Tuscany Energy Ltd. announces results and updates operations for the six months ended June 30, 2009



    CALGARY, Sept. 1 /CNW/ - Tuscany Energy LTD (TUS - TSX-V) is pleased to
report the financial and operating results for the six months ended June 30,
2009.

    Financial

    Tuscany has taken two significant steps to position the Company for
future growth. To provide capital to finance the development of its oil
prospects in Saskatchewan the Company had taken the following steps:

    
    -   On August 19, 2009 Tuscany announced a Rights Offering to provide up
        to $500,000 of additional working capital;

    -   Concurrently, the company announced an arrangement agreement to
        acquire Goldmark Minerals Ltd, through the issue of 12.2 million
        Tuscany shares which, if successful, will provide Tuscany with up to
        $1.3 million of additional working capital, and

    -   Tuscany has successfully negotiated its line of credit at
        $3.0 million.
    

    The successful completion of these transactions will put Tuscany in sound
financial condition, providing the opportunity for significant growth.
    To provide the capital required to continue development of the Company's
assets, and to manage our debt level, the Board of Directors has unanimously
approved a Rights Offering whereby shareholders are being offered the
opportunity to purchase one additional Tuscany common share for each four
shares currently owned at a price of $0.06 per share. If fully subscribed,
this Rights Offering will net the Company $500,000 of new financing. The
offering will close on October 1, 2009.
    The Board has also unanimously approved a transaction whereby Tuscany
will acquire the assets of Goldmark Minerals Ltd., consisting mainly of $1.4
million of working capital, through the issue of 12.2 million shares. The
transaction will be completed through a plan of arrangement, subject to the
approval of the Goldmark shareholders at a Goldmark shareholder's meeting
anticipated to be held in early in October 2009.

    Operations

    Production, revenue and cash flow for both the six months and the
three-months ending June 30, 2009 were lower than for the same periods in
2008. The reduced production results primarily from a year over year decline
in natural gas production at Wildwood and Evesham as flush production from
wells declined. Oil production showed a small increase for the six months
ended June 30, 2009, however Q2 2009 oil production was lower than anticipated
due to a number of factors:

    
    -   The Evesham Dina horizontal well stabilized at a lower rate than the
        initial flush production. The well is producing at a rate of
        45 Bbls/d at the end of August, 2009. Tuscany plans to construct
        water injection facilities and increase the total fluid production in
        order to increase oil production from the well and to prepare for
        additional wells,
    -   Oil production from the Evesham Sparky pool was also lower than
        anticipated as a result of the Company's decision to minimize well
        workovers and planned recompletions during the period of low oil
        prices in the first quarter of 2009. A program consisting of 4
        workovers and 3 recompletions commenced in Q3 2009 with a successful
        recompletion of an oil well adding 13 Bbls/d to Tuscany at the end of
        August 2009, and
    -   Production from the flowing oil well at Wildwood, Alberta declined
        and the operator is in the process of equipping the well with a
        bottom hole pump and pumping unit to restore production levels.
    

    On a positive note oil prices have recovered since the end of Q1 2009,
and we are particularly pleased with the relatively high prices being paid for
the Company's heavy oil production. This is particularly relevant to the
Company as 85% of Tuscany's revenue is generated from Oil and NGL sales.

    Business Outlook

    Energy prices commenced to diverge in Q2 2009, with gas prices falling
and oil prices recovering. Oil prices rebounded in the last few months and we
are particularly pleased with prices received for heavy oil production. Better
oil prices are somewhat offset by a virtual collapse in natural gas prices.
However, Tuscany is primarily an oil producer with 85% of the Company's
revenue in the first half of 2009 coming from oil and NGLs.
    The Company plans to target its capital expenditures toward the
development of new oil production and operating cost reduction projects to
provide the maximum financial benefit for our Shareholders.
    The Company has also streamlined staff and has arranged to reduce General
and Administrative cost by utilizing, on a part time basis, support staff
employed by a related company.

    
    The Board of Tuscany believes growth for Tuscany shareholders lies in:

    -   Restored oil production from existing wells,

    -   Increased production from a potential Dina pool development program,

    -   Sustained higher oil prices,

    -   Improved natural gas prices,

    -   Lower operating and General and Administrative costs and,

    -   New financial strength from the announced financial transactions
    

    These actions will allow the Company to profit from the current downturn
and emerge a stronger, more viable company.

    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
(NGLs).

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


    Summary of Financial Operating Results

    -------------------------------------------------------------------------
                                                          Six Months Ended
                                                               June 30
                                                          2009          2008
    -------------------------------------------------------------------------

    Financial (restated)

      Total revenue                               $    924,138  $  2,183,357
      Cash flow from operations                        157,600       918,522
        per share, diluted                                   -          0.03
      Earnings (loss) for the period                  (253,736)      187,774
        per share, diluted                               (0.01)         0.01
      Property, plant and equipment - additions        175,056       224,448
      Net Debt                                       3,039,534     2,124,508

      Total shares outstanding at period end        34,767,836    36,550,836

    Operations
      Production
        Gas (Mcf/d)                                        211           419
        Oil (Bbl/d)                                        109           106
        NGL (Bbls/d)                                         1             1
        BOE/d (6 Mcf = 1 Bbl)                   145           176

      Product Prices
        Gas ($/Mcf)                               $       4.24  $       9.31
        Oil ($/Bbl)                               $      46.49  $      90.15
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For further information:

For further information: John G. F. McLeod, President, TUSCANY ENERGY
LTD., Telephone: (403) 264-2398, Fax: (403) 264-2399; Robert W. Lamond,
Chairman, TUSCANY ENERGY LTD., Telephone: (403) 269-9889, Fax: (403) 264-2399,
TSX Venture: TUS

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TUSCANY ENERGY LTD.

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