Rival Energy Ltd.

Rival Energy Ltd.

August 29, 2005 09:27 ET

Second Quarter 2005: Rival Energy Ltd. Achieves Record Cash Flow

CALGARY, ALBERTA--(CCNMatthews - Aug. 29, 2005) - RIVAL ENERGY LTD. (TSX VENTURE:RGY) is pleased to release its operating and financial performance for the second quarter and first six months of 2005. For this most recent quarter, Rival Energy's cash flow was a record $1.7 million ($0.09 per share), an increase of 59% over the same quarter last year. Oil and natural gas revenues rose to a record $3.4 million, a 34% increase over the second quarter of 2004. Considering the timing of our drilling and the delay in receiving governmental and surface approvals for the completion and tie-in of the four successful wells drilled, the Company still realized a 17% increase in average daily production, averaging 789 barrels of oil equivalent versus 672 for the second quarter of 2004. Rival Energy remains on track to achieve record corporate performance in 2005. With current production of just over 1000 barrels of oil equivalent per day (boe/d), an additional 100 boe/d of production to come on-stream within 30 days and a solid platform of drilling opportunities, the Company expects to meet or exceed all of its 2005 financial objectives and should achieve our year-end exit rate of 1200 boe/d by the end of Rival's fiscal third quarter.

Highlights Table

Three Months Ended Six Months Ended
June 30 June 30
Percent Percent
Financial 2005 2004 Change 2005 2004 Change
Oil &
gas sales $3,443,770 $2,573,141 34 $6,623,058 $5,218,866 27
Cash flow
operations 1,742,433 1,098,677 59 3,051,712 2,228,847 37
Net income 580,624 278,193 109 642,858 354,492 81
Cash flow
per share 0.09 0.06 50 0.16 0.12 33
Net income
per share 0.03 0.01 200 0.03 0.02 50
Average shares
(000) 19,121 19,200 0 19,121 19,192 0

(6:1 BOE)
Average daily
Natural gas
(mcfd) 2,972 2,593 15 3,012 2,774 9
Oil and NGL
(bblsd) 294 240 23 283 249 14
Barrels of oil
equivalent (boe) 789 672 17 785 711 10

Average Sales Price
Natural gas
($/mcf) $ 7.38 $ 6.90 7 $ 7.15 $ 6.61 8
Oil and NGL
($/bbl) 54.67 43.47 26 52.54 41.51 27

Rival's second quarter drilling activity was reduced in scope due to weather and surface related delays and partner approvals. As a result, we were only able to drill five wells during this time period, resulting in two oil wells, two natural gas wells and one well that was abandoned. At this time only the two successful oil wells have been placed on production as the two natural gas wells drilled in Robsart are still awaiting tie-in due to governmental approval for surface access for the pipeline. Rival currently has approximately 100 boe/d of production waiting to be placed on-stream.

Production averaged 789 boe/d during this most recent quarter as no new production was placed on-stream and the sale of our Suffield, Sask. oil property and natural declines limited the positive impact of the Killam discovery well that commenced production in mid February of this year. The two development wells drilled in Killam during the second quarter are now on production and the pool is producing approximately 400 barrels per day of water-free clean oil net to Rival's account. The Company presently plans to drill two additional wells in this pool over the next 30 days.

Success in Robsart has resulted in an increased drilling program being proposed for the area and additional wells have also been approved for the Company's W4M and W5M areas of exploration. Rival expects to drill at least another four wells in these areas over the next sixty days, with additional drilling proposed for the fourth quarter to follow-up on the positive results from these programs.

Rival expects the results from this drilling program to continue the Company's growth momentum and drive production to exceed its exit rate target of 1200 boe/d. At the same time, Rival is making considerable progress in its effort toward establishing an additional core area within central W5M and the Peace River Arch (W6M) areas of Alberta. The Company is very 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 will be increasing its technical manpower over the next thirty days and believes that with this additional strength and the Company's cash flow, we can now support participation in these areas.

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

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