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Press release from Marketwire

AvenEx Energy Corp. Announces Second Quarter 2011 Results

Friday, August 12, 2011

AvenEx Energy Corp. Announces Second Quarter 2011 Results18:23 EDT Friday, August 12, 2011CALGARY, ALBERTA--(Marketwire - Aug. 12, 2011) -AvenEx Energy Corp. ("AvenEx" or the "Company") (TSX:AVF) is pleased to announce the financial and operational results for the second quarter ended June 30, 2011 and to announce they have filed the complete Management Discussion and Analysis and Unaudited Interim Consolidated Financial Statements. Certain selected financial and operational information is set out below and should be read in conjunction with AvenEx's financial statements and related Management Discussion and Analysis. These filings will be available on the Corporation's SEDAR profile at www.sedar.com.TOTAL CONSOLIDATED FINANCIAL SUMMARY ---------------------------------------------------------------------------- For the three months ended June 30 -------------------------------------(in thousands of dollars except for % per share amounts) 2011 2010 Change ----------------------------------------------------------------------------Total Revenue $239,284 $116,178 106 Funds From Continuing Operations (FFCO)(1) $11,986 $7,414 62 FFCO(1)Per Share - Basic $0.23 $0.17 35 Funds From Operations (FFO)(1) $12,096 $8,007 51 FFO Per Share(1)- Basic $0.23 $0.19 21 Dividends $7,139 $7,711 (7) Dividends Per Share - Basic $0.135 $0.18 (22) Dividend Payout Ratio(2) 59% 96% 39 Net Income from Continuing Operations (NICO) $14,521 $3,549 309 NICO Per Share - Basic $0.27 $0.08 238 Net Income (loss) $14,475 $3,848 276 Net Income (loss) Per Share - Basic $0.27 $0.09 200 Total Assets $450,849 $324,032 39 Working Cap. excluding assets held for sale ($38,050) $14,044 (371) Mortgages (assets held for sale) $5,512 $15,793 65 Wtd. Avg. Shares Outstanding - Basic 52,877,930 42,789,014 24 Shares Outstanding 52,877,930 42,865,654 23 TOTAL CONSOLIDATED FINANCIAL SUMMARY -------------------------------------------------------------------------- For the six months ended June 30 ------------------------------------(in thousands of dollars except for % per share amounts 2011 2010 Change--------------------------------------------------------------------------Total Revenue $449,264 $337,196 33 Funds From Continuing Operations (FFCO)(1) $26,384 $20,545 28 FFCO(1)Per Share - Basic $0.50 $0.48 4 Funds From Operations (FFO)(1) $26,633 $21,732 23 FFO Per Share(1)- Basic $0.50 $0.51 (2)Dividends $16,656 $15,358 8 Dividends Per Share - Basic $0.32 $0.36 (11)Dividend Payout Ratio(2) 63% 71% 11 Net Income from Continuing Operations (NICO) $12,550 $1,281 880 NICO Per Share - Basic $0.24 $0.03 700 Net Income (loss) $12,731 $1,629 651 Net Income (loss) Per Share - Basic $0.24 $0.04 500 Total Assets $450,849 $324,032 39 Working Cap. excluding assets held for sale ($38,050) $14,044 (371)Mortgages (assets held for sale) $5,512 $15,793 65 Wtd. Avg. Shares Outstanding - Basic 52,871,331 42,616,763 24 Shares Outstanding 52,877,930 42,865,654 23 --------------------------------------------------------------------------(1) Funds from continuing operations ("FFCO"), funds from continuing operations per share, funds from operations ("FFO"), Funds from Operations per share are not recognized measures under International Financial Reporting Standards (IFRS). Funds from Operations is calculated by taking cash provided by operating activities on the statement of cash flows adjusted for the effect of changes in non-cash working capital and asset retirement costs incurred. Management believes that these measures are useful supplemental measures to analyze operating performance as they demonstrate AvenEx's ability to generate the Funds from Operations necessary to fund future dividends and capital investments. AvenEx's method of calculating these measures may differ from other issuers, and accordingly, they may not be comparable to measures used by other issuers. Investors should be cautioned that these measures should not be construed as an alternative to net income, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS.(2) Dividend Payout Ratio is calculated by dividing the Monthly Dividends by the Funds from Operations. During the first quarter of 2011 there were four dividends declared versus three in the first quarter of 2010.SECOND QUARTER 2011 RESULTS SUMMARYThe Corporation's second quarter 2011 results were in line with management expectations but significantly ahead of the prior year as the impact of higher oil production and prices offset production shut-ins and rail disruptions in a very wet second quarter. For the quarter ended June 30, 2011, the Corporation had net income of $14.5 million, funds from operations of $12.1 million and distributions of 59% of funds from operations. This compares to the second quarter of the previous year, where the Corporation had net income of $3.8 million, funds from operations of $8.0 million and distributions of 96% of funds from operations The payout ratio is on track with our annual 60% ratio target despite the fact that