Wild Stream Exploration Inc.
TSX VENTURE : WSX

January 31, 2011 09:00 ET

Wild Stream Exploration Inc. Announces Operational and Reserves Update, Private Company Acquisition and 2011 Guidance

CALGARY, ALBERTA--(Marketwire - Jan. 31, 2011) - Wild Stream Exploration Inc. ("Wild Stream" or the "Company") (TSX VENTURE:WSX) is pleased to announce substantial increases to reserves, production and net asset value as a result of successful operations in 2010. Wild Stream is also pleased to announce that we have closed the acquisition of a Private Company.

2010 Year End Reserves Highlights

  • Total Proved plus Probable ("P+P") reserves of 15.7 million BOE (97% liquids) increased 227% over December 2009 reserves of 4.8 million BOE.
  • Present value before tax 10% (PVBT10) of P+P reserves was $388.9 million, an increase of 267% over the $105.9 million as at December 2009.
  • Finding, development and acquisitions costs, including a $105 million change in future development capital were $21.36 per boe on a P+P basis.
  • Based on an estimated 2010 average corporate net back of $38.00 per boe the Company achieved a recycle ratio of 1.8 times.
  • Maintained an enviable reserves life index of 13.2 years based on our December 2010 average production of 3,250 boepd.
  • Reserve additions replaced 2010 production by a factor of 15 times on a P+P basis.
  • Increased reserves per share by 115% to 300 boe from 140 per thousand fully diluted shares
  • Increased our undeveloped land to in excess of 140,000 net acres at year end 2010 from approximately 50,000 net acres at year end 2009.
  • Estimated net asset value per share calculated on (PVBT10) values increased to $8.90 per share at December 31, 2010 from $4.61 at December 31, 2009.

The Sproule Associates Limited independent assessment of the Company's reserves dated December 31, 2010 is summarized as follows (using forecast prices and costs):

December 31, 2010                   Present Value Before Tax
                Oil   Discount   Discount   Discount
Reserves Category   Oil   NGL   Gas   Equivalent   0%   5%   10%
Gross Working Interest   Mbbl   Mbbl   MMcf   mBOE   M$'s   M$'s   M$'s
Proved Developed Producing   4,870   68   1,708   5,223   236,625   190,418   163,056
Total Proven   9,705   83   2,009   10,122   414,019   324,901   269,233
                             
Total Proven Plus Probable   15,074   125   3,036   15,706   707,805   500,222   388,875

Notes:

  1. The December 31, 2010 reserves report has been prepared in accordance with the definitions, procedures and standards contained in the Canadian Oil and Gas Evaluation Handbook and the Canadian Securities Administrators National Instrument; National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.
  2. Barrels of Oil Equivalent ('BOE") may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
  3. The estimated net present value of future net revenue is based on current legislation in place at December 31, 2010.
  4. Prices for oil F.O.B. Edmonton are based upon 40 degrees API oil having less than 0.4% sulphur. The wellhead oil prices were adjusted for quality and transportation based on historical actual prices.
  5. Prices and volumes for natural gas are based upon a base pressure of 14.65 pounds per square inch and base temperature of 60 degrees F. The natural gas prices were adjusted, where necessary, based on historical pricing based on heating values and the differing costs of service applied by various purchasers.
  6. The natural gas liquids prices were adjusted to reflect historical average prices received.
  7. The forecast prices and cost case assumes no legislative or regulatory amendments and includes the effects of inflation. The estimated future net revenue to be derived from the production of the reserves includes an inflation rate of 1.5% per year.

2010 Fourth Quarter Operational Highlights

The Company has not released its audited 2010 financial results and accordingly the numbers included in the calculations below are currently estimates and unaudited.

