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Press release from CNW Group

Sure Energy Announces Year End 2011 Financial and Operating Results

Wednesday, March 07, 2012

Sure Energy Announces Year End 2011 Financial and Operating Results16:48 EST Wednesday, March 07, 2012CALGARY, March 7, 2012 /CNW/ - Sure Energy Inc. ("Sure Energy" or the "Company") is pleased to announce results for the year ended December 31, 2011.The Company's MD&A, Financial Statements and Notes, and AIF can be viewed or downloaded at www.sureenergyinc.com or www.sedar.com. During 2011, Sure Energy accomplished the following:Corporate production for the year averaged 1,220 BOE/d up from 944 BOE/d for a year over year increase of 29 percent.Funds flow from operations doubled in 2011 to $13.4 million ($0.28/share) up from $6.4 million ($0.13/share) in 2010.Corporate reserves increased for the year to 5.9 million BOE's proved plus probable from 4.5 million BOE's proved plus probable in 2010 for a 33 percent growth year over year.For the fourth quarter 2011 compared to the third quarter of 2011 Sure Energy accomplished the following:Corporate production increased to 1,495 BOE/d in the fourth quarter up from 1,057 BOE/d in the third quarter of 2011 and oil and liquids increased to 61 percent of overall production.Funds flow from operations more than doubled to $4.7 million ($0.10/share) from $2.8 million ($0.06/share) in the previous quarter.On December 29, 2011 Sure Energy closed an $18 million equity financing at $1.50 per share and also during the fourth quarter expanded its bank credit facility to $33 million up from $25 million.HIGHLIGHTS             Three MonthsEnded December31,   Year EndedDecember31,      2011   2010   2011   2010($000 except share and per share amounts)                  Financial                  Petroleum and Natural Gas Revenues     8,907   5,813   25,364   13,063Funds Flow from Operations (1)     4,672   3,669   13,381   6,407      Per Share, Basic  and Diluted     0.10   0.08   0.28   0.13Income (loss)     (1,381)   115   (694)   (532)      Per Share, Basic and Diluted     (0.03)   0.00   (0.01)   (0.01)Capital Expenditures     8,146   9,797   38,308   18,041Total Assets             81,048   53,685Net Debt(1)             22,668   14,700Shareholders' Equity             50,165   33,230Common Shares Outstanding                        Basic             60,548,630   48,431,130      Diluted             64,884,464   52,224,464      Fully Diluted with Performance Rights and Warrants             70,214,464   57,609,464Weighted Average Common Shares Outstanding                        Basic and Diluted     48,809,500   47,278,477   48,604,089   46,958,260                   Share Trading                        High     1.69   2.00   1.99   2.00      Low     1.10   1.32   1.10   0.57      Close     1.44   1.75   1.44   1.75Trading Volume     1,936,968   7,435,277   11,848,550   19,703,686      Three Months EndedDecember 31,   Year EndedDecember 31,HIGHLIGHTS     2011   2010   2011   2010                   Operations                    Production                        Natural Gas (Mcf/d)     3,479   4,071   3,653   4,248      Oil (bbls/d)     843   578   557   196      Heavy Oil (bbls/d)     31   -   .8   -      NGLs (bbls/d)     41   41   46   40      BOE/d     1,495   1,297   1,220   944                   Average Selling Price                        Natural Gas ($/Mcf)     3.47   3.82   3.91   4.26      Oil ($/bbl)     94.14   78.34   92.33   78.11      Heavy Oil ($/bbl)     79.32   -   79.32   -      NGLs ($/bbl)     70.92   57.38   68.89   59.01      BOE ($/BOE)     64.76   48.70   56.98   37.90                   Operating Netback ($/BOE) (1)     39.05   34.36   35.86   22.86Funds Flow Netback ($/BOE) (1)     33.97   30.75   30.06   18.60(1) Please refer to Management's Discussion and Analysis for a definition of Non-GAAP measures.RESERVESThe following presentation should be read in conjunction with reserves information contained in Sure Energy's Annual Information Form ("AIF") which has been released concurrently.  The AIF presents the Company's reserves according to Canadian Securities Administrators National Instrument 51-101 ("NI 51-101") along with the related Forms and per the NI 51-101 Companion Policy.Sure Energy engaged independent petroleum consultants Sproule Associates Limited ("Sproule") to evaluate reserves for all of Sure Energy's properties effective December 31, 2011.  