Seaview Energy Inc.
TSX VENTURE : CVU.A
TSX VENTURE : CVU.B

Seaview Energy Inc.

May 20, 2009 15:34 ET

Seaview Energy Inc. Releases Record Financial and Operating Results for the Three Month Period Ended March 31, 2009

CALGARY, ALBERTA--(Marketwire - May 20, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Seaview Energy Inc. ("Seaview" or the "Company") (TSX VENTURE:CVU.A) (TSX VENTURE:CVU.B) is pleased to announce its financial and operating results for the three months ended March 31, 2009.



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SELECTED INFORMATION
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Financial Q1 2009 Q1 2008 % Change
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Petroleum and natural gas sales ($000's) $ 7,000 $ 1,130 519%
Funds flow from operations ($000's)(1) 2,910 352 727%
Basic and diluted per share(2) 0.06 0.02 200%
Net loss ($000's) (1,061) (353) 201%
Basic and diluted per share(2) (0.02) (0.02) -
Capital expenditures ($000's)(3) 5,914 4,516 31%
Net debt (working capital surplus)($000's) 21,971 (3,801) (678%)
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Shares Outstanding at period end
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Class A 50,005,182 19,073,007 162%
Class B 1,053,540 1,053,540 -
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Operations
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Daily production
Natural gas (mcf/d) 9,464 1,456 550%
Light oil and NGLs (bbl/d) 388 4 9600%
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Total production (boe/d) 1,965 246 699%
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Average realized sales price
(net of risk management gains or losses)
Natural gas (per mcf) $ 6.34 $ 8.28 (23%)
Light oil and NGL (per bbl) 46.23 100.81 (54%)
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Netback per boe
Sales price (net of risk management
gains or losses) $ 39.58 $ 50.43 (22%)
Royalties 7.60 11.83 (36%)
Operating expenses 10.19 11.23 (9%)
Transportation 1.73 1.25 38%
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Operating netback $ 20.06 $ 26.12 (23%)
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(1) The Company uses "funds flow from operations" and "funds flow from
operations per share" which do not have any standardized meaning
prescribed by Canadian GAAP. The term is used to analyze operating
performance and leverage.
(2) Weighted average diluted shares outstanding for Q1 2009 and Q1 2008
exclude the granted options and the impact of the conversion of the
Class B shares as these would have been anti-dilutive.
(3) Capital expenditures include the cash additions for the period and
capitalized G&A expense.


HIGHLIGHTS OF Q1 2009

- Average production for Q1 2009 was 1,965 boe/d, an increase of 699% relative to Q1 2008 (204% per share), and a 10% increase compared to Q4 2008 of 1,794 boe/d (7% per share);

- Since commencing operations on October 17, 2007, record production levels in the first quarter of 2009 mark the Company's sixth consecutive quarter of growth;

- Funds flow from operations for Q1 2009 increased 727% to $2.91 million from $0.35 million in Q1 2008. Funds flow from operations increased 200% per share over the same period;

- Expanded credit facility to $44 million representing a 30% increase relative to June 30, 2008. Based on net debt of approximately $22 million at the end of Q1 2009, Seaview has $22 million of available credit capacity to pursue strategic opportunities;

- Seaview drilled and cased 3 wells (1.67 net) in Q1 2009 resulting in 2 potential gas wells (0.67 net) and 1 abandoned well (1.0 net);

-- Participated in one successful exploration well (0.25 net) in the Harlech area of west-central Alberta targeting a developing resource play. During the first quarter of 2009, several prospective reservoir zones were successfully completed evaluating the long-term resource potential of this exploration property. Due to surface access issues in the Harlech area, tie-in of this successful well to a near-by gathering system is planned for winter 2009-2010;

-- Participated in one successful gas well (0.42 net) in the Gordondale area. The construction of the wellsite facilities and pipeline has been completed with initial production of more than 50 boe/d expected to be on-stream by Q3 2009.

- During Q1 2009 operations focused on equipping and tie-in activities on 3 producing wells (1.2 net) drilled and completed in Q4 2008 and Q1 2009 in the Gordondale, Valhalla and Sinclair areas adding more than 220 boe/d of production. New production from these wells was deferred until April 1, 2009 in order to maximize the 5% royalty rate under the Alberta Government's Royalty Incentive Program ("2009 RIP") announced on March 3, 2009; and

- Seaview has an additional three wells (1.2 net) to be brought on production during the year which are expected to add combined deliverability of approximately 180 boe/d. New production from these wells will also qualify for the 5% royalty rate under the 2009 RIP for a total of 400 boe/d of new production eligible for the maximum 5% royalty rate until March 2010.

BUSINESS STRATEGY

Although industry experienced volatile commodity prices and the impact of the global financial crisis on capital markets, Seaview is well positioned to continue executing its aggressive growth strategy. Through a disciplined approach to capital management, the Company has several key characteristics that support continued growth and value creation for shareholders despite the current economic climate:

- High-quality, long reserve life assets, focused on natural gas in the Peace River Arch and light oil in southeast Saskatchewan, both desirable areas within the Western Canadian Sedimentary Basin;

- Strong financial position including a low cost structure, strong balance sheet and $22 million of available credit capacity providing Seaview with the ability to capitalize on strategic opportunities;

- Attractive commodity risk management program to provide an enhanced cash flow stream in order to maintain balance sheet strength, secure acquisition economics and finance the Company's capital expenditures; and

- Strong management team, directors and technical professionals with significant ownership positions, ensuring strong alignment to shareholders' interests.

