WINNIPEG, Aug. 31 /CNW/ - Nordic Oil and Gas Ltd. (TSXV: NOG) today
announced the Company's financial results from operations for its second
quarter and six months ended June 30, 2009. All amounts referenced herein are
in Canadian dollars.
Highlights from the Six Months Ended June 30, 2009
Revenue from oil, natural gas and Coal Bed Methane ("CBM") sales for the
six-month period (including liquids and transport revenue) totaled $616,795 up
25.8% from the $490,119 reported for same period in 2008. When adding interest
income of $10,427, total revenue for the first six months of the year was
$627,221, compared to $524,724 from the same period a year ago. The increase
in the first half revenue totals was due to a rise in oil and gas revenue
alone to $608,258 as compared to $473,376 a year ago - a 28.5% increase.
Cash, short term investments, accounts receivable, deposits and deferred
costs for the first six months of the year totaled $866,860 compared to
$3,255,500 at the end of December, 2008. Total assets as at June 30, 2009 were
$12,410,364, on par with the $12,686,306 as at March 31, 2009, and down
slightly from the 2008 year-end total of $14,113,291.
General and administrative expenses for the first half of 2009 totaled
$131,157, down from the $218,080 reported for the same period in 2008. Overall
expenses for the first half of 2009 were down approximately $259,000 at
$670,857 compared to the first half of 2008 at $929,524. Total production
costs plus expenses for the first half of 2009 were $1,280,109, on par with
last year's total of $1,245,758.
The Company recorded a net loss of $499,327, after applying the future
income tax recovery of ($153,560) for the first six months of 2009, an
increase of $227,000 over the same period a year ago ($272,233). The increase
in the net loss for the six-month period can be attributed to a lower future
income tax recovery totaling approximately $298,000.
Second Quarter Results
Revenue from oil and natural gas sales (including liquids and transport
revenue) during the second quarter of 2009 totaled $358,127, compared to
$258,668 in Q1 2009 - a 38% increase - and a 4.1% increase over the $344,266
recorded during Q2 last year. When adding interest revenue, the Q2009 second
quarter revenue totaled $366,001, up approximately $100,000 over the Q1 2009
total of $261,220, but down slightly from the Q2 2008 of $375,622. The
increase from the first quarter is due to stronger oil and gas revenue (a
result of higher oil prices during Q2), while the slight decrease from last
year was due to the higher than normal interest revenue accrued during Q2
Overall expenses, not including production costs for the quarter under
review, increased slightly to $395,999 from the $342,201 for the same period
last year, and increased by approximately $110,000 over the first quarter of
this year. The increase in expenses for the second quarter was due primarily
to a rise in interest expenses to $32,233 from $13,402. General &
Administration expenses for the quarter dropped 19% to $87,463, compared to
$108,744 for the same period a year ago.
Total production costs plus expenses for the quarter were $735,467,
compared to $576,175 during the same period in 2008. The reason for the
increase was the rise in operating costs from $128,368 to $316,688, a direct
result of the extensive well maintenance that took place at the Company's
Lloydminster heavy oil wells.
For the quarter, the Company recorded a net loss of $277,215 (after
applying the future income tax recovery of $92,250), as opposed to the
$135,730 loss reported in Q2 2008.
Average gas production volume for the three months ended June 30, 2009
was 7.36 10(3)m(3)/day (264.28 GigaJoules/day), as opposed to 8.95
10(3)M(3)/day (352.34 GJ/day) during the second quarter of 2008. The Company
received $3.86/GJ as an average gas price during the second quarter of 2009
compared to $7.58/GJ for the second quarter last year.
Average heavy oil production volume for the three months ended June 30,
2009 was 53.57 Barrels of Oil per day (BOPD), compared to 37.04 BOPD during Q1
of this year. The Company received $33.28 as an average price per barrel
during Q2, up from the $20.04 received during Q1.
