Winstar Reports Record Production, Cash Flow and Net Asset Value in 2006



    CALGARY, March 26 /CNW/ - Winstar Resources Ltd. ("Winstar" or "the
Company") (TSX:WIX) is pleased to announce its operating and financial results
for the fourth quarter and year ended December 31, 2006 and provide an
overview of its plans and perspectives for 2007.
    Winstar, a junior oil and gas company with producing properties in
Canada, Tunisia and Hungary, achieved rapid growth in 2006, including record
production, cash flow from operations, reserves and net asset value while
maintaining an industry average consolidated finding costs during a period of
spiraling operational costs.

    
    2006 Highlights                 Result              % Change Over 2005
    Average Production            1,612 boepd               up 100%
    Exit Production               2,651 boepd               up 21%
    Average Sales                 1,555 boepd               up 91%
    Cash Flow From Operations    $15.8 million              up 117%
                                ($0.55 per share)
    Reserves - Proved
     and Probable               9.8 million boe             up 3%
    Net Asset Value -
     Dec. 31, 2006               $216.79 million            up 17%
                                ($7.03 per share)
      (Before tax, escalated
       price deck at present
       value discounted 10%)
    

    The achievements of 2006 have resulted in a substantial appreciation in
Winstar's share price. The Company closed 2005 trading at $1.98 per share on
the TSX Venture Exchange, graduated to the Toronto Stock Exchange in December
2006 and exited the year trading at $4.90 per share, an increase of 147%.

    
    Operating and Financial Summary:
    --------------------------------
    -------------------------------------------------------------------------
    Highlights                                 Year Ended December 31,
                                        -------------------------------------
                                              2006         2005     % Change
    -------------------------------------------------------------------------
    Production (not sales)
    -------------------------------------------------------------------------
    Average daily production 6:1 (boepd)     1,612          808          100
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Sales and Prices
    -------------------------------------------------------------------------
    Natural gas sales (Mcf/d)                5,564        2,534          120
    -------------------------------------------------------------------------
    Oil and NGL sales (bopd)                   627          392           60
    -------------------------------------------------------------------------
    Average daily sales 6:1 (boepd)          1,555          814           91
    -------------------------------------------------------------------------
    Average natural gas price ($/Mcf)         7.30         7.85           (7)
    -------------------------------------------------------------------------
    Average oil and NGL price($/bbl)         67.99        59.90           14
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Financial
    (CDN $ thousands except per share)
    -------------------------------------------------------------------------
    Oil and gas revenue                     30,385       15,822           92
    -------------------------------------------------------------------------
    Cash flow from operations               15,812        7,281          117
    -------------------------------------------------------------------------
    Per share, basic and diluted              0.55         0.41           34
    -------------------------------------------------------------------------
    Net income/(loss)                        1,780       (1,483)           -
    -------------------------------------------------------------------------
      Per share, basic and diluted            0.06        (0.08)           -
    -------------------------------------------------------------------------
    Working capital at period end            7,371       14,865          (50)
    -------------------------------------------------------------------------
    Long term debt at period end                 -            -            -
    -------------------------------------------------------------------------
    Shareholders' equity at period end      68,237       64,859            5
    -------------------------------------------------------------------------
    Common Shares
    -------------------------------------------------------------------------
    Weighted average during the
     period - Basic and diluted         28,569,104   17,625,359           62
    -------------------------------------------------------------------------
    Outstanding at period end           28,676,939   28,563,606            0
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Highlights                             Three Months Ended December 31,
                                        -------------------------------------
                                              2006         2005     % Change
    -------------------------------------------------------------------------
    Production (not sales)
    -------------------------------------------------------------------------
    Average daily production 6:1 (boepd)     1,894        1,679           13
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Sales and Prices
    -------------------------------------------------------------------------
    Natural gas sales (Mcf/d)                6,048        6,827          (11)
    -------------------------------------------------------------------------
    Oil and NGL sales (bopd)                 617(1)         739          (16)
    -------------------------------------------------------------------------
    Average daily sales 6:1 (boepd)        1,625(2)        1877          (13)
    -------------------------------------------------------------------------
    Average natural gas price ($/Mcf)         8.10         8.15           (1)
    -------------------------------------------------------------------------
    Average oil and NGL price($/bbl)         64.23        61.65            4
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Financial
    (CDN $ thousands except per share)
    -------------------------------------------------------------------------
    Oil and gas revenue                      8,156        9,308          (12)
    -------------------------------------------------------------------------
    Cash flow from operations                3,672        5,370          (32)
    -------------------------------------------------------------------------
    Per share, basic and diluted              0.13         0.19          (32)
    -------------------------------------------------------------------------
    Net income/(loss)                          (79)         (69)           -
    -------------------------------------------------------------------------
      Per share, basic and diluted           (0.00)       (0.00)           -
    -------------------------------------------------------------------------
    Working capital at period end            7,371       14,865          (50)
    -------------------------------------------------------------------------
    Long term debt at period end                 -            -            -
    -------------------------------------------------------------------------
    Shareholders' equity at period end      68,237       64,859            5
    -------------------------------------------------------------------------
    Common Shares
    -------------------------------------------------------------------------
    Weighted average during the
     period - Basic and diluted         28,584,983   28,378,731            1
    -------------------------------------------------------------------------
    Outstanding at period end           28,676,939   28,563,606            0
    -------------------------------------------------------------------------
    (1) Q4 2006 to Q4 2005 oil sales are down. Oil production actually
        increased, in particular from the Chouech Es Saida Concession in
        southern Tunisia, but this additional production was not sold until
        Q1 2007.
    (2) A warmer than normal winter in Hungary resulted in lower natural gas
        demand and lower gas sales in Q4 2006 compared to Q4 2005.
    

