EXHIBIT 99.1
FOR IMMEDIATE RELEASE: NEWS
October 16, 2003 OTCBB-KEST
KESTREL ENERGY REPORTS IMPROVED RESULTS FOR FISCAL YEAR ENDING JUNE 2003
Denver, Colorado (October 16th, 2003) - Kestrel Energy Inc. (OTCBB-KEST), an oil
and gas exploration and production company today announced its financial results
for the fiscal year ending June 2003.
Revenue was stronger with oil and gas sales increasing in fiscal 2003 by
$146,898, or 13%, to $1,304,581. Average prices per barrel of oil increased 30%
to $24.10 from $18.52 a year ago. Average prices received per Mcf of gas
increased 59% to $3.18 from $2.00 a year ago.
The Company's net working capital deficit also improved at June 30, 2003, to
$4,642 compared to a working capital deficit of $631,012 at June 30, 2002.
The Company's proved reserves value (PV10%) has been estimated by Sproule
Associates Inc., an independent petroleum engineering firm, to be approximately
$10,600,000. This compares to $8,900,000 as of June 30, 2002. The Company's
undiscounted net future cash flows have been estimated by Sproule Associates
Inc., to be approximately $21,667,000. This compares to $18,641,000 as of June
30, 2002. The increase in the current year is the result of higher oil and
natural gas prices offset against production during the year and revisions of
previous quantity estimates.
At June 30, 2003, the Company's proved oil reserves increased approximately
37,300 bbls. to 310,700 bbls., or 14% from 273,400 in 2002. The Company's proved
gas reserves decreased 7,310 Mmcf to 4,759 Mmcf, or 61%, from 12,069 Mmcf in
2002. The decrease in proved gas reserves is attributable primarily to the
decision to remove all proved undeveloped and proved developed non-producing
reserves associated with the Greens Canyon project, production during the year
and the sale of several non-core producing assets. The resource at Greens Canyon
will remain as unproved until further appraisal drilling can confirm the
project's commerciality.
Despite the reserve write down at the Greens Canyon property, the Company's
reserve value on the remaining properties grew during the year due to higher
prices for natural gas and oil. The Company's core properties have excellent
development potential and a current reserve life in excess of 40 years. These
reserves provide for a solid foundation as the Company moves forward.
The Company is also investigating other petroleum targets at different horizons
on the Company's 30,000 acre leasehold position in the Greens Canyon/ Firehole
Canyon area. The other horizons include numerous coalbed methane zones at depths
between 1,000 feet and 5,800 feet. While these targets remain unproved they do
provide the potential for significant reserve additions should exploration
efforts prove successful. The Company will be seeking industry partners to
evaluate these other targets.
The Company will report a net loss of $2,335,980 in fiscal 2003 compared to a
net loss of $8,111,561 in fiscal 2002, which was a decrease of $5,775,581. The
net loss in fiscal 2003 is primarily attributable to abandonment and impairment
expenses of $1,238,214, depreciation and depletion expenses of $339,002 and the
loss on sale of available-for-sale securities of $575,893. The abandonment and
impairment expenses of $1,238,214 was largely attributable to a write down in
value of Greens Canyon gas reserves and dry hole costs during the year.
Barry Lasker, President and CEO said "Management is pleased to report that the
painful steps taken during the year to focus on strengthening the Company's
balance sheet have begun to bear fruit. The Company's debt has been reduced and
it has a positive relationship with its current lenders, the debt repayment
schedule is now under manageable terms, our overhead has been reduced
significantly, our revenues are up and our costs are down. We intend to grow
through the drill bit over the next few years, including aggressive development
of our existing reserves. We remain confident on the long term outlook for the
natural gas industry in general and will continue to seek out additional
projects of merit. We are well placed in the Rocky Mountain arena, which is seen
by industry experts to be a huge growth area for natural gas, with a solid
prospect inventory and leasehold position".
Headquartered in Denver, Kestrel has producing properties in Wyoming, Oklahoma,
New Mexico, Texas and Louisiana.
Proved oil and gas reserves are the estimated quantities of crude oil, natural
gas and natural gas liquids which geological and engineering data demonstrates
with reasonable certainty to be recoverable in future years from known reserves
under existing economic and operating conditions. Proved developed oil and gas
reserves are those expected to be recovered through existing wells with existing
equipment and operating methods.
Statements made in this press release that are not historical facts may be
forward-looking statements. Actual results may differ materially from those
projected in any forward-looking statement. There are a number of important
factors that could cause actual results to differ materially from those
anticipated or estimated by any forward-looking information. In addition,
while the Company's current plans are to drill additional wells and further
develop some of its existing properties, various factors, including but not
limited to actual drilling results, equipment availability or breakage,
limited financial resources, or other problems, could change those plans. A
description of the risks and uncertainties which are generally attendant to
Kestrel Energy and its industry and other factors which could affect the
Company's financial results are included in the Company's report to the
Securities and Exchange Commission on Form 10-KSB for the year ended June 30,
2003.
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CONTACTS:
Kestrel Energy
Barry Lasker, President
303/295-0344
E-mail: mtemple@kestrelenergy.com