I agree; the outstanding shares must be cut off. Maybe that is why I sometimes call it Nervous Energy! Love the company, but not the high number of shares.
NOVUS ENERGY INC. ANNOUNCES UPDATE ON ITS VIKING LIGHT OIL DRILLING PROGRAM IN DODSLAND SASKATCHEWAN
CALGARY, ALBERTA, July 20, 2011 – Novus Energy Inc. (“Novus” or the “Company”) is pleased to announce that the Company is now halfway through its 2011 Viking oil drilling program, and has now successfully drilled 26 Viking oil wells in the Dodsland area of Saskatchewan, with 20 of these wells having been completed. Seventeen of the wells that have been completed have been placed on production, with the remainder to follow. Novus is pleased with the initial rates the first wells have demonstrated to date. Drilling and completion costs in the Dodsland area continue to meet the Company’s budgeted figures of $850,000 per well. Novus expects to provide a further update in August, as more wells are completed, and more production data is collected.
With two drilling rigs running, Novus expects to drill a total of 52 net Viking oil wells in the Dodsland area by the end of the third quarter of 2011, and complete a total of 46 wells, assuming normal summer weather, by the end of September 2011. The remaining wells will be completed early in the fourth quarter of the year.
Total estimated field level corporate production as of July 18, 2011 was approximately 2,120 boe/d. Novus expects production will continue to steadily increase through the balance of the third quarter as additional wells are drilled and placed on production. The Company is comfortable that given the progression of its drilling plans and results to date, that it will meet its previously announced exit rate guidance of 3,000 boe/d. The Company’s anticipated exit rate of 3,000 boe/d represents a near doubling of production from the 1,544 boe/d the Company reported in its first quarter of 2011.
CALGARY, Aug. 15, 2011 /CNW/ - Novus Energy Inc. ("Novus" or the "Company") is pleased to announce that it has obtained an increase to its credit facilities to $60 million up from the previous $40 million. The new facilities comprised of a $50 million revolving operating demand loan and a $10 million acquisition and development demand loan, will be used to assist with the Company's 2011 drilling program.
The Company's 2011 Viking oil drilling program continues to progress on schedule. The Company has now successfully drilled 34 Viking oil wells in the Dodsland area of Saskatchewan, with 30 of these wells having been completed. Twenty-six of the wells that have been completed have been placed on production, with the remainder to follow. Novus is pleased with the initial rates the first wells have demonstrated to date. Drilling and completion costs in the Dodsland area continue to meet the Company's budgeted figures of $850,000 per well.
Total estimated field level corporate production as of August 12, 2011 was approximately 2,425 boe/d. Novus expects production will continue to steadily increase through the balance of the year as additional wells are drilled and placed on production.
With recent land acquisitions in the Dodsland area, Novus now controls 124.25 net sections of Viking rights, and has identified 601 net undrilled Viking oil locations.
Novus Energy Inc. is a well positioned, junior oil and gas company with a proven management team committed to aggressive, cost-effective growth of high netback light oil reserves and production. Novus will continue to grow through a targeted acquisition and consolidation strategy coupled with exploratory and development drilling.
Novus Shares trade on the TSX Venture Exchange under the symbol NVS. Novus currently has 169.7 million common shares outstanding.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release will not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. Such securities have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States, or to a U.S. person, absent registration, or an applicable exemption therefrom.
Advisory Regarding Forward Looking Statements
Certain disclosures set forth in this press release constitute forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believes", "budget", "continue", "could", "estimate", "forecast", "intends", "may", "plan", "predicts", "projects", "should", "will" and other similar expressions. All estimates and statements that describe the Company's future, goals, or objectives, including Management's assessment of future plans and operations, may constitute forward-looking information under securities laws. Forward-looking statements involve known and unknown risks and uncertainties which include, but are not limited to: exploration, development and production risks; assessments of acquisitions; reserve measurements; availability of drilling equipment; access restrictions; permits and licenses; aboriginal claims; title defects; commodity prices; commodity markets, transportation and marketing of crude oil, liquids and natural gas; reliance on operators and key personnel; competition; corporate matters; funding requirements; access to credit and capital markets; market volatility; cost inflation; foreign exchange rates; general economic and industry conditions; environmental risks; Kyoto protocol; and government regulation and taxation.