The Sproule report has been prepared in accordance with the standards contained in the COGE Handbook and the reserve definitions contained in NI 51-101 by Qualified Reserve Evaluators. Sproule has reviewed and consented to the information contained herein.All evaluations and future net cash flows are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures and abandonment costs for wells to which reserves have been assigned. Values of future net revenues do not represent the fair market value of the reserves.Reserves and future net revenue have been made assuming that development of each property in respect of which the estimate is made will occur, without regard to the likely availability to Sure Energy of funding required for that development.The Company's total proved plus probable reserves increased by 33% in 2011 to 5.9 MMboe and proved reserves increased by 20% to 3.9 MMboe.  These increases were largely the result of reserves attributed to Sure Energy's 2011 drilling program and additional increased reserves from undeveloped locations acquisitions during 2011, and positive revisions to previous reserves. The Company's focus on oil prospects resulted in an increase in light and medium oil reserves of 0.5 MMbbl proved and 1.1 MMbbl proved plus probable which increased the Company's oil and liquids weighting to 73%.Summary Of Oil And Gas ReservesForecast Prices and Costs     Light and Medium Oil  Heavy Oil  Gas NGLs     (Mbbl)  (Mbbl)  (MMcf)  (Mbbl)    GrossNet GrossNet GrossNet GrossNetProved                    Developed producing   786.9659.8 22.722.1 5,9264,882 82.653.5      Developed non-producing   10.29.5 -- 630540 33.623.6     Undeveloped   1,793.81,599.1 -- 658592 5.04.3Total Proved   2,591.02,268.3 22.722.1 7,2146,015 121.281.4Probable   1,461.51,146.1 52.442.1 2,5022,129 56.640.9Proved plus probable(1)   4,052.53,414.4 75.264.2 9,7168,144 177.8122.3(1)  Columns may not add due to rounding    2011 Total Reserves (1)    (MBOE)    GrossNetProved           Developed producing   1,879.91,549.1      Developed non-producing   148.8123.1      Undeveloped   1,908.51,702.0Total Proved   3,937.13,374.2Probable   1,987.51,584.0Proved plus probable(1)   5,924.74,958.2(1)  Columns may not add due to roundingSummary of Net Present Values of Future Net Revenue Forecast Prices and Costs ($000s)Before Income Taxes, Discounted at (% per year) (1)      0%  5%  8%  10%  15%  20%Proved                           Developed producing     51,206  42,620  38,984  36,971  32,947  29,925      Developed non-producing     1,902  1,314  1,055  912  629  426      Undeveloped     64,804  45,536  37,120  32,451  23,231  16,531Total Proved     117,911  89,470  77,159  70,333  56,808  46,882Probable     69,403  47,951  39,742  35,437  27,374  21,808Proved plus probable     187,314  137,422  116,901  105,770  84,182  68,689(1)  Columns may not add due to roundingReserve Life IndexThe reserve life index is calculated by dividing gross company reserves as at the effective date of the reports (December 31, 2011) by Sproule's estimate of average production for the following year.  The reserve life index represents a measure of the amount of time production could be sustained at the assumed production rates based on the reserves at the applicable point in time.                 2011                 Proved Proved plusProbable2012 Forecast Production (BOE/d)                1,358 1,715Reserve Life Index (years)                7.9 9.4UNDEVELOPED LANDFor the year ended December 31, 2011 Sure Energy's total non-reserve landholdings were 78,111 net acres as determined by Seaton-Jordan & Associates Ltd.  The majority of Sure Energy's undeveloped land is located in the Plains area of Alberta.  The Company's land acquisition strategy focuses primarily on acquiring lands to expand existing project areas and prospect inventory.   2011     Reserves   Non-Reserve   Total      Gross  Net   Gross  Net   Gross  NetAlberta     73,998  35,942   95,312  71,127   169,310  107,069Saskatchewan     746  746   6,984  6,984   7,730  7,730      74,744  36,688   102,296  78,111   177,040  114,799NET ASSET VALUEThe following table represents the net asset value ("NAV") of Sure Energy as at December 31, 2011 based on proved and probable reserves using forecast pricing as evaluated by Sproule, undeveloped land value as determined by Seaton Jordan & Associates Ltd., seismic value as determined by internal estimates, and internal estimates of value for tax pools.                    