NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A
VIOLATION OF U.S. SECURITIES LAWS.
Seaview Energy Inc. (TSX VENTURE:CVU.A) (TSX VENTURE:CVU.B) ("Seaview" or the
"Company") is pleased to provide shareholders with an update on the Company's
recent operations and corporate developments.
In the Company's first 6 months of operations, Seaview has enjoyed significant
early success in executing its balanced strategy of acquiring, exploiting and
exploring for high quality natural gas and light oil assets in Western Canada.
Through a combination of two strategic corporate acquisitions and early
exploration success, management has established Seaview as an emerging
high-growth, junior exploration and production company.
The Company is pleased to report that as a result of the acquisition of 1332915
Alberta Ltd. ("1332915"), which closed on April 1, 2008, and a very successful
first quarter 2008 drilling program, that the reserves evaluation of the
Company, has increased materially relative to the year end December 31, 2007
results. The independent reserves evaluation was completed by Sproule and
Associates Limited with an effective date of March 31, 2008, in a NI 51-101
compliant report "Evaluation of the P&NG Reserves of Seaview Energy Inc."
- Total Proven reserves have increased by 465% (297% per share) since December
31, 2007 to 2,320 MBoe.
- Total Proven plus Probable reserves increased by 363% (225% per share) during
the same period to 3,291 MBoe.
- Production per share increased by 153% per share, compared to December 31,
2007 exit.
- Net asset value of $1.99 per Class A share, using a BTAX 10% discount rate
increased 58% relative to December 31, 2007.
Seaview's management team has aggressively positioned the Company for solid
future growth per share through the successful execution of the Company's
business strategy.
Accomplishments in 2007 and First Quarter 2008:
- Successfully closed in October, 2007 the Company's Initial Public Offering
with gross proceeds of $11,706,000 and concurrently the acquisition of 1276921
Alberta Ltd ("PrivateCo") establishing an initial core area in the Peace River
Arch, focused in the Gordondale area.
- The 2007 capital program resulted in the completion of 7 (3.8 net) operations
with an 87% success rate. The capital program included the drilling of 2 (1.5
net) wells with 100% success rate, the completion of 4 (1.8 net) wells
previously drilled by PrivateCo and re-entering one (0.5 net) suspended well
bore, resulting in 4 (1.8) net producing gas wells and 2 (1.5 net) potential gas
wells.
- Closed the corporate acquisition of 1332915 on April 1, 2008 for total
consideration of $27.4 million, comprised of the assumption of 1332915's net
debt position and the issuance of 8,049,250 Class A shares of Seaview.
- The acquisition of 1332915 was highly accretive on all measures to Seaview,
and significantly expanded the Company's reserves, production, cash flow, land
and drilling inventory.
-- The assets acquired from 1332915 consist of high quality, natural gas and
light oil focused properties in the Peace River Arch area with production of 550
boe/d (92% natural gas weighted) at the time of closing.
-- Expanded Seaview's land opportunity base to 71,333 gross acres (23,695 net
acres) of land including 10,100 net acres of undeveloped land. In addition,
Seaview has exposure to additional lands through several farm-in options
totalling 31,786 gross acres (19,054 net acres) of undeveloped land.
-- Consolidated the Company's interests in the Pouce Coupe area, increasing
Seaview's land position to approximately 3 net sections, increasing Seaview's
long term development potential in the Montney-Doig resource play.
-- Significantly expanded the Company's drilling inventory to over 45
opportunities, offering a diversified portfolio of exploration, development and
lower-risk optimization projects.
- On April 2, 2008, management upwardly revised the Company's 2008 production
guidance to an average daily production estimate of more than 750 boe/d and 2008
production exit rate target to approximately 900 boe/d.
- The Company recently completed a very successful winter 2008 drilling program
resulting in 6 (3.3 net) wells drilled, comprised of 5 (2.8 net) successful
wells for an 85% drilling success rate.
-- Significant new pool discoveries were made in Clayhurst, Boundary Lake and
Gordondale during the first quarter of 2008. In Clayhurst, the gas well (1.0
net) has been placed on production at current rates of 1.0 mmcf/d (167 boe/d
net). The Boundary Lake discovery gas well (0.5 net) is currently on production
at a restricted rate of 1.0 mmcf/d gross (83 boe/d net).
-- Seaview's Gordondale Kiskatinaw discovery (0.3 net) has been successfully
completed and evaluated with test rates of 3.8 mmcf/d (190 boe/d net) at a
flowing pressure of 1200 psi. Tie-in operations are underway with initial
production rates of 2.0 - 2.5 mmcf/d (100 - 125 boe/d net) expected to be online
by the third quarter of 2008.
