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Exall Energy Corporation Announces Results For The Three Months Ended March 31, 2013

Exall Energy Corporation Announces Results For The Three Months Ended March 
31, 2013 
CALGARY, May 15, 2013 /CNW Telbec/ - Exall Energy Corporation ("Exall" or the 
"Company") (TSX:EE EE.DB) is pleased to announce its financial and operating 
results for the three months ended March 31, 2013. Exall's public filings 
can all be found at www.exall.com or www.sedar.com. 
Highlights: 


    --  A first quarter 2013 production average of 1,303 boe per day a
        17 percent increase over the same quarter in 2012, the second
        highest quarterly average in the Compay's history,
    --  A first quarter 2013 Net Back of $53.71 a 4 percent increase
        over the same quarter in 2012, the third highest quarterly
        average in the Company's history while commodity prices where
        only the fifth highest in the most recent eight months,
    --  A first quarter 2013 cash flow from operations of $5,024,000 a
        22 percent increase over the same quarter in 2012, the second
        highest quarterly average in the Company's history,
    --  A 20% reduction in the debt to cash flow, excluding convertible
        debentures due March 31, 2017, to 2.0:1 at March 31, 2013 from
        the 2.5:1 at December 31, 2012,
    --  Drilled, completed and tied-in 1.0 gross (0.80 net wells)
        development well (15-25) during the first quarter of 2013,
    --  Drilled 1.0 gross (0.80 net wells) exploration well (11-31)
        during the first quarter of 2013, further refining and
        correlating the 2012 3D Seismic program,
    --  The 11-31 well was cased through the Wabamun and the 11.5 meter
        thick zone was perforated and hydrocarbon fracture stimulated
        and swab tested, recovering first frac oil and then
        transitioning to light oil and formation water, and
    --  Completed the Second Derivative analysis of the 2012 3D Seismic
        program, with the interpreted channel anomaly showing a
        remarkable correlation to the productive and non-productive
        well penetrations in the North Waterflood Area.

HIGHLIGHTS                                Three months ended
                                                    March 31

In thousands of dollars                   2013   2012      %
                                                      change

Financial ($)                                               

Gross revenue                            9,753  8,604     13

Funds from operations                    5,024  4,127     22

  Basic per share                         0.08   0.07     14

  Diluted per share                       0.04   0.06   (33)

Net income (loss) before tax             1,732  1,529     13

  Basic per share                         0.03   0.02     50

  Diluted per share                       0.01   0.02   (50)

Net income (loss)                          896  1,065   (16)

  Basic per share                         0.01   0.02   (50)

  Diluted per share                       0.01   0.02   (50)

Capital expenditures, net                6,879 28,200   (76)
                                                       

HIGHLIGHTS                                Three months ended
                                                    March 31
                                          2013   2012      %
                                                      change

Operations                                                  

Daily production                                            

  Crude oil (bbl)                        1,218  1,004     21

  Natural gas liquids (bbl)                 19     15     27

  Natural gas (mmcf)                       394    598   (34)

Total daily production (boe @ 6:1)       1,303  1,118     17

Netback per boe (6:1) ($)                53.71  51.89      4
                                                       

Corporate Developments

Outlook

Exall is a light oil-weighted company with high operating margins. Starting 
from a modest production base of light oil and gas, the Company has 
historically, excluding the 2012 Reservoir conformance challenges in the south 
waterflood, shown itself capable of setting and achieving ambitious production 
and cash flow targets (as can be seen in the chart below reflecting 
production), production growth that currently translates to 41.9 percent 
compounded annually from 2007. Exall will continue to focus on organic growth 
through exploitation and expansion of its existing oil producing properties.

http://files.newswire.ca/357/EE-05152013.pdf

Evaluation of the 2012 Seismic program data continued through Q1 of 2013. 
Inversion and AVO processing was completed in late 2012 which allowed the 
calculation of seismic attributes, an important step in the interpretation of 
a 3D seismic data set and used in the evaluation of potential targets. The 
derived Second Derivative is frequently used in the exploitation of channel 
sands, the so-called "channel finder" in geophysical terminology. Drilling to 
date has been defined utilizing the amplitude anomaly of the Watt Mountain 
interval, which is host to the Gilwood channel sands. Successful wells to date 
include the original "Seismic Channel" discovery well (10-24) completed in 
January 2012 and three additional oil wells drilled and placed on production 
through 2012 (11-24, 7-25 and 2-25 subsequently converted to water injection). 
These three wells are currently producing 750 BOPD (530 net).

Three infill wells between the North Seismic Channel discovery well and the 
Central Waterflood were also drilled and completed in 2012. The locations were 
chosen on the basis of the interpreted continuity between the North and 
Central areas and all of the wells penetrated more than three meters of 
channel sand. One continues to produce more than 290 BOPD (210 net) and the 
other two are awaiting work overs due to problems encountered during 
completion.