Forward-looking statements relate to future events and/or performance and although considered reasonable by Novus at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated in the statements made. Novus does not undertake any obligation to publicly update forward-looking information except as required by applicable securities law.
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Novus' operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), and at Novus' website (www.novusenergy.ca). The forward-looking statements and information contained in this press release are made as of the date hereof and Novus undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
CALGARY, Aug. 26, 2011 /CNW/ - Novus Energy Inc. ("Novus" or the "Company") (TSXV:NVS.V) announces that it has filed its unaudited condensed interim financial statements and management's discussion and analysis ("MD&A") as at and for the three and six months ended June 30, 2011. These may be accessed through the SEDAR website www.sedar.com and at the Company's website http://www.novusenergy.ca.
Novus is pleased to report that its 2011 Viking oil drilling program continues to progress on schedule. The Company has now successfully drilled 39 Viking oil wells in the Dodsland area of Saskatchewan, with 32 of these wells having been completed. Thirty of the wells that have been completed have been placed on production, with the remainder to follow. Costs in the greater Dodsland area continue to meet the Company's budget, with estimated per well costs for drilling and completions on the Company's first 32 wells averaging approximately $835,000.
Total estimated field level corporate production as of August 25, 2011 was approximately 2,625 boe/d, with approximately 78% of production comprised of oil and liquids. Novus expects production will continue to steadily increase through the balance of the year as additional wells are drilled and placed on production. The Company expects to show significant production growth in the second half of the year and expects to comfortably meet its 2011 exit rate guidance of 3,000 boe/d, weighted 80% to oil and liquids production, early in the fourth quarter.
With recent land acquisitions in the Dodsland area, Novus now controls 124.25 net sections of Viking rights, and has identified 601 net risked, undrilled Viking oil locations.
FINANCIAL HIGHLIGHTS
• For the three months ended June 30, 2011, Novus' gross revenue increased 168% to $8.29 million compared to $3.09 million recorded in the comparative period in 2010. For the six months ended June 30, 2011, gross revenue was $17.16 million, compared to $6.08 million in the comparative period of 2010, representing a 182% increase.
• Funds flow from operations was $2.94 million in the second quarter of 2011, versus an outflow of $711 thousand for the comparative three month period of 2010. For the first half of 2011, funds flow from operations was $6.15 million, compared to an outflow of $796 thousand recorded in the first half of 2010.
• Novus' capital program for the three month period ended June 30, 2011, was $18.13 million, versus $20.13 million spent in the comparative period of 2010. Novus' capital program for the first six months of the year was $30.38 million, compared to $26.06 million spent in the first six months of 2010. These figures are exclusive of the non-cash transactions and business combinations, which occurred in 2010.
• Subsequent to quarter end, the Company increased its credit facilities to $60 million, consisting of a $50 million revolving operating demand loan and a $10 million acquisition/development demand loan. The Company's borrowing capacity has increased substantially from the $28 million of credit facilities which were available to it at the beginning of 2011.
• At June 30, 2011, the Company had net debt of $23.85 million.
• The Company currently has outstanding 22.64 million in-the-money warrants expiring March 31, 2012, which, upon exercise, would result in proceeds of $16.98 million being realized by the Company.
OPERATIONAL HIGHLIGHTS
• Average daily production for the second quarter of 2011 increased 70% to 1,318 boe/d compared to 774 boe/d recorded in the corresponding period in 2010. Average daily production for the first six months of 2011 was 1,430 boe/d, up 93% from the 742 boe/d recorded in the corresponding period in 2010.
• Average crude oil and liquids production for the second quarter of 2011 was up 162% to 844 bbls/d versus 322 bbls/d in the comparative quarter of 2010. Natural gas production averaged 2,841 mcf/d for the second quarter of 2011, a 5% increase from 2,717 mcf/d in the comparative period of 2010.
