RIPPER OIL AND GAS INC. RELEASES THIRD QUARTER RESULTS

TSX VENTURE STOCK SYMBOL: RIP

CALGARY, Feb. 24 /CNW/ - Ripper Oil and Gas Inc. (TSX: RIP) ("Ripper" or the "Corporation") presents its third quarter 2010/2011 financial results for the nine months ended December 31, 2010, and operational activities to date.

Corporate highlights include:

  • average production for the third quarter was 84boe/day down from 339boe/day in the first quarter, due to the divestitures in the second and third quarters.
  • third quarter operating netbacks were $29.61/boe on an average realized price of $45.48/boe, up from the second quarter $14.29/boe on an average realized price of $32.53/boe.  Although higher natural gas prices were a contributing factor to the increase, the higher netbacks are mainly due to the Corporation's third quarter production being 50% oil weighted as compared to second quarter oil weighing of 24%.  This was a direct result of the corporation's gas property divestures in the previous quarter.
  • natural gas prices averaged $4.11/mcf for the quarter, up 12% from the second quarter price of $3.66/mcf, and down 6% from the price of $4.36/mcf in the third quarter of last year.
  • funds from operations were a deficiency for the third quarter of $431,832 as compared to a  deficiency of $1,005,498 for the previous quarter.  The deficiencies in the second and third quarters are due to the current taxes that are payable as result of the property sales.
  • during the third quarter, the Corporation sold its Wildmere assets for $135,000 to an arm's length party, effective October 1, 2010.  Presently all wells associated with the property are shut in.
  • the corporation also sold two minor assets at Carnwood for $30,400.
  • the directors of Ripper declared an eligible dividend of $0.40 per Common Share of Ripper.  Payment was made on November 15, 2010, to shareholders of record on November 10, 2010.
  • subsequent to quarter end, the Corporation announced it has entered into an agreement to sell its remaining assets to an arm's length purchaser in consideration for $3 million effective March 1, 2011. The disposition is conditional on negotiation of a binding agreement of purchase and sale, completion of due diligence, and other conditions including TSX Venture Exchange approval. If all conditions are met, closing is set for March 3, 2011.  Total proved plus probable reserves assigned to these assets at March 31, 2010 by the independent firm GLJ Petroleum Consultants was 200 thousand barrels of oil equivalent (Mboe). Ripper estimates that approximately 30 Mboe will have been produced from these assets to March 1, 2011.  Ripper's current production from these assets is estimated at 88 barrels of oil equivalent per day (boepd) (6 mcf = 1 barrel of oil).
  • The Corporation intends to use the cash it expects to receive from the disposition and cash on hand to satisfy tax, severance and other corporate obligations. To the extent that it deems it advisable and to the extent that it has the estimated excess cash, Ripper's Board may declare a dividend on its common shares.  Ripper's March 31, 2011 year end including audited financial statements should be released at the end of June, 2011, and the Corporation's annual tax filing should be completed in early July. The company is debt free and has no bank line in place at this time.

The following table sets forth certain quarterly financial information of the Corporation for the eight most recent quarters:

    2011     2010     2009
  Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
FINANCIAL HIGHLIGHTS ($000)                
Gross Revenue 350.8 1,013.8 1,139.8 1,281.1 1,223.6 922.0 976.7 1,288.1
Less:                
  Royalties 3.2 121.0 78.5 187.4 85.7 92.5 44.2 141.0
  Production costs 105.4 402.0 437.6 474.5 444.8 400.8 371.3 478.8
  Transportation costs 13.8 45.5 46.0 51.7 48.8 42.4 51.2 52.3
Operating Netback 228.4 445.3 577.8 567.6 644.2 386.3 510.0 616.0
Less (add):                
  Other income/gain on hedge (17.4) (74.5) (62.7) (25.0) (8.3) (1.3) (0.1) 0
  G&A 168.2 184.0 186.2 221.9 226.1 190.5 214.2 198.2
  Interest expense 0.3 34.3 35.7 36.0 40.4 29.7 29.0 29.9
  Asset retirement expenditures 0.0 0 0 (19.3) 0.8 3.1 0 21.0
  Current taxes 509.1 1,307.1 18.3 (314.8) (6.0) 0 (6.8) (78.9)
Funds Flow from Operations (431.8) (1,005.5) 400.3 668.8 391.2 164.3 273.8 445.8
  Per share, basic and diluted (0.02) (0.05) 0.02 0.03 0.02 0.01 0.01 0.02
Add:                
  Change in non-cash working capital (68.4) 169.6 45.8 (661.1) 260.4 (43.9) (315.1) 174.2
Cash Flow from Operating Activities (500.3) (835.9) 446.0 7.7 651.6 120.4 (41.3) 620.0
                   
Net Income (loss) (141.3) 1,268.8 (146.9) (53.3) (210.5) (374.7) (294.0) (341.7)
  Per share, basic and diluted (0.01) 0.06 (0.01) (0.00) (0.01) (0.02) (0.01) (0.02)
                   
OPERATIONAL HIGHLIGHTS                
Daily Average Production                
  Oil (bbl) 42 61 64 64 60 59 60 66
  NGL (bbl) (8) 21 20 13 14 20 12 18
  Gas (mcf) 299 1,540 1,723 1,708 1,861 1,795 1,877 1,972
  Boe (6:1) 84 339 370 362 384 378 385 413
Sales Price                
  Oil ($/bbl) 74.44 69.32 70.83 68.00 72.70 65.74 58.17 44.23
  NGL ($/bbl) 68.35 54.46 51.24 75.60 59.67 24.03 44.06 41.90
  Gas ($/mcf) 4.11 3.66 4.07 5.19 4.36 3.14 3.57 5.18
Average Realized Price ($/boe) 45.48 32.53 33.81 39.29 34.63 26.49 27.88 34.29
Less:                
  Royalties ($/boe) 0.42 3.88 2.33 5.75 2.43 2.66 1.26 3.75
  Production costs ($/boe) 13.66 12.90 12.98 14.55 12.59 11.51 10.60 12.75
  Transportation costs ($/boe) 1.79 1.46 1.36 1.59 1.38 1.22 1.46 1.39
Operating Netback ($/boe) 29.61 14.29 17.14 17.41 18.23 11.10 14.56 16.40
                   
Note:  columns may not add due to rounding          

Ripper Oil and Gas Inc. ("RIP") is a publicly traded company on The TSX Venture Exchange.  Further information is available on SEDAR at www.sedar.com.

BOEs may be misleading, particularly if used in isolation.  A BOE conversion ratio 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.

The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.

SOURCE Ripper Oil and Gas Inc.

For further information:

Mr. R.G. (Jerry) Ball, President and Chief Executive Officer
at (403) 662-2020 or Fax (403) 662-2029
RIPPER OIL AND GAS INC.
Suite 1150, 606 - 4 Street S.W.
Calgary, Alberta  T2P 1T1

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Ripper Oil and Gas Inc.

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