Sharon Energy Ltd. announces results for the first quarter ended June 30, 2009



    CALGARY, Aug. 21 /CNW/ - Sharon Energy Ltd. (TSX-V: SHY) Sharon's revenue
and cash flow results for the three months ended June 30, 2009, were
significantly lower when compared with the prior year quarter as weak oil and
natural gas prices combined with declined production.

    Financial

    Revenue for the three months ended June 30, 2009, totaled $285,000
compared with $1.4 million for the prior year period. Cash flow from
operations for the quarter was $165,000 compared with $971,000 for the prior
year period. Sharon had a loss of $475,000 versus earnings of $180,000 in the
prior year period.
    Capital expenditures for the three months ended June 30, 2009, totaled
$309,000 compared with $1.2 million for the prior year period. Capital
expenditures were financed from working capital, cash flow and property
dispositions.
    Sharon exited the first quarter with working capital of $222,000 versus
working capital of $310,000 at the beginning of the year.
    All dollar figures are United States dollars.

    New Land Acquisitions

    In the U.S., Sharon has acquired approximately 8,500 gross acres (3,621
net acres) in the Eagleford fractured shale play. Sharon's acreage is on trend
with a large development program operated by Apache Corporation. However, the
Company is actively looking to sell or farmout this project as individual well
costs may be significant.
    In Canada, Sharon has acquired 9,611 acres (2,816 net acres) in Alberta
and Saskatchewan. The Alberta lands were acquired to expand existing holdings
at Big Bend. Sharon's primary Canadian exploration focus is in Saskatchewan
where the Company now has acreage on prospective Viking, Shaunavon and Bird
Bear oil plays.

    Production

    For the three months ended June 30, 2009, production decreased 62% to 112
BOEd compared with 292 BOEd for the prior year quarter. The primary cause of
the drop resulted in Canada from the shut-in of production at the Big Bend
field which will be put back on production in late fall, and in the U.S.
resulting from the shut-in of production at the Black Owl field combined with
declining production rates at the Hound Dog, N.W. Speaks and Allen Ranch
fields.

    Business Outlook

    The continued weak natural gas pricing environment has led to a sharp
reduction in the number of rigs drilling for natural gas over the last eight
months. The drop of rig activity in Canada and the U.S. should decrease
domestic supply as production rates from existing wells decline without
offsetting new production. However, there is still considerable uncertainty as
to when prices will again rise to above $7.00 Mcf. Because of the uncertainty
in the gas market and the underlying economy Sharon expects that natural gas
prices will stay in the range of $3.50 to $5.50 per Mcf for the remainder of
calendar 2009.
    Sharon plans to match capital spending to operating cashflows and has
halted new projects until gas prices improve over current levels. Sharon's
future exploration program will focus on a number of shallower prospects in
Texas that can be managed within the Company's capital budget. However, Sharon
is also considering various alternatives to its normal operations such as the
selling of assets, a reduction of overhead costs, and other Corporation
transactions to optimize shareholder value.

    
    -------------------------------------------------------------------------
    ($ Thousands, except share & per share              Three Months Ended
     amounts, U.S. Dollars, unaudited)                       June 30
                                                    -------------------------
                                                          2009          2008
    -------------------------------------------------------------------------
    Financial
      Total revenue                                $       284   $     1,448
      Cash flow from operations                    $       165   $       971
        per share, basic and diluted               $         -   $      0.01
      Loss for the period                          $      (475)  $       180
        per share, basic and diluted               $     (0.01)  $      0.00
      Property, plant and equipment
        Capital additions                          $       309   $     1,206
        Dispositions                               $        45   $        17
      Working capital                              $       222   $       190
      Total assets                                 $    13,059   $    19,831
      Total shares outstanding, at period end       74,085,565    75,358,565
    Operations
      Production
        Gas (MMcfd)                                        0.6           1.5
        Oil (Bopd)                                          11            45
        BOEd (6 Mcf equals 1 Bbl)                          112           292
      Product Prices
        Gas ($/Mcf)                                $      3.10   $     10.29
        Oil ($/Bbl)                                $     52.47   $    114.33
    -------------------------------------------------------------------------

    BOE Presentation - the term barrels of oil equivalent (BOE) 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. All BOE conversions in this report are derived by
    converting gas to oil in the ratio of six Mcf of gas to one Bbl of oil.

    Financial Reporting - all numbers are reported in U.S. dollars.
    

    Sharon is an oil and gas exploration and production company based in
Calgary, Alberta. Sharon's current focus is on shal ow gas developments in
southern Alberta, natural gas exploration in central and southern Alberta and
deep gas exploration in Texas.

    ADVISORY: Certain information regarding the Company in this News Release
including management's assessment of future plans and operations may
constitute forward-looking statements under applicable securities laws and
necessarily involve risks including, without limitation, risks associated with
oil and gas exploration, development, exploitation, production, marketing and
transportation, loss of markets, volatility of commodity prices, currency
fluctuations, imprecision of reserve estimates, environmental risks,
competition from other producers, inability to retain drilling rigs and other
services, capital expenditure costs, including drilling, completion and
facilities costs, unexpected decline rates in wells, wells not performing as
expected, incorrect assessment of the value of acquisitions, failure to
realize the anticipated benefits of acquisitions, delays resulting from or
inability to obtain required regulatory approvals and ability to access
sufficient capital from internal and external sources. As a consequence,
actual results may differ materially from those anticipated in the
forward-looking statements. Readers are cautioned that the foregoing list of
factors is not exhausted. Additional information on these and other factors
that could effect the Company's operations and financial results are included
in reports on file with Canadian securities regulatory authorities and may be
accessed through the SEDAR website (www.sedar.com) and at the Company's
website (www.sharonenergy.com). Furthermore, the forward-looking statements
contained in this news release are made as at the date of this news release
and the Company does not undertake any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a result of
new information, future events or otherwise, except as may be required by
applicable securities laws.

    
    THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY
    OR ACCURACY OF THIS RELEASE.
    





For further information:

For further information: H.C. (Kip) Ferguson, III, President, Houston,
Texas, SHARON ENERGY LTD., Telephone: (713) 789-5395, Fax: (713) 789-8454;
Robert W. Lamond, Chairman, Calgary, Alberta, SHARON ENERGY LTD., Telephone:
(403) 269-9889, Fax: (403) 269-9890; TSX-V: SHY

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SHARON ENERGY LTD.

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