CALGARY, ALBERTA--(Marketwired - Aug 15, 2013) - Hyperion Exploration Corp. ("Hyperion" or the "Company") (TSX VENTURE:HYX) announces operating results for the quarter ended June 30, 2013. 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.
Q2 2013 Financial Highlights
The following represents the highlights of Hyperion's second quarter ended June 30, 2013:
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Average production in Q2 2013 of 1,148 boe/day (55% light oil and NGLs), a 18% decrease compared to the Q2 2012 production average of 1,403 boe/day (67% light oil and NGLs);
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Quarterly funds flow in Q2 2013 of $2.3 million or $0.04/share;
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Continued to achieve operating efficiencies with field netbacks of $32.49 per boe in Q2 2013;
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Field netbacks on recent Niton/McLeod horizontal wells were in the range of $55.20 to $60.67 per boe during the first six months of 2013;
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In Q2 2013, Hyperion expended total capital, including land acquisitions and work overs of $997; and
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As at June 30, 2013 total unused and available credit facilities of over $18.3 million.
Financial Highlights
| | 3 Months Ended June 30 | | 6 Months Ended June 30 | |
| | 2013 | | 2012 | | Change | | 2013 | | 2012 | | Change | |
| Financial ($000's except per share amounts) | |
| Oil sales (net of financial contract settlements) | 3,970 | | 6,114 | | -35 | % | 9,515 | | 11,446 | | -17 | % |
| NGL sales | 616 | | 512 | | 20 | % | 1,434 | | 1,199 | | 20 | % |
| Natural gas sales | 1,072 | | 514 | | 109 | % | 2,086 | | 1,155 | | 81 | % |
| Total Oil, NGL, & Natural gas | 5,658 | | 7,140 | | -21 | % | 13,035 | | 13,800 | | -6 | % |
| Funds inflow (outflow) from operations | 2,263 | | 3,498 | | -35 | % | 6,280 | | 6,772 | | -7 | % |
| | Per common share basic & FD ($) | 0.04 | | 0.06 | | -33 | % | 0.12 | | 0.12 | | 0 | % |
| Net earnings (loss) | 343 | | 1,095 | | -69 | % | (13,885 | ) | 1,268 | | nm | |
| | Per common share basic & FD ($) | 0.01 | | 0.02 | | nm | | (0.26 | ) | 0.02 | | nm | |
| Capital expenditures including deposits1 | 997 | | 6,960 | | nm | | 5,071 | | 33,811 | | nm | |
| Working capital (deficit) exit | (32,662 | ) | (32,779 | ) | 0 | % | (32,662 | ) | (32,779 | ) | 0 | % |
| Unused credit facilities | 18,326 | | 23,193 | | -21 | % | 18,326 | | 23,193 | | -21 | % |
| Production | |
| Oil (bbls per day) | 480 | | 820 | | -41 | % | 601 | | 748 | | -20 | % |
| NGL (bbls per day) | 147 | | 114 | | 29 | % | 159 | | 119 | | 34 | % |
| Natural gas (mcf per day) | 3,124 | | 2,812 | | 11 | % | 3,301 | | 2,941 | | 12 | % |
| Total (boe per day) (6:1) | 1,148 | | 1,403 | | -18 | % | 1,310 | | 1,357 | | -3 | % |
| | Per 1 million common share basic & FD (boe per day)2 | 21.18 | | 25.89 | | -18 | % | 24.17 | | 25.04 | | -3 | % |
| Average realized price ($'s - production weighted) | |
| Oil ($ per bbl) | 90.37 | | 82.54 | | 9 | % | 86.93 | | 85.18 | | 2 | % |
| NGL ($ per bbl) | 46.03 | | 49.46 | | -7 | % | 49.77 | | 55.35 | | -10 | % |
| Natural gas ($ per mcf) | 3.77 | | 2.01 | | 88 | % | 3.49 | | 2.16 | | 62 | % |
| Average ($ per boe) | 53.97 | | 56.30 | | -4 | % | 54.71 | | 56.49 | | -3 | % |
| Netback ($'s per boe) | |
| Oil, natural gas and NGL sales | 53.97 | | 56.30 | | -4 | % | 54.71 | | 56.49 | | -3 | % |
| Royalties | (9.05 | ) | (6.04 | ) | 50 | % | (6.58 | ) | (8.58 | ) | -23 | % |
| Operating and transportation expenses | (12.43 | ) | (13.69 | ) | -9 | % | (12.55 | ) | (12.99 | ) | -3 | % |
| Operating netback | 32.49 | | 36.57 | | -11 | % | 35.58 | | 34.92 | | 2 | % |
| Common Shares (000's) | |
| Basic and fully diluted common shares o/s, end of period3 | 54,190 | | 54,190 | | 0 | % | 54,190 | | 54,190 | | 0 | % |
| Weighted average basic and fully diluted common shares o/s3 | 54,190 | | 54,190 | | 0 | % | 54,190 | | 54,190 | | 0 | % |
| 1 | Net income includes non-cash asset impairment charges of $15,100 in Q1 2013 |
| 2 | Weighted average basic and fully diluted common share count used in calculation. Figures not adjusted for debt or working capital positions. |
Operations Update
Hyperion was inactive drilling in the second quarter due to spring break up conditions, which allowed the team to focus efforts on improvements in future capital efficiency through refinements to drilling, completion and tie-in methods. The first well on a new 4 well drilling pad is now expected to cost $3.3 million versus $3.7 million on previous wells. The first well carries the cost of the lease road, multi-well pad and solution gas sales pipeline. The average cost of a well on a four well pad is expected to be approximately $2.8 million.
Throughout the second quarter, Hyperion continued to monitor the production performance of the five Cardium horizontal light oil wells drilled in its new area of Niton/McLeod between March 2012 and January 2013. The productivity profile of these wells further validates our initial assessment that the Niton/McLeod asset holds visible horizontal development drilling repeatability with strong economics.
