CALGARY, ALBERTA — (Marketwired) — 08/12/13 — Alexander Energy Ltd. (“Alexander” or the “Company”) (TSX VENTURE: ALX) has filed its Condensed Interim Financial Statements and related Management–s Discussion and Analysis for the three and six months ended June 30, 2013 all of which are available on the Company–s profile at (“SEDAR”).
Operations
Alexander is currently producing approximately 800 boe/d (60% oil) from its core property at Alexander, Alberta. The 2 wells drilled in Q1 2013 were tied in and equipped during Q2 2013. These expenditures made up the majority of the $1.2 million in capital costs incurred in Q2 2013. Current average monthly production rates from the 103/7-7-56-26W4 well (on-stream April 2013) and the 12-12-56-27W4 well (on-stream June 2013) are 50 boe/d gross each (95 % oil).
In Q2 2013 production volumes averaged 835 boe/day which is down from 900 boe/day in Q1 2013. While average oil volumes increased, gas volumes decreased by over 400 mcf/day due to declining production of associated gas from a single well at 8-7-56-26W4.
Although average daily volumes decreased by 7% in Q2 versus Q1 2013, total revenues increased by 14% due to a 21% increase in average commodity prices.
The Company is now implementing operating cost saving measures to improve profitability of the existing production volumes. These measures include reducing third party emulsion treating, reducing trucking of produced water, and improving market access by delivering clean oil to sales terminals.
Financial
Cash flow from operations in Q2 2013 was $1.85 million on revenues of $4.15 million as compared to cash flow of $1.80 million on revenues of $3.65 million in Q1 2013.
At June 30, 2013 net debt decreased to $11.6 million, down from $12.6 million at December 31, 2012. The net debt to annualized cash flow ratio decreased to 1.58:1 at June 30, 2013 down from 2.94:1 at December 31, 2012. The Company expects to continue to improve the debt to cash flow position during the balance of this year.
Corporate Update
Effective June 19, 2013 Dan Wilson, P.Eng., and Bill Macdonald were appointed to the board of directors and Mr. Wilson was appointed Chief Executive Officer of the Company.
Effective July 5, 2013 Ron Peshke, P.Eng., was appointed Chief Operating Officer of the Company.
Alexander is looking to strengthen its financial and operating position by implementing the following near term corporate directives:
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Forward-Looking Statements: All statements, other than statements of historical fact, set forth in this news release, including without limitation, assumptions and statements regarding the volumes and estimated value of the Company–s proved and probable reserves, future production rates, exploration and development results, financial results, and future plans, operations and objectives of the Company are forward-looking statements that involve substantial known and unknown risks and uncertainties. Some of these risks and uncertainties are beyond management–s control, including but not limited to, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of foreign exchange rates, environmental risks, industry competition, availability of qualified personnel and management, availability of materials, equipment and third party services, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
These assumptions and statements necessarily involve known and unknown risks and uncertainties inherent in the oil and gas industry such as geological, technical, drilling and processing problems and other risks and uncertainties, as well as the business risks discussed in Management–s Discussion and Analysis of the Company under the heading “Business Risks”. The Company does not undertake any obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise.
Barrels of oil equivalent (boe) is calculated using the conversion factor of 6 mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl (barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas 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.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Alexander Energy Ltd.
Daniel T. Wilson
Chief Executive Officer
(403) 523-2504
(403) 264-1348 (FAX)
Alexander Energy Ltd.
1540, 521-3rd Avenue S.W.
Calgary, Alberta T2P 3T3