-- Seaview drilled a multi-zone exploratory well (0.4 net) at Valhalla that
tested at 200 bbls/d from a new light oil pool discovery. The well is expected
to be brought on production post break-up and will be restricted to a regulatory
allowable of 60 bbls/d. In addition to the new pool discovery, the Valhalla well
encountered four other prospective pay zones leading to additional development
potential as a result of this new discovery.
- Increase to current bank line of $13.5 million, anticipated to be increased to
more than $16.5 million subject to final lender approval.
OUTLOOK; 2008 GUIDANCE
With the execution of two strategic corporate acquisitions, combined with a very
successful 2008 winter drilling program, Seaview now has the following corporate
characteristics:
- Total Proven reserves of 2,323 Mboe, and Total Proven plus Probable reserves
of 3,291 Mboe, effective March 31, 2008, as evaluated by Sproule and Associates
Limited utilizing NI 51-101 reserve definitions.
- Reserve life index of 9 years based on Total Proven plus Probable reserves.
- Total Proven reserves value of $47.9 million, based on before tax net present
value at a 10% discount rate ("BTAX NPV10%"). Total Proven plus Probable
reserves value of $62.9 million at BTAX NPV10%.
- Net asset value of $2.51 and $1.99 per Class A share, using a BTAX 5% and 10%
discount rate respectively, including value of undeveloped land.
- Forecast 2008 average daily production estimate of more than 750 boe/d and
2008 production exit rate target to approximately 900 boe/d.
- Forecast annualized cash flow of $10.3 million ($0.38 per Class A share),
assuming 2008 average AECO gas price of $8.85/GJ which represents a 10% discount
to current 2008 calendar year strip prices.
- A debt to cash flow ratio of 1.0 times (based on current estimated net debt of
$10.5 million and the aforementioned cash flow estimate).
- Current bank line of $13.5 million, is anticipated to be increased to more
than $16.5 million subject to final lender approval.
- 27.12 million Class A shares and 1.054 million Class B shares outstanding.
RESERVES
Seaview has a reserve committee of independent board members, which reviews the
qualifications and appointment of the independent reserve evaluators. The
committee also reviews the processes and technical data used to determine the
reserves booked.
The Company has filed its Annual Information Form which includes Seaview's
reserves data and other oil and gas information for the year ended December 31,
2007 as mandated by National Instrument 51-101 Standards for Disclosure for Oil
and Gas Activities of the Canadian Securities Administrators.
Subsequent to year end, the Company successfully closed the corporate
acquisition of 1332915 and completed a successful drilling program in the first
quarter of 2008. As a result, the reserves and value of the Company have changed
materially relative to year end and therefore an update, as follows, is provided
to account for the increases from year end 2007.
The March 31, 2008, evaluation was prepared by Sproule Associated Limited
("Sproule") utilizing the methodology and definitions as set out under National
Instrument 51-101 ("NI 51-101"). The reserves presented herein include the total
Company's working interest reserves before deduction of royalties and exclude
royalty interest reserves as at March 31, 2008.