Drilling in Q1 of 2013 continued on the basis of the amplitude anomaly map. 
Both of the wells drilled confirmed sand presence, although thinner than 
anticipated. The first well (15-25) was fracture stimulated and is currently 
recovering fracture fluid (water) and oil. The second well (11-31) did not 
encounter reservoir quality porosity and has been abandoned in the Gilwood 
zone. The well was cased through the Wabamun zone for further cased-hole 
testing. Log-based parameters were significantly superior to the previously 
drilled and tested wells, located 4.5 km to the south, both in 
porosity-thickness and calculated hydrocarbon saturation.

Subsequent to drilling the wells, the Second Derivative map has been refined 
and integrated with well control. The interpreted channel anomaly shows a 
remarkable correlation to the productive and non-productive well penetrations 
in the North Waterflood Area. As a result of this work drilling plans have 
been initiated to confirm the validity of the correlation. The completed step 
out well 15-25 referenced above, appears to be drilled into the edge of the 
Second Derivative anomaly. The Company plans to plug back the 15-25 well and 
drill a short sidetrack to confirm this interpretation. This is a cost 
effective means of optimizing reservoir penetration already put to use during 
the drilling of three successful North WF wells (10-24, 2-25 and 7-25).

As noted previously, the 11-31 well was cased through the Wabamun for further 
testing. While the Company was aware that a vertical, fracture stimulated 
completion was likely to produce high water cuts, the intent was to prove 
movable light hydrocarbon presence in this area, which is located 4.5 km and 
16 meters higher structurally than the area tested earlier by Exall. The 11.5 
meter thick zone was perforated in the middle and hydrocarbon fracture 
stimulated. The well was swab tested, recovering first frac oil and then 
transitioning to light oil and formation water. The well is currently standing 
as a potential horizontal sidetrack and multi-frac candidate. Exall is seeking 
joint venture interest to advance the testing program.

Exall's debt to cash flow at March 31, 2013, excluding the Convertible 
Debentures was 2.0 times. This was a 20% improvement from the 2.5 times at 
December 31, 2012. It is Exall's goal to continue to reduce its overall debt 
exposure to exit the 2014 year with a fourth quarter annualized cash flow that 
would see the debt to cash flow at December 31, 2014, including the 
Convertible Debentures, being in the order of 1.0 - 1.5 times. This would then 
give Exall 27 months to establish a $23.0 million fund to pay out the 
Convertible Debentures in March of 2017, subject to the Debentures not being 
converted or repurchased.

Overview

Exall's average daily production for the first quarter of 2013 increased 17 
percent to 1,303 barrels of oil per day ("boe/d") from 1,118 boe/d in the 
first quarter of 2012. As at May 13, 2013 Exall's net production rate was as 
outlined below:
                                                                

PRODUCTION          ESTIMATED  Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012
BY                     Q2 2013
REGION

Mitsue Waterflood                                                     
-    Totals

  Oil      bbls/d        1,235   1,216   1,041     884     993     993

  Natural  mmcf/d          343     394     297     209     206     331
  Gas

  Liquids  bbls/d            8      19      14       8      18       7
  (bbls/d)
           Boe/d         1,300   1,301   1,105     927   1,046   1,054

Bow Island                                                            
Heavy Oil

  Oil      bbls/d            1       2       2       2       2       2

  Natural  mmcf/d            -       -       -       -       -       -
  Gas

  Liquids  bbls/d            -       -       -       -       -       -
           Boe/d             1       2       2       2       2       2

Corporate                                                             
Totals

  Oil      bbls/d        1,236   1,218   1,042     897   1,004   1,004

  Natural  mmcf/d          343     394     297     471     464     598
  Gas

  Liquids  bbls/d            8      19      14      16      25      15
           Boe/d         1,301   1,303   1,106     991   1,106   1,118

Exall's estimated second quarter 2013 average daily production at May 13, 2013 
is approximately 1,301 boepd. The Company groups the Waterflood Approvals in 
the Marten Mountain area into three project areas; the South WF, Central WF 
and North WF. The production issues faced in these three project areas are 
being successfully addressed, as described below.

Reservoir conformance issues presented challenges in the south waterflood 
during 2012. Optimization efforts aimed at improving well performance and 
oil recovery have had a positive effect. Polymer treatments were performed 
on two injection wells resulting in reduced water cuts in one adjacent well, 
along with an increase in oil production. Current production from the South WF 
area is 403 boepd (292 boepd net).

The Central WF continues to improve as the result of well optimization and the 
installation of an Electric Submersible Pump (ESP) into the newest producing 
well. The new oil well, which was producing 165 boepd, is now producing at 353 
boepd (254 boepd net). The Central WF project is currently producing 670 boepd 
(467 boepd net).

A water source well was drilled, completed and equipped during Q4 2012 and 
injection of water has begun in the North WF Approval area. Optimization 
efforts in the North WF and the addition of two producing wells have increased 
production to an average of 783 boepd (534 boepd net).