Discounted at ($000s)          8%   10%Present value of reserves (before tax)          116,901   105,770Undeveloped lands          14,411   14,411Seismic          1,072   1,072Proceeds from in-the-money stock options          6,502   6,502Net debt          (22,668)   (22,668)Tax pools (no value assigned)          -   -           116,218   105,087                NAV per share          1.73   1.57Number of diluted shares outstanding as of December 31, 2011          67,024,464   67,024,464OPERATIONAL REVIEWCapital expenditures for the period were as follows:      Three Months EndedDecember 31,   Year EndedDecember 31,Capital Program Summary     2011  2010   2011  2010($000s)                Land     893  108   2,328  837Geological and geophysical     51  99   146  467Drilling     827  6,851   7,235  11,063Completions     (561)  1,151   4,002  2,007Recompletions and workovers     4,013  (440)   4,947  376Production equipment and facilities     1,893  1,377   6,182  2,681Capitalized exploration G&A     265  39   821  200Drilling credits     -  -   60  (451)Asset acquisition (disposition)     138  -   11,276  155Other assets     19  9   50  9      7,538  9,194   37,047  17,344Non-cash items                Decommissioning obligations     608  185   1,852  279Undeveloped land     -  418   (591)  418      8,146  9,797   38,308  18,041Drilling activity for the three months and year is summarized as follows:Three Months Ended December 31, 2011      Gas  Oil  Dry andAbandoned  Total      Gross Net  Gross Net  Gross Net  Gross NetExploration     - -  - -  - -  - -Development     - -  1 1.0  - -  1 1.0Total     - -  1 1.0  - -  1 1.0Year Ended December 31, 2011      Gas  Oil  Dry and Abandoned  Total      Gross Net  Gross Net  Gross Net  Gross NetExploration     - -  1 1.0  - -  1 1.0Development     - -  10 8.6  - -  10 8.6Total     - -  11 9.6  - -  11 9.6Areas of ActivityPlains (Redwater)The Company owns 16,855 net acres of land on the Lower Viking light oil trend at Redwater, just north of Edmonton.  The Viking in the area has recently been exploited by horizontal drilling.  Thirty day initial production rates typically vary from 60 - 125 barrels of oil per day, although some wells have averaged over 300 barrels of oil per day in the first 30 days.  All of Sure Energy's horizontal wells are subject to the New Well Royalty Rate which reduces royalties to 5 percent for a defined period or production volume dependant on the length of the well.  This royalty incentive leads to high operating netbacks.  The Company realized net operating income of $63.80 for 2011 and $68.48 for the fourth quarter of 2011 from the Redwater area.  This leads to very robust economics; two wells that came on production in late September and early October, 2011 respectively had generated an estimated $1 million net operating income by the end of January 2012 (4 months on stream).In the fourth quarter of 2011 the Company produced 534 BOE/d from the Redwater (Plains) area of which 478 BOE/d was oil (89 percent).  This is an increase from 305 BOE/d in the third quarter of 2011 because of two wells that were drilled in the third quarter and came on production early in the period.  The Company also has two 40 percent working interest wells on the south end of the productive trend which were awaiting tie-in at year end.  The Company plans to drill 11 wells here in 2012 which will add another significant wedge of growth to the area.Sure Energy has identified 82 gross (72 net) low risk development locations surrounded by or adjacent to production on the trend.  In addition to this low risk drilling inventory the Company has 16.5 sections of land still to evaluate on the productive oil trend.  Wells cost $1.5 to $1.75 million to put on stream.SE SaskatchewanIn the Queensdale area in southeast Saskatchewan Sure Energy produced 225 barrels of oil per day (100% oil) up from 64 barrels of oil in the third quarter of 2011.  The Company has drilled four horizontal wells on the property to date, but during 2011 only two of these wells were on production consistently.  The other two wells are waiting on the drilling of a salt water disposal well before they can be pumped at optimal rates.  This well has been drilled in the first quarter of 2012 and should become operable in March.  The drilling of the salt water disposal well extended the pool to the north and the Company is currently evaluating the economics of exploiting the extension with either a vertical well or a horizontal well.Sure Energy owns 5,170 net acres in the area and owns proprietary 3D seismic over much of the acreage.  The Mississippian Alida member is the main geological target and the wells produce light crude oil.  The Company's first well in the area came on production at approximately 240 BOE/d and paid out in three months.  