Assure Announces Strong Growth in First Six Months and Updates Recent Development Activities.CALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. -- Assure Energy, Inc. ("Assure" or the "Company") (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : ASURF ASURF (Large) Area Surface (Heating) Facility ) is pleased to announce its consolidated operating and financial results for the six-month period ended June June: see month. 30, 2004. The results include the operations of Assure's 100% owned subsidiaries, Assure Oil & Gas Corp. ("Assure Oil & Gas") and Westerra 2000 Inc. ("Westerra"), and, its 51% owned subsidiary Quarry Quarry Cerynean stag captured by Hercules as third Labor. [Gk. and Rom. Myth.: Hall, 149] Cretan bull savage bull caught by Hercules as seventh Labor. [Gk. Oil & Gas Ltd. ("Quarry") and are stated in US Dollars. CORPORATE HIGHLIGHTS -- Assure and Quarry exited the six month period with a combined production rate of 1,475 boe/d (approximately 60% oil and 40% natural gas); -- Assure's acquisition of Quarry and a successful drilling program increased average daily production by 201% from 360 boe/d in the first six months of 2003 to 1,081 boe/d in the first six months of 2004; -- Assure closed an equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. and raised proceeds of over US $1.7 million at US $3.60 per unit; -- Assure invested over US $6 million in drilling, completions, land acquisitions, seismic and pipeline tie in; -- Assure participated in drilling 10 wells during the six months ended June 30, 2004 and achieved a 90% drilling success rate. Harvey Harvey, city (1990 pop. 29,771), Cook co., NE Ill., a suburb S of Chicago; inc. 1895. Its manufactures include steel castings, metal products, chemicals, machinery, and electronic equipment. Harvey has an oil research center. The city was founded by Turlington W. Lalach, President of Assure stated' "Assure has achieved considerable growth for the first six months of 2004 derived through the acquisition of Quarry and successful implementation of drilling and exploration programs. Given continued strong drilling results and record high commodity prices, Assure is on track to add significant production volumes and shareholder value for the remainder of 2004." OPERATIONS SUMMARY During the six months ended June 30, 2004, Assure and its subsidiaries continued to implement management's business strategy of creating sustainable growth in reserves and production by acquiring and developing high quality oil and natural gas properties. Assure participated in drilling 10 wells and completed 6 oil wells previously drilled in 2003. Excellent results have been achieved adding 6 producing oil wells at the end of March, 2 producing natural gas wells at the end of April, 3 producing oil wells at the end of July, one producing natural gas well at the end of August, and one abandoned well. Furthermore, one natural gas well, drilled during the period is currently being completed and is scheduled for tie-in within the 3rd quarter and 2 natural gas wells drilled during the period are scheduled for completion and tie-in by the 4th quarter. At June 30, 2004 Assure had an interest in 85 producing wells and varying interests in over 50,000 gross acres of land in northeast British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography , Alberta and Saskatchewan. Also during the six months ended June 30, Assure accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. 6,702 gross acres (2,550 net acres) of prospective lands that are slated for development and exploitation in the coming fall and winter drilling season. ASSURE Northeast, British Columbia & Alberta Assure participated in drilling 5 natural gas wells in Northeastern British Columbia (NEBC NEBC Northwest Environmental Business Council NEBC New England Botanical Club (Cambridge, MA) NEBC New England Bible College (South Portland, ME) NEBC North Eastern Bible College ) with an average 90% before pay out working interest and one 25% working interest gas well in Alberta that was abandoned. The 5 wells in NEBC encountered 11 potential pay zones. Assure has completed and tied-in tied-in a conformation defect in an animal in which a limb is perceptibly thinner at one point, e.g. tied-in below the knee, or below the hock. 2 of the 5 wells in NEBC with one well producing from 2 of 3 producible zones while the second is producing from one zone. One NEBC well is currently being completed and is scheduled for tie in during the 3rd quarter of 2004 and the 2 remaining NEBC wells are scheduled for completion and tie in during freeze up expected by the 4th quarter of 2004. Edson, Alberta Edson is a town in west-central Alberta, Canada. It is located in Yellowhead