Seaview continues to focus on the Company's balanced growth strategy of acquiring, exploiting and exploring for high-quality natural gas and light oil assets in Western Canada.

Throughout the first quarter of 2009, the Company has focused on preparing for an active summer program directed towards capitalizing on the benefits of the 2009 RIP. In order to qualify for the drilling credit, new wells must be drilled between April 1, 2009 and March 31, 2010. Seaview is well positioned to capitalize on the incentive program due to the Company's solid balance sheet and inventory of low to medium risk drilling opportunities within the Peace River Arch core area. The benefits of 2009 RIP may be significant to Seaview as the royalty credits earned through drilling offset 50% - 75% of the capital cost to drill a typical well.

The 2009 RIP 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 on new production as well as drilling credits used to lower royalties payable on existing production. It is estimated that, at current strip pricing, the 2009 RIP would have approximately a $2.5 million cash impact over the next two years, which will result in a reduction to royalties payable.

Seaview has the ability to expand the prospect inventory of over 60 opportunities through execution of additional acquisition and farm-in opportunities in the Peace River Arch. Due to the lack of equity and credit availability for many competitors, Seaview has an ability to capitalize on several opportunities in an area where the Company has experienced significant drilling success to date. Seaview has demonstrated this success with our strong 2008 drilling program, drilling 18 wells (9.1 net) and adding over 2.6 million boe of reserves on a Total Proven Plus Probable basis at a cost of $12.08/boe (including changes in Future Development Costs ("FDC")).

The Company continues to review several property and corporate acquisition opportunities aimed at consolidating the existing Peace River Arch and southeast Saskatchewan core areas, or adding a new focus area, for the Company. Seaview is well positioned, financially, to capitalize the drilling program and acquisition opportunities that meet the investment criteria of quality reserves with additional upside potential through drilling and optimization.

COMMODITY PRICE RISK MANAGEMENT

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.

- Seaview currently has approximately 850 boe/d (43% of estimated 2009 production) hedged for the remainder of 2009.

-- 4,500 GJ/d of natural gas hedged in put and fixed contracts providing for a "net of cost" floor of $8.10/GJ which is a 94% premium to the current calendar AECO 2009 futures strip of $4.17/GJ.

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

- Current hedging program provides minimum gross revenue of $14.5 million for 2009 for the hedged volumes.

- As at April 30, 2009, the estimated mark-to-market value of the derivatives contracts was $4.0 million.

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



Volume Pricing Point Price Term
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Natural Gas August '08-
Put(1) 1,000 GJ/d AECO Monthly $ 8.70/GJ December '09
Natural Gas November '08-
Put 1,500 GJ/d AECO Monthly $ 8.50/GJ December '09
Natural Gas April '09-
Put 1,000 GJ/d AECO Monthly $ 9.00/GJ December '09
Natural gas March '09-
swap 1,000 GJ/d AECO Monthly $ 6.02/GJ December '09
Natural gas January '10-
call 1,500 GJ/d AECO Monthly $ 7.00/GJ December '10
Crude oil March '09-
swap 100 bbl/d WTI-Nymex CAD $ 55.90/bbl December '09
Crude oil January '10-
call 100 bbl/d WTI-Nymex CAD $ 80.00/bbl December '10
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(1) The net floor for this contract reflects the deferred cost of $1.80/GJ
paid over the course of the contract. The strike price of the put is
$10.50/GJ before the deferred cost.


OUTLOOK; 2009 GUIDANCE

Seaview's core areas feature high-quality, long-life reserves with significant identified upside potential through exploration and development drilling. The Company is currently well positioned to continue its growth strategy in 2009 despite the current challenging economic climate, with the following characteristics:

- Total Proven reserves are 4,786 mboe, and Total Proven plus Probable reserves are 7,256 mboe, effective December 31, 2008, as evaluated by Sproule and Associates using National Instrument 51-101 reserve definitions;

- Forecast 2009 average daily production of more than 2,000 boe/d, and 2009 exit rate of more than 2,100 boe/d;

- Expanded credit facility of $44 million representing a 30% increase relative to June 30, 2008. Based on net debt of $22 million as at March 31, 2009, Seaview has $22 million of available credit capacity to pursue strategic opportunities;

- Commodity hedging program providing for downside protection on 43% of 2009 forecasted average production generating minimum of $14.5 million gross revenue for 2009;

- Reserve life index is 10.1 years based on Total Proven plus Probable reserves and Q1 2009 production of 1,965 boe/d;

- Forecasted 2009 capital budget designed to be net debt neutral at the end of 2009 compared to year end 2008 based on reinvesting cash-flow plus the positive impact of drilling credits to be earned under the 2009 RIP announced on March 3, 2009; and

- Drilling inventory of more than 80 locations, including over 60 prospects targeting multizone conventional formations in the Peace River Arch, and 20 potential locations targeting light oil in southeast Saskatchewan. Seaview's prospect inventory is not fully reflected in the Company's independent reserve evaluation and therefore provides for significant long-term growth potential.

FILING OF FIRST QUARTER 2009 FINANCIALS

Seaview has filed its financial results for the three month period ended March 31, 2009 including the unaudited interim consolidated financial statements and related management's discussion and analysis ("MD&A").

These filings are available in their entirety at www.seaviewenergy.com and www.sedar.com or by contacting the Company directly.

ANNUAL MEETING

Seaview's Annual Meeting is scheduled for 3:00 pm on Thursday, June 4, 2009 in the Viking Room at the Calgary Petroleum Club, 319 - 5th Avenue SW, Calgary, Alberta.

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.

Estimated values contained in this press release do not represent fair market value.

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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