Wells are simple, non-frac'ed horizontals and cost about $1.3 million to put on stream.Virginia HillsIn April of 2011 Sure Energy closed the second of two acquisitions in the Virginia Hills area thereby creating a new core area.  The Company acquired 69 sections of land (average 64 percent working interest) of various mineral rights and 160 BOE/d of associated production (72 barrels of oil per day) for $11.3 million.The initial motivation for establishing a position in the Virginia Hills area was to gain exposure to a Viking resource play, similar to Redwater.  The Viking section at Virginia Hills is approximately twice as thick as that at Redwater.  The Viking produces oil in the area from coarse grained sands but the resource upside of the play exists in lower permeability sediments above and below the primary pay.  Two vertical wells drilled by others demonstrate that the lower permeability sediments will produce oil when frac'ed, albeit at marginally economic rates.  These two vertical producing wells produce at steady rates of 6 and 10 barrels of oil per day which compares to rates of two to five barrels of oil per day from mature vertical producing wells at Redwater.  No horizontal wells have been drilled in the Viking in the Virginia Hills area to date.  The Company owns 9.5 sections with approximately a 50 percent working interest and 3 sections with a 100 percent working interest in the core area of the play.  Sure Energy plans to drill a horizontal well on its 50 percent working interest lands in the second quarter of 2012, and has budgeted a follow up well should it be successful.Through the acquisitions the Company also acquired 1,705 net acres (2.7 net sections) of land with Beaverhill Lake rights.  Horizontal wells drilled into the Beaverhill Lake and frac'ed multiple times with large volumes of acid have exhibited high production rates.  Included in Sure Energy's acquisition at Virginia Hills were two horizontal Beaverhill Lake producing wells which were completed open hole but were never frac'ed.  Both wells produce clean oil, but at low rates (15- 22 barrels per day) consistent with production from a low permeability reservoir.  The Company recompleted one of these wells in the fourth quarter of 2011 using the multi-frac acid technique.  Because the recompletion involved re-entering a pre-existing wellbore the liner and packer system used was of smaller diameter than is optimal for the operation, which lead to lower acid injectivity rates than is normal.  As well the wellbore is approximately half the length of offsetting producing wells.  The well originally came on stream at a strong rate, testing for two days at over 1,100 barrels of oil per day, and producing initially at rates from 200 to 350 barrels of oil per day but it has since declined to less than 100 barrels of oil per day indicating that the recompletion did not achieve the fracture height to successfully open up the reservoir.  Sure Energy attempted the recompletion because it was budgeted at a third of the cost of drilling a new well.  The Company's lands are highly prospective and continue to be offset by competitor wells.  The Company will continue to monitor offsetting activity and production rates.  It has one new horizontal well budgeted for the play type for 2012.Hatton (SW Saskatchewan)In September 2011 Sure Energy drilled its first well into a heavy oil prospect at Hatton in southwest Saskatchewan.  The Company's vertical appraisal well encountered 6.5 meters of heavy oil pay.  The well came on production on Nov 7, 2011 and averaged 75 barrels of oil per day for the first 30 days on production.  It is currently producing at 77 barrels of oil per day.  Although the oil is 12° API the Company realized net operating income of approximately $50 per BOE from the property in 2011.Sure Energy owns 2,560 net acres on the play (four 100 percent working interest sections), as well as proprietary 2D seismic data.  Depending on the extent of the play the Company has 9 to 23 drilling locations on its lands based on one well per legal sub-division.  It intends to drill two immediate offset vertical locations and one step-out vertical location in 2012.  Wells are budgeted at $0.8 million to put on stream.Other PropertiesThe Company produced 443 BOE/d from the Peace River Arch, Southern Plains (Chinook), Tweedie and a series of minor properties in the West Central area of Alberta.  Most of this production is gas. Due to the current depressed state of the gas markets the Company spent very little capital in 2011 on these properties.  