    Production
    ----------

    Winstar realized record oil and gas production in 2006, reflecting better
overall performance plus a full year of consolidation. The Company increased
its production from an average 808 boepd in 2005 to 1,612 boepd in 2006.

    
    -------------------------------------------------------------------------
                                                           2006        2005
                                                          boepd      boepd(1)
    -------------------------------------------------------------------------
    Tunisia                                                 614          420
    -------------------------------------------------------------------------
    Hungary                                                 497          214
    -------------------------------------------------------------------------
    Canada                                                  501          174
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average Daily Production (boepd)                      1,612          808
    -------------------------------------------------------------------------

    (1) In 2005, Tunisian sales were for a period of 12 months; Hungarian
        production was for a period of approximately seven months and
        Canadian production was for a period of approximately 4.5 months.
    

    Reserves
    --------

    Winstar reports a 3% increase in its proved plus probable reserves from
2005 to 2006. Of particular significance is the increase in proved reserves,
which increased by 12% year over year. Winstar's reserves, evaluated
independently by McDaniel & Associates Consultants Ltd. ("McDaniel") for
Alberta and by RPS - APA Petroleum Engineering Inc. ("RPS-APA") for Tunisia
and Hungary, are as follows (based on McDaniel's forecast prices and gross
before royalty):

    
    -------------------------------------------------------------------------
                              Alberta      Tunisia      Hungary        TOTAL
                               mboe(1)      mboe         mboe          mboe
    -------------------------------------------------------------------------
    As of December 31, 2005
    -------------------------------------------------------------------------
    Proved developed reserves     585        1,242          254        2,082
    -------------------------------------------------------------------------
    Proved undeveloped reserves     8        1,248           90        1,345
    -------------------------------------------------------------------------
    Total proved                  593        2,490          344        3,427
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Probable reserves             201        5,776           99        6,076
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    TOTAL proved + probable       794        8,266          443        9,503
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    As of December 31, 2006
    -------------------------------------------------------------------------
    Proved developed reserves     528        1,321          176        2,025
    -------------------------------------------------------------------------
    Proved undeveloped reserves    18        1,809            -        1,827
    -------------------------------------------------------------------------
    Total proved                  546        3,130          176        3,852
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Probable reserves             214        5,669           79        5,962
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    TOTAL proved + probable       760        8,799          255        9,814
    -------------------------------------------------------------------------

    (1) 1 mboe = 1,000 boe
    (2) The Proved + Probable reserves change is smaller than the increase to
        Proved reserves due to reclassification of Probable reserves into
        Proved reserves in Tunisia, and a reduction in Probable reserves at
        Torokkoppany in Hungary.
    

