Join        Login             Stock Quote

Hyperion Exploration Corp. Announces Third Quarter 2012 Highlights, Niton/McLeod Development Update, and Financial and Operating Results for the Quarter Ended September 30, 2012

Thursday, November 15, 2012 5:14 PM


CALGARY, ALBERTA -- (Marketwire) -- 11/15/12 -- Hyperion Exploration Corp. ("Hyperion" or the "Company") (TSX VENTURE:HYX) is pleased to announce third quarter 2012 highlights and operating results for the quarter ended September 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 www.sedar.com.

Q3 2012 Highlights

The following represents the highlights of Hyperion's third quarter 2012 operations:

--  Record average production in Q3 2012 of 1,522 boe/d (64% light oil and
    NGLs), a 45% increase compared to the Q3 2011 production average of
    1,050 boe per day (54% light oil and NGLs); 
--  Record Q3 2012 funds flow of $4.2 million or $0.08/share, a 69% year
    over year increase; 
--  Enhanced Niton/McLeod undeveloped land position via farm-in providing a
    combined total of 35,680 gross (32,508 net) acres of Cardium rights and
    future growth potential with an un-booked drilling inventory of 191
    gross (172 net) light oil locations; 
--  Continued to achieve operating efficiencies, increasing field netbacks
    from $30.32 per boe in Q3 2011 to $34.84 per boe in Q3 2012; 
--  Reduced operating costs from Q2 2012 to $10.38/boe, a decrease of 12%; 
--  In Q3 2012, Hyperion expended total capital, including land acquisitions
    and work overs, of $3.6 million; 
--  Drilled 1 gross (0.89 net) Cardium light oil well in the Niton/McLeod
    area which was completed and tied-in in Q4 2012; 
--  Completed and tied-in 1 gross (0.85 net) Cardium light oil well in the
    Garrington area that was drilled in late Q2 2012; and 
--  Equipped and tied in 1 gross (0.5 net) Cardium light oil well in the
    Pembina area that was drilled late in Q1 2012. 

Niton/McLeod Cardium Light Oil Development Update

During the third quarter, Hyperion drilled 1 gross (0.89 net) Cardium light oil horizontal well at McLeod ("02-02" well), over 20 kilometers (12 miles) from the Company's first Cardium horizontal light oil well ("05-14" well). The 02-02 was completed and placed on production in late October and has achieved a production rate of 209 boe/d (87% oil) in its first 21 days of production (IP21). The current performance of 02-02 is on track to exceed the Company's risked production profile of IP30 161 boe/d (92% oil) for a Cardium horizontal light oil well at Niton/McLeod. The Company's technically supported upside production profile for a Cardium horizontal well at Niton/McLeod is an IP30 of 225 boe/day (92% oil).

The results of 02-02 are very encouraging and support the continued development of the Company's inventory of 191 gross (172 net) potential locations at Niton/McLeod.

Operations Update

Hyperion achieved record production in the third quarter as a result of its successful drilling program in the first of half of 2012 in the Garrington and Pembina areas, highlighting the low risk, high quality nature of these assets. Typically, the Company would look to expand its drilling inventory in these areas to continue the track record of growth. The challenge for Hyperion is that these areas are highly coveted and highly competitive. Land prices reached levels in excess of $10,000/hectare ($4,000/acre), representing over $0.5MM per Cardium horizontal drilling location. At these levels, Hyperion recognized the need to look elsewhere to source Cardium light oil opportunities of comparable quality yet not subjected to similar industry competition. This approach required significant technical commitment and after 1.5 years, Hyperion identified and sourced the Niton/McLeod opportunity.

In August 2012, Hyperion announced a new undeveloped land acquisition and farm-in providing for a combined total of 35,680 gross (32,508 net) acres of Cardium rights in the Niton/McLeod area, with an average working interest of approximately 90%. Hyperion has the opportunity base to provide consistent, multi-year light oil production and cash flow per share growth with a strong return on capital.

Within this new Niton/McLeod land position, the Company estimates the Total Petroleum Initially In Place ("TPIIP"), effective August 15, 2012, to be 171 MMbbls of light oil and a primary recovery factor of 11.7%. The new Niton/McLeod acreage and farm-in increases Hyperion's Cardium light oil horizontal well inventory at Niton/McLeod to 191 gross (172 net) potential locations. This brings Hyperion's total inventory of Cardium light oil horizontal drilling locations to 215 gross (196 net). 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.

In addition to Hyperion's activity at Niton/McLeod, the Company also completed, equipped and tied in 1 gross (0.85net) Cardium light oil well at Garrington and equipped and tied in 1 gross (0.5 net) Cardium light oil well at Pembina.

To date in 2012, Hyperion drilled 11 gross (8.12 net) wells, consisting of 10 gross (7.12 net) Cardium light oil wells and 1 gross (1 net) Glauconite light oil well. Drilling of the balance of the 2012 drilling program will occur in the Niton/McLeod area consisting of 1 gross (1 net) Cardium light oil well.


The successful acquisition and farm in of lands at Niton/McLeod in mid-2012 represents a noteworthy change to Hyperion's 2012 capital spending plan. The Company re-allocated $4 million dollars to land acquisitions and committed to a rolling option drilling commitment as part of the farm in agreement. Hyperion commenced operations on the Niton/McLeod farm-in lands by spudding 02-02 in September 2012. After flow testing, 02-02 was placed on production on October 24, 2012 and after 21 days the well has averaged 209 boe/d (87% oil). The 02-02 result, along with sustained production performance from 05-14, supports continued development in the area. The next phase of development is the third Cardium horizontal well at Niton/McLeod which is planned to be spud in November 2012. This well is expected to be on production by year end 2012.

