CALGARY, ALBERTA--(Marketwire - May 28, 2012) -
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Conversion of natural gas volumes to barrels of oil equivalent (boe) are at 6:1.
Charger Energy Corp. ("Charger", the "Company") (TSX VENTURE:CHX) announces its unaudited interim financial and operating results for the quarter ended March 31, 2012. Charger has filed interim Financial Statements and Management's Discussion and Analysis on www.sedar.com and on the Company's website at www.chargerenergy.com.
Activities and Results for the First Quarter of 2012
- Closed strategic four-company business combination, creating a publicly traded company with a large, light oil focused land base and drilling inventory in the Viking resource play in the Halkirk-Provost area of Alberta (see 'Plan of Arrangement' below);
- Capital spending totalled $10.8 million during the first quarter of 2012 and was focused primarily on development of the Viking light oil play in the Halkirk-Provost core area where the Company successfully drilled 2 and completed and equipped 5 horizontal oil wells during the quarter;
- As a result of encouraging initial drilling results and the acquisition of the Silverback lands, Charger has moved to infill drilling in 3 high priority Viking oil prone areas at Halkirk, Neutral Hills and Consort;
- The Company has achieved stabilized 30-day production rates ranging from 80 to 140 boe/d per well from several recent wells in the Neutral Hills and Consort areas that were placed on production in late 2011 and the first quarter of 2012;
- Commenced drilling a 4 well pad at Neutral Hills in March which is expected to be completed, equipped, tied-in and placed on production by mid-June 2012. The Company is very encouraged by the initial production rates from these new wells which are consistent with Charger's previous successful results in the Neutral Hills area; and
- First quarter exit production was approximately 3,250 boe/d (30% oil and liquids), reflecting encouraging results in the Halkirk-Provost area offsetting production declines at Wapiti.
Plan of Arrangement
On March 6, 2012, Charger completed a business combination by way of a plan of arrangement ("the Arrangement") with Seaview Energy Inc. ("Seaview"), Silverback Energy Ltd. ("Silverback") and Sirius Energy Inc. ("Sirius") whereby Charger, Silverback and Sirius (all private companies) exchanged all of their issued and outstanding shares for Class A shares of Seaview. On completion of the Arrangement, the resulting entity was renamed Charger Energy Corp. The Class A shares outstanding upon closing of the Arrangement totaled approximately 67.3 million.
The Arrangement was considered a "reverse takeover" transaction under applicable securities legislation, and as a result, Charger became the reporting issuer. As such, results for the first quarter of 2012 are presented on a standalone basis from January 1 to March 5, 2012 and from March 6 to March 31, 2012, incorporate the Arrangement and the combined financial and operating results for the four companies. Additional details concerning the Arrangement are included in the Joint Information Circular of Charger, Seaview, Silverback and Sirius dated February 2, 2012 which is filed on SEDAR at www.sedar.com.
Charger expects to commence producing 4 new Viking horizontal wells in the Neutral Hills area in June. These wells have been drilled and completed and are currently being equipped and tied in. The Company is also constructing a multi-well battery at Neutral Hills which will provide 4,000 bbl/d of processing capacity for Charger's Viking light oil production in the area.
Charger has identified 3 high priority development areas at Neutral Hills, Consort and Halkirk within the Viking light oil resource play based on promising initial drilling results. In the Neutral Hills and Consort areas, the Company has drilled several wells with 30-day stabilized production rates of 80 to 140 boe/d. As a result of this initial success, development has moved to multi-well pads which are intended to enhance capital efficiencies and to optimize development of the Viking play. The Company has identified approximately 100 sections (64,000 net acres) which are highly prospective for Viking light oil development from its extensive land position in the Halkirk-Provost area.
Charger will focus its 2012 capital program in the Halkirk-Provost area on Viking light oil development opportunities. The Company will also continue to evaluate strategic acquisition and capital market opportunities and monitor commodity market conditions, in order to prudently manage capital spending and financial resources in the best interest of shareholders. Management may choose to revise its $60 million 2012 capital program in the context of such evaluation.
Charger's strategy is to grow shareholder value by focusing primarily on acquiring, developing and producing light oil resource plays in Western Canada using horizontal drilling and multi-stage fracturing technology. The Company is pursuing a growth strategy focused on building a large undeveloped land base and drilling inventory through a combination of strategic acquisitions, farm-ins and crown land acquisitions.
About Charger Energy Corp.
Charger is a Calgary, Alberta based crude oil and natural gas company that trades on the TSX Venture Exchange under the symbol "CHX". The Company is committed to maximizing value for its shareholders through successful drilling of internally‐generated light oil prospects and by pursuing strategic property and corporate acquisitions with light oil potential using new completion technology. The Company has operated, high working interest, light oil and natural gas assets in the Halkirk-Provost and Ghost Pine areas of east central Alberta as well as the Peace River Arch area of north western Alberta.
Reader Advisory and Note Regarding Forward Looking Information
This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. Forward‐looking statements and information are often, but not always, identified by the use of words such as "appear", "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions. More particularly and without limitation, this news release contains forward‐looking statements and information concerning the expected results of the Arrangement; the Company's petroleum and natural gas production and reserves; drilling opportunities; management team; business strategy; future development and growth opportunities; prospects; asset base; anticipated benefits from the Arrangement; value and debt levels; and capital programs. The forward‐looking statements and information are based on certain key expectations and assumptions made by the management of the Company, including expectations and assumptions concerning prevailing commodity prices and exchange rates, applicable royalty rates and tax laws; future well production rates and reserve volumes; the timing of receipt of regulatory approvals; the performance of existing wells; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; and the availability and cost of labour and services. Although management of the Company believes that the expectations and assumptions on which such forward looking statements and information are based are reasonable, undue reliance should not be placed on the forward‐looking statements and information since no assurance can be given that they will prove to be correct.
Forward-looking information is provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information 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 risks associated with the oil and gas industry in general such as 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 reserves, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations, marketing and transportation, loss of markets, environmental risks, competition, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, ability to access sufficient capital from internal and external sources, failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. There are risks also inherent in the nature of the Arrangement, including failure to realize anticipated synergies or cost savings; risks regarding the integration of the four entities and incorrect assessments of the values of each entity. Accordingly, readers should not place undue reliance on the forward‐looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward‐looking statements and information contained in this news release are made as of the date hereof and no undertaking is given 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.
Barrel of oil equivalents or BOEs 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. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
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