Furthermore, the Company has no immediate plans to spend significant capital in these areas in 2012.ProductionProduction for the period by major property is as follows:      Three Months Ended December 31,2011      Gas  Oil  Heavy Oil  NGLs  Total      Mcf/d  Bbls/d  Bbls/d  Bbls/d  BOE/dHatton     -  -  31  -  31Peace River      839  8  -  14  162Plains     338  478  -  -  534Saskatchewan     -  225  -  -  225Southern Plains     659  -  -  2  112Tweedie     722  -  -  -  120Virginia Hills     535  127  -  10  227West Central     386  5  -  15  84Total     3,479  843  31  41  1,495      Year Ended December 31, 2011      Gas  Oil  Heavy Oil  NGLs  Total      Mcf/d  Bbls/d  Bbls/d  Bbls/d  BOE/dHatton     -  -  8  -  8Peace River     978  10  -  16  189Plains     308  365  -  -  416Saskatchewan     -  105  -  -  105Southern Plains     768  -  -  4  132Tweedie     763  -  -  -  127Virginia Hills     408  65  -  9  142West Central     428  12  -  17  101Total     3,653  557  8  46  1,220OUTLOOK As the industry becomes more dependent on resource plays that require horizontal drilling and multi-stage frac'ing it is very important that companies manage costs prudently.  This is the industry's biggest challenge at present.  For a small company like Sure Energy this is particularly tough; larger companies are able to tie-up rigs and services for long periods allowing them to negotiate favourable rates.  Sure Energy tries to organize its wells into programs; this allows for economies of scale and for more efficient organization of frac operations and follow-up work.  This year the Company secured a rig for late in the first quarter and plans to drill partially into breakup thereby avoiding high first quarter drilling and completion rates.The other challenge for companies exploiting resource plays is the initial decline rates associated with the multi-frac wells.  Bigger companies are able to manage these declines by continually drilling.  Smaller companies like Sure Energy do not have the capital to drill constantly so our production profile is more erratic.  However, through the first half of 2011 when the Company was not actively drilling, production remained relatively stable which is a testament to the quality of the assets.As the Company's oil weighting increases another challenge that has arisen is operating costs, especially costs associated with trucking emulsion and water.  Sure Energy's experienced production group, both in the office and the field, are actively addressing this issue.  At Queensdale, for instance, the construction of a battery has allowed for more efficient separation of the oil on site and the drilling of a salt water disposal well will eliminate water trucking fees, saving close to $80,000 per month.In December the Company raised $18 million by issuing equity and this along with an increase to the bank line to $33 million has cleaned up the balance sheet, allowing Sure Energy to plan a $38 million capital program for 2012.  With gas prices being depressed and with no relief in sight, the Company will deploy its capital on oil projects.  The capital program is balanced to allow for low risk production growth at Redwater and Hatton as well as exploration and step out activities at Virginia Hills and on the peripheral lands at Redwater which will expand the reserve and opportunity base.  As with all small companies capital has to be wisely employed and flexibility of the capital budget is very important to allow for maximum economic impact of the program.Recognizing the operating challenges ahead the Company has hired a Vice President of Production and a Drilling and Completions Manager as well as increasing its field staff.  Going forward the Company has a diverse asset base which allows for steady growth with occasional "big hit" upside.  2011 was Sure Energy's first year as a Company producing more oil than gas and that transformation to oil will continue in 2012 and beyond.STATEMENTS OF FINANCIAL POSITION(in thousands of Canadian dollars)           December 31,December 31,January 1,   2011  2010  2010Assets          Trade and other receivables $3,080 $3,110 $1,829 Deposits and prepaid expenses  1,399  853  457Total current assets  4,479  3,963  2,286          Property, plant and equipment  69,502  46,062  33,723Exploration and evaluation assets  5,604  1,481  1,899Deferred financing costs  1,463  2,179  -Total assets $81,048 $53,685 $37,908          Liabilities          Bank debt $7,981 $440 $3,046 Trade and other payables  9,166  8,223  3,777Total current liabilities  17,147  8,663  6,823          Note facility  10,000  10,000  -Decommissioning