the second quarter is traditionally the weakest quarter due to the seasonal slowdown for the Elbow River Marketing Group. Of the second quarter 2011 funds from operations, the Oil and Gas Division provided 87%, with 15% coming from Elbow River, 1% from Real Estate and the Corporate Division used 3%.In the Oil and Gas Division, second quarter 2011 production averaged 5,086 BOE per day, up 47% from the 3,471 BOE per day in the corresponding quarter of 2010 largely as a result of the acquisition of Great Plains Exploration Inc. in the fourth quarter of 2010. Production however was down 6% from first quarter 2011 levels as production was impacted by wild fires and pipeline restrictions in Randell in NW Alberta, an extended wet spring break-up delaying drilling plans, a scheduled plant maintenance in Noel and the permanent shut-in of 150 BOE per day of low netback natural gas in Liege due to a gas over bitumen ruling in June. Quarterly production volumes were split 45% oil and NGL and 55% natural gas. Second quarter oil and NGL prices were $87.16 up 30% over the previous year while natural gas prices were $4.35 per mcf down 19% from the previous year level. 2010 benefited from a natural gas hedging program at a significantly higher price than currently available and in place in 2011. Prices for the year averaged $82.08 per barrel for oil and NGL and $4.46 per Mcf for natural gas. Given the continued weakness in the natural gas markets, the Corporation has protected its 2011 cashflow with about 25% of its natural gas production hedged at prices of above $5.75 per Mcf for the year. Operating netbacks improved with the higher oil prices to $27.62 per BOE versus $21.77 per BOE in the comparable period last year and $24.11 per BOE in the first quarter of 2011.The 2011 oil & gas capital budget remains at $34 million with an additional $8.9 million first quarter Southern Alberta property acquisition. Horizontal oil projects will be the focus of the balance of the year in the Cardium at Pembina, the Shaunavon and Viking in SW Saskatchewan and the Beaverhill Lake and Slave Point zones in NW Alberta. The capital program is 90% focused on oil projects with a view to increasing the oil/natural gas ratio closer to a 50%/50% per BOE weighting by year end. Although AvenEx has significant natural gas upside, natural gas development continues to be closely managed in view of current low natural gas prices. The capital program will also be weighted more heavily to the latter part of the year than originally forecast due the wet second and early third quarter field conditions and resulting drilling delays. Drilling is now underway in Pembina with completion results expected in September. Accordingly, given the delayed timing of summer drilling program and the 150 BOE per day shut-in at Liege the balance of the year is now expected to average between 5,000 - 5,200 BOE per day.Overall, the Elbow River Marketing Group results were ahead of the prior year results but slightly behind internal expectations as flooding and rail disruptions impacted sales and inventory timing particularly in the crude and heavy fuel oil sales areas. The second quarter provided funds from operations of about $1.9 million versus last year's $1.5 million. The quarter included unrealized gains of financial instruments of $13.3 million on its hedged forward sales as a result of changes in the underlying product commodity prices. The gain impacts net income but not funds from operations as the gains or losses reverse in the coming periods when the physical transactions occur. The second and third quarters are traditionally Elbow River's weakest quarters as winter propane and butane demand subsides but with term sales ahead of last year's numbers and the second quarter rail issues behind us, the third quarter appears to be more in line with past year's sales levels rather than the weak 2010 levels.The Corporation is continuing with the disposition of its real estate portfolio in order to focus on its more energy related divisions. Two portfolio properties remain, including an industrial property in Ontario and the "larger centre" Western Canadian theatre package. We are now targeting to have transactions in place on the remaining properties by the end of the fall 2011. Sale funds generated will be redeployed into growth opportunities in the energy divisions. The portfolio continues to be 100% leased and perform as expected.In the second quarter, the Trust did not sell any of the EnerVest Diversified Income Trust units being held for investment purposes. The EnerVest units currently yield around 8.5%, but will be disposed of as opportunities arise for the redeployment of the capital into one of the Trust's core businesses. The Trust continues to maintain a strong balance sheet post the Great Plains acquisition, with a debt to cash flow ratio of less than 1:1 (exclusive of mortgages), undrawn bank lines in the Oil and Gas Division and remaining mortgages of about $5.5 million in the Real Estate Division.The Corporation paid monthly dividends of $0.045 throughout the second quarter. The Avenex board of directors reviews the