Churchill Energy Inc. (Churchill Energy) has reported oil and gas revenues, before royalties of CAD8.7 million for the year-end 2008, compared with the oil and gas revenues, before royalties of CAD7.6 million in the previous year. It also reported a net income of CAD13.3 million, or CAD0.37 per share, for the year-end 2008, compared with the net income of CAD2.4 million, or CAD0.08 per share, in the previous year.
Financial highlights:
— Churchill Energy said that its cash flow from operations totaled CAD3.3 million for the year-end 2008, up 32% over previous year’s levels
— Sold an operated natural gas property in Smoky Alberta for net proceeds of CAD14.1 million comprising of about 165 BOE/d of production or CAD85,000 per flowing BOE and 1,311 MBOE’s of total proved plus probable reserves based on GLJ ‘s December 31, 2007 reserve report or CAD10.76 per BOE
— Proceeds on the disposition were used to remove bank debt. For 2008, the company has a working capital deficiency of CAD1.9 million and CAD6.5 million of unused bank lines
— On December 16, 2008, Churchill Energy announced that it would be acquiring Welton Energy Corporation for consideration of CAD3.2 million in net debt assumed and issuance of about 5.5 million common shares to Welton debentureholders and shareholders. The deal closed in February 2009 and Welton is now a wholly owned subsidiary of Churchill Energy. Churchill Energy acquired 150 BOE/d of production at CAD25,400 per flowing BOE and 953 MBOE’s of total proved plus probable reserves based on GLJ’s March 1, 2009 reserve report at CAD3.99 per BOE. In conjunction with the Welton acquisition, the company’s operating demand loan was increased to CAD9 million from CAD6.5 million and the non-revolving acquisition / development demand loan was increased to CAD2.5 million from CAD0.7 million
— Churchill Energy’s net asset value for the year-end 2008 based on GLJ’s January 1, 2009 price forecast and discounted 10% is CAD0.68 per share. On a combined basis using GLJ’s March 1, 2009 price forecast and discounted 10% for Welton’s proved plus probable reserve value results in a combined net asset value of CAD0.83 per share.
Operational highlights:
— Churchill Energy has reported that the production averaged 362 BOE/day in 2008 compared to 457 BOE/day in the previous year as a result of the smoky property disposition
— The company has drilled three successful wells in Grand Forks, one as a Glauconite producer and two water injection wells as part of the waterflood project
— Expanded Churchill Energy’s battery capacity at Grand Forks to 17,000 barrels of fluid per day from 10,000 barrels of fluid per day to handle future increases in production from the area
— Operating netbacks increased 48% to CAD39.11 per BOE from CAD26.51 per BOE in the previous year mainly as a result of higher commodity prices in the first three quarters of 2008.