Table 1 NI 51-101
Summary of Oil and Gas Reserves
as of March 31, 2008
Forecast Prices and Costs
Gross Reserves Net Reserves
----------------------------- --------------------------------
Light
and Light and
Medium Natural Medium Natural
Crude Heavy Gas Natural Crude Heavy Gas Natural
Oil Crude Liquids Gas Oil Crude Liquids Gas
------ ----- ------- ------- --------- ----- ------- --------
Mbbls Mbbls Mbbls Mmcf Mbbls Mbbls Mbbls Mmcf
------ ----- ------- ------- --------- ----- ------- --------
Proved
Developed
Producing 70.3 0 52.4 11,225 65.1 0 37.8 8,732
Developed
Non-Producing 53.6 0 1.2 1,369 47.0 0 0.8 1,006
Undeveloped 19.9 0 0.9 150 17.2 0 0.6 106
Total Proved 143.8 0 54.6 12,745 129.2 0 39.2 9,845
Probable 134.1 0 18.3 4,894 118.3 0 13.2 3,815
Total Proved
plus Probable 278.0 0 72.9 17,639 247.5 0 52.4 13,660
Table 2 NI 51-101
Summary of Net Present Values of Future Net Revenue
as of March 31, 2008
Forecast Prices and Costs
Unit Value
Before
Income Tax
Before Future Income Tax Expenses and Discounted
Discounted at at
---------------------------------------- -----------
0% 5% 10% 15% 20% 10%/year
-------- ------- ------- ------- ------- -----------
(M$) (M$) (M$) (M$) (M$) ($/boe)
-------- ------- ------- ------- ------- -----------
Proved
Developed Producing 61,740 47,801 39,755 34,470 30,695 25.51
Developed Non-Producing 9,028 8,082 7,305 6,659 6,114 33.90
Undeveloped 1,161 992 854 738 641 24.04
Total Proved 71,928 56,875 47,915 41,867 37,450 26.48
Probable 31,514 20,275 15,055 12,024 10,032 19.62
Total Proved plus
Probable 103,442 77,150 62,969 53,892 47,482 24.44
After Future Income Tax Expenses and Discounted at
---------------------------------------------------
0% 5% 10% 15% 20%
----------- ------- ------- ------- -------
(M$) (M$) (M$) (M$) (M$)
----------- ------- ------- ------- -------
Proved
Developed Producing 46,671 36,170 30,106 26,125 23,283
Developed Non-Producing 6,494 5,766 5,174 4,684 4,273
Undeveloped 834 691 576 481 402
Total Proved 53,999 42,627 35,586 31,290 27,958
Probable 23,334 14,888 10,965 8,688 7,192
Total Proved plus
Probable 77,333 57,514 46,821 39,978 35,150
Table 3 NI 51-101
Total Future Net Revenue Undiscounted
as of March 31, 2008
Forecast Prices and Costs
Abandon- Future
ment Net Future
and Revenue Net
Operat- Develop- Reclam- Before Revenue
ing ment ation Income Income After
Revenue Royalties Costs Costs Costs Taxes Taxes Income
Taxes
------- --------- ------- ------- -------- ------- ------ --------
(M$) (M$) (M$) (M$) (M$) (M$) (M$) (M$)
------- --------- ------- ------- -------- ------- ------ --------
Total
Proved
Reserves 128,386 25,553 28,361 1,754 790 71,928 17,929 53,999
Total
Proved
plus
Probable 186,257 36,370 42,455 3,007 983 103,442 26,109 77,333
Table 4 NI 51-101
Net Present Value of Future Net Revenue
By Production Group
as of March 31, 2008
Forecast Prices and Costs
Future Net
Revenue Before Unit Value Before
Income Taxes Income Taxes
and (Discounted (Discounted at
at 10%/Year) 10%/Year)
---------------- ------------------
(M$) ($/boe)
---------------- ------------------
Proved
Light and Medium Crude Oil
(including solution gas and associated
by-products) 5,509 37.98
Heavy Crude Oil
(including solution gas and associated
by-products) 0 0
Natural Gas
(including associated by products) 42,406 25.49
Proved plus Probable
Light and Medium Crude Oil
(including solution gas and associated
by-products) 10,433 37.73
Heavy Crude Oil
(including solution gas and associated
by-products) 0 0
Natural Gas
(including associated by products) 52,536 22.85
Pricing Assumptions - Forecast Prices and Costs
The Reserves Report used the following pricing, exchange rate and inflation
rate assumptions as of March 31, 2008 in estimating Seaview's reserves data
using forecast prices and costs.
