Ironhorse Announces Third Quarter 2011 Financial and Operating Results

CALGARY, Nov. 25, 2011 /CNW/ - Ironhorse Oil & Gas Inc. ("Ironhorse" or the "Company") (TSX-V: IOG) has released its financial and operating results for the period ended September 30, 2011.

Highlights and Accomplishments:

  • The Company entered into an agreement to sell its Shackleton, Saskatchewan shallow gas property for net cash proceeds of $9.5 million, the sale closed on October 26, 2011. The net proceeds were used to pay down the Company's bank debt.
  • The Company achieved funds from operations for the nine months ended September 30, 2011 of $1.6 million ($0.05 per share) compared to $3.3 million ($0.13 per share) over the same period in 2010.
  • Ironhorse and its partners completed the drilling of a water injection well at its core area in Pembina, Alberta. The Company anticipates the injection well will help maintain reservoir pressure allowing the other oil wells to be produced at higher rates and optimize the recovery of reserves when brought online during 2012.
  • During the third quarter, the Company commenced drilling operations on its Leon Lake, Saskatchewan lands. In October, Ironhorse drilled and cased two (1.5 net) vertical Shaunavon wells encountering Lower Shaunavon oil pay. The Company plans to evaluate these locations further using horizontal drilling and multi stage fracture stimulation techniques.
  • Subsequent to the third quarter, The Company started work on its three dimensional seismic program over the balance of its lands at Leon Lake and expects to have interpreted the results prior to year end 2011.

An overview of the financial and operating highlights for the three and nine months ended September 30, 2011 is set forth below:

  Three months ended September 30 Nine months ended September 30
SELECTED INFORMATION 2011 2010 2011 2010
Thousands except per share amounts        
Financial        
Revenue $1,671 $2,628 $6,966 $8,148
Royalties 431 474 2,208 1,619
Funds from operations 258 840 1,638 3,338
            Per share - basic & diluted 0.01 0.03 0.06 0.13
Loss                (1,644)                     (134)               (1,183)                   (3,092)
            Per share basic & diluted                  (0.06)                    (0.01)                 (0.04)                     (0.12)
Capital expenditures 626 384 1,399 13,420
         
Operations        
Production        
            Gas - mcf/d 3,139 4,298 3,394 4,640
            Oil  - bbl/d 89 203 153 162
            Total - boe/d 612 919 719 935
         
Revenue - $/boe 29.69 31.41 35.51 31.91
Royalty - $/boe 7.65 5.67 11.26 6.34
Operating & transportation expenses - $/boe 8.79 7.08 7.34 4.82
Field netback - $/boe 13.25 18.66 16.91 20.75
General & administrative expenses - $/boe 3.99 6.36 4.63 5.67

Ironhorse's complete results for the three and nine months ended September 30, 2011, including unaudited interim financial statements and the management's discussion and analysis are available on SEDAR and on the Company's web site at www.ihorse.ca.

About Ironhorse:

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."

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.

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.

 

SOURCE Ironhorse Oil

For further information:

Rob Solinger
VP Finance & CFO
(403) 355-3620
rsolinger@ihorse.ca
www.ihorse.ca


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