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Nextraction posts 23% sequential sales growth, "encouraging" flow-back rates from Alberta well

As of 9.30am EDT, shares in the Vancouver-headquartered company were up 1.69% at $0.60.

For the three months ending June 30, revenues were $238,868 and net loss was $1.03 million. On a per-share basis, losses per share totalled 4 cents.

Mark S. Dolar, President and CEO said: "Corporate and asset growth has been our primary focus in the first half of 2011."

"In the second quarter of 2011 we encountered several one-time capital expenditures required for the growth of a company of our size. With these costs now behind us, we look forward to improving our balance sheet and generating shareholder value through developing the assets in our inventory."

In February of this year, Nextraction formed a a joint venture with Magnum Energy (CVE:MEN) to acquire the 842-hectare Viking property, located in eastern Alberta's Provost Field. The company also produces light oil and liquids rich gas at its Pinedale Anticline property in Wyoming, and has exploratory rights to conduct a seismic survey and development opportunities in the Saturn Project in Montana.

The oil and gas company said in the three months to June, total production averaged 64 barrels of oil equivalent (boe) per day, weighted 32% light oil and natural gas liquids, and 68% natural gas.
This is 14% lower than average production of 75 boe per day, weighted 13% light oil and natural gas liquids, and 87% natural gas, in the first quarter of 2011, as despite higher oil production in the second quarter, natural gas output dropped from the previous period.

The company said total average production volumes for the second quarter were lower as approximately 55 boe per day was shut-in for the first half of the quarter, as a result of adding facilities required for regulatory compliance and work-over activities.

Still, higher oil and natural gas liquids production and improved realized prices for the commodity helped revenue, with prices of $99.34 per barrel in the second quarter, up 21% from the prior period.

Nextraction exited the second quarter with no debt, and a positive working capital position of $4.15 million, while also securing a commitment from a shareholder to provide a $1.5 million credit facility.

During the period, the company established its Calgary office, and acquired producing properties, beginning the drilling of its initial horizontal well in the Viking formation of eastern Alberta in June. Production is expected to come on stream in the third quarter of this year.

Looking ahead, the company said it plans to focus its attention on developing the Viking project and has identified a further 19 gross locations on the acreage, with hopes to accelerate drilling.