Seaview Energy Inc.

Seaview Energy Inc.

June 30, 2009 23:45 ET

Seaview Energy Inc. Announces Completion of Previously Announced Peace River Arch Asset Acquisition


Seaview Energy Inc. ("Seaview" or the "Company") (TSX VENTURE:CVU.A) (TSX VENTURE:CVU.B) is pleased to announce that it has successfully completed the previously announced acquisition of certain high quality, long life, assets located in the Peace River Arch (the "Transaction") from a senior public oil and gas company (the "Vendor") for total consideration of approximately $26.5 million. The effective date of the Transaction is April 1, 2009.

The Transaction was financed using a combination of proceeds from a concurrent bought-deal equity financing of subscription receipts for gross proceeds of approximately $15.7 million and Seaview's expanded credit facility. The combined equity and credit availability provide Seaview with a strong balance sheet to ensure continued financial flexibility.

Pursuant to the Transaction, Seaview purchased properties located in the Balsam and Boundary Lake areas of northwest Alberta (the "Assets"). The Assets consolidate Seaview's existing working interest in the Company's key Peace River Arch core area. Seaview currently is a working interest holder in over 70% of production associated the Assets to be acquired.

The Assets are currently producing an estimated 730 boe/d (90% natural gas weighted). Management has identified numerous opportunities to enhance the value of the Assets, including 10 drilling locations and 4 recompletion opportunities. Seaview's consolidated working interest in these opportunities will increase from an average of 41% to 79%.

Seaview is increasing its working interest in its current drilling inventory which will be eligible to benefit from the Alberta Government Royalty Incentives announced on March 3, 2009. The Royalty Incentive Program provides a one time opportunity to maximize the net asset value of the assets by adding new reserves while benefiting from the reduced royalty rates and the drilling credit.

The Assets also increase Seaview's ownership in associated gathering systems and processing facilities providing a base for competitive operating costs and increased access to take-away capacity for future production volumes through Company owned infrastructure.

Seaview's total land position in the Peace River Arch expands by 15% to 139,323 gross acres of land at an average working interest of 42.5%. In addition, Seaview's undeveloped land position in this area has increased by 16% to 25,359 net acres, at an average working interest of 47.8%.

Based on a National Instrument 51-101 independent evaluation of the reserves by Sproule Associates Limited ("Sproule") effective April 1, 2009, the Total Proven plus Probable reserves associated with the Assets are 1.8 mboe. Additionally, 1.6 mboe of the Total Proven plus Probable reserves are fully developed and are currently on production and 82.0% of the reserves have common working interest with assets currently owned by Seaview. Based on the acquisition price of $26.5 million, Seaview acquired Total Proved plus Probable reserves at a cost approximately $14.42/boe excluding attributed land value of $970,000.

The strategic merits of the Transaction are significant for Seaview shareholders. The larger, more diversified cash flow base will permit Seaview to embark upon a more aggressive exploration and development program in its Peace River Arch focus area as well as pursue the upside potential on the Assets acquired pursuant to the Transaction.

With an expanded inventory of both exploration and development locations, Seaview is well positioned for additional growth potential through a risk balanced capital program.


A key component to Seaview's balance sheet management is the Company's commodity price risk program. The price risk management program is intended to reduce price volatility in order to maintain balance sheet strength, protect acquisition economics and finance ongoing capital expenditures. Subsequent to Seaview's first quarter 2009 hedging disclosure, the Company has entered into two additional contracts providing for expanded protection for the remainder of 2009 and 2010.

- Seaview currently has approximately 1,100 boe/d (48% of estimated average 2009 production) hedged for the remainder of 2009.

-- 6,500 GJ/d of natural gas hedged in put and fixed contracts providing for a "net of cost" floor of $6.89/GJ which is a 72% premium to the current calendar AECO 2009 futures strip of $4.00/GJ.

-- 100 bbl/d of crude oil hedged in a fixed contract at CDN$55.90/bbl.

- Seaview currently has approximately 475 boe/d (21% of estimated average 2009 production) hedged for the period from January 1, 2010 through December 31, 2010.

-- 3,000 GJ/d of natural gas hedged in put and fixed contracts providing for a "net of cost" floor of $4.69/GJ which is an 18% premium to the current calendar AECO 2009 futures strip of $4.00/GJ.

- The following natural gas and crude oil financial contraccts are currently outstanding:

Seaview is a Calgary, Alberta based company engaged in the exploration, development and production of conventional crude oil and natural gas reserves in Canada. Seaview's strategy is to build shareholder value through a balance of exploration and development drilling complemented by a focused acquisition program.

Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.

This press release may contain forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, anticipations, expectations, opinions, forecasts, projections, guidance or other similar statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. These risks include, but are not limited to: the risks associated with the oil and gas industry (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 and health, safety and environmental risks), commodity price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations 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 the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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