  • Based on field estimates, the Company's fourth quarter 2010 average production increased 20% to 2,750 boepd.
  • Based on field estimates, December estimated average production rate exceeded our 2010 year end exit guidance of 3,200 boepd (95% crude oil).
  • Fourth quarter estimated funds from operations increased 38% to $10.5 million ($0.25 per basic share) from $7.6 million ($0.21 per basic share) in the third quarter.
  • We significantly expanded our Lower Shaunavon fairway with exploration success and the purchase of 45 net sections of land.
  • The Company drilled 21 gross (19.8 net) oil wells with a 90% success rate including 12.4 net wells in Shaunavon, 6.0 net wells in Dodsland and 1.4 net wells in Garrington.

Operations Update

Wild Stream has drilled 3 gross (2.9 net) successful wells to date in 2011 in the Shaunavon area and we expect to drill a total of 12 wells in this area by breakup.

Construction of a second oil processing and water injection facility to expand the Upper Shaunavon waterflood will be completed by the middle of February. Performance from the existing waterflood project is exceeding expectations with six Upper Shaunavon horizontal wells responding to our current water injection.

We also anticipate drilling 3 gross and net wells in the Dodsland area and 1 other well prior to break up.

Private Company Acquisition

Effective January 28, 2011, Wild Stream has acquired a Private Company with high netback, crude oil assets focused in the Dodsland area for total consideration of 3.5 million WSX common shares. The properties have an average working interest of 90% and are 100% operated. The acquired properties also contain significant undeveloped inventory in both the Dodsland and Shaunavon areas of southwest Saskatchewan.

The Acquisition has the following characteristics:

Current Production: 300 Boe/d (100% crude oil)
Estimated Reserves (1): 1.3 MMBoe
RLI: 11.9 years
Total Net Development Drilling Locations  
  Dodsland Viking 42
  Shaunavon 5
Operating Netback (2): $45.00 per Boe
Assumed Net Debt: $nil

1. Reserves estimated internally by Wild Stream.

2. Based on $90.00/Bbl WTI and calculated by subtracting royalties and operating costs from revenues.

FirstEnergy Capital Corp. acted as Wild Stream's sole financial advisor with respect to the Private Company Acquisition.

2011 Guidance

The Board of Directors of Wild Stream has approved a 2011 capital budget of $95 million. Average daily production is expected to increase 105% over 2010 averages to 4,100 boepd (97% crude oil and NGLs). Based on expected prices of WTI$90/Cdn during 2011 our estimated cash flow will be approximately $67 million. The balance of 2011 capital program will be financed through the Company's existing credit facility.

$55 million of the capital budget is allocated to the Shaunavon area where 30 to 35 net wells are planned. $25 million is allocated to the Dodsland area where 20-25 net wells are planned. $10 million has been allocated to land expenditures and $5 million to the drilling of 3 net wells in other areas.

Wild Stream is a pure play resource oil company with a significant drilling inventory of 450 net horizontal locations and $750 million of potential capital expenditures. The large drilling inventory will help set the stage for continued growth in 2011 and beyond. 

Additional corporate information can be found in our February corporate presentation on our website at www.wildsr.com.

FORWARD-LOOKING STATEMENTS

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Wild Stream, including the anticipated accretive impact of the transaction on Wild Stream, expectations and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells and prevailing commodity prices and capital expenditures.

Although Wild Stream believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Wild Stream can give no assurance that they will prove to be correct.

Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals or satisfy the conditions to closing the transactions, risks associated with the oil and gas industry in general (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 fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in Wild Stream's Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com.

The forward-looking statements contained in this document are made as of the date hereof and Wild Stream undertakes no obligation 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.

MEANING OF BOE

When used in this press release, BOE means a barrel of oil equivalent on the basis of 1 BOE to thousand cubic feet of natural gas. boepd means a barrel of oil equivalent per day.

BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 1 BOE for 6 thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Wild Stream Exploration Inc.
    Neil Roszell, P.Eng.
    President and CEO
    (403) 767-1250
    or
    Wild Stream Exploration Inc.
    Jerry Sapieha, CA
    Vice-President, Finance and CFO
    (403) 767-1265
    (403) 232-8083 (FAX)
    or
    Wild Stream Exploration Inc.
    710, 400-5th Ave SW
    Calgary, AB T2P 0L6
    www.wildsr.com