• Average crude oil and liquids production for the first six months of 2011 was up 215% to 940 bbls/d versus 298 bbls/d in the comparative period of 2010. Natural gas production averaged 2,940 mcf/d, a 10% increase from 2,669 mcf/d in the comparative period of 2010.
• Current production is approximately 2,625 boe/d, weighted 78% towards oil and liquids.
• During the second quarter of 2011, Novus participated in the drilling of 19 wells (19.0 net), 14 of which were Viking horizontal oil wells in the greater Dodsland area. Fifteen wells (15.0 net) were completed, with six of them onstream by June 30, 2011.
• Novus now controls 124.25 net sections in its Dodsland Viking core area, and has a multi-year risked drilling inventory of 601 net Viking horizontal oil wells.
• Novus acquired a 100% working interest in approximately 55 net sections of land with rights in the oil bearing Birdbear formation of southwestern Saskatchewan. This acquisition complements the 24 net sections of land Novus currently owns targeting this formation. These lands are located in the immediate vicinity of the Company's Dodsland Viking lands and provide the Company with an exciting opportunity to target another prolific, emerging oil resource play, while maintaining operational synergies. The Company will likely be dedicating some of this year's capital expenditure program towards the shooting of 3D seismic and the potential drilling of a number of Birdbear locations.
• The upgrades at Novus' owned and operated facilities at Whiteside and Avon Hills have now been completed. Gas production from the Whiteside area is currently being conserved with a number of additional pipelines being surveyed to handle new solution gas volumes from our current drilling program.
In the first half of 2011, Novus drilled 17 net horizontal Viking oil wells. Completion operations were hampered by wet weather, and production from the wells was not tied in until the end of the second quarter and early in the third quarter of the year. With completion operations delayed, the Company's Viking oil drilling program did not materially contribute to production levels in the second quarter of 2011. Production for the second quarter of 2011 was also impacted by prolonged third party plant maintenance at Wembley which resulted in production from the area being shut-in for nearly six weeks of the quarter. Prior to, and subsequent to being shut-in, the Wembley property was producing approximately 180 boe/d.
Novus is pleased with the performance of the wells and the stable nature of the production to date from its current drilling program. The Company has drilled wells in its Flaxcombe, Whiteside, Kerrobert, Forgan, Plato, Plenty and Dodsland regions that are expected to meet or exceed internal type curve forecasts of 48 bbls/d of initial oil production. The Company now has several wells with at least 60 days of production history, and these wells are now averaging 64 bbls/d of oil per well. Results from the Flaxcombe sub area in the Dodsland region have been extremely encouraging. The Company has determined that these previously undrilled lands are characterized by two distinct cycles in the Viking formation. The Company has now drilled horizontal wells targeting both the lower and upper cycle. Current production rates from wells in this area which have been on production for at least 60 days are 80 bbls/d of oil per well. Virgin pressures realized on these wells have been up to 7,600 KPa which are amongst the highest pressures the Company has recorded in any of its Viking wells drilled thus far. Novus has mapped over ten sections of its lands where both cycles are present and expects this area to add at least 80 drilling locations to its existing drilling inventory of 601 net Viking oil locations. Reserves and production growth will also increase as development of the two distinct Viking cycles progresses. Production from the recently drilled wells has far exceeded expectations, and is supportive of the longer term potential the Company believes the area exhibits.
Based upon the production rates, recoverable reserves, and drilling and completion costs in the Dodsland area the Company has experienced to date, Novus plans on maintaining an aggressive drilling program on its current acreage, and will continue its efforts to further consolidate and expand its position within the area through acquisitions. Novus has been one of the most active operators in the Dodsland area, and with the success it has enjoyed to date, the Company plans to continually expand its already significant position in the area. Novus is also excited to commence drilling operations shortly on its first horizontal Viking light oil well in Alberta. Based upon success, the Company would pursue numerous other locations in the area throughout 2012.
Novus will be operating approximately 98% of the capital expenditures it incurs in 2011, which gives the Company significant flexibility on the timing and scale of its capital program. Novus is well positioned financially, and as operator of the vast majority of its capital program, the Company has the flexibility to accelerate its drilling with continued success.
