Sep. 8, 2009 (Filing Services Canada) -- Ironhorse Oil & Gas Inc. (IOG - TSX Venture), is pleased to announce that it has received an independent reserves evaluation as at July 31, 2009 (the "report"). The report incorporates results from our recent oil discovery at Pembina and the impact of lower gas prices on our Shackleton property. Highlights of the report are as follows:
* Pembina increased our total reserves by 42% or 1.3 million boes, 1.1
million proved and 0.2 million probable;
* The Pembina oil discovery increased the value of our reserves before
tax discounted at 10% by 88% or $32.8 million, $26.2 million proved and
$6.6 million probable;
* Proved reserves at July 31, 2009 were 68% of total reserves up from 51%
of total reserves at December 31, 2008;
* Oil and NGLs account for 25% of our total reserves and 47% of the
before tax value discounted at 10%;
* Future capital costs to develop the reserves are estimated at $6.7
million of which $5.4 million pertains to developing the Pembina
reserves; and
The table below summarizes our reserves as at July 31, 2009.
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Proved Proved Total Probable Total
Producing Undeveloped Proved Proved +
Probable
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Oil & NGLs - 18 864 882 218 1,100
Mbbl
Gas - MMcf 10,623 2,297 12,920 6,855 19,775
Mboe 1,788 1,247 3,035 1,360 4,395
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The before tax value of the cash flows discounted at 10% are as follows:
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Proved Proved Total Probable Total
Producing Undeveloped Proved proved +
Probable
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$ millions $26.4 $29.5 $55.9 $15.9 $71.8
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Estimated values do not represent fair market values.
The following commodity price assumptions were made when preparing the report.
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2009 2010 2011 2012 2013
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Oil - Edmonton Par $76.79 $79.77 $81.46 $87.34 $94.97
Gas - AECO-C spot $3.92 $5.60 $6.34 $6.87 $7.50
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As at June 30, 2009, IOG's net debt was $11.5 million and there were 21.8 million shares outstanding. Our net asset value per share calculated as the before tax value of the cash flows discounted at 10% less net debt divided by the shares outstanding is $2.77 per share.
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. Statements relating to "reserves" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. In particular, this press release contains forward looking information pertaining to the following: the quantity of reserves; oil and natural gas production levels; capital expenditure programs; projections of oil and natural gas market prices and costs; expectations regarding the Company's ability to raise capital and to continually add to reserves through acquisitions and development; and treatment under government regulatory and taxation regimes. 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 geological, technical, drilling and processing problems, 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 manner; 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 and; unless required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information of future events or otherwise. The forward-looking statements are expressly qualified by these cautionary statements.
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. Boe's may be misleading, particularly if used in isolation. 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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