CALGARY, ALBERTA--(CCNMatthews - July 3, 2007) - Spitfire Energy Ltd. (TSX VENTURE:SEL) achieved record production, revenue and cash flow for the fiscal year ending March 31, 2007. Compared with fiscal 2006, the company increased its proved reserves 82% to 1.2 million barrels of oil equivalent (boe), its proved plus probable reserves 51% to 1.9 boe, its average production 117% to 280 boe per day, its oil and gas revenues 113% to $4.8 million and its cash flow from operations 93% to $1.2 million.
The following table provides a summary of Spitfire's results for the 12-month period ending March 31, 2006 and 2007.
----------------------------------------------------------------------------
Year Ended March 31
----------------------------------------------------------------------------
2007 2006 % change
----------------------------------------------------------------------------
Financial
----------------------------------------------------------------------------
Petroleum and natural gas sales
----------------------------------------------------------------------------
Crude oil and NGLs $ 3,346,947 $ 1,506,252 122
----------------------------------------------------------------------------
Natural gas $ 1,462,826 $ 748,933 95
----------------------------------------------------------------------------
Net revenue $ 4,809,773 $ 2,255,185 113
----------------------------------------------------------------------------
Cash flow from operations $ 1,228,696 $ 635,878 93
----------------------------------------------------------------------------
Per share basic $ 0.05 $ 0.05 -
----------------------------------------------------------------------------
Per share diluted $ 0.04 $ 0.04 -
----------------------------------------------------------------------------
Net earnings (loss) ($381,802) ($52,726) -
----------------------------------------------------------------------------
Per share basic and diluted ($0.01) $ 0.00 -
----------------------------------------------------------------------------
Capital expenditures $ 9,648,197 $ 4,971,974 94
----------------------------------------------------------------------------
Net debt $ 7,215,044 $ 2,372,816 204
----------------------------------------------------------------------------
Total assets $ 17,406,195 $ 9,119,616 91
----------------------------------------------------------------------------
Shareholders equity (deficit) ($1,290,310) ($908,508) 41
----------------------------------------------------------------------------
Common shares outstanding 29,363,744 25,804,744 14
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating
----------------------------------------------------------------------------
Realized prices
----------------------------------------------------------------------------
Crude oil and NGLs ($/bbl) $ 52.10 $ 44.21 18
----------------------------------------------------------------------------
Natural gas ($/mcf) $ 6.44 $ 9.10 (29)
----------------------------------------------------------------------------
Total ($/boe) $ 47.06 $ 47.07 -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Average production
----------------------------------------------------------------------------
Crude oil and NGLs (bbls/d) 176 93 89
----------------------------------------------------------------------------
Natural gas (mcf/d) 622 216 188
----------------------------------------------------------------------------
Total (boed) 280 129 117
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Reserves BOE PV 5% PV 10%
----------------------------------------------------------------------------
Constant Pricing
----------------------------------------------------------------------------
Total proved 1,254,000 $ 24,815,000 $ 19,162,000
----------------------------------------------------------------------------
Total proved plus probable 1,955.000 $ 35,113,000 $ 25,523,000
----------------------------------------------------------------------------
Reserve Life Index - 14.2 years (P+P)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Forecast Pricing
----------------------------------------------------------------------------
Total proved 1,214,000 $ 18,274,000 $ 14,140,000
----------------------------------------------------------------------------
Total proved plus probable 1,907,000 $ 27,612,000 $ 19,698,000
----------------------------------------------------------------------------
Reserve Life Index - 13.8 years (P+P)
----------------------------------------------------------------------------
Spitfire focused its energy and capital resources in fiscal 2007 on strengthening the company's financial house and exploiting its assets, adding 751,555 boe of reserves at a cost of $14.96 per boe. Spitfire's three-year weighted average finding, development and acquisition cost is $11.17 per boe.
The company's significant asset continues to be the Fosterton area of Saskatchewan. Since acquiring the property, Spitfire has grown it from 37 boed to 223 boed and has increased proved plus probable recoverable reserves from 179 Mbbl to 1,516 Mbbl with capital expenditures of $10,631,604 at a cost of $7.95 per boe. Spitfire expects to continue the growth in present value and volumes at Fosterton through a focused strategy of maximizing fluid rates and optimizing operations.
The quality of Spitfire's assets is high with a 14.2-year reserve life index (RLI). These assets are expected to offer Spitfire's shareholders a base of cash flow for years to come. The strength of Spitfire's proved reserves also allows for the conservative use of debt to leverage the company's growth. The company expects an increase in its line of credit shortly from $8.2 million to more than $10 million. Spitfire does not plan to increase its debt beyond $7.5 million without additional cash flow.
In fiscal 2007, Spitfire averaged 280 boed of production. Spitfire's current productive capability is in excess of 400 boe/d. This is below the previous target of 600 boed largely due to three wells drilled in the last 12 months with less than optimum results. Spitfire also has a small amount of production shut-in due to water disposal well issues at two facilities, which the company is working aggressively to repair in one instance and to replace in the other. To date in fiscal 2008, Spitfire has drilled one well, which has been cased as a potential gas well, and has two locations surveyed and ready to be drilled in the next quarter.
Spitfire's audited financial statements, management's discussion and analysis and detailed information regarding Spitfire's reserves for the fiscal year ended March 31, 2007 have been electronically filed and can be accessed on SEDAR at www.sedar.com and on the company website at www.spitfireenergy.com.
Spitfire Energy Ltd. is a junior oil and gas company engaged in the exploration, development and production of natural gas and crude oil reserves. Spitfire's common shares trade on the TSX Venture Exchange under the symbol "SEL".
This press release contains forward-looking statements that are based on current expectations. There are a number of risks and uncertainties associated with the oil and gas industry that could cause actual results to differ materially from those anticipated. A barrel of oil equivalent, derived by converting gas to oil using a ratio of six thousand cubic feet of gas to one barrel of oil, may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
FOR FURTHER INFORMATION PLEASE CONTACT:
Spitfire Energy Ltd.
Keith N. Chase
President and Chief Executive Officer
(403) 205-3400 x224
Spitfire Energy Ltd.
Danny Zivkusic
Chief Financial Officer
(403) 205-3400 x228