Hyperion's second quarter production was negatively impacted by approximately 90 boe/day. This was directly the result of limited access to producing wells attributable to wet roads and third party facility maintenance/downtime. Hyperion continues to deal with an unusally wet summer and is still working to get the Niton/McLeod 9-21 Cardium horizontal well back on production. This well was shut in at spring break up due to wet conditions and a temporary access road. The 9-21 well was producing approximately 60 boe/d of oil when it was shut in. Hyperion is targeting the end of August to have this well producing with an upgraded access road to allow for year round production capability. Hyperion is also prepared to spud its next Cardium, light oil horizontal well in the area as soon as conditions dry enough to facilitate a rig move. This well will be the third earning well on the previously announced 8,000 acre farmin in the Niton/McLeod area and is expected to evaluate the productivity of some of the thickest net pay seen by the Company in the area.
The Company currently has an inventory in Niton/McLeod of up to 167 gross (151 net, unbooked) short horizontal locations. Management estimates that long reach horizontal drilling techniques could be applied to 45% of this existing Niton/McLeod inventory.
About Hyperion
Hyperion is a publicly traded, junior light oil and gas company with a strategy of growing through acquisitions which lead to lower risk, scalable and repeatable development drilling projects. Hyperion's core Alberta operations are in the Niton/McLeod, Garrington, North Pembina, Buck Lake, and Chip Lake areas. The common shares of the Company trade on the TSX Venture Exchange under the trading symbol "HYX".
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 judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. 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.
In the interest of providing Hyperion shareholders and potential investors with information regarding the Corporation, including management's assessment of Hyperion's future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on the Corporation's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. By its nature, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Hyperion believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements contained throughout this press release should not be unduly relied upon. 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:
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the performance characteristics of the Corporation's oil and natural gas properties;
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oil and natural gas production levels;
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capital expenditure programs;
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the quantity of the Corporation's oil and natural gas reserves and anticipated future cash flows from such reserves;
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projections of commodity prices and costs;
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supply and demand for oil and natural gas;
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expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; and
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treatment under governmental regulatory regimes.
The material assumptions in making these forward-looking statements include certain assumptions disclosed in the Corporation's most recent management's discussion and analysis included in the material available on this press release.
The Corporation'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:
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volatility in market prices for oil and natural gas;
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liabilities inherent in oil and natural gas operations;
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uncertainties associated with estimating oil and natural gas reserves;
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competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel;
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incorrect assessments of the value of acquisitions and exploration and development programs;
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geological, technical, drilling and processing problems;
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fluctuations in foreign exchange or interest rates and stock market volatility;
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failure to realize the anticipated benefits of acquisitions;
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general business and market conditions; and
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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, Hyperion 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.
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.
