Ceres Announces Its Financial & Operating Results for the Second Quarter Ended June 30, 2009
August 28 2009 - 9:02AM
Marketwired Canada
Ceres Capital Corp. (the "Company" or "Ceres") (TSX VENTURE:SRS) is pleased to
report its operational and financial results for the second quarter ended June
30, 2009.
The consolidated financial statements and management discussion and analysis for
the three and six months ended June 30, 2009 for Ceres and its subsidiary
Reliable Energy Ltd. ("Reliable") will be available at www.sedar.com or at the
Company's website www.reliableenergy.ca.
HIGHLIGHTS AND ACCOMPLISHMENTS
The following represents some of the recent highlights and accomplishments that
are relevant to the Company:
- Increased production for the quarter to 7,779 boe up by 3,369 boe or 76%
compared with last quarter. Average daily production for the quarter was 85
boe/d compared with 49 boe/d in the first quarter
- Operating netbacks improved to $37.12 per bbl compared with $22.13 per bbl
last quarter.
- Drilled four (3.95 net) wells targetting the Bakken and Lodgepole formations
on our Kirkella properties in southwest Manitoba. Two wells were Bakken
development wells offsetting our discovery well and are currently undergoing
completion operations.
- The drilling of our first Lodgepole well has added an additional play type to
our drilling plans
- Growth in the landbase to a total of 68,636 net acres, with a further 22,588
acres under option.
- Acquired a quarter section of land offsetting our discovery well which
immediately added reserves and four drilling locations for the Company.
- Established a drilling inventory of 11 exploration prospects and 15
development locations
- At the Company's Annual General Meeting, shareholders approved a change of
name from Ceres to Reliable Energy Ltd. The new trading symbol will be REL and
will take effect on August 31, 2009.
The second quarter was significant for the Company as we commenced a four well
drilling program in the Kirkella area of Manitoba. The Company undertook the
drilling of two exploration and two development wells. The exploration wells
resulted in one well being put on production in July while one well was
abandoned. The two development wells were cased and are being completed in
August.
OUTLOOK
The Company is well positioned for significant growth following the successful
completion of its summer drilling program.
The focus for the balance of the year is to acquire sufficient seismic data to
delineate the existing discovery pool and provide the necessary data to assist
in directing the exploration program. The Company has a nine well exploration
program planned for the balance of the year and hopes to prove the existence of
additional Bakken pools to complement its discovery pool.
The Company is encouraged by the additional opportunities that exist in other
geological formations in the area and plans on targetting some of these
opportunities in its exploration program. With the majority of land now tied up
on our discovery pool, the Company will also drill a minimum of two more
development wells with additional wells planned subject to availability of
capital. This development program will provide additional cashflow and proven
reserves to the Company.
We remain committed to cost control in such areas as G&A and drilling and
completion activities and have recently initiated steps to reduce costs in these
areas. Our goal is to become a significant low cost, high netback oil explorer
and producer in our focus area of Saskatchewan and Manitoba.
Ceres's remaining obligations from its 2008 flow-through share financing at June
30, was approximately $6.3 million and the Company has a solid plan in place
that includes an exploratory drilling program and a number of 2-D and 3-D
seismic acquisition programs to satisfy these requirements.
In the Trochu Basin in south central Alberta, the Company holds 18,720 acres
(gross), 9,600 acres (net) of prospective lands on a Nisku oil play. For the
balance of 2009, the Company is not planning any drilling activity on this play
however this position could change with sustained higher oil prices or
substantial revisions to the Alberta royalty regime.
At the Company's Annual General Meeting on June 23, 2009, the Company received
shareholder approval to change the name of Ceres to that of Reliable Energy Ltd.
This is planned to be changed on August 31, 2009.
FINANCIAL AND OPERATING HIGHLIGHTS
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Three months ended
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June 30, Mar. 31, June 30,
2009 2009 2008
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Financial
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Gross Revenue $ 411,581 $ 201,562 $ 93,533
Net Income (Loss) (745,528) 2,071,903 (508,665)
Per share - basic (0.006) 0.016 (0.013)
Cash flow used in operations 626,856 402,559 380,572
Capital expenditures 3,245,674 2,566,914 159,374
Total assets 12,245,979 11,647,294 1,876,609
Weighted average shares - basic 126,855,872 126,855,872 38,019,756
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Operational
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Production (boe) 7,779 4,410 2,226
Lands
Undeveloped land (net acres) 68,636 42,858 13,322
Lands under option (net acres) 22,588 19,294 -
Wells drilled
Gross 4.0 1.0 -
Net 3.9 1.0 -
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SELECTED QUARTERLY INFORMATION
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3 months ended June 30 6 months ended June 30
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2009 2008 2009 2008
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Production
Natural gas - mcf 10,844 13,356 22,990 27,922
Crude oil - bbls 5,971 - 8,356 -
Total production - boe (6:1) 7,779 2,226 12,189 4,654
Gross sales revenue 411,581 $ 93,533 $ 613,143 $ 184,937
Royalties 53,189 23,070 85,539 41,246
Operating expenses 69,629 53,110 141,233 122,293
Net operating revenue 288,763 17,353 386,371 21,398
Average price - $/boe 52.91 42.02 50.30 39.74
Operating costs - $/boe 8.95 23.86 11.59 26.28
Netback - $/boe 37.12 7.80 31.70 4.60
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Note: 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.
About Ceres and Reliable
Ceres is an Alberta based public company listed on the TSX Venture Exchange and
conducts its operations through Reliable Energy Ltd, a wholly owned subsidiary.
The Company is currently focused on two core areas in the Western Canadian
Sedimentary Basin. The first core area consists of an unconventional resource
play in the Bakken/Three Forks formation situated on the Saskatchewan - Manitoba
border. The second is a Devonian reef play in central Alberta.
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