A summary of financial and operational results for the three and six month periods ended June 30, 2011, along with the comparative periods, are outlined in the following table:
On January 1, 2011, the Company adopted International Financial Reporting Standards ("IFRS") for financial reporting purposes, using a transition date of January 1, 2010. The unaudited condensed interim financial statements as at and for the three and six months ended June 30, 2011, have been prepared in accordance with IFRS. Comparative information has been restated from the previously published financial statements which were prepared in accordance with Canadian Generally Accepted Accounting Principles ("GAAP").
NON-GAAP FINANCIAL MEASUREMENTS
Included in this press release are references to certain financial measures commonly used in the oil and gas industry, such as funds flow from (used in) operations, operating netbacks and net debt. These measures have no standardized meanings, are not defined by IFRS or Canadian GAAP, and accordingly are referred to as non-GAAP measures.
The Company considers funds flow from (used in) operations to be a key measure as it demonstrates the Company's ability to generate the cash necessary to repay debt and to fund future growth through capital investment. Novus determines funds flow from (used in) operations as cash provided by (used in) operating activities prior to changes in non-cash working capital items and decommissioning expenditures. The determination of the Company's' funds flow from (used in) operations may not be comparable to the same as reported by other companies.
Operating netbacks are calculated by deducting royalties, field operations and transportation and marketing expenses from production revenue. Operating netbacks are used by management to assess operating results between periods and between peer companies as they provide an indication of results generated by the Company's principal business activities before the consideration of how these activities are financed or how the results are taxed. Novus' reported amounts may not be comparable to similarly titled measures reported by other companies. These terms should not be considered an alternative to, or more meaningful than, cash provided by operating, investing and financing activities or net income as determined by IFRS or Canadian GAAP as an indicator of the Company's performance or liquidity.
Net debt is calculated as current assets less all current liabilities, including the current portion of any bank debt. The Company monitors net debt as part of its capital structure.
OTHER MEASUREMENTS
Reported production represents Novus' ownership share of sales before the deduction of royalties. Where amounts are expressed on a barrel of oil equivalent ("boe") basis, natural gas has been converted at a ratio of six thousand cubic feet to one boe. This ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Boe's may be misleading, particularly if used in isolation. References to natural gas liquids ("liquids") include condensate, propane, butane and ethane and one barrel of liquids is considered to be equivalent to one boe.
Novus Energy Inc. is a well positioned, junior oil and gas company with a proven management team committed to aggressive, cost-effective growth of high netback light oil reserves and production. Novus will continue to grow through a targeted acquisition and consolidation strategy coupled with development and exploration drilling.
Novus Shares trade on the TSX Venture Exchange under the symbol NVS. Novus currently has 169.6 million common shares outstanding.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release will not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. Such securities have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States, or to a U.S. person, absent registration, or an applicable exemption therefrom.
ADVISORY REGARDING FORWARD LOOKING STATEMENTS
Certain disclosures set forth in this press release constitute forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believes", "budget", "continue", "could", "estimate", "expects", "forecast", "intends", "may", "plan", "predicts", "projects", "should", "will" and other similar expressions. All estimates and statements that describe the Company's future, goals, or objectives, including Management's assessment of future plans and operations, may constitute forward-looking information under securities laws. Forward-looking statements involve known and unknown risks and uncertainties which include, but are not limited to: exploration, development and production risks; assessments of acquisitions; reserve measurements; availability of drilling equipment; access restrictions; permits and licenses; aboriginal claims; title defects; commodity prices; commodity markets; transportation and marketing of crude oil, liquids and natural gas; reliance on operators and key personnel; competition; corporate matters; funding requirements; access to credit and capital markets; market volatility; cost inflation; foreign exchanges rates; general economic and industry conditions; environmental risks; Kyoto protocol; and government regulation and taxation.
Forward-looking statements relate to future events and/or performance and although considered reasonable by Novus at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated in the statements made. Novus does not undertake any obligation to publicly update forward-looking information except as required by applicable securities law.