dividend level monthly and based on current commodity prices, tax pool balances operational forecast and balance sheet strength, the current forecast 2011 dividend payout ratio is targeted at 60% of funds from operations. This compares to a 70%-80% target distribution payout ratio of funds from operations when AvenEx was a Trust.REVIEW OF FINANCIAL RESULTSNet income from continuing operations for the quarter ended June 30, 2011 was $14.5 million, up from a net income of $3.5 million in the quarter ended June 30 2010. Net income for the quarter ended June 30, 2011 was $14.5 million, up from a net income of $3.8 million for the quarter ended June 30, 2010.Funds from continuing operations were $12.0 million for the quarter ended June 30, 2011, higher than $7.4 million in the comparable quarter in 2010. Funds from operations were $12.1 million for the quarter ended June 30, 2011, up from funds from operations for the quarter ended June 30, 2010 of $8.0 million.AvenEx declared dividends of $7.1 million ($0.135 per share) for the quarter ended June 30, 2011 which is down from the $7.7 million ($0.18 per share) distributed for the quarter ended June 30, 2010. The second quarter payout ratio was 59% of funds from operations compared to 96% at June 30, 2010. The six month dividend payout ratio of 63% was higher than long term targets of 60% due to an extra dividend being declared on January 4, 2011 as AvenEx transitioned to a corporation. This was followed by the normal monthly dividends for each of the first six months of 2011. Without this additional dividend, the dividend payout ratio would have been 54%.The Common Shares of AvenEx trade on the Toronto Stock Exchange (the "TSX") under the trading symbol AVF. Previous historical references to "unitholders", "distributions", "trust units" and "per unit' have now been replaced by "shareholders", "dividends", "common shares" and "per share", respectively, where applicable. Despite the change in legal structure from a trust to a dividend paying corporation, AvenEx's business activities and business strategy remain unchanged and all officers and directors remain the same.Adoption of International Financial Reporting Standards ("IFRS")On January 1, 2011, AvenEx adopted IFRS for financial reporting purposes, using a transition date of January 1, 2010. The unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2011, including required comparative information, have been prepared in accordance with IAS 34, as issued by the IASB. Except as noted in the Selected Quarterly Information section of this MD&A, 2010 comparative information has been prepared in accordance with IFRS. Reconciliations between previous Canadian GAAP and IFRS can be found in Note 19 of the unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2011. The adoption of IFRS has not had an impact on the Corporation's operations, strategic decisions or cash flow. The most significant area of impact was the adoption of the IFRS accounting policies relating to property, plant and equipment, and income taxes. Further information on the impact of converting to IFRS is provided in the Critical Accounting Policies section of this MD&A, in Notes 3 and 23 of the Corporation's unaudited interim condensed consolidated financial statements for the three months ended March 31, 2011 and in Note 19 of the unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2011.AvenEx Energy Corp. was created to provide stable, sustainable dividends to shareholders while providing modest growth. AvenEx is focused on energy with two distinct business units, namely Oil & Gas development and production and LPG marketing and logistics.AvenEx trades on the TSX under the symbol AVF. For further information on AvenEx please go to our website at: www.avenexenergy.com.This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.Forward Looking StatementsCertain statements contained herein including, without limitation, financial and business prospects and financial outlook, the effect of government announcements, proposals and legislation, plans in its Oil and Gas Division regarding hedging, wells to be drilled, expected or anticipated production rates, timing of expected production increases, the weighting of production between different commodities, expected commodity prices, exchange rates, production expenses, transportation costs and other costs and expenses, maintenance of productive capacity and capital expenditures; plans in the Elbow River Marketing Limited Partnership ("Elbow River") business regarding plans for its ongoing Liquefied Petroleum Gas ("LPG") business and activities around the exit from marketing its bio-diesel product; plans in the Real Estate Division for the timing of selling assets and the nature of capital expenditures; and the timing and method of financing these businesses, may be forward looking statements. Words such as "may", "will", "should", "could", "anticipate", "believe", "expect", "intend", "plan", "potential", "continue", "targeted" and similar expressions may be used to identify these forward looking statements. These statements reflect management's current beliefs and