COBRA EARNS $528,646 IN FISCAL 2008
April 1, 2009
Vancouver, B.C. - Cobra Venture Corporation ("Cobra" or the "Company") (TSX Venture : CBV) is pleased to announce that the Company earned a record $528,646 or $0.04 per common share for the year ended November 30, 2008. Complete financial results and management’s discussion and analysis related thereto can be found on SEDAR at www.sedar.com.
During fiscal 2008, Cobra achieved several significant milestones including the following:
- Completed a private placement of 1 million flow-through units for proceeds of $300,000.
- Sold 480 (240 net) acres of lands in the Viewfield area of Saskatchewan for $790,000 resulting in a gain of $330,737.
- Entered into a multi-well farm out on 640 (480 net) acres in the Viewfield area with a commitment to drill two 1-mile horizontal Bakken wells subject to a gross overriding royalty of 20%.
- Drilled a successful oil well (80% interest) in the Willesden Green area with expected tie-in during 2009.
Revenue, consisting of oil and natural gas royalty and production revenue, during the year ended November 30, 2008, totalled $1,033,684, an increase of 27% over 2007. Other income of $89,847, including interest and lease income, was up significantly from $42,304 achieved during 2007. Operating expenses were $643,301 during 2008, an increase of 64% due to higher management fees, professional fees, consulting fees, stock-based compensation, and general office expenses. Net income for the year ended November 30, 2008 was $528,646 ($0.04 per common share) compared to a net loss of $255,468 ($0.02 per common share) during 2007. Included in the 2008 net income was a gain of $330,737 on the sale of land recorded during the first quarter of the year.
During the fourth quarter of fiscal 2008, Cobra generated oil and natural gas royalty and production revenue of $332,960. Other income was $6,157 and operating expenses were $255,304 resulting in net income of $262,151 ($0.02 per common share).
As at November 30, 2008, Cobra had no debt and positive working capital of $1,105,822 ($0.07 per common share) compared to working capital of $884,815 as at November 30, 2007. The Company remains well funded with a cash balance of $1,784,900 (2007 - $878,075).
As at March 31, 2009, Cobra has 14,940,750 common shares issued and outstanding.
The Company’s southeast Saskatchewan lands continue to produce monthly revenue on a royalty basis from 9 wells. Cobra owns 80% of the freehold mineral rights on these lands and has retained a non-convertible 16% gross overriding royalty held under the terms of a previous lease agreement. The Company has also entered into a multi-well farm out on 640 (480 net) acres in the Viewfield area with a commitment to drill two 1-mile horizontal Bakken wells subject to a gross overriding royalty of 20%.
At Pembina, the Company has earned a 27% working interest in 2 natural gas wells and is receiving production revenue from 1 well with 1 well pending recompletion. The Company has subsequently earned a 40% net working interest in 4,200 acres where an additional 10-12 drill targets have been identified and are being evaluated for future development.
In the Alderson area, the Company has obtained a 50% net working interest in 320 acres of land. A 3D program has been completed by a third party at no cost to Cobra. The evaluation by this 3D seismic seems to indicate the presence of a large high anomaly, which has the potential for a new oil pool. The anomaly is offset by a smaller anomaly that produced 98,000 barrels from depths of only 900 meters. Cobra holds a 25% working interest in the existing lands and 3D seismic.
Willesden Green, Alberta
The first of two locations has now been drilled in the Willesden Green area. The wellbore encountered 5 meters of net oil pay including 1 meter of conglomerate. The well has now been cased, perforated and fracture stimulated. Following the fracing, the well flowed oil to surface from 2,100 meters, however, the well has now been shut in to allow for pressure build-up data to be acquired. Following this acquisition of data, it is anticipated that the well will be tied into a nearby pipeline and put into production. The Company has acquired an 80% working interest ownership in this oil well, subject to applicable royalties.
The Company has acquired the oil and natural gas rights to the Nisku zone and plans to re-enter an existing oil well that was abandoned in the 1980’s with historical production of between 20 and 30 bbls/d of light oil. The surface audit of the existing well site has been completed by the current owner of the wellbore and Cobra has vetted this environmental audit and is fully satisfied that no environmental liabilities exist with the old well site. The potential re-entry is anticipated to re-establish the production of approximately 20-30 barrels of light oil per day that existed when the well was abandoned in the 1980’s. Cobra owns a 20% working interest in 160 acres (32 net acres) but may earn additional percentages by farm-in from the current owners.