On June 1, the Company, in conjunction with its joint venture partner,
Western Warner Oils Ltd acquired 3,856 hectares (9,528 acres) of coal leases
located at Drumheller, Alberta.
Preliminary evaluation of the mining potential of this property conducted
by Norwest Resource Consulting Ltd. historically concluded the total
calculated in place coal was 95,951,031 tonnes with 53,905,623 tonnes
In conjunction with this acquisition, the Company announced in July that
it was examining the possibility of using Underground Coal Gasification
("UCG") as a means to convert the coal into product gas at its recently
acquired Drumheller, Alberta property.
Nordic is currently making preparations to submit an application to the
Province of Alberta for a UCG pilot project, only the second such project ever
undertaken in Canada, and one of just a few in North America. In March of this
year, the Alberta government, through the Alberta Energy Research Institute,
announced that it was providing $8.83 million for a $30-million deep coal
gasification project being undertaken by a Calgary-based company. It is
expected the project will demonstrate the ability to produce environmentally
clean synthetic gas from Alberta's vast, deep, coal resources, with the future
potential of utilizing the coal seams for carbon capture and storage.
In July, the Company began marketing a new non-brokered private placement
offering for up to 10,000,000 units at a price of $0.125 per Unit for gross
proceeds of $1,250,000 to various subscribers. Each Unit will consist of one
Class A common share of the Company issued as a "Flow-Through share" within
the meaning of the Income Tax Act (Canada) and one-half of one Class A common
share purchase Warrant ("a Warrant"). Each whole Warrant would entitle the
holder thereof to purchase one regular Class A common share of the Company at
a price of $0.13 for a period of one year from the date of issuance. On August
18, Nordic had its first closing, issuing 6,388,500 flow-through units (the
"Units") at a price of $0.125 per Unit for gross proceeds of $798,562.50 to
various subscribers. Furthermore, on August 31, 2009, the Company announced
its second closing on the afore-mentioned Flow-Through Offering, issuing and
additional 1,758,000 flow-through units at a price of $0.125 per Unit for
gross proceeds of $219,750.
Also in late July, the Company, along with its Joint Venture partner,
Western Warner Oils Ltd., entered into a strategic development agreement with
a private, major international oil company whereby Nordic has the opportunity
to earn an interest in that company's land in Preeceville, Saskatchewan. The
ensuing exploration work on the lands will result in that company having the
option to participate on a 50-50 go forward basis with Nordic, or allow Nordic
to retain a 100% interest in the land with the other company earning a Gross
Mr. Benson also stated that survey work has been completed for a
multi-well drilling program for shale gas on the Nordic land in Preeceville.
"We believe that with new drilling technology available to us, we will be
successful in unlocking the enormous reserves of natural gas that consultants
have confirmed is in the region." Drilling is expected to begin in September
of this 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.
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
This press release contains forward-looking statements with respect to
Nordic Oil and Gas Ltd. and matters concerning the business, operations,
strategy, and financial performance of Nordic. These statements generally can
be identified by use of forward-looking words such as "may", "will", "expect",
"estimate", "anticipate", "intends", "believe" or "continue" or the negative
thereof or similar variations. Such forward-looking statements are qualified
in their entirety by the inherent risks and uncertainties surrounding future
expectations. Forward-looking statements are based on a number of assumptions
which may prove to be incorrect. Unless otherwise stated, all forward looking
statements speak only as of the date of this press release and Nordic does not
undertake any obligation to update such statements except as required by law.
For further information:
For further information: Donald Benson, Chairman & CEO, Nordic Oil and
Gas Ltd., Tel. (204) 956-5042, Fax. (204) 897-7154, E-mail: email@example.com;
Don Bain, Corporate Secretary, Nordic Oil and Gas Ltd., Tel. (204) 943-1810,
Fax. (204) 943-1829, E-mail: firstname.lastname@example.org; www.nordicoilandgas.com