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Eagle Rock Reports Second Quarter 2009 Results

^{Published on 2009-08-21 16:59:24 - Market Wire}
 

 CALGARY, Aug. 21 /CNW/ - Eagle Rock Exploration ("Eagle Rock " or "the Corporation") (TSXV: ERX) has filed its Unaudited Financial Statements and Management's Discussion and Analysis (MD&A) for the second quarter ended June 30, 2009 on SEDAR. The documents can be accessed through SEDAR's website at[ www.sedar.com ], or on Eagle Rock's site at [ www.eaglerockexploration.com ]. The following table provides a summary of key financial results. Three Three Six Six months months months months 2009 2008 2009 2008 $000's except production and per share amounts $ 000's $ 000's $ 000's $ 000's ------------------------------------------------------------------------- Average daily production - boed 527 403 560 444 Petroleum & natural gas revenue 2,691 3,929 4,986 7,456 Cash flow - operating activities 790 2,295 3,971 3,467 Loss for the period (646) (613) (1,562) (488) Basic and diluted loss per share (0.01) (0.01) (0.03) (0.01) Capital expenditures 166 4,560 1,542 6,929 Total assets 50,546 35,432 50,546 35,432 Net (debt) cash (20,254) (7,290) (20,254) (7,290) Common shares outstanding - 54,543 54,001 54,543 54,001 The Corporation entered terms of forbearance with its bank in April 2009 following a breach of the working capital covenant in the lending agreement. The key term of the forbearance agreement was to cure the working capital default by June 30, 2009. This was not accomplished. Subsequent to the period end Eagle Rock continued to seek solutions to the working capital issue and was successful in selling a natural gas property for net proceeds of $1.2 million. These proceeds are to be applied to reduction of the bank debt but are not sufficient to resolve the working capital problem. The Corporation has continued its efforts to resolve the working capital problem and is considering several proposed courses of action. The capital program remains suspended until such time as additional capital resources are available. Lower oil prices in 2009 have generated lower netbacks and cash flow from the sale of petroleum and natural gas compared to 2008. The operating netback for Q2 2009 was $31.80 per boe, a decrease of 56% from $72.75 in Q2 2008. Cash flow from operating activities was $0.8 million for Q2 2009, a decrease of 66% from the cash flow of $2.3 million in Q2 2008. The six month cash flow from operating activities of $4.0 million in 2009 includes $2.2 million from the monetization of a 2009 collar on the price of WTI oil. Average daily production was 527 boe/d in Q2 2009, a 31 % increase over 403 boe/d Q2 2008. This increased production was a result of the 2008 drilling program and a corporate acquisition in December 2008. Current production is approximately 430 boe/d which is 95% oil. 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". The TSX Venture Exchange has not reviewed and does not accept 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. %SEDAR: 00019108E 

For further information: please visit the Company's website at [ www.eaglerockexploration.com ] or contact: Jim Silye, President and Chief Executive Officer, Tel: (403) 269-4040, Fax: (403) 261-1978, E-mail: [ jimsilye@eagler.ca ]