Rockyview Energy Inc.

Rockyview Energy Inc.

August 10, 2005 14:07 ET

Rockyview Energy Inc. Provides Corporate Update

CALGARY, ALBERTA--(CCNMatthews - Aug. 10, 2005) - New junior exploration company identifies 168 drilling opportunities and outlines significant coalbed methane development program NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. Rockyview Energy Inc. (TSX:RVE) ("Rockyview" or the "Company") is pleased to provide a corporate update. Background Rockyview is a junior oil and gas company created in June 2005 through a plan of arrangement with APF Energy Trust ("APF"), prior to APF's merger with StarPoint Energy Trust ("StarPoint"). The Rockyview team comprises all the senior officers and several key technical staff from APF, which was one of the best performing trusts on the TSX from its initial public offering in late 1996 until its merger with StarPoint. Over that period, APF unitholders enjoyed a 25% average annual return while production grew from zero to 18,000 barrels of oil equivalent ("boe") per day. Rockyview is 93% weighted to natural gas, with conventional and coalbed methane ("CBM") operations in the greater Wood River area of central Alberta. Rockyview's CBM assets comprise substantially all of APF's former Horseshoe Canyon properties. In addition to Wood River proper, the Company operates in a focussed area that also includes Wetaskiwin, Bittern, Clive, Knellar, Stettler and Millet. Most of Rockyview's 55,000 net undeveloped acres of land are prospective for both conventional locations in the Cretaceous (predominantly in the Belly River formation), as well as for CBM in the Horseshoe Canyon. Deeper prospects in the Basal Quartz formation are also being pursued. In addition to a production base of 1,000 boe per day, Rockyview has identified 168 (93 net) drilling locations on its lands. The Company intends to develop and optimize this asset base, as well as identify, evaluate and execute strategic acquisitions. 2005 Capital Program Rockyview's board of directors has approved a $13 million capital program for the balance of 2005, comprised of $12 million for drilling, completions and facilities, as well as $1 million on land and seismic acquisitions. A total of 43 (26 net risked) wells are expected to be drilled as follows: - Conventional operations - 11 (5 net) Belly River wells at Wood River for $2.0 million. These wells have working interests between 40-75%. - Coalbed methane - 32 (21 net) Horseshoe Canyon wells, predominantly at Wood River, Wetaskiwin, Clive and Knellar for $9.8 million. These wells have working interests between 50-100% and are initially drilled on a spacing of one well per section. Drilling is expected to commence during the last week of August. Aggregate production additions from these activities are estimated to be approximately 4.2 million cubic feet per day of gas (700 boe/d), at an average cost of $17,140 per flowing boe (excluding $1.0 million spent on land and seismic). Funding for the capital program will come from Rockyview's working capital of $6.8 million, as well as from cash flow. In addition to these funds, Rockyview has an undrawn $13.5 million credit facility. Further Upside Potential Beyond 2005, Rockyview estimates that it has another 125 (67 net) drilling locations prospective for CBM in the Horseshoe Canyon formation, once it receives standard regulatory approvals to reduce spacing to four wells per section and expands its existing facilities. Incremental production from this phase could result in an additional 500-1,000 boe per day. Additional Guidance Rockyview anticipates that its capital program will result in a 2005 exit production rate of approximately 1,400 boe/d, based on projected drilling and completion dates. Actual on-stream dates may result in some production being brought on in early 2006.

Commodity price and foreign exchange assumptions:
Gas price (base and realized)        C$7.50/mcf @ AECO
Oil price (base)                     US$55/bbl @ WTI
Oil price (realized)                 C$65.86/bbl
US$/C$                               $1.22

Netback calculation (C$, per boe):
Revenue                              $46.00
Royalties (19.5%)                    $9.00
Transportation expense               $1.15
Operating expense                    $7.50
Operating netback                    $28.35
General & administrative expense     $4.00
Cash flow                            $24.35

Rockyview Energy Quarterly Results Detailed information respecting Rockyview's quarterly financial and operating results for the period ended June 30, 2005 will be available on August 11, 2005 at Results for the period only reflect ten days of operations during the month of June. Reader Advisory Forward Looking Statements - Certain information regarding Rockyview set forth in this news release, including management's assessment of future plans, contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Rockyview's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of reserve estimates, currency fluctuations and the timing of listing of shares. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of six mcf to one bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion factor is an industry accepted norm and is not based on either energy content or current prices. The Toronto Stock Exchange has neither approved nor disapproved of the contents of this news release.

Contact Information

  • Rockyview Energy Inc.
    Steve Cloutier
    President & CEO
    (403) 538-5000
    Rockyview Energy Inc.
    Alan MacDonald
    Vice President, Finance & CFO
    (403) 538-5000
    (403) 538-5050 (FAX)