Nov. 12, 2010 (Filing Services Canada) -- Ironhorse Oil & Gas Inc. (IOG - TSX Venture), ("Ironhorse" or the "Company") has released its financial and operating results for the third quarter ended September 30, 2010.
Highlights and accomplishments achieved during the third quarter of 2010 include:
* Revenues for the nine months ended September 30, 2010 increased 13% to $8.2 million from $7.2 million for the same period in 2009.
* Higher revenues are a result of increases in oil production which averaged 162 bbl per day in 2010 as compared to 11 bbl per day in 2009. Overall production fell 15% from 1,117 boe per day to 935 boe per day due to natural declines in gas production.
* Field netbacks per boe increased 40% from $14.78 per boe to $20.75 per boe as Ironhorse's oil production accounts for 17% of total production in 2010 as compared to 1% in 2009.
* Funds from operations increased 4% to $3.3 million in the first nine months of 2010 from $3.2 in 2009.
* During the third quarter Ironhorse and its partners continued to work on a number of alternatives for placing the Nisku oil wells at Pembina, Alberta on production. The Company is pursuing implementation of a production scheme which would separate the sour gas from the oil at the well site and inject the sour gas back into the Nisku formation. Milestones achieved during the quarter with respect to this alternative include:
-- ERCB approval to drill injection wells;
-- Obtaining a surface lease to construct the facilities required to separate the gas and oil and inject the gas back into the Nisku formation and
-- Preliminary engineering and design work with respect to the facilities to be constructed at the well site.
-- Ironhorse estimates the Nisku oil wells could be on production in the next 12 to 18 months depending on the time lines for regulatory approvals and construction of the facilities.
* Ironhorse drilled one (1.0 net) successful Upper Shaunavon oil well at Leon Lake the well was placed on production in late October at a rate of 30 bbl of oil per day.
An overview of the financial and operating highlights for the three and nine months ended September 30, 2010 is set forth below:
Three months ended Nine months ended
September 30 September 30
SELECTED INFORMATION 2010 2009 2010 2009
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Thousands except per share amounts
Financial
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Revenue 2,628 1,858 8,148 7,208
Royalties 474 407 1,619 1,820
Funds from operations 840 798 3,338 3,222
Per share * diluted 0.03 0.04 0.13 0.15
Loss
per share 0.01 0.02 0.03 0.05
Capital expenditures 1,256 384 13,420 7,395
Operations
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Production
Gas * mcf/d 4,298 6,252 4,640 6,633
Oil * bbl/d 203 8 142 11
Total * boe/d 919 1,051 949 1,117
Revenue - $/boe 31.41 19.22 31.91 23.64
Royalty - $/boe 5.67 4.21 6.34 5.97
Operating & transportation expenses - $/boe
7.08 2.81 4.82 2.89
Field Netback - $/boe 18.66 12.20 20.75 14.78
General & administrative expenses - $/boe
6.36 3.10 5.67 3.50
Ironhorse's priorities for the balance of 2010 include drilling additional oil wells at Leon Lake, Saskatchewan, working towards placing the Nisku oil wells on production at Pembina, Alberta, identifying and evaluating prospective acquisition and merger candidates and fulfilling its remaining expenditure commitments with respect to the 2010 flow-through share offering. These activities will be funded by existing credit facilities and funds from operations.
Additional Information
Ironhorse's complete results for the three and nine months ended September 30, 2010, including unaudited financial statements and corresponding management discussion and analysis, are available on SEDAR or the Company's web site at www.ihorse.ca. The Company has posted its current power point presentation on its web site.
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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