the initiation of a drilling program within the Company's core area of east central Alberta for natural gas and light oil prospects that have been developed internally.

Rival expects the results from these drilling programs to continue the Company's growth momentum and drive production to record levels. At the same time, considerable effort is being directed toward establishing an additional core area for Rival within central W5M and the Peace River Arch (W6M) areas of Alberta. The Company is interested in gaining a foothold in these areas in order to complement its shallower oil and natural gas opportunities with a few higher impact oil and natural gas plays. Rival believes that its cash flow can now support participation in these areas and we expect to gain access to these areas through a multi-well farmin arrangement or a property or corporate acquisition during 2005. With current production of approximately 825 boe/d, Rival remains on-track to meet or exceed its performance targets for the year.

Corporately, Rival has filed a notice with the TSX Venture Exchange of its intention to conduct a normal course issuer bid. The maximum number of common shares, which Rival may acquire for cancellation under this bid, is 956,064 shares, representing 5% of the 19,121,281 common shares, which are currently outstanding.

The Company is conducting the normal course issuer bid because, in the view of management, trading prices for the Corporation's shares may at times be less than its asset value per share and lower on a cash flow per share multiple than many of its peer corporations. Rival intends to commence the bid upon receipt of approval from the TSX Venture Exchange. Any purchases made by Rival under the bid will be made through First Associates Investments Inc. and through the facilities of, and subject to approval by, and in accordance with the rules of, the TSX Venture Exchange.

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

Contact Information