PetroSands announces annual filings

/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TSX Venture Exchange
Trading Symbol: PCA

CALGARY, May 9 /CNW/ - PetroSands Resources (Canada) Inc. ("PetroSands" or the "Company") announces filing of its' financial results for the year ended December 31, 2010 and provides an operational update on current activity.                                    

Financial Results

The Company announces that it has filed its audited consolidated financial statements and related management discussion and analysis for the year ended December 31, 2010 with the Canadian securities regulatory authorities on SEDAR. In addition, the Company has filed its statement of reserves data and other oil and gas information for the year ended December 31, 2010 as mandated by National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") of the Canadian Securities Administrators. An electronic copy of these materials is available under the Company's issuer profile on SEDAR at www.sedar.com. PetroSands' reserves were evaluated as at December 31, 2010 by McDaniel & Associates Consultants Ltd. ("McDaniel"), an independent engineering firm.  McDaniel's evaluation was conducted in accordance with standards set out in the Canadian Oil and Gas Evaluation Handbook and is compliant with NI 51-101.

2011 Operational Update - Production

For the first quarter of 2011, estimated field production for the Company averaged 275 BOE/d, weighted 60% to medium gravity oil and NGLs and 40% to natural gas. This is a 460% increase over Q4 2010 production of 60 BOE/d while current production is over 400 BOE/d.

The increase in production was a result of the acquisition of 54 operated wells and related facilities in the Provost area of East Central Alberta and was pursuant to a transaction which closed on February 24, 2011 (see the press release of the Company dated February 25, 2011 relating thereto). The acquired assets are strategically focused and have numerous low-risk drilling locations. Using existing well control and 3D seismic coverage, management has identified several opportunities to significantly increase production beyond current levels. The Company plans to drill up to 2 wells in the next 3 to 5 months and expects that its financial results will continue to improve with the addition of these new assets.

Management and Board Changes

The Company has accepted Chad Dust's resignation as Director, Executive Vice-President and a Consultant to the Company. Having successfully fulfilled his mandate, completed PetroSands recent financing and executed its recently announced acquisitions, Mr. Dust is leaving his Director and Officer duties to pursue other opportunities. The Board of Directors wishes to thank Mr. Dust for his contribution, leadership and commitment to the Corporation over his term.

Debt Settlement

In addition, the Company announces it has reached a settlement to revise the repayment terms on approximately $1.7 million of debt associated with secured promissory notes owing to related parties. The consideration payable includes 45% to be paid in the form of 1,390,900 common shares at a deemed value of $0.55, (priced above current market price, and at the same price as the common shares that were issued under the recent December 2010 private placement). The Company feels settling this outstanding debt will reduce its financial leverage, and give it flexibility to continue to expand. The issuance of these common shares is subject to the approval of the TSX Venture Exchange.

About PetroSands Resources (Canada) Inc.

PetroSands Resources (Canada) Inc. is a dynamic new publicly traded junior oil and gas company focused on exploration and development of oil and natural gas in Alberta and Saskatchewan. The Company is focused on strategic acquisitions within its core areas that aggressively expand production, cash flow and reserves. The Company holds sizeable undeveloped lands in Alberta and Saskatchewan. Post debt settlement, the Company will have approximately 23.4 million common shares outstanding. PetroSands' shares are listed on the TSX-V under the trading symbol "PCA".

Forward-Looking Statements:  This news release contains certain forward-looking statements, including but not limited to, management's assessment of future plans and operations, capital expenditures and the timing thereof and expected timing and results from operations, that involve substantial known and unknown risks, uncertainties and assumptions, certain of which are beyond the Company's control. Such risks, uncertainties and assumptions include, without limitation, those associated with oil and gas exploration, development, exploitation, production, marketing, processing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive there from. 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 in reports, including the Company's annual information form for the financial year ended December 31, 2009, on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).  All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. 

The term BOE may be misleading, particularly if used in isolation. A BOE (barrel of oil equivalent) conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Neither the 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 news release.

ON BEHALF OF THE BOARD OF DIRECTORS

SOURCE PetroSands Resources (Canada) Inc.

For further information:

 
Greg Busby        President
Telephone:  (403) 540-9312
Email:   gbusby@petrosandscan.com
   
or
 
Brian Prokop  Chairman of the Board
Telephone:         (403) 919-1962
Email:               bprokop@petrosandscan.com

 

Profil de l'entreprise

PetroSands Resources (Canada) Inc.

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