are based on information currently available to management. Forward looking statements involve significant risk and uncertainties.A number of factors could cause actual results to differ materially from the results discussed in the forward looking statements including, but not limited to, risks associated with oil and gas exploration: development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers and the inability to retain drilling rigs and other services; risks associated with its Elbow River business including, but not limited to, counterparty risk in default, operational risks, hedging, access to credit, competitor risk, seasonality and impact of the global recession on overall economic activity; and risks associated with the Real Estate Division including, but not limited to the impact the overall economy has on valuations, future delinquencies, access to mortgages and impact on interest rates; as well as the risks associated with AvenEx's incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources and the risk factors outlined under "Risk Factors" and elsewhere herein. The recovery and reserve estimates of AvenEx's reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although AvenEx believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because AvenEx can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which AvenEx operates; the timely receipt of any required regulatory approvals; the ability of AvenEx to obtain qualified staff, equipment and services in a timely and cost efficient manner; Divisional results; the ability of operators to operate the field in a safe, efficient and effective manner; the ability of AvenEx to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of AvenEx to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which AvenEx operates; and the ability of AvenEx to successfully market its products, fluctuations in foreign exchange or interest rates and stock market volatility, credit risk and the ability to realize on collateral in the event of default, failure of counter parties to perform on contracts, fluctuation in the value of real property, failure to produce income or revenue from real estate, failure of tenants to meet lease obligations, increase in property taxes and mortgage, maintenance, insurance, operating costs and decreases in occupancy and rental rates, and fixed costs in relation to variable revenue streams. Readers are cautioned that the foregoing list of factors is not exhausted.Forward looking statements and other information contained herein concerning the Oil and Gas Division, Elbow River's business, the Real Estate Division and AvenEx's general expectations concerning these industries are based on estimates prepared by each Division's management and from using data from publicly available industry sources as well as from reserve reports, market research and industry analysis and on assumptions based on data and knowledge of these industries which AvenEx believes to be reasonable. However, this data is inherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While AvenEx is not aware of any misstatements regarding any industry data presented herein, these industries involve risks and uncertainties and are subject to change based on various factors.These forward looking statements are made as of the date hereof and AvenEx assumes no obligation to update or review them to reflect new events or circumstances except as required by applicable securities laws.AvenEx Energy Corp.CONSOLIDATED BALANCE SHEETS(Unaudited) As at June 30, December 31, 2011 2010(in thousands of dollars) $ $----------------------------------------------------------------------------ASSETS Current Cash - 1,028Marketable securities 7,361 7,595Accounts receivable 73,068 64,659Prepaid expenses 2,830 3,514Inventory 31,098 25,591Risk management assets 13,260 4,950----------------------------------------------------------------------------Current assets 127,617 107,337Assets held for sale - Real Estate 12,543 12,533---------------------------------------------------------------------------- 140,160 119,870Exploration and evaluation 34,133 32,613Property, plant and equipment 217,233 204,731Intangibles and other assets 12,085 12,836Goodwill 28,069 28,069Deferred income taxes 19,169 24,492---------------------------------------------------------------------------- 450,849 422,611--------------------------------------------------------------------------------------------------------------------------------------------------------LIABILITIES AND SHAREHOLDERS' EQUITY Current Bank indebtedness 77,233 58,380Accounts payable and accrued liabilities 83,282 72,988Dividend payable 2,380 -Risk management liabilities 2,772 5,461----------------------------------------------------------------------------Current liabilities 165,667 136,829Liabilities of assets held for sale - Real Estate 5,640 5,862---------------------------------------------------------------------------- 171,307 142,691Decommissioning liabilities 23,885 22,198---------------------------------------------------------------------------- 195,192 