    2006 Net Asset Value
    --------------------

    Based on its independently evaluated reserves and land value and audited
financial statements, Winstar's net asset value and net asset value per share
as of December 31, 2006 and December 31, 2005 are calculated as follows:

    
    -------------------------------------------------------------------------
                                          2006                      2005
    -------------------------------------------------------------------------
                                        $million                  $million
                                      (except per               (except per
                                      share values)             share values)
    -------------------------------------------------------------------------
    Proved developed reserves         $      47.08              $      41.14
    -------------------------------------------------------------------------
    Proven undeveloped reserves       $      40.21              $      26.23
    -------------------------------------------------------------------------
    Probable reserves                 $     102.77              $      81.54
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total proved + probable
     reserves(1)                      $     190.06              $     148.91
    -------------------------------------------------------------------------
    Land(2)                           $      12.80              $      13.53
    -------------------------------------------------------------------------
    Working capital                   $       7.37              $      14.46
    -------------------------------------------------------------------------
    Long-term debt                            zero                      zero
    -------------------------------------------------------------------------
    Proceeds from options             $       6.56              $       5.09
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NET ASSET VALUE                   $     216.79              $     182.39
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NET ASSET VALUE PER
     DILUTED SHARE(3)                 $       7.03              $       6.05
    -------------------------------------------------------------------------
    NET ASSET VALUE PER
     DILUTED SHARE(3) - PROVED ONLY   $       3.69              $       3.35
    -------------------------------------------------------------------------

    (1) As evaluated by McDaniel (Canada) and RPS-APA (Tunisia and Hungary).
        Discounted at 10%, before tax, using McDaniel forecast prices.
    (2) As independently evaluated by Seaton-Jordan & Associates Ltd.
        ("Seaton-Jordan"). Value includes only Canadian undeveloped acreage.
        No value was attributed to non-producing acreage in Tunisia and
        Hungary.
    (3) Fully diluted shares: 30,831,273, representing all outstanding shares
        and options as at period end December 31, 2006 (2005: 30,152,274).
    

    2006 Finding, Development and Acquisition Costs
    -----------------------------------------------

    Winstar's capital expenditures in 2006 were $18.1 million for the
purposes of calculating finding and development costs (no expenditures for
acquisitions). Based on Winstar's independently evaluated reserves (based on
McDaniel's forecast prices) at year-end 2006, the Company's finding and
development costs are calculated as follows:

    
                              Total
                              Proved
                             Reserves
                              Added       F&D(1)    Acquisition      FD&A
                         ----------------------------------------------------
                              (mboe)     $ per boe    $ per boe    $ per boe
    -------------------------------------------------------------------------
    Capex program               1,014        24.00            0        24.00
    -------------------------------------------------------------------------
    Acquisition                     0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total                       1,014        24.00            0      24.00(1)
    -------------------------------------------------------------------------


                              Total
                              Proved
                           + Probable
                             Reserves
                              Added       F&D(1)   Acquisition       FD&A
                         ----------------------------------------------------
                           (mboe)        $ per boe    $ per boe    $ per boe
    -------------------------------------------------------------------------
    Capex program                 901        21.20            0        21.20
    -------------------------------------------------------------------------
    Acquisition                                  0            0            0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total                         901        21.20            0      21.20(1)
    -------------------------------------------------------------------------

    (1) Finding & development costs include changes in non-discounted future
        development capital and do not include $3.53 million in capital or
        associated reserves for capital programs (Strachan 13-10,
        Ferrier 7-15 and Ferrier 2-33 wells) that were initiated but not
        completed in late 2006.
    

    2006 Reserves Replacement
    -------------------------

    Winstar's reserves replacement ratio using average production of
1,612 boepd is as follows:

    
    -------------------------------------------------------------------------
                                                          Proved + Probable
     Consolidated 2006             Proved Reserves      Reserves Replacement
         Production               Replacement Ratio             Ratio
    -------------------------------------------------------------------------
           (boe)                         (%)                     (%)
    -------------------------------------------------------------------------
          588,380                        173                     154
    -------------------------------------------------------------------------


    Land Base and Fair Market Value
    -------------------------------

    The majority of Winstar's land base is undeveloped and covered with 2D or
3D seismic data.