NATURAL
CRUDE OIL GAS
----------------------------------------- ------------
Edmonton Cromer
Par Price Medium
40 29.3
WTI degrees degrees Alberta
Crude API API AECO Gas
Year Oil Crude Oil Crude Oil Price
---------- --------- ---------- ---------- ------------
($US/Bbl) ($Cdn/Bbl) ($Cdn/Bbl) ($Cdn/mmbtu)
--------- ---------- ---------- ------------
(1) (2) (3)
--------- ---------- ----------
Forecast
2008 100.75 99.77 85.39 8.44
2009 98.32 96.88 83.32 8.06
2010 96.94 95.48 82.11 7.63
2011 83.89 82.41 70.87 7.46
2012 81.18 79.68 68.53 7.41
2013 82.81 81.28 69.90 7.58
2014 84.46 82.92 71.31 7.76
2015 86.15 84.58 72.74 7.94
2016 87.87 86.28 74.20 8.12
2017 89.63 88.02 75.69 8.31
2018 91.42 89.78 77.21 8.50
Thereafter +2.0%/yr +2.0%/yr +2.0%/yr +2.0%/yr
NATURAL GAS
LIQUIDS
--------------------------
Pentanes Butanes
Plus FOB US/CAN
FOB Field Field Exchange
Year Gate Gate Inflation Rate
---------- ---------- ---------- ---------- ---------
(Cdn/Bbl) ($Cdn/Bbl) (%) ($US/Cdn)
---------- ---------- ---------- ---------
Forecast
2008 101.71 79.02 0.2 0.999
2009 99.22 72.21 2.0 1.000
2010 97.79 71.17 2.0 1.000
2011 84.40 61.42 2.0 1.000
2012 81.61 59.39 2.0 1.000
2013 83.25 60.58 2.0 1.000
2014 84.92 61.80 2.0 1.000
2015 86.62 63.04 2.0 1.000
2016 88.37 64.31 2.0 1.000
2017 90.14 65.60 2.0 1.000
2018 91.95 66.92 2.0 1.000
Thereafter +2.0%/yr +2.0%/yr 2.0 1.000
Notes:
(1) West Texas Intermediate at Cushing Oklahoma 40 degrees API, 0.5% sulphur
(2) Edmonton Light Sweet 40 degrees API, 0.3% sulphur
(3) Comer Medium (29.3? degrees API Heavy stream)
Net Asset Value per Share Information
Based on Sproule Reserves Evaluation as at March 31, 2008
----------------------------------------------------------------------------
($M except share amounts) Before Tax Before Tax
5% Discount 5% Discount
----------------------------------------------------------------------------
Value of Total Proven plus Probable Reserves 77,150 62,969
Undeveloped Land (10,100 acres at $150 per acre) 1,515 1,515
Estimated Net Debt as at April 1, 2008 (10,500) (10,500)
----------------------------------------------------------------------------
Total Net Assets 68,165 53,984
Class A shares Outstanding (MM) as at April 1,
2008 27.12 27.12
Estimated Net Asset Value per Class A share $2.51 $1.99
----------------------------------------------------------------------------
FILING OF 2007 FINANCIALS AND ANNUAL INFORMATION FORM
Seaview announces that it has filed its financial results for the year ended
December 31, 2007 including the audited consolidated financial statements and
related management's discussion and analysis ("MD&A") for the year ended
December 31, 2007.
In addition, the Company has filed its Annual Information Form which includes
Seaview's reserves data and other oil and gas information for the year ended
December 31, 2007 as mandated by National Instrument 51-101 Standards for
Disclosure for Oil and Gas Activities of the Canadian Securities Administrators.
These filings are available in their entirety at www.seaviewenergy.com and
www.sedar.com or by contacting the Company directly.
ANNUAL MEETING
Seaview Annual Meeting is scheduled for 11:00 am on Thursday, June 12, 2008 in
the Viking A Room at the Calgary Petroleum Club, 319 5th Avenue SW, Calgary,
Alberta.
As referred to above, to view Seaview's audited consolidated financial
statements and related MD&A for the periods ended December 31, 2007 and December
31, 2006 please visit our web site at www.seaviewenergy.com or www.sedar.com. To
the extent investors do not have access to the internet, copies of the audited
financials and related MD&A can be obtained on request without charge by
contacting Seaview at (403) 450-3713 or at Suite 1500, 444-5th Ave SW Calgary,
Alberta, T2P 2T8.
Barrels of oil equivalent (boe) may be misleading, particularly if used in
isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural
gas to one barrel (bbl) of oil is based on an energy conversion method primarily
applicable at the burner tip and is not intended to represent a value
equivalency at the wellhead. All boe conversions in this press release are
derived by converting natural gas to oil in the ratio of six thousand cubic feet
of natural gas to one barrel of oil. Certain financial amounts are presented on
a per boe basis, such measurements may not be consistent with those used by
other companies.
This press release may contain forward-looking statements within the meaning of
applicable securities laws. Forward-looking statements may include estimates,
plans, anticipations, expectations, opinions, forecasts, projections, guidance
or other similar statements that are not statements of fact. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to be correct. These statements are subject to certain risks and
uncertainties and may be based on assumptions that could cause actual results to
differ materially from those anticipated or implied in the forward-looking
statements. These risks include, but are not limited to: the risks associated
with the oil and gas industry (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 fluctuation and uncertainties resulting from
potential delays or changes in plans with respect to exploration or development
projects or capital expenditures. The Company's forward-looking statements are
expressly qualified in their entirety by this cautionary statement. The
forward-looking statements contained in this press release are made as of the
date hereof and the Company undertakes no obligations 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.
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