164,889----------------------------------------------------------------------------Shareholders' equity Share capital 250,936 250,337Contributed surplus 7,695 6,144Deficit (3,990) -Accumulated other comprehensive income 1,016 1,241---------------------------------------------------------------------------- 255,657 257,722---------------------------------------------------------------------------- 450,849 422,611--------------------------------------------------------------------------------------------------------------------------------------------------------AvenEx Energy Corp.CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(Unaudited) For the Three months ended Six months ended June 30 June 30, 2011 2010 2011 2010 (in thousands of dollars) $ $ $ $ ----------------------------------------------------------------------------REVENUE Oil and gas revenue 25,293 14,718 50,045 30,858 Royalties (4,354) (1,893) (9,048) (4,198)Unrealized gain (loss) on financial instruments 4,416 44 (111) 954 ----------------------------------------------------------------------------Total oil and gas revenue 25,355 12,869 40,886 27,614 ----------------------------------------------------------------------------Elbow River revenue 200,431 102,308 396,960 325,624 Unrealized gain (loss) on financial instruments 13,345 320 11,109 (17,628)----------------------------------------------------------------------------Total Elbow River revenue 213,776 102,628 408,069 307,996 ----------------------------------------------------------------------------Gain (loss) on sale of marketable securities - 383 - 848 Interest and other revenue 153 298 309 738 ----------------------------------------------------------------------------Total revenue 239,284 116,178 449,264 337,196 ----------------------------------------------------------------------------EXPENSES Oil and gas operating 7,642 5,477 15,347 10,725 Oil and gas transportation costs 512 388 1,166 696 Elbow River operating 197,290 100,090 387,574 314,963 General and administrative 4,165 3,285 8,927 8,262 Share based compensation 1,023 (299) 1,752 1,772 Bad debt expense (recovery) (289) (261) (797) (316)Finance costs 848 (73) 927 334 Capital taxes 95 81 167 170 Exploration and evaluation 320 41 534 98 Depletion, depreciation and amortization 7,656 4,779 15,774 9,623 ---------------------------------------------------------------------------- 219,262 113,508 431,371 346,327 ----------------------------------------------------------------------------Income (loss) from continuing operations before income tax 20,022 2,670 17,893 (9,131)Deferred income tax recovery (expense) (5,501) 879 (5,343) 10,412 ----------------------------------------------------------------------------Net income from continuing operations 14,521 3,549 12,550 1,281 Net income (loss) from discontinued operations - Real Estate (46) 299 181 414 ----------------------------------------------------------------------------Net income for the period 14,475 3,848 12,731 1,695 ----------------------------------------------------------------------------Other comprehensive income: Change in fair value of marketable securities, net of tax (414) (1,175) (225) 60 ----------------------------------------------------------------------------Other comprehensive income (414) (1,175) (225) 60 ----------------------------------------------------------------------------Comprehensive income for the period 14,061 2,673 12,506 1,755 --------------------------------------------------------------------------------------------------------------------------------------------------------Net income from continuing operations per share Basic and diluted 0.27 0.03 0.24 0.08 --------------------------------------------------------------------------------------------------------------------------------------------------------Net income from discontinued operations per share Basic and diluted 0.00 0.01 0.00 0.01 ----------------------------------------------------------------------------Net income per share Basic and diluted 0.27 0.04 0.24 0.09 --------------------------------------------------------------------------------------------------------------------------------------------------------AvenEx Energy Corp. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) As at Six months ended Six months ended June 30, 2011 June 30, 2010(in thousands of dollars) Number $ Number $----------------------------------------------------------------------------Share capital Balance, beginning of period 52,783,690 250,337 - -Exercise of options 94,240 599 - -----------------------------------------------------------------------------Balance, end of period 52,877,930 250,936 - ---------------------------------------------------------------------------------------------------------------------------------------------------------Unitholders' capital Balance, beginning of period - - 42,110,678 421,270Exercise of options - - 754,976 4,338----------------------------------------------------------------------------Balance, end of period - - 42,865,654 425,608--------------------------------------------------------------------------------------------------------------------------------------------------------Contributed