WINNIPEG, April 29 /CNW/ - Nordic Oil and Gas Ltd. (TSXV: NOG), today
announced the Company's financial results from operations for its
fourth quarter and year ended December 31, 2010. All amounts referenced
herein are in Canadian dollars.
Revenue from oil and natural gas sales (including liquids and transport
revenue) during the fourth quarter of 2010 totalled $285,954 up from
the $259,711 reported in Q4 2009. When taking into account any interest
earned, the Q4 revenue for 2010 totalled $285,594 versus $256,041 for
the same period in 2009.
For the 12 months ended December 31, 2010, oil and gas, liquids and
transport revenue was down to $806,064 from the $1,259,969 reported at
the end of December 2009, a decrease of 36%.
The revenue decrease for the year was due to several factors: the
Company's revenue for most of the second half of the year from its
Lloydminster wells was based on a 33 1/3% ownership position, as
opposed to the 100% ownership position ion 2009; the Company's heavy
oil wells at Lloydminster were shut-in during February, March and much
of April, thereby significantly depleting revenue; and, due to
continuing low gas prices, production was also shut-in for a period of
time in 2010 at the Company's natural gas wells at Joffre. The gas
wells did not resume production until November 2010.
Total assets, including cash, short-term investments, accounts
receivable, property and equipment and other assets (deposits), at the
end of the year under review totalled $13,292,811, down approximately
$5 million from the 2009 year end total of $17,357,549. The primary
reason for the drop in assets was a result of the sale of property and
equipment related to the Company's disposition of a 66 2/3% interest in
its Lloydminster property. As such, the value of the Company's property
and equipment decreased from $16,168,787 at the end of 2009 to
$11,847,967 at the end of 2010.
Overall expenses for the year ended December 31, 2010 totalled
$2,465,138, down approximately $600,000 from the 2009 total of
$3,079,810. The primary reason for the drop in expenses was the
decrease in operating costs to $681,700 in 2010 versus $1,293,414 in
the previous year. This is a result of more efficient operating
procedures at the Lloydminster wells. General and administrative costs
were on par with last year: $1,037,315 in 2010 against $1,028,860 in
For the fourth quarter of 2010, expenses totalled $626,683 as opposed to
$1,162,290 in Q4 2009. Again, the main reason for the sharp drop in
expenses was the reduction in operating costs to $173,542 during the
fourth quarter of 2010 from $374,064 in the same period a year ago, and
the drop in general & administrative costs from $503,528 last year to
just $229,540 in the fourth quarter of 2010.
Earnings for the year before interest, taxes, depreciation and
amortization (EBITDA) were negative ($3,504,259) compared to
($1,225,472) in 2009. The increase resulted from the aforementioned
loss on the sale of assets of ($2,289,101).
The net loss for the three months ended December 31, 2010 before income
taxes was ($1,171,824), compared to a loss of ($875,188) recorded
during the same period a year ago. For the full year under review, the net loss was $3,061,719 up
approximately $1.8 million from the $1,230,218 in 2009. The increase in
the 2010 loss can largely be attributed to the drop in the revenue by
approximately $450,000 and the previously mentioned $2,289,101 loss on
the sale of the 66 2/3% interest in the Company's Lloydminster assets.
Average production volume for gas for the year ended December 31, 2010
was 4.02 10³m³/day or 154.72 GJ/day, compared to 6.33 10³m³/day or
224.38 GJ/day in 2009. This equates to approximately 25 BOE/d in 2010,
versus 40 BOE/d last year. The Company received $3.82/GJ as a weighted
average gas price during the year under review compared to $3.93/GJ
last year. During most of 2010, the Company shut-in its natural gas
wells at Joffre due to continued low prices for gas. The wells were
subsequently placed back on production in November.
Average production volume for gas for the three months ended December
31, 2010 was 5.30 10³m³/day or 204.14 GJ/day compared to 2.84/10³m³/day
or 143.52 GJ/day during the fourth quarter last year. This year's total
equates to approximately 33 BOE/d for the quarter versus 18 BOE/day for
the same period in 2009. The increase in production from the Company's
wells at Joffre in the fourth quarter is due to the fact that three new
CBM wells were placed on production during this period, as were two
natural gas wells (6-20 and 3-18 wells), both of which came back on
production in late November.
The Company received $3.82/GJ as a weighted average gas price during the
fourth quarter of 2010 compared to $3.64/GJ for the fourth quarter last
Average daily heavy oil production for the year ended December 31, 2010
was approximately 37 BOPD, with an average price received of $64.53 per
barrel. For the fourth quarter of 2010, average daily heavy oil
production was approximately 35 BOPD, with an average price received of
$65.19 per barrel. This compares to approximately 53 barrels of oil
produced per day in 2009 and an average net price per barrel of $62.63.
Oil production was impacted due to the fact that the heavy oil wells at
Lloydminster were also shut-in for a period of time early in the year;
in addition, the Company's production was recorded on the basis of a 33
1/3% ownership at Lloydminster for most of the second half of the year.
About Nordic Oil and Gas Ltd.
Nordic Oil and Gas Ltd. is a junior oil and gas company engaged in the
exploration and development of oil, natural gas and Coal Bed Methane in
Alberta and Saskatchewan. The Corporation is listed on the TSX Venture
Exchange and trades under the symbol NOG. Nordic was one of the "2008
TSX Venture 50" companies, a ranking of the top 10 public venture
capital companies in five industry sectors listed on the TSX Venture
This news release contains certain statements that may be deemed
"forward-looking statements". All statements in this release, other
than statements of historical fact, that address events or developments
that the Corporation expects to occur, are forward looking statements.
Forward looking statements are statements that are not historical facts
and are generally, but not always, identified by the words "expects",
"plans", "anticipates", "believes", "intends", "estimates", "projects",
"potential" and similar expressions, or that events or conditions
"will", "would", "may", "could" or "should" occur. Although the
Corporation believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are not
guarantees of future performance and actual results may differ
materially from those in forward looking statements. Factors that could
cause the actual results to differ materially from those in
forward-looking statements include market prices, exploration and
drilling success, continued availability of capital and financing and
general economic, market or business conditions. Investors are
cautioned that any such statements are not guarantees of future
performance and actual results or developments may differ materially
from those projected in the forward-looking statements. Forward looking
statements are based on the beliefs, estimates and opinions of the
Corporation's management on the date the statements are made. The
Corporation undertakes no obligation to update these forward-looking
statements in the event that management's beliefs, estimates or
opinions, or other factors, should change.
* The term BOEs may be misleading, particularly if used in isolation. A
BOE conversion ratio of 6 Mcf: 1 barrel 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 the contents of
this News Release.
SOURCE Nordic Oil
For further information:
Nordic Oil and Gas Ltd.