CALGARY , Sept. 12, 2011 /CNW/ - Novus Energy Inc. ("Novus" or the "Company") (TSXV:NVS.V) announces that it intends to make a normal course issuer bid through the facilities of the TSX Venture to buy up to 5,000,000 of its issued and outstanding Common Shares. This amount represents approximately 3% of Novus' 169.5 million issued and outstanding Common Shares. The bid will commence September 15, 2011 and expire September 14, 2012 and any shares acquired pursuant to the bid will be cancelled. The bid will be conducted through National Bank Financial Inc., a member of the TSX Venture Exchange.
Novus' reasoning for the normal course issuer bid is that from time to time the purchase of Common Shares for cancellation will increase the proportionate interest of, and be advantageous to, all remaining shareholders. In addition, any purchases made by Novus will afford increased liquidity to those shareholders of the Company who may wish to dispose of their Common Shares.
Novus Energy Inc. is a well positioned, junior oil and gas company with a proven management team committed to aggressive, cost-effective growth of high netback light oil reserves and production. Novus will continue to grow through a targeted acquisition and consolidation strategy coupled with development and exploration drilling.
Novus Shares trade on the TSX Venture Exchange under the symbol NVS. Novus currently has 169.5 million common shares outstanding.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release will not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. Such securities have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States , or to a U.S. person, absent registration, or an applicable exemption therefrom.
ADVISORY REGARDING FORWARD LOOKING STATEMENTS
Certain disclosures set forth in this press release constitute forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believes", "budget", "continue", "could", "estimate", "forecast", "intends", "may", "plan", "predicts", "projects", "should", "will" and other similar expressions. All estimates and statements that describe the Company's future, goals, or objectives, including Management's assessment of future plans and operations, may constitute forward-looking information under securities laws. Forward-looking statements involve known and unknown risks and uncertainties which include, but are not limited to: exploration, development and production risks; assessments of acquisitions; reserve measurements; availability of drilling equipment; access restrictions; permits and licenses; aboriginal claims; title defects; commodity prices; commodity markets; transportation and marketing of crude oil, liquids and natural gas; reliance on operators and key personnel; competition; corporate matters; funding requirements; access to credit and capital markets; market volatility; cost inflation; foreign exchanges rates; general economic and industry conditions; environmental risks; Kyoto protocol; and government regulation and taxation.
Forward-looking statements relate to future events and/or performance and although considered reasonable by Novus at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated in the statements made. Novus does not undertake any obligation to publicly update forward-looking information except as required by applicable securities law.
CALGARY, Nov. 22, 2011 /CNW/ - Novus Energy Inc. ("Novus" or the "Company") (TSXV: NVS.V - News) announces that it has filed its unaudited condensed interim financial statements and management's discussion and analysis ("MD&A") as at and for the three and nine months ended September 30, 2011. These may be accessed through the SEDAR website www.sedar.com and at the Company's website www.novusenergy.ca.
During the third quarter the Company continued with its full scale oil development program on its large land block in the Viking light oil play in the Dodsland region of Saskatchewan. This low risk, development focused asset has provided Novus with an inventory of 573 drilling locations to fuel light oil growth well into the future. With current estimated field production volumes of 2,850 boe/d, Novus has more than doubled its production volumes from the second quarter of the year and will comfortably meet its 2011 exit rate guidance of 3,000 boe/d, weighted 80% to oil and liquids production.
FINANCIAL HIGHLIGHTS
• For the three months ended September 30, 2011, Novus' gross revenue increased 143% to $14.79 million compared to $6.16 million recorded in the comparative period in 2010. For the nine months ended September 30, 2011, gross revenue was $31.95 million, compared to $12.23 million in the comparative period of 2010, representing a 161% increase.
• Funds flow from operations increased 288% to $7.93 million in the third quarter of 2011, versus $2.05 million for the comparative three month period of 2010. For the first nine months of 2011, funds flow from operations increased 1,025% to $14.08 million, compared to $1.25 million recorded in the first nine months of 2010.
