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CALGARY, ALBERTA -- (Marketwire) -- 03/18/13 -- Anderson Energy Ltd. ("Anderson" or the "Company") (TSX: AXL) is pleased to announce its operating and financial results for the fourth quarter and year ended December 31, 2012.
HIGHLIGHTS-- The Company completed its Cardium horizontal light oil winter drilling program using slick water frac technology. Initial production results were vastly superior to previously used fracture stimulation techniques. The average initial production rate over the first 30 days for the seven wells that used this technology was 455 BOED. With the completion of the Company's winter drilling program, all of its drilling commitments have been fulfilled.-- Anderson closed all of the previously announced property dispositions prior to year end. Approximately $74 million in properties were sold during 2012.-- Bank debt was reduced significantly to $48.1 million at December 31, 2012 ($88.7 million - 2011) and bank loans plus cash working capital deficiency was reduced to $64.5 million ($132.7 million - 2011).-- Funds from operations were $5.7 million for the fourth quarter of 2012 and $29.6 million for the year ended December 31, 2012.-- Production in the fourth quarter of 2012 was 4,500 BOED, which includes 645 BOED related to properties sold in the quarter. Net of all of the properties sold, the Company estimates first quarter 2013 production to be approximately 3,900 to 4,200 BOED (43% oil and NGL).-- The Company's operating netback per BOE increased throughout the year to $26.50 per BOE in the fourth quarter of 2012 compared to $22.71 per BOE for the year. Cardium operating netbacks averaged $44.32 per BOE in the fourth quarter of 2012 and $44.73 per BOE for the year.-- Proved plus probable ("P&P") BOE reserves are 17.8 MMBOE at December 31, 2012.-- Cardium P&P reserves are 13.3 MMBOE representing 75% of total P&P reserves volumes and 90% of total P&P reserves value on a pre-tax 10% net present value ("NPV 10") basis. Full cycle three year average finding, development and acquisition costs ("FD&A") including future development capital in the Cardium play were $36.77 per BOE on a total proved ("TP") basis and $25.81 per BOE on a P&P basis. For the same three year period, the Cardium P&P recycle ratio was 2.03.-- Oil and NGL represent a larger proportion of total reserves: 39% of the Company's proved developed producing ("PDP") reserves, 43% of TP reserves and 48% of P&P reserves compared to 33%, 29% and 31% respectively at December 31, 2011. Cardium properties represent 96% of the Company's P&P oil and NGL reserves and 55% of the Company's P&P natural gas reserves (primarily solution gas).-- Anderson's total P&P pre-tax NPV 10 reserves value at December 31, 2012 was $224.8 million.-- 232 additional gross (148 net) Cardium drilling locations (97% Company operated) have been identified of which only 32% on a net basis are recognized as P&P locations in the GLJ Report (as defined herein).-- The Company's average oil price was $83.21 per bbl for the year. The Cardium oil production is light, sweet oil that was subject to an average price differential of $7.87 US per bbl in 2012.SUMMARYIn 2012, the Company entered into and continues to pursue strategicalternatives. Progress made to date includes:-- selling $74 million of non-strategic assets, which were primarily natural gas assets and other miscellaneous properties, and although production on a BOED basis is lower, the remaining production is more valuable as it is primarily related to the higher netback Cardium assets;-- reducing bank debt to $48.1 million at December 31, 2012 from $106.7 million at March 31, 2012 with the proceeds from the sale of assets;-- restructuring all of its shallow gas and Cardium drilling commitments such that by the end of January 2013, Anderson had completed all of its drilling commitments; and-- reducing its head office staff count and head office leasing costs.
