Zapata Energy Corporation
TSX VENTURE : ZCO

Zapata Energy Corporation

May 04, 2009 13:35 ET

Zapata Energy Corporation: 2008 Annual Results Released

CALGARY, ALBERTA--(Marketwire - May 4, 2009) - Zapata Energy Corporation (TSX VENTURE:ZCO) is pleased to announce that it has released its annual financial statements, MD&A and NI51-101 reserve report. These documents are all available on SEDAR.

In 2008, Zapata boosted cash flow 55% to a record $31.2 million or $1.83 per share. Net income quadrupled to $7.7 million or $0.45 per share. This resulted in an average corporate field netback of $35.37 per boe.



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Year ended December 31
(Thousands except where noted) 2008 2007 Change
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FINANCIAL
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Gross revenue $ 69,400 $ 54,399 28%
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Net revenue (gross sales
less royalties) 58,348 45,164 29%
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Cash flow from operations 31,213 20,745 50%
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Cash flow per share (basic) 1.83 1.19 54%
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Cash flow per share (diluted) 1.83 1.18 55%
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Net income 7,698 1,881 309%
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Net income per share (basic) 0.45 0.11 318%
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Net income per share (diluted) 0.45 0.11 321%
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Capital expenditures 33,145 16,198 105%
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Bank debt 39,650 37,950 4%
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Bank debt and working capital deficiency 47,890 43,115 11%
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Shareholders' equity 55,037 48,479 14%
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Shares outstanding
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Weighted average (basic) 17,048 17,395 (2%)
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Weighted average (diluted) 17,073 17,551 (3%)
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OPERATIONS
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Natural gas sales (mcf/d) 9,056 9,252 (2%)
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Average sales price ($/mcf) 8.38 7.08 18%
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Field netback ($/mcf) 4.35 3.08 41%
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Oil (bbls/d) 1,164 1,243 (6%)
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Average sales price ($/bbl) 81.45 58.56 39%
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Field netback ($/bbl) 42.12 31.97 32%
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NGL (bbls/d) 201 182 11%
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Average sales price ($/bbl) 90.43 58.88 54%
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Field netback ($/bbl) 62.31 40.58 54%
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Combined (boe/d) 2,875 2,967 (3%)
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Average sales price ($/boe) 65.96 50.23 31%
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Field netback ($/boe) 35.37 25.48 39%
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RESERVES (MBOE)
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Proved 5,892 5,732 3%
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Probable 2,941 2,947 -
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Total proved plus probable 8,833 8,679 2%
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LAND (net acres)
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Undeveloped land holdings 192,034 151,056 27%
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Total land 256,556 208,167 23%
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NET ASSET VALUE 144,741 142,001 2%
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Net asset value per share (basic) 8.67 8.24 5%
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Net asset value per share (diluted) 8.50 8.15 4%
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Zapata's 2008 capital program of $33.1 million added 1.2 million boe of reserves, more than replacing 2008 production. $19.4 million was spent on drilling 27 (17.9 net) wells resulting in 12 (6.9 net) gas wells, seven (6.5 net) oil wells, one net abandoned well, two (2 net) standing wells and five (1.5 net) wells in progress at year end.

In addition to drilling, $8.4 million was spent on tie-ins and facilities. At Silver, the waterflood project received EUB approval in July and is showing very positive results. An expansion is planned in 2009. Improved recovery factors are expected to add significant reserve additions.

The net present value of Zapata's proved plus probable reserves (discounted at ten percent) improved from $163 million in 2007 to $176 million in 2008. Zapata's reserves were valued at more than $10.00 per share before debt. These reserve numbers do not include any reserves or value for the five (1.5 net) wells that were in progress over year end nor do they account for the full effect of the Silver waterflood. Zapata's average finding and development costs were $22.64 per boe for proved plus probable and $25.40 per boe for proved reserves.

The current economy is providing Zapata with opportunity to invest, to acquire, to re-evaluate and to develop better ways of doing things. Zapata's capital budget for 2009 has been set at $14 million. The recently announced drilling incentives by the Alberta government will increase the number of wells Zapata can drill. Zapata will be commencing an oil drilling program planned for the second half of the year.

Zapata's annual general meeting will be held at 3:00 pm on Tuesday June 9, 2009 at the Petroleum Club 319 Fifth Avenue SW, Calgary, Alberta

Zapata is a junior oil and gas production company operating in western Canada and trades on the TSX Venture Exchange under the symbol "ZCO."

This press release may include forward-looking statements which are statements other than of historical fact, such as information regarding drilling potential and production forecasts. Factors that could cause actual results to differ materially from our expectations include exploration and development risks, commodity prices and operating hazards. A barrel of oil equivalent (boe), derived by converting gas to oil in the 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 has neither approved nor disapproved of the information contained herein.

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