• Net income for the third quarter of 2011 was $3.46 million representing a material increase over the comparative three month period loss of $4.81 million in 2010. For the first nine months of 2011, net income was $1.37 million, up from the nine month period loss of $11.14 million in 2010.
• Novus achieved a record operating netback of $49.78/boe up 90% from $26.18/boe recorded in the third quarter of 2010.
• The Company's Viking production achieved impressive operating netbacks of $64.49/boe for the third quarter of 2011. For the nine month period of 2011, operating netbacks in the Viking were $59.46/boe.
• Novus' net cash capital expenditures for the three month period ended September 30, 2011, were $31.29 million, versus $10.47 million spent in the comparative period of 2010. Novus' net cash capital expenditures for the first nine months of the year were $61.47 million, compared to $36.53 million spent in the first nine months of 2010.
• The Company currently has outstanding 22.59 million in-the-money warrants expiring March 31, 2012, which, upon exercise, would result in proceeds of $16.94 million being realized by the Company.
OPERATIONAL HIGHLIGHTS
• Average daily production for the third quarter of 2011 increased 61% to 2,159 boe/d compared to 1,339 boe/d recorded in the corresponding period in 2010. Average daily production for the first nine months of 2011 was 1,676 boe/d, up 74% from the 961 boe/d recorded in the corresponding period in 2010.
• Average crude oil and liquids production for the third quarter of 2011 was up 118% to 1,730 bbls/d versus 793 bbls/d in the comparative quarter of 2010. Average crude oil and liquids production for the first nine months of 2011 was up 160% to 1,207 bbls/d versus 465 bbls/d in the comparative period of 2010.
• The Company's field level production estimate for the month of October was 2,725 boe/d. The Company's current field level production is approximately 2,850 boe/d, weighted 80% towards oil and liquids.
• Production per share increased 64% in the third quarter of 2011 compared to the second quarter of 2011. Production per share increased 58% in the third quarter of 2011, compared with the corresponding quarter of 2010.
• Novus' operating costs have continued to materially decrease from $18.20/boe in the first quarter of 2011 to $13.69/boe in the third quarter of 2011.
• The Company's third quarter 2011 operating costs for its Viking production was $11.43/boe, with further reductions anticipated in the fourth quarter.
• During the third quarter of 2011, Novus spent $24.8 million drilling and completing a record 30 wells (29.8 net), 29 of which (28.8 net) were horizontal Viking oil wells, with a 100% success rate. Twenty- four of these wells were brought on stream during the quarter, in addition to 11 wells that were drilled during the second quarter.
• For the nine months ending September 30, 2011 Novus participated in the drilling of 54 wells (52.9 net), 47 of which (46.8 net) were horizontal Viking oil wells, with a 100% success rate.
• Novus now controls 122.75 net sections of Viking rights, and has a risked drilling inventory of 573 net, undrilled Viking oil locations.
• Results from the Company's Flaxcombe lands in the Viking play are materially exceeding expectations. Novus has identified two distinct Viking cycles which have been mapped over 10 contiguous sections. This 10 section sub area has the potential to add up to 80 future drilling locations for the Company.
• During 2011, Novus acquired a 100% working interest in approximately 55 net sections of land with rights in the oil bearing Birdbear formation in southwestern Saskatchewan. This acquisition complemented the 24 net sections of land Novus already owned targeting the formation. All of these lands are located in the immediate vicinity of the Company's Dodsland Viking oil project and provide the Company with an exciting opportunity to target another prolific, emerging oil resource play, while maintaining operational synergies. The Company may be dedicating some of next year's capital expenditure program towards the shooting of 3D seismic and the drilling of a number of Birdbear locations.
• With highly economic netbacks of over $64.00/boe from its Viking oil assets, the Company is generating strong cash flow which will provide it with the ability to internally fund an aggressive drilling program in 2012.
A summary of financial and operational results for the three and nine month periods ended September 30, 2011, along with the comparative periods, are outlined in the following table:
During the third quarter, Novus continued to implement its business strategy of creating sustainable growth in reserves, production and cash flow through the drilling of its high quality, long life, light oil properties.
