Invicta Energy Corp. Announces Financial and Operating Results for the Quarter Ended March 31, 2011

CALGARY, May 25, 2011 /CNW/ - Invicta Energy Corp. ("Invicta" or the "Company") (TSXV: VCA) is pleased to report its financial and operating results for the three months ended March 31, 2011. Invicta's interim condensed financial statements and related management's discussion and analysis for the period ended March 31, 2011 have been filed and are available on the SEDAR website at www.sedar.com and may also be obtained on Invicta's website at www.invictaenergy.ca.

             
    Three months ended Period ended


March 31,
2011

December 31,
20101

March 31,
2010
OPERATIONS            
Average daily production            
  Crude oil (bbls/d)   50   45  
  Natural gas (mcf/d)   359   93  
  Total equivalent (boe/d)   110   61  
               
Average product prices            
  Crude oil (Cdn $/bbl) $ 86.80 $ 79.51 $
  Natural gas (Cdn $/mcf) $ 3.68 $ 3.66 $
  Total equivalent (Cdn $/boe) $ 51.41 $ 64.81 $
               
Royalties (Cdn $/boe) $ 6.75 $ 6.50 $
Production and operating costs (Cdn $/boe) $ 11.27 $ 13.30 $
Field netback (Cdn $/boe) 2 $ 33.39 $ 44.50 $
               
FINANCIAL            
Oil and natural gas revenue $ 506,177 $ 363,181 $
Cash flow from operations $ (276,122) $ (197,880) $ 27,878
  Per share - basic and diluted $ (0.01) $ (0.01) $
Net loss $ (487,360) $ (875,561) $ (24)
  Per share - basic and diluted $ (0.01) $ (0.04) $ (0.00)
Capital expenditures $ 792,609 $ 2,111,615 $ 16,762
Working capital (net debt) $ (908,140) $ 73,494 $ (16,761)
Common shares outstanding (000)   35,650   35,645   100
Weighted average shares outstanding (000)   35,649   24,720   100
Options outstanding (000)   3,535   2,413  
Warrants outstanding (000)   19,125   19,130  

1 Invicta was incorporated February 1, 2010 and during the period ended March 31, 2010 had no oil and gas operations. Accordingly, a more useful comparison for operations is the fourth quarter of 2010.
2 Field netback is not a term prescribed by IFRS or the previous Canadian generally accepted accounting principles (Canadian GAAP), so is considered a non-GAAP measure. Field netback is calculated as oil and natural gas revenues after deducting royalties, production and operating expenses resulting in an approximation of initial cash margin in the field of oil and natural gas production. Invicta's use of this non-GAAP measurement may not be comparable with the calculation of similar measures for other companies.

Overview

The first quarter of 2011 was focused on raising equity, preparing for the next 6 to 8 horizontal well drilling program at Kindersley, Saskatchewan and building the Company's prospect inventory in Central Alberta.

To improve access to the institutional investment community and efficiency of the next financing, the Company worked diligently to become eligible to file a short form prospectus. The Company achieved this by filing its Annual Information Form and audited financial statements for the year ended December 31, 2010, on March 25, 2011. Invicta is pleased to report that, as a result of these efforts, Invicta successfully raised $5 million gross proceeds ($4.5 million net of issue costs) pursuant to a brokered financing that closed on May 3, 2011. These proceeds will be used to fund the first 6 to 8 horizontal well drilling program at Kindersley, Saskatchewan.

The Company had planned to start the 2011 drilling program at Kindersley, Saskatchewan during the first quarter, however the drilling licenses were received too close to the onset of spring breakup. Accordingly, the program was postponed until after breakup. This decision was considered prudent due to the increased risk of cost overruns. The essential services, including the drilling rig and fracturing crews, were secured prior to breakup and the drilling program is expected to commence on May 26.

In Central Alberta, the Company completed the two vertical test wells and brought them on production for testing in March, earning the Company two gross sections of land pursuant to the farm-in agreement. These light oil wells have associated water production, but prior to being shut-in for breakup the wells had not yet been optimized. Post breakup, production testing resumed and Invicta continues to optimize production from these wells. Additional drilling locations with potential horizontals and fluid handling facilities will proceed depending on the production testing over the next quarter.

Invicta continues to expand its exposure to light oil prospects in Central Alberta. The Company participated in the March and April crown land sales and added another seven gross sections of land. In addition the Company acquired two suspended oil wells and a section of land from another oil and gas producer. A recent workover on one of the acquired wells has been successful and the well has been brought back on production. The Company also acquired approximately 40 km of 2D seismic over this light oil play to help delineate the reservoir. In summary, the Company has increased its undeveloped land acreage to 31,481 net acres, a 22% increase from December 31, 2010, for a net investment of approximately $566,000.

Outlook

The focus of the 2011 $14 million capital program continues to be development drilling at Kindersley, Saskatchewan where the Company has in excess of 80 drilling locations. Over the year the Company plans to drill 16 wells at Kindersley, Saskatchewan and another three in Central, Alberta. The capital program will be funded by the net proceeds from the May equity issue, credit facilities and the additional cash flow generated from the wells drilled at Kindersley, Saskatchewan.

We are enthusiastic about Invicta's prospect-generating possibilities as our strong technical team is demonstrating its ability to generate real value on a reasonable cost basis. With the additional undeveloped land acquired we expect to add to our drilling inventory as these new prospects are developed.

About the Company

Invicta is a Calgary based, emerging junior oil and gas company focused on exploring and developing Viking light oil opportunities on lands in Kindersley, Saskatchewan, Central Alberta and Redwater, Alberta.

Cautionary Statements:

This press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Invicta. Undue reliance should not be placed on these forward-looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.

In the interest of providing Invicta shareholders and potential investors with information regarding the Company, including management's assessment of Invicta's future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on the Company's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. By its nature, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Invicta believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements contained throughout this press release should not be unduly relied upon. These statements speak only as of the date specified in the statements.

In particular, this press release may contain forward looking statements pertaining to the following:

  • the performance characteristics of the Company's oil and natural gas properties;
  • oil and natural gas production levels;
  • capital expenditure programs;
  • the quantity of the Company's oil and natural gas reserves and anticipated future cash flows from such reserves;
  • projections of commodity prices and costs;
  • supply and demand for oil and natural gas;
  • expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; and
  • treatment under governmental regulatory regimes.

The material assumptions in making these forward-looking statements include certain assumptions disclosed in the Company's most recent management's discussion and analysis included in the material available on this press release.

The Company's actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:

  • volatility in market prices for oil and natural gas;
  • liabilities inherent in oil and natural gas operations;
  • uncertainties associated with estimating oil and natural gas reserves;
  • competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel;
  • incorrect assessments of the value of acquisitions and exploration and development programs;
  • geological, technical, drilling and processing problems;
  • fluctuations in foreign exchange or interest rates and stock market volatility;
  • failure to realize the anticipated benefits of acquisitions;
  • general business and market conditions; and
  • changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry.

These factors should not be construed as exhaustive. Unless required by law, Invicta does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

SOURCE Invicta Energy Corp.

For further information:

Gordon Reese
President & CEO
gord@invictaenergy.ca
(403) 265-8890 ext 1
or  


Carrie McLauchlin
Vice President, Finance & CFO
carriem@invictaenergy.ca
(403) 265-8890 ext 4 

 

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