Richards Oil & Gas Reports Third Quarter 2007 Results



    CALGARY, Nov. 23 /CNW/ - Richards Oil & Gas Limited (the "Company") (TSX
Venture: RIX) is pleased to report that it has filed on SEDAR (www.sedar.com)
its unaudited financial statements and related Management's Discussion and
Analysis ("MD&A") of the results of operations and financial condition for the
three and nine month periods ended September 30, 2007.

    THIRD QUARTER 2007 HIGHLIGHTS

    
    -   Increased year to date production volumes 91% to 143 boe per day from
        75 boe per day in 2006
    -   Drilled, completed and tied in 13 (6.8 net) Horseshoe Canyon coal bed
        methane ("CBM") wells at Morningside and Lacombe during the third
        quarter and October 2007 resulting in current production of 210 boe
        per day
    -   Replaced declining conventional gas production at Gadsby with stable,
        long life CBM production (91% of current gas production is now from
        CBM versus 22% in January 2007)
    -   Continued development of the Company's Ardley lands by drilling and
        completing two vertical and one horizontal wells all of which have
        demonstrated CBM gas flow with no associated water production
    -   Enhanced financial flexibility completing $10 million private
        placement in August; net proceeds will accelerate development of the
        Company's Horseshoe Canyon CBM properties
    -   Maintained financial strength with working capital of $7.8 million
        and an available bank line of $1.5 million at the end of the third
        quarter


    SELECTED FINANCIAL AND OPERATIONAL INFORMATION

                    Three       Three               Nine        Nine
    $ Amount       months      months             months      months
     except         ended       ended              ended       ended
     for per        Sept-       Sept-              Sept-       Sept-
     unit amounts   ember       ember  Change      ember       ember  Change
    -------------------------------------------------------------------------
                     2007        2006       %       2007        2006       %
    -------------------------------------------------------------------------
    Production
     revenues     353,086     347,720       2  1,536,964     731,431     110
    Net loss   (3,408,991) (1,341,237)    154 (6,617,027) (1,692,285)    291
    Net loss
     per share      (0.06)      (0.04)     50      (0.14)      (0.05)    180
    Total
     production
     (boe/day)        122         102      20        143          75      91
    Operating
     netback
     ($/boe)        $7.52       $7.02       7     $14.68       $7.78      89
    -------------------------------------------------------------------------
    

    The Company recorded an impairment charge of $3.7 million in the third
quarter ($5.9 million for the nine month period). This charge is due to the
decline in future natural gas prices used to determine future cash flow from
the Company's proved plus probable reserves and is also a result of the
Company's decision to remove from unproved property cost certain expenses
incurred on its Ardley and Thorsby CBM properties.
    Management continues to work on improving its operating and general and
administrative expense metrics both of which are expected to show improvements
as production volumes increase. General and administrative expenses for the
quarter have been reduced by 34% or $184,216 compared to the prior period

    OUTLOOK

    Despite the moderating price of natural gas, the Company is experiencing
improved investment economics due to reduced costs for drilling, completion
and production tie-ins and will continue to actively develop its Horseshoe
Canyon and Ardley CBM properties. In addition, the recently announced changes
to the Alberta government's royalty rates in 2009 are expected to have a
positive impact on the Company's projects.
    During the fourth quarter, the Company continues to develop its Horseshoe
Canyon CBM properties with a 13 well (4.7 net) drilling program underway in
the Company's Morningside, Lacombe and Thorsby areas. The Company is also
re-entering and extending the horizontal leg of the recently drilled Ansell
area Ardley CBM well where an under-balanced drilling process with fluids
designed to minimize drilling damage to the well bore will be used. The
Company anticipates the resulting production from these drilling activities
will be tied-in during December 2007 and early into the first quarter of 2008.
    The Company's recent Horseshoe Canyon drilling activity has shown
significant production potential from the "dry" sand channels that exist
amongst the Horseshoe Canyon coal seams. The Company is currently evaluating a
recent co-mingled well completion showing initial production of over 500 mcf
per day (gross). In addition to opening selected sand channels during the
planned fourth quarter drilling activity, the Company will be evaluating logs
from its existing Horseshoe Canyon CBM producing wells for additional sand
channel potential and will pursue these co-mingled production opportunities.
The resultant incremental natural gas production from these sand channels
typically declines at conventional rates but may have a positive effect on
overall project economics and payout.
    For 2008 the Company will utilize its working capital surplus to seek out
opportunities with the potential to add production and cash flow as well as
increase its drilling location inventory through farm-in agreements ("drill to
earn") and Crown land sales. The Company's focus will continue to be on
developing those projects with the greatest near-term potential, particularly
its operated high working interest core areas with "dry" CBM and those in
close proximity to gas gathering infrastructure.
    The Company's financial statements and related MD&A for the three and
nine months ended September 30, 2007 can be accessed at www.sedar.com or
www.richardsoilandgas.com. Those investors who do not have access to the
internet can obtain copies of the financials and related MD&A without charge
by contacting Richards Oil & Gas Limited at (403) 265.8444.

    Richards Oil & Gas Limited (www.richardsoilandgas.com) is a Calgary-based
exploration company, involved in the development of crude oil and natural gas,
with an emphasis on the exploitation of CBM. With a significant land base and
industry-leading experience in the development of CBM projects, the Company is
at the forefront of the CBM industry in Western Canada. The Company is able to
capitalize on opportunities that create both short-term cash flow and
long-term value for its shareholders.
    Coalbed Methane (CBM) or Natural Gas from Coal (NGC) is technically
defined as gas produced naturally by coalification, and found within coal
natural gas reservoirs consisting predominately of methane, with smaller
amounts of higher hydrocarbons, water vapor, nitrogen, carbon dioxide, or
other non-hydrocarbons. The majority of gas is usually physically sorbed
within the microporosity and mesoporosity within the organic matrix. The
Company's management has extensive experience in the development of CBM
projects, which it is using to exploit the Company's land base and to add and
sustain significant value for its shareholders.

    ADVISORIES
    BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.

    Statements in this news release contain forward-looking information
including expectations of future production, procurement of drilling permits,
plans for and results of exploration and development activities and other
operational developments. The reader is cautioned that assumptions used in the
preparation of such information may prove to be incorrect. Events or
circumstances may cause actual results to differ materially from those
predicted, as a result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of the Company. These
risks include, but are not limited to; the risks associated with the oil and
gas industry, commodity prices, and exchange rate changes. Industry related
risks include, but are not limited to; operational risks in exploration,
development and production, availability of skilled personnel and services,
failure to obtain industry partner, regulatory and other third party consents
and approvals, delays or changes in plans, risks associated with the
uncertainty of reserve estimates, health and safety risks and the uncertainty
of estimates and projections of reserves, production, costs and expenses. The
reader is cautioned not to place undue reliance on this forward-looking
information. The forward-looking statements contained herein are subject to
change. Except as required by applicable securities laws, the Company assumes
no obligation to update or revise any forward-looking statements should
circumstances or management's opinions or estimates change.

    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this news release.

    %SEDAR: 00021365E




For further information:

For further information: Brad Turner, President & CEO, Richards Oil &
Gas Limited, Tel: (403) 265-8444, E-Mail: bturner@richardsoilandgas.com; Lonn
Bate, CFO, Richards Oil & Gas Limited, Tel: (403) 265-8444, E-Mail:
lbate@richardsoilandgas.com

Organization Profile

Richards Oil & Gas Limited

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890