    -------------------------------------------------------------------------
                                         Net Sections(1)     Net Sections(1)
                                              as of               as of
                                       December 31, 2006   December 31, 2005
    -------------------------------------------------------------------------
    Canada (Alberta - Crown and
     freehold leases or licenses)                     68                  92
    -------------------------------------------------------------------------
    Tunisia (five concessions)                       236                 236
    -------------------------------------------------------------------------
    Hungary (one concession and one
     exploration permit)                             888                 888
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    TOTAL sections/sq. miles                       1,192               1,216
    -------------------------------------------------------------------------
    Fair Market Value for
     Undeveloped Lands(2)                   $ 12,801,000        $ 13,562,000
    -------------------------------------------------------------------------

    (1) 1 section = 1 square mile, 640 acres or 259 hectares.
    (2) As independently evaluated by Seaton-Jordan. Value includes only
        Canadian undeveloped acreage. No value was attributed to non-
        producing acreage in Tunisia and Hungary.
    

    Plans and Perspectives for 2007
    -------------------------------

    Winstar is forecasting an average net daily production (sales) of between
2,600 and 2,900 boepd in 2007 (compared with 494 boepd in 2004, 808 boepd in
2005 and 1,612 boepd in 2006). The 2007 forecast results of potential cash
flow from operations of between $35 and $40 million ($1.24 to $1.40 per
share), based on Winstar current price forecast and dependent upon project
success.
    Winstar's Tunisian subsidiary is a priority for 2007. The focus will be
the Winstar-operated Sabria concession (45% working interest), where two major
drilling operations are planned, and in the 100% working interest Chouech Es
Saida and Ech Chouech concessions where the Company is planning two or three
significant well operations (drilling or recompletions).
    In addition, subject to ongoing technical work, the Company expects to
drill at least two high impact wells and may participate in another five to
10 wells in Alberta, Canada, one possible exploration well in Hungary in late
2007.
    Winstar anticipates 2007 capital expenditures to be a minimum of
$40 million and, dependent on program success and the advancement of current
opportunities, up to $60 million. Winstar expects to fund its capital budget
through working capital and cash flow, but is likely to supplement the budget
through short-term bank debt and/or by farming out certain Alberta prospects.

    Tunisia

    Recent drilling results in Tunisia have been encouraging. Winstar
operates five onshore concessions in this northern African country on
151,040 net acres. The potential being targeted in this area is 500 to
1,000 boepd per well.
    Winstar estimates it has four to six years of exploration and development
inventory within its existing concessional acreage. After experiencing delays,
due in part to a shortage of available equipment, the Company has overcome the
initial operational hurdles, strengthened its team on the ground and is
optimistic about the prospects on its concessions.

    Canada

    In 2006, Winstar generated less than expected overall results in Alberta,
due to the combination of high costs and low reserve additions. The Company
will continue to develop its deep large potential plays.
    Although Winstar believes the Canadian federal government's decision to
tax the income trust sector starting in 2011 has caused fiscal instability,
the announcement is expected to open up new opportunities for junior oil and
gas companies. A number of potential acquisitions, which were previously more
expensive than the Company thought appropriate, may become attractive targets.
Long-life assets that were once acquired mostly by the trusts may now become
more available to healthy juniors such as Winstar.

    Hungary

    The Igal II exploration permit and the Torokkoppany concession are
Winstar's lowest cost and thus highest impact exploration opportunity.
Although the Company drilled an uneconomic well at Koppanyszanto 1 in October
2006, it is optimistic it will be able to solve the geological and geophysical
puzzle in Hungary to duplicate the success of its Torokkoppany gas field.

    Outlook
    -------

    With three to four years of exploration and development locations, a
number of high-impact Tunisian, Canadian and Hungarian drilling opportunities
within a medium-risk portfolio and a share price, which is in between three
and four times the Company's projected cash flow per share for 2007, Winstar
expects continued growth this year and beyond.

    Stock Option Grants
    -------------------

    Winstar announces that, on March 23, 2007, its Board of Directors
approved the grant, effective March 28, 2007 of options to acquire
500,000 common shares at an exercise price of equal to the closing trading
price on March 27, 2007 to directors, officers and employees. As of March 23,
2007, Winstar has 28,740,273 common shares issued and outstanding and (further
to the approved grants) 2,591,000 common shares issuable pursuant to
outstanding stock options.

    BOE

    References herein to boe mean barrels of oil equivalent derived by
converting gas to oil in the ration of six thousand cubic feet (Mcf) of gas to
one barrel (bbl) of oil. Boe may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 Mcf:1 bbl is based upon an energy
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.

