Canadian Superior Posts 3Q Financial, Operating Results

Canadian Superior has reported its financial and operating results for the three months ("Q3 2009") and nine months ended September 30, 2009.

RECENT HIGHLIGHTS

Corporate Highlights

  • On October 28, 2009, the Company announced that the Toronto Stock Exchange ("TSX") had completed its review of the common shares of the Company and had determined that the Company met the TSX original listing requirements;
  • On October 28, 2009, the Company announced that its current lender, the National Bank of Canada, approved an increase in the Company's credit facility from $25 million to $40 million;
  • On September 17, 2009, the Company announced it had completed its financial restructuring and had emerged from protection under the Companies' Creditors Arrangement Act (Canada) ("CCAA"). The Plan resulted in the acquisition of Challenger Energy Corp., the sale of a 45% interest in Block 5 (c) in Trinidad and Tobago to BG International Limited and the Company's creditors being paid in full. The Company has retained a 25% interest in Block 5 (c), its assets in Western Canada, the East Coast and North Africa and a 100% interest in its Liberty Natural Gas project in the United States; and
  • On September 9, 2009, the shareholders elected six independent directors to the board, five of whom are new directors.

Operational Highlights

Western Canada

  • Current production from Western Canada is approximately 2,700 boe/d, an increase of approximately 150 boe/d from the third quarter daily average production of 2,546 boe/d. There remain several wells from the 2008 drilling program to be tied-in. Tie-in operations have currently been suspended pending freeze-up;
  • The Company currently has three rigs drilling and expects to have a further two to three rigs running continuously through November and December. These rigs are focused on exploration plays with a mix of oil and gas targets. The drilling and subsequent completions of these wells are expected to fulfill our 2009 flow-through expenditure commitments.

Trinidad and Tobago

  • - The Company's remaining 25% interest in Block 5 (c) remains an important asset in creating future shareholder value. The planning of the appraisal program is budgeted to occur in 2010 with actual drilling on the block is expected in 2011.

Tunisia/Libya

  • The Company has completed the 2D and 3D seismic interpretation of 7th of November Block in offshore Tunisia/Libya and has identified two locations. The Company is advancing the well planning and rig sourcing with a goal of drilling the Zarat appraisal well in the latter half of 2010.

Liberty Natural Gas

  • In August 2009, the Company executed an agreement wherein the Company now owns 100% of the project and is responsible for 100% of the ongoing costs. The Company has recommenced the permitting process.

Financial Highlights

  • Western Canada average daily production of 2,548 boe/d in Q3 2009 was down 29% compared to Q3 2008; petroleum and natural gas revenues of $5.9 million was achieved in Q3 2009, down 71% compared to Q3 2008; and cash flow from operations before restructuring costs was $(3.2) million in Q3 2009, down 133% compared to the same period in 2008;
  • Western Canada average daily production for the nine months ended September 30, 2009 was 3,007 boe/d, down 14% or 509 boe/d compared to the nine months ended September 30, 2008; for the nine months ended September 30, 2009, petroleum and natural gas revenues were $23.8 million or $29.03/boe, down 61%, compared to $61.3 million or $63.57/boe for the comparable period in 2008; and, for the nine months ended September 30, 2009, cash flow from operations before restructuring costs was $(4.0) million compared to $29.2 million for the comparable period in 2008;
  • The decrease in petroleum and natural gas sales is mainly due to significant decline in commodity prices combined with natural declines in production volumes in 2009 compared to 2008. In addition, during CCAA, the Company was unable to tie-in all the successful wells from the 2008 drilling program and was forced to postpone the 2009 drilling program until the Company exited from CCAA protection on September 15, 2009;
  • During the nine months ended September 30, 2009, the Company incurred $18.9 million in restructuring costs related to the receivership of the Trinidad Block 5 (c) asset and CCAA proceedings. These costs were substantially related to legal costs incurred directly by the Company and associated with the CCAA process and legal costs incurred by the Receiver, BG International and the Company's former banker, charged back to the Company; and
  • The Company recorded net income for the nine months ended September 30, 2009 of $10.6 million compared to a loss of $5.6 million for the comparable period in 2008. The increase in 2009 is mainly attributable to the gain of $35.6 million related to the disposition of a 45% interest in Block 5 (c) to BG International for gross proceeds of USD $142.5 million.

 

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