Spitfire Energy Ltd.
TSX VENTURE : SEL

Spitfire Energy Ltd.

March 03, 2008 09:00 ET

Spitfire Energy Announces Third Quarter Results and Operational Update

CALGARY, ALBERTA--(Marketwire - March 3, 2008) - Spitfire Energy Ltd. (TSX VENTURE:SEL) is pleased to announce its financial and operating results for the third quarter of fiscal 2008 ending December 31, 2007.

Third Quarter Fiscal 2008 Highlights

- Spitfire produced an average of 289 barrels of oil equivalent per day, achieving revenue of $1.3 million. Most of the production consisted of crude oil from the Company's wells in Saskatchewan.

- The Company achieved cash flow from operations of $457,000, an increase of 236% over the same period in fiscal 2007.

- Spitfire evaluated a portfolio of assets for potential acquisition, targeting assets that offer a predictable production base with a mixture of exploration and development upside.

- The Company dedicated resources to its Fosterton, Saskatchewan optimization project. The Company is on track to have the capacity to handle the fluids for new development drilling by the end of the fiscal year.

Spitfire increased its revenue base in the quarter and nine months ending December 31, 2007. In the third quarter of fiscal 2008, oil production increased 15% compared with the same period of fiscal 2007. The increase in oil production offset declines in gas production. As result, revenue increased 9% to $1.3 million. The Company continues to shift its production to take advantage of record high crude oil prices, with more than 77% of Spitfire's production now weighted to oil.

In the third quarter, the Company evaluated a portfolio of assets for acquisition. Spitfire continues to look for assets that offer a predictable production base with a mixture of exploration and development upside. As Spitfire works to identify potential acquisitions, the Company is prepared to add additional engineering, land and exploration talent required to facilitate growth. In the meantime, Spitfire's Saskatchewan production base continues to provide steady cash flow.

Given the Company's production and prospects, Spitfire believes its shares represent a good investment. As a result, the Company took advantage of its new normal course issuer bid to purchase 374,500 common shares at $0.32 per share during the three months ended December 31, 2007. As part of the issuer bid, the Company is able to purchase up to 2% of its shares in any 30-day period. Spitfire intends to continue to acquire common shares at appropriate times to provide capital appreciation and market stability for shareholders. The Company's issuer bid was established on October 25, 2007 and runs until October 24, 2008.

The following table provides a summary of Spitfire's results for the three-month period ending December 31, 2007 and 2006. Spitfire's unaudited financial statements and Management's Discussion and Analysis can be accessed for viewing on SEDAR at www.sedar.com and on the Company website at www.spitfireenergy.com.



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Quarter Ended December 31
2007 2006
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Financial
Petroleum and natural gas sales
Crude oil and NGLs $ 1,128,695 $ 790,415
Natural gas $ 218,727 $ 446,237
Net revenue $ 1,347,422 $ 1,236,652
Cash flow from operations $ 457,284 $ 136,197
Per share basic $ 0.01 $ 0.00
Per share diluted $ 0.01 $ 0.00
Net earnings (loss) $ (13,182) $ (197,457)
Per share basic and diluted $ 0.00 $ (0.01)
Capital expenditures $ 769,917 $ 1,764,995
Working capital (deficit) $ (1,246,963) $ (5,626,257)
Total assets $ 19,311,406 $ 16,951,581
Common shares outstanding 42,223,744 29,323,744

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Operating
Realized prices
Crude oil and NGLs ($/bbl) $ 55.26 $ 44.52
Natural gas ($/mcf) $ 5.93 $ 6.83
Total ($/boe) $ 50.68 $ 43.22
Corporate Netbacks ($/boe) $ 17.20 $ 4.76
Average production
Crude oil and NGLs (bbl/d) 222 193
Natural gas (mcfd) 401 710
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Total (boed) 289 311
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Spitfire Energy Ltd. is a junior oil and gas company engaged in the exploration, development and production of natural gas and crude oil reserves. Spitfire's common shares trade on the TSX Venture Exchange under the symbol "SEL."

This press release contains forward-looking statements that are based on current expectations. There are a number of risks and uncertainties associated with the oil and gas industry that could cause actual results to differ materially from those anticipated.

The term "cash flow" is defined as revenue less royalties, operating expenses, general and administrative expenses, and interest, which is expressed before changes in non-cash working capital. Cash flow is considered useful to investors and management to analyze operating performance, leverage and liquidity. This term does not have any standardized meaning prescribed by Canadian GAAP and, therefore, might not be comparable with the calculation of a similar measure for other companies.

A barrel of oil equivalent, derived by converting gas to oil using a ratio of six thousand cubic feet of gas to one barrel of oil, may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of the contents of this press release.

Contact Information

  • Spitfire Energy Ltd.
    Keith N. Chase
    President and Chief Executive Officer
    (403) 205-3400 x224
    or
    Spitfire Energy Ltd.
    Danny Zivkusic
    Chief Financial Officer
    (403) 205-3400 x228
    Website: www.spitfireenergy.com