CALGARY, April 29 /CNW/ - Tuscany is pleased to report on its operations
and financial results for the three month and twelve month periods ended
December 31, 2008.
The Company reports a significant increase in the financial results for
the periods. Production from our Alberta and Saskatchewan properties was
essentially stable during the last three quarters of the year, which when
combined with elevated prices for both oil and natural gas resulted in
increased cash flow and earnings, as well as a slightly reduced debt level at
Revenue from the Dina horizontal well in Evesham drilled in December 2008
should allow the Company to weather the current economic downturn affecting
the entire energy industry. The decline in the value of the Canadian dollar
has mitigated the effect of lower prices expressed in US dollars, but both oil
and gas price levels will be significantly lower in 2009 than the prices
received during 2008.
Revenue for the twelve months of 2008 totaled $4.3 million compared with
$2.0 million in 2007. The Company reported cash flow from operations of $1.7
million compared with a cash flow deficiency of $24,000 in the twelve months
ended December 31, 2007. Tuscany reported net earnings of $244,000 for 2008
versus a net loss of $774,000 for the same period in 2007.
Capital expenditures for the twelve months ended December 31, 2008 were
$1.5 million compared with $1.3 million during the same period in 2007.
At December 31, 2008 Tuscany had a net debt of $2.8 million. More
significantly, the debt repayment ratio (net debt divided by monthly cash
flow), a simple estimate of the time required to repay debt, decreased to 12
months by the end of 2008.
Tuscany's Wildwood 10-10 well commenced production in January of 2008.
The well continues to produce at excellent rates, but the net impact on the
company from this well has been reduced in the fourth quarter of 2008, as a
result of lower prices. In 2009 the impact of the well will be reduced further
as the well will be subject to the new Alberta royalty rates. The oil from the
well was royalty free during 2008. Tuscany has acquired additional land in the
area to expand the play. Additional exploration and development prospects in
the area are being investigated, but these are unlikely to be drilled until
commodity prices improve.
In the Evesham and Macklin areas of Saskatchewan, production was
maintained by remedial work on the producing heavy oil wells. A horizontal
well to test the Dina formation in the area was successfully drilled in the
Reserves Data Report
Tuscany has also filed its Reserves Data Report which includes the
Company's reserves data and other oil and gas information for the year ended
December 31, 2008, as mandated by National Instrument 51-101 Standards of
Disclosure for Oil and Gas Activities of the Canadian Securities
Administrators. Copies of Tuscany's Reserves Data Report may be obtained at
Energy commodity prices have declined significantly since mid 2008, and
remain volatile. The Company plans to maintain its production base and
carefully manage cash during what could be an extended period of lower prices.
This plan will put the company in a position to benefit from the inevitable
upturn in pricing.
The Company is relatively small however, and the Board of Directors
continues to examine strategic alternatives to add shareholder value, such as
an acquisition or a corporate transaction. To date however, no such
opportunities have been identified.
Tuscany is very optimistic regarding the potential for a substantial
development at Evesham involving the drilling of further horizontal wells into
the Dina formation. The current producing well has been produced at restricted
rates to fully evaluate its commerciality and is currently being pumped at
increasing rates to determine optimal production. With improving oil prices,
and with a higher stabilized rate for the discovery well, Tuscany anticipates
that a significant development program, similar to other Dina pools in the
immediate area, could be commenced in the late summer or early fall of 2009.
The Company, with a solid production base, excellent, relatively low risk
exploration and development projects and a smaller, compact management team is
ideally suited to weather the current financial crisis.
The Company's Financial Statements and Management's Discussion and
Analysis for the year ended December 31, 2008 may be obtained at
The following is a summary of Financial and Operating Results:
Years Ended December 31
Total revenue $ 4,263,605 $ 1,980,217
Cash flow from operations 1,717,012 (24,374)
per share, diluted 0.05 -
Earnings (loss) for the period 244,246 (773,757)
per share, diluted 0.01 (0.03)
Capital additions 1,541,777 1,259,744
Net debt 2,804,592 2,818,716
Total assets $ 9,332,842 $ 9,368,682
Total shares outstanding 35,394,836 36,550,836
Natural gas (Mcfd) 398 228
Heavy oil and NGLs (Bopd) 118 92
BOEd (6 Mcf = 1 Bbl) 184 130
Natual gas ($/Mcf) $ 8.42 $ 6.23
Heavy oil and NGLs ($/Bbl) $ 83.86 $ 47.53
Reserves (proved plus probable, future
costs and prices)
Gas (Mmcf) 816.0 776.9
Oil (MBbl) 496.0 474.9
BOE (Thousands) 632.0 601.1
Present value, before tax
($Millions at 10%) $ 10,937 $ 7,977
Forward-looking statements - statements included in this press release
that are not historical facts may be considered "forward-looking statements."
Actual results could differ materially from the conclusions, forecasts or
projections in the forward-looking information. Certain material factors and
assumptions were applied in drawing the conclusions or making the forecasts or
projection in the forward-looking information and the material factors or
assumptions that were applied in drawing the conclusion or making the forecast
or projection as reflected in the forward-looking information is contained in
the press release.
Where amounts are expressed on a barrel of oil equivalent (boe) basis,
natural gas volumes have been converted to barrels of oil at six thousand
cubic feet (mcf) per barrel (bbl). Boe figures may be misleading, particularly
if used in isolation. A boe conversion of six thousand cubic feet per 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.
References to oil in this discussion include crude oil and natural gas liquids
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information:
For further information: John G. F. McLeod, President, TUSCANY ENERGY
LTD., Telephone: (403) 264-2398, Fax: (403) 264-2399, TSX Venture: TUS; Robert
W. Lamond, Chairman, TUSCANY ENERGY LTD., Telephone: (403) 269-9889, Fax: