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Share Name | Share Symbol | Market | Type |
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Seaview Energy Inc. Class B | TSXV:CVU.B | TSX Venture | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.00 | - |
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS. Seaview Energy Inc. ("Seaview" or the "Company") (TSX VENTURE:CVU.A) (TSX VENTURE:CVU.B) is pleased to announce that the Company has entered into a strategic farm-in agreement within the Wapiti area targeting a Cardium light oil resource play. The farm-in agreement significantly expands the Company's position in the Wapiti Cardium light oil play and is a continuation of Seaview's business plan to focus on high quality, large oil in place resource plays. With the Company's ongoing operations and recent exploration success in Wapiti, this transaction further expands the scalability and inventory of repeatable drilling locations. STRATEGIC MERITS OF THE FARM-IN AGREEMENT The agreement provides Seaview with rights to farm-in on 22 sections of land within the Wapiti Cardium light oil resource play fairway. Under the terms of the farm-in agreement, Seaview will pay 100% of all the farmor's capital costs to drill, complete and tie-in with the ability to earn all of the farmor's interest subject to an industry standard royalty on production. Seaview's initial commitment is to drill two earning wells, with subsequent rolling options to earn the remainder of the farm-in lands. Contingent upon Seaview's sole option to drilling all wells under the option phase, the Company has exposure to earn up to 10.5 net sections of land with Cardium oil and natural gas rights. The location of the farm-in lands represents a continuation of Seaview's strategy to accumulate a large, continuous land position targeting high quality, light oil in the Wapiti Cardium fairway. Execution of this agreement further strengthens Seaview's presence in the area by providing a contiguous land block which will provide an excellent operational fit with Seaview's current producing assets in Wapiti. This strategic farm-in agreement substantially increases Seaview's opportunity base within the prospective Wapiti Cardium light oil resource area. Including the option lands under this agreement, Seaview's opportunity base in Wapiti will have the following characteristics: -- Exposure to earn up to 41 sections (20.8 net) of prospective Cardium light oil rights; -- Significant increase in gross potential locations to over 164 (83 net) horizontal development locations; and -- Improved operational focus by consolidating a large contiguous land position directly offsetting the Company's recent successful Cardium exploration activity. Seaview believes the Wapiti Cardium light oil resource play contains the essential elements of a profitable resource play including: -- Large areal extent, supported by numerous logs and tests validating the reservoir continuity; -- Contiguous resource potential including an average of 10 m of vertical pay exceeding 6% porosity providing for significant accumulation of light oil, and a high degree of repeatability; -- Ability to improve drilling and completion techniques leading to lower capital costs and higher productivity over time; and -- Scalable project targeting high quality light oil (41 degree API). Continued success in developing the Wapiti Cardium light oil play could add significant incremental upside to Seaview's current asset base. The Company will therefore continue to focus on proving the commerciality of this play throughout the balance of 2010. EXPANDED 2010 CAPITAL BUDGET Seaview's board of directors has approved an increase to the 2010 capital budget to $28.5 million, up from previous guidance of $22.2 million. The incremental capital spending will be dedicated to funding the two additional drilling commitments under the farm-in agreement. The expanded capital program will not materially impact production guidance for 2010 given the timing of the expanded drilling program. Seaview is preparing to drill 3 Wapiti Cardium horizontal wells (1.6 net) in Q4 2010 with initial production expected for Q1 2011. As a result of the exploration success at Wapiti, the 2010 capital budget will now include drilling a total of 6 horizontal wells (4.5 net) to evaluate the long term growth potential of the Wapiti Cardium project. In addition to the 3 Cardium locations, Seaview is planning to drill up to 3 (1.5 net) multi-zone gas targets in the Peace River Arch, as well as complete the equip and tie-in of 2 gas wells with estimated behind pipe production capacity of 500 boe/d to be brought online over the balance of the year. Given the higher weighting of capital directed towards oil-weighted plays, Seaview expects to more than double exit crude oil and liquids production to 450 bbl/d as compared to current crude oil and liquids production of 220 boe/d. Combined with the Company's growing prospect inventory and solid financial position, Seaview is well positioned to continue its track record of growth in cash-flow, production and reserves on a per share basis. OUTLOOK; UPWARD REVISION TO 2010 GUIDANCE Including the impact of the recent Wapiti oil success, Seaview is well positioned to continue its growth strategy for 2010. Seaview's Peace River Arch core area featuring high quality, long-life reserves, combined with the emerging Cardium light oil resource play, provide the Company with a significant drilling inventory. As a result of the recent corporate success, Seaview provides the following updated guidance for 2010: -- Forecast 2010 average daily production estimate of more than 3,100 boe/d compared to 2009 annual average production of 2,321 boe/d resulting in an estimated forecast production growth of 34% per share (based on 65.48 million Class A shares outstanding); -- 2010 estimated exit production of more than 3,450 boe/d including over 450 bbl/d of crude oil and natural gas liquids; -- Upward revision to forecasted 2010 capital budget to $28.5 million; -- As at June 30, 2010, Seaview had approximately $10.6 million of net debt representing a trailing net debt to cash flow ratio of 0.60; -- Seaview's credit facility has been confirmed by the lenders at $52 million. The next interim review is set for February 2011. As at June 30, 2010, Seaview had approximately $41 million of available credit capacity to pursue strategic opportunities; -- Seaview has established significant positions in resource plays providing for longer-term growth potential in a diverse portfolio of assets targeting both light oil and natural gas plays, including: -- In Wapiti, the Company has assembled a sizable land position with exposure to 41 sections of land (20.8 net) targeting a Cardium light oil resource play. Seaview plans to spend $16 million total in 2010 to drill a total of 6 horizontal multi-frac wells (4.5 net) to delineate the resource potential of the Company's land position; -- In Pouce Coupe, the Company holds interests in 21 sections of land (4.5 net) targeting a Doig-Montney natural gas resource play. Seaview's land position is on trend with successful industry development activities further reducing the risk of full development when economics are more viable; and -- In Harlech, Seaview holds a 25% working interest in 9 contiguous sections of land (2.25 net) targeting multi-zone Cretaceous and Nordegg gas resource potential. The Harlech area offers exposure to liquids rich natural gas reservoirs. -- Strong commodity hedging program providing for downside protection on 45% of 2010 forecasted average production generating a minimum $9.4 million gross revenue for the second half of 2010; and -- 65.48 million Class A shares and 1.0 million Class B shares outstanding. 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. This press release may contain forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, anticipations, expectations, opinions, forecasts, projections, guidance or other similar statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses and health, safety and environmental risks), commodity price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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