The Company has entered into an agreement to acquire a 20% working interest in one section of land in the Valhalla area. The section shows several interesting sands that have high natural gas readings identified during drilling of an old abandoned well. The Company has identified several natural gas zones which correlate to nearby natural gas wells drilled to the Bluesky-Gething formation that produced between 1 Bcf and 2.5 Bcf in offset wells. Also of interest is the shallower Paddy-Cadotte sand package that produced over 3.8 Bcf in a nearby wellbore. This land acquisition is anticipated to close soon and once acquired, a location has been identified for winter drilling in Cobra’s 2009 budget. The Company will also have the option to earn an additional 30% interest for a total 50% working interest in this section of land. Initial production rates for the offset Bluesky well were 1.5 mmcf/d, while the Paddy production rates were over 4 mmcf/d for the first year in a well 2 miles to the south of these lands.
Morinville area, Alberta
During the year ended November 30, 2008, the Company acquired a 40% net working interest in one section of land over a 5 year crown lease.
Inga Area, N.E. British Columbia
The Company holds 640 (480 net) acres of crown leased land underlying a significant structure in this area. Cobra’s net working interest is 75%, and additional seismic structures are being reviewed with the intent to accumulate a larger land position in the prospect area. The Company is awaiting results from some Montney horizontal wells drilled in the immediate vicinity of its Inga play. Upon analysis, the decision to drill a vertical or horizontal Montney natural gas well will be made along with the conclusion of current efforts to increase the land base in the offsetting acreage. Three Montney wells are to be released and a land sale is taking place prior to that release. Once data on the wells is available, the Company will decide on the depth to be drilled and the type of completion to be used. Cobra is in discussion with other landholders in the area for pooling and participation in a possible Montney well.
Cobra has filed all required information and reports relating to reserve data and other oil and natural gas information for the financial year ended November 30, 2008, as required pursuant to National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. Copies of these documents may be obtained electronically from SEDAR at www.sedar.com.
Cobra Venture had a successful year and achieved many of the goals set out by management. Despite the current challenging economic environment, Cobra remains well financed with no debt and positive working capital. The Company is unique in that the majority of its revenues are derived from overriding royalty interests which require no capital outlay and no ongoing maintenance costs. This allows Cobra to continue to build its cash balance while effectively timing the deployment of capital into new projects.
About Cobra Venture Corporation
Cobra Venture Corporation is an emerging energy corporation focused on the acquisition and development of strategic oil and natural gas reserves in Western Canada. Cobra is currently exploring and developing oil and natural gas interests in SE Saskatchewan, Central Alberta and NE British Columbia. Cobra is actively involved in prospect generation, and secures working interests at an early stage through farm out and royalty agreements. Cobra retains key ownership positions in multiple projects and employs this strategy to minimize shareholder dilution and maximize shareholder asset value.
The common shares of the corporation trade on the TSX Venture Exchange under the symbol CBV.
FOR FURTHER INFORMATION PLEASE CONTACT:
|Cobra Venture Corporation
Daniel B. Evans
President and CEO
Canadian Toll Free (888) 888-9122
US Toll Free (888) 888-9123
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This press release contains “forward looking statements” within the meaning of applicable Canadian securities legislation. The words “could”, “plan”, “expect”, “estimate”, “anticipate”, “project”, “predict”, “intend”, “may”, “potential”, “believe” and similar expressions and variations thereof are forward-looking statements. These include, but are not limited to, statements respecting anticipated business activities, anticipated drilling, completion and tying in of future oil and natural gas wells, planned land acquisitions and other expenditures, corporate strategies, and participation in projects and financing and any other statements that are not historical facts. Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Corporation's periodic filings with Canadian securities regulators. Although the Corporation believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and actual results may vary materially from these forward-looking statements. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The reader is cautioned not to place undue reliance on forward-looking statements. The Corporation undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this filing, except as required by applicable law. You should carefully review the cautionary statements and risk factors contained in this and other documents that we file from time to time with the Canadian securities regulators.