Excelsior Energy Limited reports results for the three and six month periods ended June 30, 2008. The Company continues to focus efforts on oil sands exploration and appraisal in the Hangingstone and West Surmont areas in the Athabasca oil sands region of Alberta. The success of the core delineation program at Hangingstone during the past winter has confirmed the resource potential of this asset. An independent resource evaluation by McDaniel and Associates dated July 1, 2008 (“the Report”), as announced on July 29, 2008, supports an economically feasible commercial project, allowing Excelsior to move towards an application for a development pilot project at Hangingstone by mid-2009.
“The Report confirms the commercial potential of the Hangingstone asset and supports Excelsior’s plan for a 10,000 bopd SAGD demonstration project application in Q2 2009,” said David Winter, Excelsior’s President and Chief Executive Officer. “The report results triggered a financing of up to $20 million to fund the 2008/2009 winter drilling program.”
Second Quarter Highlights
• Core analysis from the core drilling programs was completed on May 28, 2008.
• Excelsior engaged an experienced oil sands contractor to assist in regulatory application and environmental assessments for the Phase I production project; fieldwork commenced in July 2008.
• Excelsior contracted Paradigm Strategic Consulting, an industry leader in digital subsurface asset management, to accelerate the development planning of a Phase 1, 10,000 barrels of bitumen per day SAGD project at Hangingstone.
• The Company restructured its holdings in Excelsior Energy North Sea Limited (“EENS”) exchanging all shares of EENS for shares in ENS Energy Ltd. (“ENS”), a newly incorporated Alberta private company. Subsequent to the restructuring, ENS issued 25% of its common shares in a private placement for gross proceeds of $1.0 million. The financing had the effect of reducing the Company’s interest in ENS from 100% to 75% as Excelsior did not participate in the financing. The transaction segregated the Company’s oil sands and North Sea assets, providing access to capital markets for these opportunities independently.
Third Quarter Outlook
• Excelsior entered into an agreement on August 6, 2008 to raise up to $20 million through a private placement financing on a best efforts basis. The Company plans to issue a combination of common shares at $0.29 per share and common shares issued on a flow-through basis at $0.34 per share. The financing is expected to close in early September 2008.
• An independent engineering report on the Hangingstone asset was completed by McDaniel and Associates in July 2008.
• Excelsior will submit an oil sands exploration application to Alberta Energy Resources Conservation Board permitting the Company to engage in seismic and drilling activities at Hangingstone and West Surmont for the 2008/2009 winter program.
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