TSX Venture: RTE
CALGARY, June 6 /CNW/ - Result Energy Inc. ("Result") is pleased to
announce the following highlights of operating results for Q1, and an update
on 2006 activity:
<<
- Q1 production averaged 601 boe/d, a 40% increase compared to 428
boe/d for Q1-05. Result managed to boost production despite shut-in
volumes at Clearhills and Pembina.
- Production revenues, net of royalties, increased by 93% to $1,828,354
compared to $945,978 in the Q1-05 period, and cash flow from
operations increased by 173% to $992,972 compared to $363,709 for
Q1-05.
Summary financial information
for the 3-month periods ended % change
March 31 2006 2005 from 2005
------------------------------------------
Revenue $ 2,345,018 $ 1,435,806 63.3 %
Less royalties 516,664 489,828 5.5 %
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Net revenue 1,828,354 945,978 93.3 %
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Operating expenses 528,969 321,514 64.5 %
General & administrative
expenses 476,459 331,024 43.9 %
Depreciation, depletion
and accretion 1,117,235 611,260 82.8 %
Interest 50,196 29,758 68.7 %
------------------------------------------
2,172,859 1,293,556 68.0 %
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Loss before income taxes (344,505) (347,578) (0.9 %)
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Tax expense (recovery) (9,451) (310,000) (97.0 %)
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Net (loss) for the period (335,054) (37,578) (791.6 %)
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Net (loss) per share
- basic and diluted (0.01) (0.00) (100.0 %)
Cash flow from operations 992,972 363,709 173.0 %
Cash flow per share 0.02 0.01 100.0 %
Total assets 36,292,332 14,700,654 18.4 %
Weighted average number of
common shares outstanding for
the period 45,648,793 32,020,143 42.6 %
>>
The full content of Result's unaudited financial statements and the
related Management Discussion and Analysis ("MD&A") for Q1 2006 are available
for review on SEDAR and the company's website (www.resultenergy.com).
Result also reports the following update on its main exploration and
operation activities for the 2006 year-to-date period:
<<
- Result recently entered into three farm-in agreements totaling over
7,000 acres. These farm-ins, at Worsley and in the Dodsland/Alsask
core area, are highly prospective and add several potential locations
to the Company's drilling inventory.
- at the Clear Hills area in the Peace River Arch, Result and partners
drilled 3 (1.1 net) additional gas wells in Q1 targeting a
delineation of the Charlie Lake "A" pool. Two of these outpost wells
were uneconomic and will be abandoned. The third well was cased and
will be completed early in Q3-06. In addition to this standing cased
well, Result has interests in 4 (2.1 net) shut-in gas wells in the
Clear Hills area.
- In Q1 Result commenced construction of a 10 mile, 6 inch gathering
pipeline, which was successfully completed prior to spring break-up.
This pipeline was subsequently purchased by a third party mid-stream
company who are in process of constructing an area gas processing
plant, with a planned in-service date of August 31, 2006. Result's
production in the Clear Hills area was shut-in in mid 2005 due to
third party processing capacity constraints. Result's estimated
shut-in production capacity in its Clear Hills area wells is 1,500
mcf/d (net), or 250 boe/d.
- in the Worsley area, one additional Leduc gas well (36.4% WI) was
drilled in Q1-06. This well has been completed, and is expected to be
tied-in and on production in Q2. A second Leduc gas well (50% WI) was
drilled and tested in May, and is expected to be tied-in and on
production in early Q3. The estimated combined incremental production
volumes from these two new wells is 175 boe/d (net).
- in the Eureka area east of Worsley, Result acquired additional 3D
seismic data in Q1, and acquired 3 additional sections of mineral
rights on a Devonian prospect, which is planned to be drilled in Q3.
- at the Dodsland area of Saskatchewan, Result drilled an additional 3
(1.5 net) Viking gas development wells in February. In addition, a 2
section pilot project to increase Viking gas infill wells from 2 to 4
per section is expected to commence in Q2. Subject to satisfactory
weather conditions and rig availability, Result has an inventory of
at least 10 (5.0 net) development and exploration locations to drill
in its Saskatchewan core area over the Q2 and Q3 periods.
- in the Pembina area, Result awaits a regulatory ruling which will
allow a third party compression facility to be commissioned, through
which the Company's gas volumes can flow. Result has a 50% (BPO)
interest in two completed Viking natural gas wells which should
produce at an estimated total of 1,750 mcf/d net, or 300 boe/d net
(BPO) once on stream.
- Result's current field estimated production volume is approximately
625 boe/d. As noted above, additional productive capability from
projects at Clear Hills, Pembina and Worsley of approximately 725
boe/d remains shut-in and is anticipated to come on stream by mid Q3.
- the Company's existing bank revolving credit facility has been
expanded from $6.5 million to $11.5 million. The facility has an
initial limit of $9 million, which is scheduled to increase as the
existing backlog of production is brought on stream. This expanded
bank facility will give Result flexibility in expanding exploration
and development activities, and pursuing potential property
acquisitions.
- for the balance of 2006, Result's activity plans include drilling a
total of up to 20 (10 net) wells, and acquiring new 3D seismic for
potential expansion in the Kakwa and Pembina areas.
>>
Bill Matheson added in summary "Result has experienced a challenging
environment in 2006 owing to soft natural gas prices and tie-in delays.
However, with our drillbit success year-to-date and our basket of exploration
and development projects in the works, we are very excited about the balance
of 2006 and 2007".
Result Energy Inc. is a publicly traded Canadian energy company involved
in the exploration and development of oil and gas properties in western
Canada, with a current exploration focus in the Peace River Arch region.
Result trades on the TSX Venture Exchange under the symbol "RTE".
Investors are cautioned that this news release contains forward looking
information. Such information is subject to known and unknown risks,
uncertainties and other factors that could influence actual results or events
and cause actual results or events to differ materially from those stated,
anticipated or implied in the forward-looking information. Readers are
cautioned not to place undue reliance on forward-looking information, as no
assurances can be given as to future results, levels of activity or
achievements.
The term barrels of oil equivalent ("boe") may be misleading,
particularly if used in isolation. A boe conversion ratio of six thousand
cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence
is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wellhead. All
boe conversions herein are derived from converting gas to oil in the ratio mix
of six thousand cubic feet of gas to one barrel of oil.
The TSX Venture Exchange does not accept responsibility for the adequacy
and accuracy of this release.
%SEDAR: 00012334E