Starting in 2010, the current management team's first full year of operations, the Company's focus was the appraisal of its significant Viking light oil resource with an emphasis on optimizing the drilling and completion technology. With continual refinement, the Company has implemented several cost and time saving changes in the completion of its horizontal Viking wells and is now extremely pleased that the majority of wells are placed on production in less than a week after the commencement of completion operations. Well costs in the greater Dodsland area continue to decrease, with costs for drilling and completions on the Company's 2011 wells averaging approximately $835 thousand, tie in costs averaging $95 thousand and all in on stream costs averaging $930 thousand per well.
In 2011, the Company evolved into a large scale development phase of its Viking resource. With 33 wells drilled in 2010 and 52 wells drilled to date in 2011, Novus is now one of the most active drillers in the industry in the Viking play.
The Company has been pleased with the performance of the wells and the stable nature of the production to date from its 2011 drilling program. Novus has drilled wells in its Flaxcombe, Whiteside, Kerrobert, Forgan, Plato, Plenty and Dodsland sub regions. Results from the Flaxcombe sub region have been particularly encouraging. The Company has determined that these previously undrilled lands are characterized by two distinct cycles in the Viking formation. The Company has now drilled 18 horizontal wells targeting both the lower and upper cycle. Virgin pressures realized on these wells have been up to 7,600 KPa which are amongst the highest pressures the Company has recorded in any of its Viking wells drilled thus far. Novus has mapped over ten sections of its lands where both cycles are present and expects this area will allow for the development of each cycle independently. This will add at least 80 drilling locations to the Company's existing drilling inventory of 573 net Viking oil locations. Reserves and production growth will also significantly increase as development of the two distinct Viking cycles progresses. Production from the recently drilled wells in the area has exceeded expectations, and is supportive of the significant longer term potential the Company believes the area exhibits.
Upgrades at Novus' owned and operated facilities at Whiteside and Avon Hills continued in the third quarter increasing fluid handling capacities at each facility. An exclusive agreement was signed with a third party late in the quarter to take all of the Company's wet solution gas from Whiteside. Construction of a 4 inch sales gas line as well as an 6 inch emulsion line from the Whiteside facility to the meter station is almost complete. Five additional wells in the area will be tied in and are expected to be on-stream conserving gas by mid December. Once the infrastructure routing has been completed to the west of the Whiteside facility, Novus plans on bringing in additional third party gas volumes. The processing and transportation fees Novus will earn will reduce ongoing operating costs.
With the Company's success in Flaxcombe this year, and aggressive development planned for the area in 2012, Novus is in the process of preparing to run a major group/emulsion line to the center of the Flaxcombe field which will serve as a gathering point for oil and gas produced from the newly drilled wells. The existing 18 wells in the area will be also be tied into this facility and then sent up to Whiteside. Novus expects to have an entire closed system in the area which will alleviate downtime due to weather or other bottlenecks. Construction on this project is expected to commence early in the new year. Once completed, the system will greatly enhance operating efficiencies and reduce area operating costs.
The Viking play continues to drive strong economics. The Company is enjoying predictable production, operational efficiencies, favorable royalties and high netbacks.
OUTLOOK
Novus will continue to execute its business plan of creating sustainable growth in reserves, production and funds flows through developing its high quality, long life, Viking oil assets at Dodsland, Saskatchewan. The Company plans on maintaining an aggressive drilling program on its current acreage, and will continue its efforts to further consolidate and expand its position within the Dodsland area through further acquisitions.
Novus delivered strong operational and financial results and executed a record development drilling program in the third quarter. The Company remains on track to achieve its exit production rate of 3,000 boe/d, and is currently producing an estimated 2,850 boe/d based on field reports.
The Company has more than 573 net low risk drilling locations on its Viking lands. The depth of the Company's drilling inventory positions the Company well for long term sustainable growth in production, reserves and net asset value. With operatorship of the vast majority of its Saskatchewan acreage, Novus enjoys significant flexibility on the timing and scale of its capital programs going forward.