County, km ( mi) west of Edmonton, at the intersection of Yellowhead Highway and Highway 47. Assure participated for a 25% working interest in a deep test gas well in the Edson area of Alberta. The well tested at a stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. rate of 2.2 mmcf/d and commenced production in August 2004 at a current rate of 1.6 mmcf/d. Assure has earned 3 sections of land (1920 gross acres - 480 net acres) and an area of mutual interest with its partner. Geological ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. modeling and reservoir evaluation of the initial test well indicates further potential in an offsetting section. Lloydminster, Saskatchewan Assure successfully drilled 3 heavy oil wells. The 3 wells encountered multiple potential pay zones and were completed as General Petroleum formation oil wells. Assure has a 100.00% BPO BPO Business Process Outsourcing BPO Benevolent & Protective Order (of Elks of the USA) BPO Benzoyl Peroxide BPO Business Process Optimization BPO Broker Price Opinions BPO Buffalo Philharmonic Orchestra (70.00% APO apo- 1 A prefix indicating a protein component in a conjugated molecule–eg, apoferritin, apolipoprotein, see there 2 Apolipoprotein, see there ) working interest subject to a sliding scale slid·ing scale n. A scale in which indicated prices, taxes, or wages vary in accordance with another factor, as wages with the cost-of-living index or medical charges with a patient's income. convertible gross overriding royalty interest overriding royalty interest A third-party interest in royalty income derived from oil and gas rights. in these 3 oil wells that commenced production in July 2004. Additional development drilling locations have been identified and are expected to be part of Assure's fall 2004 drilling program. QUARRY Ribstone, Alberta During the first half of 2004, Quarry completed 6 oil wells previously drilled in 2003 in the Ribstone area of Alberta. Presently all 6 wells are producing oil from formations including the Sparky spark·y adj. spark·i·er, spark·i·est Animated; lively. spark  i·ly adv. ,
General Petroleum, and Lloyd. Quarry has a 100% working interest in 2.5
sections of land (1,600 acres). Quarry management is evaluating the
application of water injection techniques to potentially increase flow
rates and optimize optimize - optimisation production.OUTLOOK Assure's strong production growth during the six months was derived from the acquisition of Quarry and successful drilling programs that commenced during the winter and continued into the spring 2004 drilling season. Assure is on-track to continue to add significant production volumes for the remainder of 2004 by completing and tying into production 3 natural gas wells drilled during the six months ended June 30, 2004 with pay indicated on logs. Further development drilling of existing core properties based on geological modeling from the winter 2003/2004 program is expected to add further production volumes and together with rising commodity prices should contribute to enhanced cash flow this fiscal year and next. During the first six months of this year, Assure added to its land base to support increased drilling activity. The successful exploration of its prospect inventory will sustain growth this year and into the 1st quarter of next year. Also, Assure continues to evaluate acquisitions that will complement the Company's overall growth strategy and existing operations. FINANCIAL AND OPERATING SUMMARY The Company's financial results depend on many factors, including, but not limited to, commodity prices, exploration and development success, control of capital expenditures, and operating and overhead costs overhead costs see fixed costs. . These factors impact the Company's ability to obtain financing for its operations. Many of these factors are outside of Assure's control. The Company's results of operations for the six months ended June 30, 2003 include the results of Assure Oil & Gas and Westerra ("Assure O&G"). The results of operations for the six months ended June 30, 2004 include the results of Assure O&G and the results of its partly owned subsidiary Quarry. Assure acquired 48.5% of Quarry, effective July 28, 2003, and increased its ownership in Quarry to 51.%, effective June 30, 2004. Assure effectively controls Quarry's operations and, as a result, has included the accounts of Quarry on a consolidated basis. The interest of the remaining Quarry shareholders in Quarry's operations is recorded as minority interest in consolidated subsidiary in the consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge . A summary of the Company's results of operations for the first half of 2004 and 2003 is set out in the following table.
