CALGARY, Sept. 3 /CNW/ - Result Energy Inc. ('Result'; TSX-V: RTE) announces that it has filed its second quarter financial statements and MD&A on SEDAR. During the second quarter, Result closed the disposition of substantially all of its Saskatchewan properties. Proceeds of $11 million, net of costs and purchase price adjustments, were applied against outstanding bank debt and working capital deficiency. As a result, total corporate indebtedness has been significantly reduced to $9.1 million as at June 30, 2008 (which includes a bank operating loan of $7.2 million and a working deficit of $1.8 million). Funds from operations were $2.2 million for Q2-08 ($2.4 million for Q2-07), and $3.9 million for the 6-months year to date.
During the second quarter, Result continued to expand its presence in unconventional shale gas within the Horn River Basin of northeastern British Columbia. At the end of Q2-08, Result had acquired 26,000 gross acres (40 sections) in the Horn River Basin at 100% working interest. These lands are highly prospective for the emerging Muskwa and Evie shale gas play, which is attracting major industry interest. In addition to the shale gas, Result is also targeting high-deliverability gas within the underlying Keg River platform.
Subsequent to June 30, Result finalized agreements with two industry partners to expand its Horn River acreage position and farm-out a portion of the capital risk related to drilling and completion costs. These two agreements resulted in the acquisition of an additional $7.2 million worth of undeveloped land, which Result funded by way of a share issuance totaling 13,539,385 common shares, all at a deemed price of $0.533 per share. Following these transactions, Result now holds an interest in 83 gross (44 net) sections (55,000 gross acres; 29,000 net acres) within the Horn River Basin.
Planning for the winter 2009 activities in the Horn River Basin is well underway. Subject to final Board approval, the Company expects to spend a base budget of $7 million in the first quarter, which will fund Result's participation in at least 4 vertical wells, plus additional 3-D seismic. In commenting on the progress of the Horn River project to date, Mr. William Matheson, President, said "Since we began accumulating our position on this play, undeveloped land values in the area have increased more than 10-fold. During this time, Result has assembled a large, highly prospective position and attracted two key partners to assist in the development of these assets. The Company's strategy of moving from conventional western Canadian exploration into a large scale resource play is developing on schedule and we are gearing up for an active winter season."
Investors are cautioned that this news release contains forward looking information. Such information is subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, as no assurances can be given as to future results, levels of activity or achievements.
Result Energy Inc. is a publicly traded Canadian energy company involved in the exploration and development of oil and gas properties in western Canada. Result trades on the TSX Venture Exchange under the symbol "RTE".
The TSX Venture Exchange does not accept responsibility for the adequacy and accuracy of this release.