Nextraction Announces Second Quarter 2011 Results; Advances Provost Horizontal ProgramAugust 31, 2011
Vancouver, BC - Nextraction Energy Corporation (TSX-V: NE) (the "Company” or “Nextraction”), has filed consolidated financial statements and related management’s discussion and analysis for the period ended June 30, 2011 which are can be found under the Company’s profile on SEDAR (www.sedar.com) and on the Company’s website at www.nextraction.com. All amounts herein are reported in Canadian dollars unless otherwise noted.
Mark S. Dolar, Company President and CEO states, “Corporate and asset growth has been our primary focus in the first half of 2011. We established our Calgary office, hired a dynamic management team to execute our growth strategy, acquired producing properties and commenced drilling our initial horizontal well in the Viking formation of eastern Alberta. In the second quarter of 2011 we encountered several one-time capital expenditures required for the growth of a company of our size. With these costs now behind us, we look forward to improving our balance sheet and generating shareholder value through developing the assets in our inventory.”
Nextraction’s operating and financial highlights for the second quarter include:
Nextraction continued to execute on its strategy of shifting towards an oil-focused company.
Second quarter Production averaged 64 boe per day weighted 32% light oil and natural gas liquids and 68% natural gas, compared to average production of 75 boe per day weighted 13% light oil and natural gas liquids and 87% natural gas in the first quarter of 2011. Averaged production volumes for the second quarter were lower as approximately 55 boe per day being shut-in for the first half of the quarter as a result of adding facilities required for regulatory compliance and work over activities.
Total revenues increased 23% to $253,098 from $205,377 in the first quarter of 2011, due to a 100% increase in average oil production combined with a 21% increase in the average realized price of oil.
- Exited the second quarter of 2011 with no debt, positive working capital position of $4,149,217 and subsequently secured a commitment from a shareholder group to provide a $1,500,000 credit facility.
The Company is currently completing its first well on its Viking light oil prospect in the area of Provost, Alberta, with production expected to come on stream in the third quarter of 2011. Initial flow-back rates for this well are encouraging and exceed management’s expectations to date. The Company plans to follow up with a second well in late third quarter of 2011.
The Company plans to focus its attention on developing the Provost Viking light oil project, located in east central Alberta. The initial horizontal well in the play has been drilled and is currently in final completion stages. The well was drilled to a depth of 820 meters with a 1,200 meter horizontal leg in the Viking zone, and was completed with a 13 stage fracture treatment. The Company plans to drill a second well in the pool after completion of the initial well. The Company has identified a further 19 Gross locations on the acreage and hopes to accelerate further drilling assuming results from the first two wells support such action.
About Nextraction Energy Corp.
Nextraction Energy Corp. is a Canadian junior oil and gas company engaged in the exploration and development of oil and gas resources in North America. The Company’s model is the “next round of extraction on known plays.” Nextraction targets projects along trends with known reserves that provide low risk, high return development opportunities in both conventional and unconventional resource projects. In addition to the Provost pool, the Company is producing light oil and liquids rich gas at its Pinedale Anticline property in Wyoming.
For further information on behalf of Nextraction Energy Corp., please contact:
Mark S. Dolar
President and Chief Executive Officer
Nextraction Energy Corp.
Toll Free: 1-888-630-0370
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BARRELS OF OIL EQUIVALENT PRESENTATION
Natural gas volumes have been converted to barrels of oil equivalent (“boe”) at a ratio of six thousand cubic feet (“mcf”) of natural gas to one barrel of oil equivalent. This conversion ratio is based upon an energy equivalent conversion method primarily at the burner tip and does not represent equivalence at the wellhead. Furthermore, this conversion ratio is not intended to represent monetary equivalents between natural gas and oil. Boe figures may be misleading, particularly if used in isolation.
Certain statements made and information contained herein may constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities legislation. These statements relate to future events or the Company’s future performance. Often, but not always, forward-looking statements or information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results “may”, “may have”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Although management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These statements speak only as of the date of this Press Release and are expressly qualified, in their entirety, by this cautionary statement.
In particular, this Press Releasecontains forward-looking statements, pertaining to the anticipated benefits resulting from the Company’s Provost project, planned drilling programs, oil and gas resource estimates, future production and future net revenue; the Company’s future capital and other expenditures and requirements; results of exploration and development activities and dates by which certain areas may be developed or may come on-line; the Company’s future financing and capital activities, contingent liabilities and environmental matters; and expectations regarding the Company’s ability to obtain additional financing on satisfactory terms.
The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below herein pertaining to general economic conditions; volatility in the market prices for oil and gas; stock market volatility; uncertainties associated with estimating resources; geological, technical, drilling and processing problems; ability to explore, develop, produce and transport crude oil and natural gas to markets; title to oil and gas leases; dependence upon farm-out and joint venture partners; liabilities and risks, including environmental liabilities and risks, inherent in the oil and gas industry; fluctuations in currency and interest rates; economic conditions in the countries and regions in which the Company carries on business; competition for, among other things, capital, acquisition of reserves, equipment, undeveloped lands and skilled personnel; lack of availability of additional financing and unpredictable weather condition.
Should one or more of these risks and uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements and information.
Although the Company has attempted to identify factors that may cause actual actions, events or results to differ materially from those described in forward-looking statements and information, there may be other factors that cause actual results, performances, achievements or events to not be as anticipated, estimated or intended. Also, many of the factors are beyond our control. As actual results and future events could differ materially from those anticipated in such statements and information, readers should not place undue reliance on forward-looking statements or information. Except as may be required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.