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-
Six months ended June 30
%
2004 2003
Change
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-
OPERATIONS
Production:
Crude oil & NGL's (Bbl/d) 708 121
485
Natural gas (Mcf/d) 2,236 1,431
56
Total (Boe/d) 1,081 360
201
Average sales prices:
Crude oil ($/Bbl) $ 27.31 $ 25.73
6
Natural gas ($/Mcf) $ 4.71 $ 5.28
(11)
Total ($/boe) $ 27.63 $ 29.69
(7)
Royalty expense ($/ Boe) $ (6.46) $ (6.16)
5
Operating expense ($/ Boe) $ (8.64) $ (5.79)
49
Netback ($/ Boe) $ 12.52 $ 17.73
(29)
Wells drilled
Gross 10 -
Net (bpo) 8 -
Success rate (percent) 90 -
FINANCIAL (UNAUDITED) (US$)
Revenues:
Crude oil & NGL's $ 3,520,895 $ 563,768
525
Natural gas 1,915,501 1,368,425
40
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5,436,396 1,932,193
181
Royalty expenses (1,271,448) (400,996)
217
Operating expenses (1,700,773) (377,010)
351
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-
Net revenue from oil
and gas production $ 2,464,175 $ 1,154,187
113
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-
Net loss $ 1,709,264 $ 898,620
90
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-
Net loss per share $ 0.12 $ 0.06
100
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Cash flow from
operations before changes
in working capital $ 268,863 $ 542,859
(50)
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-
Capital expenditures $ 6,086,899 $ 1,337,047
355
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-
Weighted average common
shares outstanding 19,868,014 16,096,983
23
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-
NGLs - natural gas liquids
bbls/d - barrels of oil per day
mcf/d - thousand cubic feet per day
mmcf/d - million cubic feet per day
boe/d - barrels of oil equivalent per day
bpo - before payout
Production The increase of 485% in oil and NGLs production in the first six months of 2004 compared to the same period in 2003 resulted from the inclusion of Quarry's production of 616 bbls/d offset by a decrease of 29 bbls/d in Assure O&G production. Quarry's oil production is primarily from the Chauvin, Ribstone and Chestermere areas of Alberta, which produced 253 bbls/d, 256 bbls/d and 107 bbls/d, respectively. Assure O&G's 2004 oil production of 92 bbls/d includes 36 bbls/d from the Enchant area of Alberta, 38 bbls/d from the Lloydminster area of Saskatchewan and 18 bbls/d from other areas. The reduction in Assure O&G's production in 2004 is due to natural declines in production of 49 bbls/d from Lloydminster, offset by an increase of 20 bbls/d in production from Enchant and other areas. The increase of 56% in natural gas production in the first six months of 2004 resulted from the inclusion of 893 mcf/d from Quarry offset by a decrease of 88 mcf/d in Assure O&G production. Quarry's natural gas production includes 426 mcf/d and 277 mcf/d, respectively, from the Rigel and West Currant currant, northern shrub of the family Saxifragaceae (saxifrage family), of the same genus (Ribes) as the gooseberry bush. The tart berries of the currant may be black, white, or red; the white gooseberry becomes purple when mature. areas of British Columbia, and 143 mcf/d from Chestermere, with the remaining 47 mcf/d from other areas. Assure O&G's natural gas production of 1,343 mcf/d for 2004 includes 680 mcf/d from West Currant, 163 mcf/d from Enchant, 411 mcf/d from Lloydminster and 89 mcf/d from other areas. The production from West Currant was added at the end of March 2004 as a result of the Company's 2003/2004 winter drilling program. The change in Assure O&G's production is due to natural declines in gas production of 551 mcf/d in Lloydminster, 136 mcf/d in Enchant and 81 mcf/d from other areas, which offset the new production from West Currant. Prices The average oil price realized by the Company in the first six months of 2004 was $27.31 (equivalent to Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. $36.55) per barrel, an increase of 6% from $25.73 (equivalent to Canadian $35.99) per barrel in the same period in 2003. Quarry's average oil price realized in 2004 was $28.25 per barrel. Assure O&G's average oil price realized in the first six months of 2004 was $21.09 per barrel, down from $25.73 per barrel in the same period in 2003, due to lower average