CALGARY, July 31 /CNW/ - Breaker Energy Ltd. ("Breaker" or "Company")
(TSX: WAV.A and WAV.B) is pleased to announce its financial and operating
results for the quarter ended June 30, 2008.
Financial and Operating Summary
3 Months Ended 6 Months Ended
June June % June June %
30, 30, Change 30, 30, Change
2008 2007 2008 2007
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Financials
($000s except per share
amounts)
Petroleum sales 35,398 11,383 211 57,242 21,034 172
Natural gas sales 15,320 10,396 47 26,341 20,302 30
Processing sales 611 233 162 854 431 98
Total petroleum and
natural gas revenue 51,329 22,011 133 84,437 41,767 102
Funds from operations(1) 31,072 11,757 164 50,355 20,967 140
Per share basic 0.84 0.32 163 1.36 0.57 139
Per share diluted 0.82 0.32 156 1.34 0.57 135
Net earnings 14,223 1,523 834 20,767 1,336 1454
Per share basic 0.38 0.04 850 0.56 0.04 1300
Per share diluted 0.37 0.04 825 0.55 0.04 1275
Capital expenditures(2) 18,623 7,087 163 49,526 27,025 83
Net debt 55,921 41,904 33 55,921 41,904 33
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Operating, General and
Administrative (G&A)
Production
Crude oil
(bbls per day) 3,167 1,806 75 2,826 1,745 62
Natural gas
(mcf per day) 16,530 15,881 4 15,994 15,317 4
Total (boe per day) 5,922 4,453 33 5,491 4,298 28
Average realized price:
Crude oil ($ per bbl) 122.83 69.26 77 111.31 66.60 67
Natural gas ($ per mcf) 10.19 7.19 42 9.05 7.32 24
Combined average
(incl. processing
revenue) ($ per boe,) 95.25 54.32 75 84.49 53.70 57
Netback ($ per boe)
Petroleum and natural
gas sales 95.25 54.32 75 84.49 53.70 57
Royalties (19.90) (8.92) 123 (17.18) (10.17) 69
Operating expenses (10.48) (9.91) 6 (9.97) (9.98) -
Transportation expenses (3.24) (1.77) 83 (2.95) (1.77) 67
Operating netback 61.63 33.72 83 54.39 31.78 71
G&A expenses (2.76) (2.96) (7) (2.66) (2.86) (7)
Interest expense (1.13) (1.33) (15) (1.14) (1.36) (16)
Corporate netback 57.74 29.43 96 50.59 27.56 84
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Common Shares (000s)
Class A Shares
outstanding, end of
period 36,416 35,124 4 36,416 35,124 4
Weighted average
Class A shares 36,364 35,124 4 36,309 35,054 4
Weighted average
Class B shares 900 900 - 900 900 -
Conversion of Class B
shares - weighted
average(3) 717 1,449 (51) 717 1,449 (51)
Weighted average basic
shares outstanding(3) 37,081 36,573 1 37,026 36,503 1
Stock option dilution
(treasury method) 1,014 489 107 585 467 25
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Weighted average diluted
shares outstanding(3) 38,095 37,062 3 37,611 36,970 2
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(1) Management uses funds from operations (before changes in non-cash
working capital) to analyze operating performance and leverage.
Funds from operations as presented does not have any standardized
meaning prescribed by Canadian GAAP and, therefore, may not be
comparable with the calculation of similar measures for other
entities.
(2) Capital expenditures includes cash additions for the period,
acquisition additions, dispositions, and capitalized general and
administrative expense.
(3) For the period ended June 30, 2008 the Class B shares are converted
at the quarter-end Class A share price of $12.55 and added to the
Class A shares to calculate basic shares outstanding. For the period
ended June 30, 2007 the Class B shares are converted at the
quarter-end Class A share price of $6.21.
Overview and Highlights
The second quarter of 2008 was Breaker's most successful in its history,
achieving record production, funds from operations and net income. At Irricana
2 gross (2.0 net) horizontal wells were drilled and completed with the Packers
Plus multi-frac technology. As of July 31, 2008 Breaker has drilled 14
horizontal wells with multi-frac completions. Breaker continued development in
the Medicine Hat area drilling 4 gross (4.0 net) wells and exploring at
Girouxville where 1 gross (0.5 net) well was drilled.
- Breaker achieved record production of 5,922 boed in the second
quarter, a 33 percent increase over the second quarter of 2007
production rate of 4,453 boed and a 17 percent increase over the
first quarter 2008 average of 5,060 boe per day. The Company
expects to average more than 6,800 boe per day in the third quarter
and reiterates its guidance of average production of 6,375 boe per
day for 2008.
- Oil and natural gas liquids production increased entirely through
the drill bit by 75 percent, increasing from 1,806 bbls/d in the
second quarter of 2007 to 3,167 bbls/d in the second quarter of
2008.
- Breaker's oil and natural gas liquids weighting based on production
has increased from 30 percent in the first quarter of 2006 to a 53
percent weighting in the second quarter of 2008 with 69 percent of
revenue in the second quarter of 2008 resulting from the sale of
oil and natural gas liquids. Breaker forecasts an average
production weighting to oil and natural gas liquids of 51 percent
for 2008.
- Breaker achieved record funds from operations per basic share of
$0.84 in the second quarter, an increase of 163 percent from $0.32
in the same period of 2007. Funds from operations grew by 164
percent in the second quarter of 2008 to $31.1 million from $11.8
million in the first quarter of 2007.
- Net earnings per basic share increased by more than 800 percent to
$0.38 from $0.04 in the same period of 2007. Net earnings for the
second quarter of 2008 were $14.2 million, driven by increases in
production and revenue per boe in the second quarter of 2008 as
compared to the same period of 2007.
- Breaker's operations in the second quarter of 2008 resulted in a
very strong average operating netback (defined as revenue; less
royalties, operating and transportation expenses on a per boe
basis) of $61.63 per boe and a corporate netback (defined as
operating netback per boe less G&A and interest expense per boe) of
$57.74 per boe.
- On June 23, 2008, the Corporation entered into an agreement to
acquire the Fireweed petroleum and natural gas property in
north-east British Columbia for cash of $63.75 million, subject to
final adjustments, with a deposit of $6.375 million paid to the
vendor on that same date.