Hyperion intends to further accelerate development at Niton/McLeod in early 2013, based on success, with an additional two Cardium horizontal wells to be drilled by the end of February 2013.

Hyperion remains committed to pursuing growth through the drill bit and to execute its strategy of acquiring assets that compliment and expand its repeatable development drilling inventory. Utilizing cash flow from operations and over $19 million of unused banking facilities, Hyperion will continue to engage in development activities in the Niton/McLeod area.


                                   3 Months Ended           9 Months Ended  
                                     September 30             September 30  
                              2012    2011 Change      2012    2011 Change  
Financial ($000's except per share amounts)                                 
Oil sales (net of                                                           
 financial contract                                                         
 settlements)                5,943   3,842     54%   17,544   8,389    109% 
NGL sales                      717     604     19%    1,916   1,625     18% 
Natural gas sales              709   1,025    (31)%   1,864   2,963    (37)%
Total Oil, NGL, & Natural                                                   
 gas                         7,369   5,481     34%   21,324  12,977     64% 
Funds inflow (outflow)                                                      
 from operations             4,165   2,464     69%   10,938   5,453    101% 
  Per common share basic &                                                  
   FD ($)                     0.08    0.06     33%     0.20    0.11     82% 
Net earnings (loss)            131  (2,400)    nm     1,399  (3,581)    nm  
  Per common share basic &                                                  
   FD ($)                     0.00    0.04     Nm      0.03    0.08    (63)%
Capital expenditures                                                        
 including deposits(1)       3,641  11,393    (68)%  37,452  43,703    (14)%
Working capital (deficit)                                                   
 exit                      (32,255)   (613)  5162%  (32,255)   (613)  5162% 
Unused credit facilities    19,831  24,000    (17)%  19,831  24,000    (17)%
Oil (bbls per day)             794     478     66%      764     342    124% 
NGL (bbls per day)             182      94     93%      140      91     55% 
Natural gas (mcf per day)    3,273   2,866     14%    3,052   2,670     14% 
Total (boe per day) (6:1)    1,522   1,050     45%    1,413     877     61% 
Per 1 million common share                                                  
 basic & FD (boe per                                                        
 day)(2)                     28.08   19.37     45%    26.07   16.18     61% 
Average realized price ($'s - production weighted)                          
Oil ($ per bbl)              81.34   88.73     (8)%   83.84   90.60     (7)%
NGL ($ per bbl)              42.97   65.64    (35)%   49.96   61.12    (22)%
Natural gas ($ per mcf)       2.35    3.89    (40)%    2.23    4.06    (45)%
Average ($ per boe)          52.66   56.76     (7)%   55.10   54.20      2% 
Netback ($'s per boe)                                                       
Oil, natural gas and NGL                                                    
 sales                       52.66   56.76     (7)%   55.10   54.20      2% 
Royalties                     5.86   12.05    (51)%    7.59    9.11    (17)%
Operating and                                                               
 transportation expenses     11.96   14.39    (17)%   12.62   12.40      2% 
Operating netback            34.84   30.32     15%    34.89   32.69      7% 
Common Shares (000's)                                                       
Basic and fully diluted                                                     
 common shares o/s, end of                                                  
 period(3)                  54,190  54,190      0%   54,190  54,190      0% 
Weighted average basic and                                                  
 fully diluted common                                                       
 shares o/s(3)              54,190   54190      0%   54,190  44,852     21% 
(1)  Net of Paradise disposition with net proceeds of $3,718.               
(2)  Weighted average basic and fully diluted common share count used in    
     calculation. Figures not adjusted for debt or working capital          
(3)  Basic and fully diluted common shares outstanding are considered       
     equivalent prior to Q3 2012 as all dilutive instruments are considered 
     anti-dilutive under IFRS.                                              

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 judgments with respect to the future. 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. 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 performance characteristics of the Company's oil and natural gas
--  oil and natural gas production levels; 
--  capital expenditure programs; 
--  the quantity of the Company's oil and natural gas reserves and
    anticipated future cash flows from such reserves; 
--  projections of commodity prices and costs; 
--  supply and demand for oil and natural gas; 
--  expectations regarding the ability to raise capital and to continually
    add to reserves through acquisitions and development; and 
--  treatment under governmental regulatory regimes. 

The Company'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:

--  volatility in market prices for oil and natural gas; 
--  liabilities inherent in oil and natural gas operations; 
--  uncertainties associated with estimating oil and natural gas reserves; 
--  competition for, among other things, capital, acquisitions of reserves,
    undeveloped lands and skilled personnel; 
--  incorrect assessments of the value of acquisitions and exploration and
    development programs; 
--  geological, technical, drilling and processing problems; 
--  fluctuations in foreign exchange or interest rates and stock market
--  failure to realize the anticipated benefits of acquisitions; 
--  general business and market conditions; and 
--  changes in income tax laws or changes in tax laws and incentive programs
    relating to the oil and gas industry. 

These factors should not be construed as exhaustive. Unless required by law, the Company 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.

There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

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.

Hyperion Exploration Corp.
Trevor Spagrud
President and CEO
(403) 930-0701

Hyperion Exploration Corp.
Doug Bailey
(403) 930-0703

Hyperion Exploration Corp.
Suite 2010, Calgary Place II
355 - 4th Avenue SW
Calgary, Alberta
T2P 0J1

(Source: Market Wire )
(Source: Quotemedia)


Related Stories

  • No Stories Found


Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.