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NOVUS ENERGY INC. ANNOUNCES STRONG THIRD QUARTER 2010 RESULTS AND EXPANDED CREDIT FACILITY

^{Published on 2010-11-22 05:10:16 - Market Wire}
 

 FINANCIAL HIGHLIGHTS - For the three months ended September 30, 2010, Novus' gross revenue increased 633% to $6,155,367 compared to $839,222 recorded in the comparative period in 2009. For the nine months ended September 30, 2010, gross revenue was $12,229,914 compared to $2,554,443 in the comparative period of 2009, representing a 379% increase. - Funds flow from operations was $2,076,346 in the third quarter of 2010, versus an outflow of $558,833 for the comparative three month period of 2009. For the first nine months of 2010, funds flow from operations was $1,311,416, compared to an outflow of $2,413,782 recorded in the first nine months of 2009. - Novus' capital program, excluding non-cash and business combination transactions, for the three month period ended September 30, 2010, was $10,498,832, versus $(40,471) in the comparative period of 2009. Novus' capital program, excluding non-cash and business combination transactions, for the first nine months of the year was $36,592,139 compared to $508,326 spent in the first nine months of 2009. - As at September 30, 2010, the Company had no bank debt and had positive working capital of approximately $14.4 million. - On November 16, 2010, the Company executed an Indicative Term Sheet with a Canadian chartered bank encompassing $28 million in new credit facilities. The new facilities, to be comprised of a $22 million revolving operating demand loan and a $6 million acquisition/development demand loan, will replace the existing $5 million credit facility and are anticipated to be available in December, 2010. - Novus continues to maintain significant tax pool coverage, with $176 million estimated at September 30, 2010. - Novus commenced a Normal Course Issuer Bid on September 13, 2010 with approval to buy up to five million of its issued and outstanding shares. OPERATIONAL HIGHLIGHTS - Average daily production for the third quarter of 2010 increased 288% to 1,339 boe/d compared to 345 boe/d recorded in the corresponding period in 2009. Average daily production for the first nine months of 2010 was 961 boe/d, up 195% from the 326 boe/d recorded in the corresponding period in 2009. - Production during the third quarter of 2010 of 1,339 boe/d (59% oil and liquids) was 73% higher than the 774 boe/d recorded in the second quarter of 2010. - Current production is approximately 1,475 boe/d weighted approximately 65% towards oil and liquids. - The Company expects to meet its forecast 2010 exit rate of 2,000 boe/d with 70% of production to be comprised of oil and liquids. - During the third quarter of 2010, Novus was involved in the drilling of seven gross successful Viking horizontal oil wells (3.5 net) in its core Dodsland area. All of these wells are now on production. - Total operating costs for the quarter ended September 30, 2010 were $15.15/boe compared to $18.82/boe in the comparative quarter ended September 30, 2009. Operating costs for the fourth quarter will continue to decline with upcoming production additions from additional Dodsland area wells. - On October 4, 2010, Novus commenced the second phase of its drilling program in its core area of Dodsland, where 15 gross wells (15 net) will be drilled, completed and placed on production prior to year end. - On July 8, 2010, the Company announced that it closed an acquisition of assets within its core area of Dodsland, Saskatchewan. Pursuant to the acquisition agreement, Novus acquired 4,240 net acres (approximately 6.5 net sections) of prospective land in its Viking oil resource play. The purchase price for the acquired lands was entirely payable through the issuance of 794,199 common shares of Novus at an ascribed price of $0.80 per common share. - On October 6, 2010, the Company entered into a farm-in agreement with a private oil and gas company to earn certain key lands within its Dodsland, Saskatchewan core operational area. The agreement will provide Novus with the right to farm-in on 3,360 acres (approximately 5.25 net sections) of land with petroleum and natural gas rights in the Viking formation. - Novus controls in excess of 105.25 net sections (67,360 net acres) of prospective Viking oil acreage in its core Dodsland area. Novus has now identified over 560 net Viking oil locations on its land base, and believes that it has amassed a significant recoverable light oil resource. 

 Three months ended Sep 30 Nine months ended Sep 30 2010 2009 2010 2009 ------------------------------------------------------------------------- Financial (000s, except per share amounts) ------------------------------------------------------------------------- Revenue 6,155 839 12,230 2,554 ------------------------------------------------------------------------- Funds flow from (used in) operations 2,076 (559) 1,311 (2,414) ------------------------------------------------------------------------- per share - basic and diluted 0.01 (0.01) 0.01 (0.07) ------------------------------------------------------------------------- Net loss 3,419 1,800 10,363 12,362 ------------------------------------------------------------------------- per share - basic and diluted 0.02 0.04 0.07 0.37 ------------------------------------------------------------------------- Capital expenditures, net 10,499 (40) 36,592 508 ------------------------------------------------------------------------- Working capital 14,415 4,710 14,415 4,710 ------------------------------------------------------------------------- Weighted average shares outstanding (000s) 166,373 42,755 149,618 33,708 ------------------------------------------------------------------------- Three months ended Sep 30 Nine months ended Sep 30 Operational 2010 2009 2010 2009 ------------------------------------------------------------------------- Production ------------------------------------------------------------------------- Oil & liquids (bbls/d) 793 81 465 78 ------------------------------------------------------------------------- Gas (mcf/d) 3,278 1,584 2,978 1,491 ------------------------------------------------------------------------- Oil equivalent (boe/d) 1,339 345 961 326 ------------------------------------------------------------------------- Average realized prices ------------------------------------------------------------------------- Oil & liquids ($/bbl) 69.44 53.23 69.49 46.18 ------------------------------------------------------------------------- Gas ($/mcf) 3.61 3.04 4.19 3.86 ------------------------------------------------------------------------- Oil equivalent ($/boe) 49.95 26.45 46.60 28.66 ------------------------------------------------------------------------- Capital Three months ended Sep 30 Nine months ended Sep 30 Expenditures 2010 2009 2010 2009 ------------------------------------------------------------------------- Land acquisition / retention $ 134,993 $ 11,833 $ 4,639,739 $ 145,906 Geological, geophysical and seismic 4,371 - 368,980 6,787 Drilling and completions 6,984,272 11,155 23,853,141 381,955 Drilling royalty credits (215,573) - (482,810) - Equipping and tie-ins 3,417,503 7,044 4,706,255 17,709 Property acquisitions, net 125,000 (74,875) 3,260,455 (70,468) Other corporate assets 48,266 4,372 246,379 26,437 ------------------------------------------------------------------------- Total expenditures $ 10,498,832 $ (40,471) $ 36,592,139 $ 508,326 ------------------------------------------------------------------------- -------------------------------------------------------------------------