Ironhorse Announces Second Quarter 2011 Financial and Operating Results

CALGARY, Aug. 24, 2011 /CNW/ - Ironhorse Oil Gas Inc. ("Ironhorse" or the "Company") (TSX-V: IOG) has released its financial and operating results for the period ended June 30, 2011.

Highlights and accomplishments achieved during the quarter include:

• The Company reached an agreement with its partners to tie-in and process production from its two (0.4 net) prolific Nisku oil wells at Pembina, Alberta. Ironhorse agreed to reduce its production working interest from 18.75% to 15.63% in exchange for one of its partners paying the capital costs associated with the facilities and the construction of pipelines from the wells to the oil battery. The Company and its partners plan to drill two additional wells (one producer, one injector) in the fall of 2011. The projected on-stream production date is January 2012.  Production is expected to start at a gross rate of 1,350 (210 net) barrels of oil equivalent (boe) per day and be increased over time to an optimal rate of 4,000 (600 net) boe per day when the Company and its partners implement an enhanced oil recovery program.
• Ironhorse sold its working interest at Lochend, Alberta for $0.4 million. The property had nominal production.
• The Company achieved funds from operations for the six months ended June 30, 2011 of $1.4 million ($0.05 per diluted share) compared to $2.5 million ($0.10 per diluted share) over the same period in 2010.
• Ironhorse and Copper Island Resources Ltd. ("CIRL") agreed to extend the option to equalize their respective Hamilton Lake, Alberta lands which are prospective for Viking oil. Ironhorse initially acquired four sections of land in February 2011 at a cost of $0.5 million and CIRL acquired 19.75 sections in March 2011 at a cost of $4.5 million. This summer CIRL drilled, completed and placed on production a horizontal Viking oil well at a cost of $2.5 million. In order to exercise its option to equalize, Ironhorse must pay its share of all costs incurred to date or approximately $3.5 million. CIRL agreed to extend the equalization payment deadline until October 31, 2011 in exchange for Ironhorse transferring its interest in the four sections acquired in February to CIRL for $1.00. If Ironhorse makes the equalization payment, CIRL will transfer back a 50% working interest in the lands.
• During the second quarter the Company identified multiple Upper and Lower Shaunavon oil drilling locations on its Leon Lake, Saskatchewan lands. Ironhorse expects to commence drilling up to three (2.3 net) vertical Upper Shaunavon oil wells this fall and shoot three dimensional seismic over the balance of its lands early this winter.

An overview of the financial and operating highlights for the three and six months ended June 30, 2011 is set forth below:

Ironhorse's complete results for the three and six months ended June 30, 2011, including unaudited interim financial statements and the management's discussion and analysis are available on SEDAR and on the Company's web site at www.ihorse.ca.

About Ironhorse:

Ironhorse Oil Gas Inc. is a Calgary-based junior oil and natural gas production company trading on the TSX Venture Exchange under the symbol "IOG."

Forward-looking statements:

Statements throughout this release that are not historical facts may be considered to be "forward looking statements." These forward looking statements sometimes include words to the effect that management believes or expects a stated condition or result. All estimates and statements that describe the Company's objectives, goals, or future plans, including management's assessment of future plans and operations, drilling plans and timing thereof, expected production rates and additions and the expected levels of activities may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, incorrect assessment of the value of acquisitions, failure to complete and/or 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 changes in the regulatory and taxation environment. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, 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 the Company 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 the Company 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 ability of the Company to obtain equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manor; and field production rates and decline rates. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included elsewhere herein and in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this release are made as at the date of this release.

Boe Conversion - Certain natural gas volumes have been converted to barrels of oil equivalent ("boe") whereby six thousand cubic feet (mcf) of natural gas is equal to one barrel (bbl) of oil. This conversion ratio is based on an energy equivalency conversion applicable at the burner tip and does not represent a value equivalency at the wellhead.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.