Aug. 18, 2009 (Filing Services Canada) -- Ironhorse Oil & Gas Inc. (IOG - TSX Venture), has released its financial and operating results for the second quarter ended June 30, 2009.
Highlights and accomplishments achieved during the quarter include:
* The Company completed and production tested two (0.4 net) oil wells in the Pembina, Alberta area. These wells were completed and production tested in late April and early May. On a combined basis the two wells flowed oil at rates of over 3,200 barrels per day plus associated solution gas and liquids, bringing the gross production rate from the two wells to 4,000 boe per day.
* For the three months ended June 30, 2009 production averaged 1,223 boe per day, a 12% increase from the 1,089 boe per day in the first quarter of 2009.
* Gas prices for the second quarter averaged $4.22 per mcf compared to $5.16 in the first quarter of 2009 and $8.74 for the corresponding quarter in 2008.
* Cash flow from operations was $0.9 million ($0.04 per diluted share) compared to $1.5 million ($0.07 per diluted share) in the first quarter of 2009 and $2.9 million ($0.14 per diluted share) for the corresponding quarter in 2008.
* Capital expenditures of $1 million during the second quarter brought total capital expenditures for the year to date to $7 million which represents approximately 70% of planned capital expenditures for 2009.
* Net debt at June 30, 2009 was $11.5 million. Our available credit facility is $14.5 million. We believe the oil and natural gas discoveries made this year will allow Ironhorse to maintain or increase its credit facility when the annual review is completed later this year.
An overview of the 2009 financial and operating highlights for the three and six months ended June 30, 2009 is set forth below:
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THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
SELECTED INFORMATION 2009 2008 2009 2008
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Thousands except per share amounts
FINANCIAL
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Revenue 2,298 6,120 5,351 10,183
Royalties 591 2,558 1,413 4,227
Cash flow from operations 881 2,939 2,423 4,670
Per share - diluted 0.04 0.14 0.11 0.23
Net income (loss) (653) 919 (671) 1,231
Per share - basic and diluted (0.03) 0.05 (0.03) 0.06
Capital expenditures 1,017 1,416 7,011 7,358
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OPERATIONS
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Production
Gas - mcf/d 7,233 7,600 6,827 6,817
Oil - bbl/d 17 7 12 7
Total - boe/d 1,223 1,274 1,150 1,143
Revenue - $/boe 20.85 52.80 25.71 48.92
Royalty - $/boe 5.36 22.07 6.79 20.32
Operating expenses - $/boe 3.00 1.45 2.92 1.90
Field Netback - $/boe 12.49 29.28 16.00 26.70
General & administrative
expenses - $/boe 3.85 2.78 3.68 2.95
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Ironhorse plans to place the two (0.4 net) Pembina oil wells on production in the first half of 2010. These two oil wells are expected to increase our net production by over 800 boe per day. The exact timing for placing the wells on production will depend on when we receive regulatory approval with respect to constructing the pipeline required to deliver the oil and natural gas to a gas processing facility.
Additional Information
Ironhorse's complete results for the three and six months ended June 30, 2009, including unaudited financial statements and the management discussion and analysis, are available on SEDAR or the Company's web site at www.ihorse.ca.
For further information, please contact:
Rob Solinger
VP Finance & CFO
(403) 355-3620
rsolinger@ihorse.ca
or visit our website at www.ihorse.ca.
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".
"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."
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.
Source: Ironhorse Oil & Gas Inc. (TSX-V: IOG) http://www.ihorse.ca
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