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Eagle Rock Reports 2009 First Quarter Results

^{Published on 2009-05-27 16:22:33, Last Modified on 2009-05-27 16:24:02 - Market Wire}
 

 CALGARY, May 27 /CNW/ - Eagle Rock Exploration ("Eagle Rock" or "the Corporation") (TSXV:ERX) is pleased to announce it has filed on SEDAR its Unaudited Interim Financial Statements and Management's Discussion and Analysis (MD&A) for the first quarter ended March 31, 2009. Selected Quarterly Information The following table provides a summary of key financial results. Three months Three months ended March 30 ended March 30 2009 2008 $000's except production and per share amounts $ 000's $ 000's ------------------------------------------------------------------------- Average daily production - boed 594 482 Petroleum and natural gas revenue 2,295 3,526 Cash flow from operating activities 1,093 1,172 Income (loss) for the period (916) 125 Basic and diluted income (loss) per share (0.02) 0.00 Capital expenditures 1,376 2,369 Total assets 52,181 38,590 Net debt (21,004) (10,763) Common shares outstanding - basic 54,543 54,001 Total petroleum and natural gas revenues (88% oil) were down by 35% from $3,527,000 in the first quarter 2008 to $2,295,000 for the first quarter 2009 with cash flow from operating activities falling by 7% from $1,172,000 in the first quarter 2008 to $1,093,000 for first quarter 2009. This revenue decline is a result of lower oil prices. Eagle Rock averaged $43 per/boe in the first quarter 2009 compared to $80 per/boe in the first quarter 2008, a decrease of 46%. The net loss was $916,000 during the first quarter 2009 compared to net income of $125,000 in the first quarter 2008. Total production in the first quarter 2009 was 53,428 boe (average 594 boed); a 21% increase from first quarter 2008 for which total production was 44,162 boe (average 482 boed). This increase reflects the first full quarter of production from properties acquired in December 2008 and output from successful wells drilled in 2008. This is Eagle Rock's highest production for a quarter in its history. Current production is approximately 520 boed, 85% of which is oil. The Corporation believes it could restore another 50 bbls of oil production lost to mechanical and other well problems once sufficient capital resources are available. The Corporation's capital program has been suspended as the Corporation continues to operate under a forbearance agreement with its bank. The bank's requirement to maintain a working capital ratio of 1:1 was not met by Eagle Rock at either December 31, 2008 or March 31, 2009. Eagle Rock's net debt of $21 million continues to be a challenge and various alternatives are under consideration to reduce the level of debt. Ongoing cash flows are sufficient to cover current operating expenses and to meet the bank's monthly principle payment of $175,000. The forbearance agreement with the bank requires that Eagle Rock's working capital ratio be in compliance in the second quarter financial statements for 2009 to be filed by August 29, 2009. About Eagle Rock Eagle Rock is a publicly traded energy company involved in the exploration and development of low to medium risk oil and gas properties in Western Canada. Eagle Rock's common shares trade on the TSX Venture Exchange under the symbol "ERX". For more information please visit the Company's website at: [ www.eaglerockexploration.com ] 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. Forward-looking Information This press release includes forward-looking statements and assumptions respecting Eagle Rock's strategies, future operations, expected financial results, financial sources, commodity prices, costs of production and quantum of oil and natural gas reserves and discusses certain issues, risks and uncertainties that can be expected to impact on any of such matters. By their nature, forward-looking statements are subject to numerous risks and uncertainties that can significantly affect future results. Actual future results may differ materially from those assumed or described in such forward-looking statements as a result of the impact of issues, risks and uncertainties whether described herein or not, which Eagle Rock may not be able to control. The reader is therefore cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof and Eagle Rock undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement. In addition, the term BOE or BOE's may be misleading, particularly if used in isolation. A BOE (barrel of oil equivalent) conversion ratio of 6 Mcf per one (1) BOE 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: Jim Silye, President and Chief Executive Officer, Tel: (403) 269-4040, Fax: (403) 261-1978, E-mail: [ jimsilye@eagler.ca ]