Canadian Superior Releases Third Quarter Report
Canadian Superior continues aggressive development in Western Canada and focuses on commencement of drilling offshore Trinidad. Canadian Superior reports record first nine months operating results - revenues up 30%, cash flow up 40%, net earnings $1.6 million.
Canadian Superior Energy says that for the first nine months of 2005 and for the third quarter of 2005 the company has been very successful in implementing our strategies for creating high impact opportunities, value and growth with the support of our shareholders. We continue to deliver shareholders a growth strategy based on our ongoing development of Western Canadian cash flows and production with a focus on our Drumheller core area, which includes our recent success in Coal Bed Methane ("CBM") production, as well as other opportunities we have developed in Western Canada combined with "High Impact" opportunities offshore Trinidad and Tobago and offshore Nova Scotia. Canadian Superior is well positioned for sustained growth as we continue to apply sound business principles in prudently managing our balance sheet in order to be well positioned to pursue our offshore Trinidad and Nova Scotia Projects, as well as continue to grow in Western Canada.
- Record oil and gas revenues of $35.9 million in the first nine months of 2005, up 30% from $27.7 million in the same period in 2004, with record oil and gas revenues of $15.0 million in the third quarter of 2005, up 61% from $9.3 million in the third quarter of 2004;
- Record cash flow of $20.0 million, up 40% compared to $14.3 million for the first nine months of 2004, with record cash flow of $8.9 million in the third quarter of 2005, up 96% compared to $4.5 million for the third quarter of 2004;
- Record net income of $1.6 million in the first nine months of 2005, up from a net loss of $3.3 million over the same period in 2004 (a net change of $4.9 million compared to 2004), with a record net income of $1.5 million in the third quarter of 2005, up from a net loss of $2.3 million recorded in the third quarter of 2004 (a net change of $3.8 million compared to 2004);
- Daily production for the first nine months of 2005, increased to 2,523 boe/d, up from 2,501 boe/d recorded in the first nine months of 2004; in spite an extremely early breakup during the first quarter of 2005, and record rains and flooding during the second quarter, both of which interrupted drilling, completion and tie-in operations;
- Daily production for the third quarter of 2005 averaged 2,705 boe/d, up 13%, as compared to 2,401 boe/d recorded for the same period in 2004, and current daily production is approximately 3,100 boe/d;
- Drilled or participated in 47 gross wells (20.4 net) in wells in Western Canada in the first nine months of 2005, achieving a 98% drilling success rate, with 26 gross wells (9.8 net) in the third quarter of 2005 with a drilling success rate of 100%;
- We are very honoured and privileged to have signed the Production Sharing Contract ("PSC") for "Intrepid" Block 5(c), offshore Trinidad and Tobago, on July 20, 2005 with the Government of Trinidad and Tobago;
- In July we appointed Roger De Freitas as Country Manager (Trinidad and Tobago) and in the third quarter we opened Canadian Superior's Port of Spain, Trinidad and Tobago drilling office;
- In July we successfully completed a private placement with gross proceeds of approximately $11 million to be used for the acquisition, drilling and development of the "Intrepid" Block 5(c) offshore Trinidad and Tobago;
- Subsequent to the end of the third quarter of 2005, Canadian Superior has been advised by the Canada-Nova Scotia Offshore Petroleum Board ("CNSOPB") that the Corporation's proposal to consolidate its "Mariner" (EL 2409) and "Mayflower" (EL 2406) exploration licences offshore Nova Scotia has been approved, which, when implemented, will extend the term of the "Mayflower" license and free up $10 million of work deposit capital to be applied to drilling the next "Mariner" well.
TRINIDAD AND TOBAGO
We are very honoured and privileged to have signed the Production Sharing Contract ("PSC") for "Intrepid" Block 5(c), offshore Trinidad and Tobago, on July 20, 2005 with the Government of Trinidad and Tobago. This provides Canadian Superior the right to explore on Block 5(c) which covers 80,041 gross acres and has significant natural gas exploration and development potential off the east coast of the island of Trinidad in this "World Class" basin where we are preparing for exploration drilling.
We are currently in the process of negotiating a rig contract to allow drilling on the "Intrepid" Block 5(c) in a timely manner. The Corporation is in the final stages of a rig selection process and is currently negotiating a formal contract in this regard, with drilling planned for the end of the first quarter of 2006. In addition, our Exploration Team has continued to evaluate and interpret detailed 3D seismic data over the "Intrepid" Block 5(c) and over nearby producing fields and has identified at least three drillable prospects and selected a number of drilling locations on these prospects. We have verified that this block has multi-tcf natural gas potential and an example of "Intrepid" Block 5(c) Seismic, at one proposed drilling location. Also, in the third quarter, in addition to working with this extensive and extremely valuable seismic data set, the Corporation has also been preparing to reprocess the data and full reprocessing of the data started in the last week of October to further assist in finalizing the geological prognosis across the block and at the proposed drilling locations. In addition, extensive offset well data has been obtained from the Trinidad and Tobago Ministry of Energy and Energy Industries and is being used to confirm data already synthesized and confirm final well design engineering.
Also in the third quarter, Canadian Superior appointed Mr. Roger
De Freitas as Country Manager of operations in Trinidad and Tobago
and has opened a local country office in Port of Spain. The
Corporation is aggressively undertaking the necessary procurement and
contracting for the provision of the various drilling services and
materials and has secured the critical longer lead time casing and
wellhead components for the first "Intrepid" well. The wellhead and
related components, and several 1000m of casing, costing several
million dollars, have been secured and paid for; and as well, the
Company is in the process of transferring certain supplies and
inventory from its Nova Scotia operations to Trinidad and Tobago for
the first "Intrepid" well. The "Intrepid" Block 5(c) has water depths
in the range of 150m to 450m and all wells in Block 5(c) will be
drilled from a semisub. In preparation, the
Corporation has commenced its environmental assessment and geohazard
well site survey work on two of the prospects; and as recently
announced, the field program is scheduled for completion in November
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