The Company has grown on the increasing strength of its cash generating capabilities, and this positive momentum will continue to fuel its growth in 2012. Novus will continue to be active in drilling its core Viking oil play in Dodsland in 2012 and remains focused on the acceleration of its growth profile.
INTERNATIONAL FINANCIAL REPORTING STANDARDS
On January 1, 2011, the Company adopted International Financial Reporting Standards ("IFRS") for financial reporting purposes, using a transition date of January 1, 2010. The unaudited condensed interim financial statements as at and for the three and nine months ended September 30, 2011, have been prepared in accordance with IFRS. Comparative information has been restated from the previously published financial statements which were prepared in accordance with Canadian Generally Accepted Accounting Principles ("GAAP").
NON-GAAP FINANCIAL MEASUREMENTS
Included in this press release are references to certain financial measures commonly used in the oil and gas industry, such as funds flow from operations, operating netbacks and net debt. These measures have no standardized meanings, are not defined by IFRS or Canadian GAAP, and accordingly are referred to as non-GAAP measures.
The Company considers funds flow from operations to be a key measure as it demonstrates the Company's ability to generate the cash necessary to repay debt and to fund future growth through capital investment. Novus determines funds flow from operations as cash provided by (used in) operating activities prior to changes in non-cash working capital items and decommissioning expenditures. The determination of the Company's' funds flow from operations may not be comparable to the same as reported by other companies.
Operating netbacks are calculated by deducting royalties, field operations and transportation and marketing expenses from production revenue. Operating netbacks are used by management to assess operating results between periods and between peer companies as they provide an indication of results generated by the Company's principal business activities before the consideration of how these activities are financed or how the results are taxed. Novus' reported amounts may not be comparable to similarly titled measures reported by other companies. These terms should not be considered an alternative to, or more meaningful than, cash provided by operating, investing and financing activities or net income as determined by IFRS or Canadian GAAP as an indicator of the Company's performance or liquidity.
Net debt is calculated as current assets less all current liabilities, including any bank debt. The Company monitors net debt as part of its capital structure.
OTHER MEASUREMENTS
Reported production represents Novus' ownership share of sales before the deduction of royalties. Where amounts are expressed on a barrel of oil equivalent ("boe") basis, natural gas has been converted at a ratio of six thousand cubic feet to one boe. This ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Boe's may be misleading, particularly if used in isolation. References to natural gas liquids ("liquids") include condensate, propane, butane and ethane and one barrel of liquids is considered to be equivalent to one boe.
Novus Energy Inc. is a well positioned, junior oil and gas company with a proven management team committed to aggressive, cost-effective growth of high netback light oil reserves and production. Novus will continue to grow through a targeted acquisition and consolidation strategy coupled with development and exploration drilling.
Novus Shares trade on the TSX Venture Exchange under the symbol NVS. Novus currently has 169.0 million common shares outstanding.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release will not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. Such securities have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States, or to a U.S. person, absent registration, or an applicable exemption therefrom.
ADVISORY REGARDING FORWARD LOOKING STATEMENTS
Certain disclosures set forth in this press release constitute forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believes", "budget", "continue", "could", "estimate", "expects", "forecast", "intends", "may", "plan", "predicts", "projects", "should", "will" and other similar expressions. All estimates and statements that describe the Company's future, goals, or objectives, including Management's assessment of future plans and operations, may constitute forward-looking information under securities laws. Forward-looking statements involve known and unknown risks and uncertainties which include, but are not limited to: exploration, development and production risks; assessments of acquisitions; reserve measurements; availability of drilling equipment; access restrictions; permits and licenses; aboriginal claims; title defects; commodity prices; commodity markets; transportation and marketing of crude oil, liquids and natural gas; reliance on operators and key personnel; competition; corporate matters; funding requirements; access to credit and capital markets; market volatility; cost inflation; foreign exchange rates; general economic and industry conditions; environmental risks; Kyoto protocol; and government regulation and taxation.
Forward-looking statements relate to future events and/or performance and although considered reasonable by Novus at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated in the statements made. Novus does not undertake any obligation to publicly update forward-looking information except as required by applicable securities law.
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