Shoreline Energy Corp.
TSX : SEQ

Shoreline Energy Corp.

November 15, 2011 00:55 ET

Shoreline Energy Corporation Announces Third Quarter 2011 Financial and Operational Results

CALGARY, ALBERTA--(Marketwire - Nov. 15, 2011) - Shoreline Energy Corporation (TSX:SEQ) ("Shoreline" or the "Corporation") is pleased to provide its financial and operational results for the three and nine months ended September 30, 2011 reported in accordance with International Financial Reporting Standards ("IFRS"). These reports are available for review at www.sedar.com and on the Corporation's website at http://www.shorelineenergy.ca.

Highlights

Shoreline is pleased to report the following highlights during the third quarter:

  • Generated funds from operations of $602,549 in the quarter, an increase of 66% compared to $363,133 in the second quarter of 2011.
  • At the end of the quarter the Company paid its first declared quarterly dividend of $0.20 per share.
  • Average production increased by 13% to 895 BOE/D in the third quarter of 2011 from 792 BOE/D in the second quarter of 2011.
  • Improved operating netback by 9.5%, to $15.60/BOE in the third quarter of 2011 from $14.25 per BOE in the second quarter of 2011.
  • Decreased operating costs by 7%, to $14.00/BOE in the third quarter of 2011 from $15.03 per BOE in the second quarter of 2011.

Financial and Operational Summary


Three Months Ended

Nine Months Ended
September 30 2011 June
30 2011
Q3 2011 Q2 2011
Financial (000's except for per share amounts) (unaudited) (unaudited) (unaudited) (unaudited)
Petroleum and natural gas sales $ 2,593 $ 1,496 $ 4,019 $ -
Funds from operations(1) $ 603 $ 363 $ 966 $ (948 )
Per share basic & diluted $ 0.16 $ 0.10 $ 0.22 $ (9,478 )
Net income (loss) $ (320 ) $ (476 ) $ (795 ) $ 37,993
Per share basic & diluted $ (0.08 ) $ (0.12 ) $ (0.37 ) $ 379,926
Capital expenditures(2) $ 1,241 $ 631 $ 1,872 $ NA
Acquisitions $ (648 ) $ 28,098 $ 27,449 $ NA
Working capital surplus $ 6,171 $ 7,200 $ 6,171 $ NA
Current bank debt (credit facilities of $12 million) $ - $ - $ - $ NA
Total assets $ 39,622 $ 40,135 $ 39,622 $ NA
Shareholders' equity $ 32,638 $ 33,817 $ 32,638 $ NA
Operating
Production
Natural Gas (MCF/D) 4,137 3,737 3,977 -
Light crude oil & NGL (BBLS/D) 168 99 140 -
Royalties 37 70 50 -
BOE/day 895 792 853 -
Netback / BOE (6:1)
Sales price $ 35.58 - $ 34.88 -
Royalties $ (5.98 ) - $ (5.40 ) -
Operating & transportation expenses $ (14.00 ) - $ (14.39 ) -
Operating netback $ 15.60 - $ 15.09 -
(1) Funds from operations is a non-IFRS term and the Corporation calculates this measure as cash provided from operations before changes in non-cash working capital, acquisition costs and decommissioning expenditures.
(2) Capital expenditures include cash exploration & evaluation expenditures plus cash property & equipment expenditures.

Operational Update

Shoreline is currently constructing surface and pipeline facilities for the previously announced Bonanza horizontal oil well (50% working interest). The horizontal leg was fracture stimulated and successfully tested in October. The well will be placed on production in December 2011. During the third quarter Shoreline successfully brought on stream 4 wells (3.3 net) which were previously suspended, these projects were responsible for increasing both Q3 production and oil weighting.

On November 14th, 2011 Shoreline obtained shareholder approval to acquire the three non arms length private oil and gas production companies previously announced July 5, 2011.

On a pro forma basis Shoreline will have:

  • Over 135,000 net acres of land, an increase of 81%.
  • Increase reserves by 1.55 million BOE on a Total Proved basis, and 2.5 million BOE on a Proved plus Probable basis, representing a 76% and 92% increase respectively above existing Shoreline reserves as at December 31, 2010.
  • Produce 1,550 BOE/D (field estimate) an increase of 73%.
  • Add three significant oil growth opportunities to its inventory.
  • Add two 100% owned and operated gas processing facilities.

Guidance

Shoreline is increasing its 2011 exit production rate estimate to 1,650 BOE/D from 1,025 BOE/D and 2011 average production of 990 BOE/D from 875 BOE/D. Shoreline is currently producing approximately 1550 BOE/D, with one new well awaiting tie in. The Company has increased its 2011 Capital Budget from $5.4 million previously announced, to between $6.0 and $7.7 million, with spending in the fourth quarter between $3.8 to $5.5 million. Based on this revised capital program, Shoreline plans on participating in between 3 and 5 wells (1.7 to 3.7 net) and in two recompletions (1.5 net) in Q4 2011.

Investor Information

Currently, Shoreline has 3,830,458 common shares, 3,831,608 common share purchase warrants and 383,000 options outstanding.

Shoreline is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. The Corporation's common shares are currently listed on the TSX under the trading symbol "SEQ." Additional information regarding Shoreline is available under the Corporation's profile at www.sedar.com or at the Corporation's website, www.shorelineenergy.ca.

Forward Looking and Cautionary Statements

This news release contains forward-looking statements relating to the Corporation's plans and other aspects of the Corporation's anticipated future operations, strategies, financial and operating results and business opportunities. These forward-looking statements may include opinions, assumptions, estimates, management's assessment of value, reserves, future plans and operations.

Forward-looking statements typically use words such as "will," "anticipate," "believe," "estimate," "expect," "intend," "may," "project," "should," "plan," and similar expressions suggesting future outcomes, and include statements that actions, events or conditions "may," "would," "could," or "will" be taken or occur in the future. The forward-looking statements are based on various assumptions including expectations regarding the success of current or future drill wells; the outlook for petroleum and natural gas prices; estimated amounts and timing of capital expenditures; estimates of future production; assumptions concerning the timing of regulatory approvals; the state of the economy and the exploration and production business; results of operations; business prospects and opportunities; future exchange and interest rates; the Corporation's ability to obtain equipment in a timely manner to carry out development activities; and the ability of the Corporation to access capital and credit. While the Corporation considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward-looking statements are subject to a wide range of assumptions, known and unknown risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation: risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; loss of markets; volatility of commodities prices; currency fluctuations; imprecision of reserves estimates; environmental risks; competition from other producers; inability to retain drilling rigs and other services; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; general economic conditions; delays resulting from or inability to obtain required regulatory approvals and to satisfy various closing conditions; and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive.

Although Shoreline believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not rely unduly on forward-looking statements. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by applicable law, Shoreline does not undertake any obligation to publicly update or revise any forward-looking statements.

Note Regarding BOEs

The term barrel of oil equivalent ("BOE") may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 MCF : 1 BOE is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Contact Information