CALGARY, ALBERTA — (Marketwire) — 08/17/12 — Hyperion Exploration Corp. (“Hyperion” or the “Corporation”) (TSX VENTURE: HYX) is pleased to announce second quarter 2012 highlights and operating results for the quarter ended June 30, 2012. Selected financial and operational information is outlined below and should be read in conjunction with Hyperion–s unaudited financial statements and related management discussion and analysis which will be available for review under Hyperion–s SEDAR profile at .
Outlook
Hyperion has achieved significant growth since the recapitalization transaction of Triple 8 Energy Ltd. (“Triple 8”) in July 2010. Having closed three equity financings for gross proceeds of approximately $77.1 million together with acquisitions in both the second half of 2010 and the first quarter of 2011, Hyperion continues to be well positioned with a high quality, repeatable, Cardium light oil opportunity base.
Hyperion has a goal, as it grows, to continually add internally sourced assets with greater total petroleum initially in place (“TPIIP”) and repeatability. To meet this objective, Hyperion has recently acquired new undeveloped land and farm-in providing for a combined total of 35,680 gross (32,515 net) acres of Cardium rights in the Niton/McLeod area, with an average working interest of approximately 90%. TPIIP effective as of August 15, 2012, is internally estimated to be up to 171 MMbbls of light oil and a primary recovery factor of 12.5%. The new undeveloped acreage and farm-in is expected to add up to 177 gross (158 net) Cardium light oil wells to Hyperion–s corporate drilling inventory. This brings Hyperion–s total inventory of potential wells to 215 gross (196 net) Cardium light oil horizontal drilling locations. This represents an increase of over 415%. Estimates of TPIIP, recoverable reserves, and drilling locations are based on management–s current geological and economic models, and future drilling success. These estimates are subject to change with varying economic conditions and actual drilling results.
Further to the press release dated August 16th,2012, Hyperion is exploring alternative ways of accelerating development of this project, focusing primarily on participation with strategic partners.
The 2012 drilling program currently includes 13 gross (9.34 net) Cardium wells and 1 gross (1 net) Glauconite well. To date 10 gross (7.34 net) wells are drilled which consists of 9 gross (6.34 net) Cardium light oil wells and 1 gross (1 net) Glauconite light oil well. Drilling of the balance of the 2012 drilling program as currently planned, consisting of 3 gross (3 net) wells, will occur in the fall and winter of 2012.
Management expects that the reallocation of capital to the newly acquired Niton-McLeod lands (currently surveying drilling locations) will result in wells being drilled later than originally planned resulting in modest production growth in Q3 2012.
Hyperion will continue to pursue growth through the drill bit and execute its strategy of acquiring assets that compliment and grow its repeatable development drilling inventory. Utilizing cashflow from operations and over $23 million of unused banking facilities, Hyperion will continue to acquire strategic land assets in its core areas and take an opportunistic view for larger corporate and asset acquisitions.
Q2 2012 Highlights
Strong drilling activity in Q1 set the stage for significant production growth in Q2, however, the magnitude of this growth was negatively affected by an extended turnaround at a 3rd party gas processing facility as well as the disposition of the Paradise property, effective April 16th (budgeted to produce approximately 80 boe/d for the year). The turnaround work affected production in the Garrington area for 47 days in Q2. This downtime extended significantly beyond management–s and the facility operator–s expectations and resulted in 142 boe/day of production being shut in for the quarter.
The following represents the highlights of Hyperion–s second quarter 2012 operations:
Q2 2012 Operational Update
Hyperion focussed its capital activity in Q2 2012 in the Garrington area. Spring break up conditions allowed the drilling of 1 gross (0.85 net) Cardium light oil well in the quarter but the Company also managed to get 2 gross (1.75 net) wells completed. One of these wells was a Glauconite light oil well (1 net) and the other was a Cardium light oil well (0.75 net). The Glauconite light oil well went on production in Q2 along with 1 gross (0.85 net) Cardium light oil well that was drilled in Q1. Hyperion continues to meet or exceed its Cardium type curve IP30 rates at Garrington and has successfully brought on stream 2 gross (1.6 net) Cardium wells in Q3, 2012. The Glauconite light oil well achieved successful IP30 rates consistent with a typical Cardium light oil well, although this rate was under Hyperion–s expectation.
1 gross (0.5 net) Cardium well that was drilled in Q1 remains to be tied in at Pembina due to persistent wet conditions. It is expected that this well will go on production in late August 2012.
FINANCIAL HIGHLIGHTS
Forward Looking and Cautionary Statements
This press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward-looking statements can be identified by terminology such as “may”, “will”, “should”, “expect”, “projects”, “plans”, “anticipates” and similar expressions. These statements represent management–s expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Hyperion. Undue reliance should not be placed on these forward-looking statements which are based upon management–s assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.
In the interest of providing Hyperion shareholders and potential investors with information regarding the Corporation, including management–s assessment of Hyperion–s future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on the Corporation–s beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe” and similar expressions are intended to identify forward looking statements. By its nature, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Hyperion believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements contained throughout this press release should not be unduly relied upon. These statements speak only as of the date specified in the statements.
In particular, this press release may contain forward looking statements pertaining to the following:
The material assumptions in making these forward-looking statements include certain assumptions disclosed in the Corporation–s most recent management–s discussion and analysis included in the material available on this press release.
The Corporation–s actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:
These factors should not be construed as exhaustive. Unless required by law, Hyperion does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
Total Petroleum Initially-in-Place (“TPIIP”) – is defined in the Canadian Oil and Gas Evaluation Handbook (“COGEH”) as the quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. TPIIP includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered. There is no certainty that it will be economically viable or technically feasible to produce any portion of this TPIIP except for those portions identified as proved or probable reserves.
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.
Estimated values contained in this press release do not represent fair market value.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Hyperion Exploration Corp.
Trevor Spagrud
President and CEO
(403) 930-0701
Hyperion Exploration Corp.
Doug Bailey
CFO
(403) 930-0703
Hyperion Exploration Corp.
Suite 2010, Calgary Place II
355 – 4th Avenue SW
Calgary, Alberta
T2P 0J1