surplus Balance, beginning of period 6,144 - Exercise of options (107) - Cash settlement of options (94) - Share based compensation expense 1,752 - ----------------------------------------------------------------------------Balance, end of period 7,695 - --------------------------------------------------------------------------------------------------------------------------------------------------------Retained earnings (deficit) Balance, beginning of period - (187,550)Net income (loss) 12,731 1,695 Distributions declared during the period - (15,358)Dividends declared during the period (16,721) - ----------------------------------------------------------------------------Balance, end of period (3,990) (201,213)--------------------------------------------------------------------------------------------------------------------------------------------------------Accumulated other comprehensive income Balance, beginning of period 1,241 578 Change in fair value of Marketable securities, net of tax (225) 60 ----------------------------------------------------------------------------Balance, end of period 1,016 638 --------------------------------------------------------------------------------------------------------------------------------------------------------AvenEx Energy Corp. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Three months ended Six months ended June 30, June 30, 2011 2010 2011 2010 (in thousands of dollars) $ $ $ $ ----------------------------------------------------------------------------OPERATING ACTIVITIES Net income from continuing operations 14,521 3,549 12,550 1,281 Add (deduct) non-cash items: Share based compensation 1,023 (299) 1,752 1,774 Non-cash general and administrative 252 125 504 125 Exploration and evaluation 320 41 534 98 Depletion, depreciation and amortization 7,656 4,779 15,774 9,623 Accretion of decommissioning liabilities 468 281 872 570 Unrealized loss (gain) on financial instruments (17,761) (364) (10,999) 16,674 Unrealized foreign exchange 6 181 53 812 Deferred income tax expense (recovery) 5,501 (879) 5,343 (10,412)----------------------------------------------------------------------------Funds from continuing operations 11,986 7,414 26,383 20,545 Funds from discontinued operations - Real Estate 110 593 249 1,187 ---------------------------------------------------------------------------- 12,096 8,007 26,632 21,732 Asset retirement expenditures during year (114) (378) (499) (383)Net change in non-cash working capital (27,680) (2,567) 773 4,169 ----------------------------------------------------------------------------Cash provided (used in) by operating activities (15,698) 5,062 26,906 25,518 ----------------------------------------------------------------------------FINANCING ACTIVITIES Issue of shares, net of issue costs - 685 354 2,130 Cash settlement of options (39) (65) (95) (245)Dividends paid (7,139) (7,711) (16,656) (15,358)Real estate repayment of mortgages (61) (189) (122) (375)Net change in non-cash working capital (65) 19 (65) 45 ----------------------------------------------------------------------------Cash provided by (used in) financing activities (7,304) (7,261) (16,584) (13,803)----------------------------------------------------------------------------INVESTING ACTIVITIES Oil and gas property acquisitions (114) (174) (9,247) (660)Oil and gas property disposals 45 (14) 47 3,413 Oil and gas development expenditures (5,859) (5,728) (19,257) (13,720)Purchase of other assets (192) (123) (310) (218)Purchase of financial services royalty - (5,035) - (5,035)Real estate dispositions - 1,100 - 1,100 Net change in non-cash working capital 1,596 2,648 (1,505) 9,646 ----------------------------------------------------------------------------Cash provided by (used in) investing activities (4,524) (7,326) (30,272) (5,474)----------------------------------------------------------------------------Increase (decrease) in cash and cash equivalents during the period (27,526) (9,525) (19,950) 6,241 Cash and cash equivalents (bank indebtedness), beginning of (49,733) 5,657 (57,354) (10,152)period Change in cash of assets held for sale 26 (162) 71 (119)----------------------------------------------------------------------------Cash and cash equivalents (bank indebtedness), end of period (77,233) (4,030) (77,233) (4,030)--------------------------------------------------------------------------------------------------------------------------------------------------------Supplemental information: Cash taxes paid 27 11 49 59 Cash interest paid 574 125 901 290 --------------------------------------------------------------------------------------------------------------------------------------------------------FOR FURTHER INFORMATION PLEASE CONTACT: William GallacherAvenEx Energy Corp.President & CEO(403) 237-9949(403) 237-0903 (FAX)ORGary H. DundasAvenEx Energy Corp.Vice-President, Finance and CFO(403) 237-9949(403) 237-0903 (FAX)ORSuite 300, 808 - 1st Street S.W.AvenEx Energy Corp.Calgary, Alberta T2P 1M9www.avenexenergy.comThe TSX Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.