Results of Operations

Oil and gas exploration and development expenditures were $6,698 for the first 
quarter of 2013. During the first quarter of 2013 the Company participated 
in the drilling of 2.0 gross oil wells (1.59 net) in the Marten Mountain / 
Mitsue area. Oil and gas property expenditures were $28,165 for the first 
quarter of 2012. During the first quarter of 2012 the Company spud 5.0 gross 
wells (3.28 net) in the Marten Mountain / Mitsue area.

The Company has acquired 480 gross (352 net) acres of undeveloped land in the 
Mitsue area, during the fiscal period ended March 31, 2013. As at March 31, 
2013, the Company had 189,120 acres (140,843 acres net) of undeveloped land in 
Alberta, Canada.

Production for the first quarter of 2013 of 1,303 boe per day represents a 17% 
increase over 2012. Funds from operations for the first quarter of 2013 of 
$5.0 million or $0.08 per share was primarily the result of the increased 
production, decreased commodity prices received during the year (Exall's 
prices received were down 2% in Q1 2013 averaging $83.19 per boe compared to 
$84.54 per boe in 2012), increased royalty prices paid during the year 
(Exall's royalties paid were up 4% during the first quarter of 2013 averaging 
$19.58 per boe compared to $18.77 per boe in 2012), and decreased operating 
costs paid during the first quarter of 2013 (Exall's operating costs were down 
29% during the first quarter of 2013 averaging $9.89 per boe compared to 
$13.88 per boe in 2012).
                                              
                                 Three months ended
                                            March 31


                                               % 
Netback per boe (6:1) $        2013  2012  Change 
                                                 
Production revenue               83.19 84.54     (2) 
Royalties                        19.58 18.77       4 
Operating expenses                9.89 13.88    (29) 
Operating netbacks ($/boe)       53.71 51.89       4 
Net income, as a result, for the first quarter of 2013 was $896 or $0.01 per 
share compared to a net income for the first quarter of 2012 of $1,065 or 
$0.02 per share. 
About Exall 
Exall is a junior oil and gas company active in its business of oil and gas 
exploration, development and production from its properties in Alberta. Exall 
Energy is currently developing the new Mitsue area "Marten Mountain" discovery 
in north-central Alberta. 
Exall Energy currently has 66,634,854 common shares outstanding. The Company's 
common shares are listed on the Toronto Stock Exchange under the trading 
symbol EE. The Company's convertible debentures are listed on the Toronto 
Stock Exchange under the trading symbol EE.DB. 
Reader Advisory 
This news release contains forward-looking statements, which are subject to 
certain risks, uncertainties and assumptions, including those relating to 
results of operations and financial condition, capital spending, financing 
sources, commodity prices and costs of production. By their nature, 
forward-looking statements are subject to numerous risks and uncertainties 
that could significantly affect anticipated results in the future and, 
accordingly, actual results may differ materially from those predicted. A 
number of factors could cause actual results to differ materially from the 
results discussed in such statements, and there is no assurance that actual 
results will be consistent with them. Such factors include 
fluctuatingcommodity prices,capital spending and costs ofproduction, and 
other factors described in the Company's most recent Annual Information Form 
under the heading "Risk Factors" which has been filed electronically by means 
of the System for Electronic Document Analysis and Retrieval ("SEDAR") located 
at www.sedar.com. Such forward-looking statements are made as at the date of 
this news release, and theCompany assumes no obligation to update or revise 
them, either publicly or otherwise, to reflect new events, information or 
circumstances, except as may be required under applicable securities law. 
For the purposes of calculating unit costs, natural gas has been converted to 
a barrel of oil equivalent (boe) using 6,000 cubic feet equal to one barrel 
(6:1), unless otherwise stated. The boe conversion ratio of 6 mcf: 1 bbl is 
based on an energy equivalency conversion method and does not represent a 
value equivalency; therefore boe may be misleading if used in isolation. This 
conversion conforms to the Canadian Securities Regulators' National Instrument 
51-101 - Standards of Disclosure for Oil and Gas Activities. 
Exall Energy Corporation 
Frank S. Rebeyka Vice Chairman Tel: 403-815-6637  Roger N. Dueck President & 
CEO Tel: 403-237-7820 x 223 info@exall.com 
Please visit Exall Energy's website at:www.exall.com 
Renmark Financial Communications Inc. Maurice 
Dagenais:mdagenais@renmarkfinancial.com Nadia 
Marks:nmarks@renmarkfinancial.com Tel.: (514) 939-3989 or (416) 644-2020 
www.renmarkfinancial.com 
PDF available at:  
http://stream1.newswire.ca/media/2013/05/15/20130515_C7151_DOC_EN_26753.pdf 
SOURCE: EXALL ENERGY CORPORATION 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/May2013/15/c7151.html 
CO: EXALL ENERGY CORPORATION
ST: Alberta
NI: OIL ERN  
-0- May/15/2013 11:41 GMT