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Press release from Marketwire

Poseidon Concepts Corp. and Open Range Energy Corp. Report Strong Growth in Consolidated Third Quarter Funds from Operations

Tuesday, November 08, 2011

Poseidon Concepts Corp. and Open Range Energy Corp. Report Strong Growth in Consolidated Third Quarter Funds from Operations21:02 EST Tuesday, November 08, 2011CALGARY, ALBERTA--(Marketwire - Nov. 8, 2011) - Poseidon Concepts Corp. (TSX:PSN) ("Poseidon") and Open Range Energy Corp. (TSX:ONR) ("New Open Range") are pleased to release the consolidated financial and operating results of their predecessor combined company, Open Range Energy Corp. ("Open Range" or the "Company"), for the three and nine months ended September 30, 2011. Poseidon and New Open Range are each concurrently releasing individual operational updates and third quarter highlights. The two companies were separated effective November 1, 2011 under a plan of arrangement approved by a vote of shareholders at a special meeting held October 31, 2011. The two companies initiated separate trading on the TSX on November 4, 2011.The complete consolidated financial statements and notes thereto as well as the consolidated management's discussion and analysis for the three and nine months ended September 30, 2011 have been filed under Poseidon's profile on SEDAR at www.sedar.com and are posted on each company's website, www.openrangeenergy.com and www.poseidonconcepts.com. CONSOLIDATED HIGHLIGHTSIn the three months ended September 30, 2011, Open Range:Generated consolidated funds from operations of $27.5 million, an increase of 267 percent from $7.5 million in the third quarter of 2010; Generated consolidated funds from operations of $0.38 per diluted share, an increase of 217 percent over the third quarter of 2010; Had EBITDA of $20.2 million from Poseidon Concepts (included in consolidated funds from operations); Had average production of 4,174 boe per day, an increase of 13 percent over the third quarter of 2010; Made consolidated capital expenditures of approximately $30.6 million to initiate the Company's second-half 2011 capital program. This included further expansion of its fracturing fluid tank rental fleet, two drilling rigs operating at Ansell/Sundance focused on horizontal drilling of multiple Deep Basin targets, as well as expansion of the operated Ansell/Sundance gas plant and construction of the 15-kilometre West Sundance lateral pipeline; Continued on its track of increasing operating efficiencies in the exploration and production (E&P) business, with operating costs of $3.70 per boe plus transportation costs of $0.98 per boe, for a total of $4.68 per boe ($0.78 per mcfe), compared to a total of $5.12 per boe ($0.85 per mcfe) in the third quarter of 2010, an improvement of 9 percent; Incurred all-in cash costs (operating, transportation, G&A, interest) for the E&P business of $7.95 per boe of production, a reduction of 15 percent from the third quarter of 2010; On September 6th, 2011, announced a proposed Plan of Arrangement for a strategic realignment aimed at unlocking the value of the consolidated company's two business lines; and Exited the quarter with net debt of $46.4 million, down by $3.4 million from September 30, 2010.Subsequent to September 30, 2011:Open Range held a special meeting of shareholders on October 31, 2011 at which shareholders overwhelming approved the Plan of Arrangement to create one E&P company, Open Range Energy Corp., and one energy services company, Poseidon Concepts Corp.; and On November 4, 2011 the two independent companies commenced separate trading on the TSX.CONSOLIDATED FINANCIAL HIGHLIGHTS(in thousands except per share amounts)Three months ended Sept. 30, 2011(1)Three months ended Sept. 30, 2010(1)Nine months ended Sept. 30, 2011(1)Nine months ended Sept. 30, 2010(1)Revenue(2)$33,162$11,157$73,458$34,176Funds from operations(3)27,4547,53958,04122,357Per basic share0.400.120.880.37Per diluted share0.380.120.850.37Net income14,82268126,4582,945Per basic share0.220.010.400.05Per diluted share0.210.010.390.05Net debt (end of period)46,65649,82046,65649,820Capital expenditures, net$30,619$7,180$73,814$42,351Weighted average shares outstandingPer basic share68,43660,93466,18760,934Per diluted share72,01060,93468,15460,934EXPLORATION & PRODUCTION HIGHLIGHTSThree months ended Sept. 30, 2011(1)Three months ended Sept. 30, 2010(1)Nine months ended Sept. 30, 2011(1)Nine months ended Sept. 30, 2010(1)ProductionNatural gas (mcf per day)23,11320,13922,65420,653Oil and NGL (bbls per day)322328314337Total (@ 6:1) (boe per day)4,1743,6854,0903,779Realized average sales pricesNatural gas ($ per mcf)(2)4.204.294.264.70Oil and NGL ($ per bbl)80.2761.9581.8765.75Combined average ($ per boe)29.4529.0129.8831.52Royalties ($ per boe)(2.76)(2.75)(2.80)(3.14)Operating costs ($ per boe)(3.70)(4.14)(3.69)(4.89)Transportation costs ($ per boe)(0.98)(0.98)(0.84)(0.88)Operating netback ($ per boe)22.0121.1422.5522.61G&A costs ($ per boe)(1.98)(2.68)(2.07)(2.48)Net interest expense ($ per boe)(1.29)(1.58)(1.43)(1.36)Corporate netback ($ per boe)18.7416.8819.0518.77POSEIDON CONCEPTS HIGHLIGHTS(in thousands except percentages)Three months ended Sept. 30, 2011(1)Three months ended Sept. 30, 2010(1)Nine months ended Sept. 30, 2011(1)Nine months ended Sept. 30, 2010(1)Fracturing fluid handling tank rental revenue$22,329$1,324$41,236$1,658Operating costs(541)(12)(1,510)(14)G&A costs(1,555)(29)(3,334)(54)Operating earnings (EBITDA)$20,232$1,283$36,392$1,590(1) Open Range's transition date to International Financial Reporting Standards (IFRS) was January 1, 2010; therefore, information above including comparative information was calculated in accordance with IFRS.(2) Includes the realized gain or loss on commodity contracts.(3) Funds from operations is calculated using cash flow from operations before the change in non-cash working capital and decommissioning expenditures and excludes interest and financing expenses as presented under the Corporation's IFRS-based interim consolidated statements of cash flows for the three and nine months ended September 30, 2011. Disclosure provided herein in respect of barrel(s) of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.FOR FURTHER INFORMATION PLEASE CONTACT: A. Scott Dawson, P.Eng.Open Range Energy Corp.President and Chief Executive Officer403-205-3704www.openrangeenergy.comORLyle D. Michaluk, CAPoseidon Concepts Corp.Chief Executive Officer403-262-9280www.poseidonconcepts.com