prices for heavier grades of oil. The average natural gas price realized by the Company in the first six months of 2004 was $4.71 (equivalent to Canadian $6.30) per mcf, a decrease of 11% from $5.28 (equivalent to Canadian $7.39) per mcf in the same period in 2003. Net revenue from oil and gas production Revenues from oil and natural gas production, before deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. of royalties and operating costs operating costs npl → gastos mpl operacionales , increased by 181% in the first six months of 2004, due primarily to the inclusion of $3,916,708 from Quarry. Assure O&G's revenues decreased by $412,505 due to reduced production volumes and lower prices. Royalties increased from $400,996 or $6.16 per boe in the same period in 2003 to $1,271,448 or $6.46 per boe in the first six months of 2004. Royalties as a percentage of revenues increased from 21% to 23%. Operating costs increased 351% to $1,700,773 in 2004 primarily due to the inclusion of $1,430,714 from Quarry, offset by a reduction of $106,951 in Assure O&G's costs. Operating costs on a boe basis increased by $2.85 per boe to $8.64 per boe in the first six months of 2004. Assure O&G's operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. declined by $1.07 per boe to $4.69 in the first six months of 2004. This decline was more than offset by Quarry's operating expenses which averaged $10.28 per boe in the first six months of 2004. Quarry's operating costs were high due to facilities upgrades and work-over costs incurred to maintain and improve production from its properties. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses and net loss Cash flow from operations for the first half of 2004, after adjustment for non-cash items and before changes in working capital, was $268,863 for the first six months of 2004, compared to $542,859 for the same period in 2003. The contribution to cash flows from an increase of $1,309,988 in revenues from oil and gas activities in the first six months of 2004 was more than offset by higher general and administrative expenses and interest expenses. Cash flow from operations, after a reduction of $1,242,272 in working capital, increased by $1,718,079 from the negative cash flow of $206,944 experienced for the same period in 2003. The net loss, after deduction of depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able and other non-cash items, was $1,709,264 or $0.12 per common share in the first six months of 2004 compared to a net loss of $898,620 or $0.06 per common share in the same period in 2003. ABOUT ASSURE ENERGY, INC. Assure Energy, Inc. is an Alberta, Canada corporation that is principally engaged in the exploration, development, acquisition and production of petroleum and natural gas located in Western Canada
Western Canada, commonly referred to as the West . Assure operates through its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. Assure Oil & Gas Corp. and its wholly owned subsidiary Westerra 2000 Inc. Assure owns 51% of the issued and outstanding shares of Quarry Oil & Gas Ltd., an Alberta corporation, through Assure Holdings Inc. Assure trades on the OTCBB under the symbol ASURF. ABOUT QUARRY OIL & GAS LTD. Quarry Oil & Gas Ltd., an Alberta, Canada corporation, is a junior oil and gas company engaged in the exploration, development and production of petroleum and natural gas located in Western Canada. Quarry's common shares trade on the TSX Venture Exchange TSX Venture Exchange Originally called the Canadian Venture Exchange (CDNX), this was a result of the merger of the Vancouver and Alberta stock exchanges. The goal of TSX Venture Exchange is to provide venture companies with effective access to capital while protecting investors. under the symbol QUC QUC Quebec Urban Community QUC Number of Last Received Message (Radiotelegraphy) . FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks defined in this document and in statements filed from time to time with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by, or on behalf of, the Company, are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . Assure's entire second quarter report is available on the Company's website at www.assure-energy.com |
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