Lochaird Energy Inc. Quarter end September 30, 2008 Financial Results, Record Revenue
Calgary, Alberta CANADA, December 05, 2008 /FSC/ - Lochaird Energy Inc. (LEN - TSX Venture),
During the third quarter of 2008 a horizontal well was drilled by a third party operator, with Lochaird holding a 10% interest. The well covered 450 metres of pay and may have confirmed a new pool with an additional 100 metres of pay.
Total revenue has set new record highs for the quarter and year to date based upon higher commodity prices and higher oil production.
Summary of Quarterly Financial and Operational Results
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Three months Three months Nine months Nine months
ended September ended September ended September ended September
30, 2008 30, 2007 30, 2008 30, 2007
Total sales ? products $
225,874 209,399 731,681 578,077
Royalties $
42,595 19,708 93,641 61,268
Operating expenses $
94,498 78,455 233,316 185,911
Cash flow $
88,781 111,236 404,724 330,898
$ Per share ? basic and diluted
0.009 0.016 0.059 0.048
Average daily sales ? boe
27 39 46 36
Operating netback $/ boe
36.01 30.93 48.62 33.35
Net income (loss) $
(128,376) (67,636) (177,212) (177,606)
Net loss per share basic and diluted $
(0.013) (0.010) (0.018) (0.026)
Weighted average number of
shares outstanding
10,089,911 6,861,189 10,089,911 6,861,189
Comprehensive gain (loss) $
(128,376) (67,636) (177,212) (177,606)
$ Per share ? basic
(0.013) (0.010) (0.018) (0.026)
Oil revenue $
159,263 168,947 541,540 442,909
Oil ? $ per barrel
113.19 71.15 103.2 65.02
Natural gas revenue $
40,139 26,036 120,467 92,448
Natural gas ? $ per mcf
8.67 5.49 9.24 7.01
Natural gas liquids revenue $
26,472 14,415 69,674 42,719
Natural gas liquids - $ per barrel
93.54 33.41 77.31 46.87
Total gross revenue $
225,874 209,398 731,681 578,076
Total gross revenue $ per boe
91.75 58.22 87.92 58.27
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Historical Quarterly Results
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Q4 2007 Q1 2008 Q2 2008 Q3 2008
Total revenue 180,118 189,395 316,412 225,874
Cash flow / netback 95,133 89,775 226,170 88,781
Average sales ? boepd 32 28 36 27
Operating netback ? boe 32.70 35.21 68.31 36.01
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Q4 2006 Q1 2007 Q2 2007 Q3 2007
Total revenue 115,268 133,731 234,948 209,398
Cash flow / netback 63,125 87,198 132,467 111,234
Average sales ? boepd 27 27 42 39
Operating netback ? boe 25.75 35.43 34.30 30.93
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Risks and Uncertainties
Exploration and Development Activities
Lochaird has completed its farm-in commitment on the Tilston, Manitoba lands and earned 50% in four sections. A well tested two zones and is suspended pending further development in the area. A second farm-in has provided access to 7 sections of land in the Waskada area. Lochaird has entered into a financing agreement with Northern Securities to raise up to two million dollars to explore the Waskada and Tilston lands. The royalty regime and access to land and services makes this an attractive area for exploration for the Bakken and other zones present in each area.
The Company is exposed to numerous risks and uncertainties associated with the exploration and development activities. There is no assurance that expenditures made on exploration and development activities will result in discoveries of oil and natural gas in commercial quantities. In addition, delays in obtaining government approvals, shortage of skilled laborers and premature decline of reservoirs will have an adverse effect on future results of operations, liquidity and financial condition of the Company.
Credit Risk
Lochaird is subject to normal industry credit risk on its accounts receivable with customers and joint venture partners. The Company mitigates these risks by maintaining credit management policies.
In July and August, 2008 SemCanada Energy Company and SemCanada Crude Company were unable to pay Lochaird revenue of approximately $94,000 due to entering receivership. It is undetermined at this time when or if the funds may be recovered from the receiver.
The TSX Venture Exchange neither approved nor disapproved the contents of this press release.
For further information please contact:
Grant S. Blakely
President and Chief Executive Officer
Lochaird Energy Inc.
Phone (403) 650-2255
Fax (403) 514-0956
Email: blakelyg@telusplanet.net
Advisory:
Certain information regarding the Corporation including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserve estimates, environment risks, competition from other producers and ability to assess sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.
Source: Lochaird Energy Inc. (LEI.P - TSX-V)
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