obligations  3,736  1,792  1,450Total liabilities  30,883  20,455  8,273          Equity          Share capital  54,404  37,282  35,399 Warrants  2,065  2,065  - Contributed surplus  3,838  3,331  3,152 Deficit  (10,142)  (9,448)  (8,916)Total equity  50,165  33,230  29,635          Total equity and liabilities $81,048 $53,685 $37,908STATEMENTS OF INCOME AND COMPREHENSIVE INCOMEFor the years ended December 31 (in thousands of Canadian dollars, except per share amounts)            2011  2010     Petroleum and natural gas revenues$25,364 $13,063Royalties (2,837)  (1,108)  22,527  11,955     Production and operating 5,243  3,432Transportation 1,322  645Exploration and evaluation 732  602General and administrative 2,581  1,471Interest and financing charges 2,045  344Depletion, depreciation and amortization 8,963  4,860Impairment 1,782  423Stock based compensation 553  710  23,221  12,487      Loss and comprehensive loss for the year$(694) $(532)      Earnings per share:      Basic and diluted$(0.01) $(0.01)STATEMENTS OF CHANGES IN EQUITY       (in thousands of Canadian dollars)        Years ended December 31, 20112010 Number $ Number $        Share capital       Balance, beginning of year48,431,130 37,282 46,873,962 35,399Issue of common shares12,000,000 18,000 - -Share issue costs- (1,059) - -Exercise of stock options and Performance Incentive Rights117,500 181 1,588,666 1,912Cancelled- - (31,498) (29)Share capital, end of year60,548,630 54,404 48,431,130 37,282        Warrants       Balance, beginning of year2,800,000 2,065 - -Issued for Note Facility- - 2,800,000 2,065Warrants, end of year2,800,000 2,065 2,800,000 2,065        Contributed surplus       Balance, beginning of year  3,331   3,152Cancellation of common shares  -   29Exercise of stock options and Performance Incentive Rights  (46)   (560)Stock-based compensation expense  553   710Contributed surplus, end of year  3,838   3,331        Deficit       Balance, beginning of year  (9,448)   (8,916)Loss for the year  (694)   (532)Deficit, end of year  (10,142)   (9,448)STATEMENTS OF CASH FLOWSFor the years ended December 31(in thousands of Canadian dollars)        2011  2010      Cash flows from operating activities:-           Loss$(694) $(532)Adjustments for:      Exploration and evaluation 732  602 Interest and financing charges 2,045  344 Depletion, depreciation and amortization 8,963  4,860 Impairment 1,782  423 Stock based compensation 553  710Change in non-cash working capital (1,595)  594Net cash from (used in) operating activities 11,786  7,001      Cash flows from investing activities:     Exploration and evaluation (139)  (184)Property, plant and equipment and exploration and evaluation assets (25,771)  (17,189)Acquisition of property, plant and equipment (11,276)  (155)Change in non-cash working capital 2,022  2,174Net cash from (used in) investing activities (35,164)  (15,354)      Cash flows from financing activities:      Proceeds from issue of common shares 17,076  1,353 Proceeds from loans and borrowings 7,541  (2,606) Proceeds from note facility -  10,000 Interest paid (1,239)  (250) Deferred financing costs -  (144)Net cash from financing activities 23,378  8,353      Change in cash and cash equivalents -  -      Cash and cash equivalents beginning of year -  -      Cash and cash equivalents end of year$- $- ADVISORIESForward-looking InformationCertain statements contained in this release constitute forward-looking information. These statements relate to future events or Sure Energy's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on Sure Energy's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, Sure Energy's stated exploration and development intentions for its principal oil and natural gas properties, land acquisition strategy and statements under "Outlook" contain forward looking information. Sure Energy's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. Sure disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.Use of BOEsIn this press release the calculation of barrels of oil equivalent (BOE) is calculated at a conversion rate of 6,000 cubic feet (Mcf) of natural gas for one barrel (bbl) of oil based on an energy equivalency conversion method. BOEs may be misleading particularly if used in isolation.  A BOE conversion ratio of 6 Mcf: 1 bbl 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 visit our website at www.sureenergyinc.com or contact: Mr. Jeff Boyce, Chairman and CEO Mr. Chris Baker, President and COO Mr. Lance Wirth, Vice President, Finance and CFO Phone: (403) 410-3100  Fax: (403) 410-3111 Email: info@sureenergyinc.com