    Non-GAAP Measures

    "Cash flow" and "funds from operations," which are used interchangeably,
"cash flow per share," "funds from operations per share" and "netbacks" are
not recognized measures under Canadian generally accepted accounting
principles. The Company uses these measures to help evaluate its performance.
Management considers netbacks an important measure as it demonstrates its
profitability relative to current commodity prices. Management uses funds from
operations to analyze performance and considers it a key measure as it
demonstrates the Company's ability to generate the cash necessary to fund
future capital investments and to repay debt. Funds from operations have been
defined by the Company as net earnings plus the addback of non-cash items
(stock-based compensation, depletion, depreciation and accretion, impairment
on long-lived assets, gain on disposition of property and equipment, expiry of
undeveloped land and future income tax recovery) and excludes the change in
non-cash working capital related to operating activities and expenditures on
asset retirement obligations and reclamation. The Company also presents funds
from operations per share whereby amounts per share are calculated using
weighted average shares outstanding consistent with the calculation of
earnings per share. Winstar's determination of cash flow and funds from
operations may not be comparable to that reported by other companies nor
should it be viewed as an alternative to cash flow from operating activities,
net earnings or other measures of financial performance calculated in
accordance with Canadian GAAP.

    Sales and Seasonality

    Oil and natural gas production is not necessarily equal to sales.
Tunisian oil is transported or pipelined to a terminal for periodic offloading
onto oil tankers. Revenue from tanker sales is recognized only when the sale
occurs. Production during the period is carried in inventory until sold.
Hungarian natural gas is sold on a monthly basis into the local market.
Monthly sales are subject to local market product demand which increases
during the heating seasons of fall and winter and curtails over the warmer
spring and summer seasons.

    Forward-Looking Statements

    This press release contains forward-looking statements. These statements
relate to future events or future performance of Winstar. When used in this
press release, the words "may", "would", "could", "will", "intend", "plan",
"anticipate", "believe", "estimate", "predict", "seek", "propose", "expect",
"potential", "continue", and similar expressions, are intended to identify
forward-looking statements. These statements involve known and unknown risks,
uncertainties, and other factors that may cause actual results or events to
differ materially from those anticipated in such forward-looking statements.
Such statements reflect the Company's current views with respect to certain
events, and are subject to certain risks, uncertainties and assumptions. Many
factors could cause the Company's actual results, performance, or achievements
to materially differ from those described in this press release. Should one or
more of these risks or uncertainties materialize, or should assumptions
underlying forward-looking statements prove incorrect, actual results may vary
materially from those described in this press release as intended, planned,
anticipated, believed, estimated, or expected. Specific forward-looking
statements in this press release include, among others, statements pertaining
to the following: factors upon which Winstar will decide whether or not to
undertake a specific course of action; and estimated volumes and timing of
future production; business plans for drilling, exploration and development;
and other expectations, beliefs, plans, goal, objectives, assumptions,
information and statements about possible future events, conditions, results
of operations or performance. The risks to which Winstar is subject include
those of the oil and gas industry in general including operational risks in
exploring for, developing and producing crude oil and natural gas; risks and
uncertainties involving geology of oil and gas deposits; volatility in global
market prices for oil and natural gas; general economic conditions;
competition; liabilities and risks, including environmental liability and
risks, inherent in oil and gas operations; uncertainties as to the
availability and cost of financing and changes in capital markets;
alternatives to and changing demand for petroleum products; and changes in
legislation and the regulatory environment, including uncertainties with
respect to the Kyoto Protocol. Furthermore, statements relating to "reserves"
or "resources" are deemed to be forward-looking statements, as they involve
the implied assessment, based on certain estimates and assumptions that the
resources and reserves described can be produced profitably in the future. The
forward-looking statements contained in this press release are expressly
qualified in their entirety by this cautionary statement. These statements
speak only as of the date of this press release. The Company does not intend
and does not assume any obligation, to update these forward-looking statements
to reflect new information, subsequent events or otherwise, expect as required
by law.

    Winstar Resources Ltd. is a Calgary-based junior oil and gas company,
which explores for, develops, produces, and sells crude oil, natural gas
liquids and natural gas in Alberta, Tunisia and Hungary. Winstar's common
shares trade on the Toronto Stock Exchange under the symbol WIX.





For further information:

For further information: Mr. David Monachello, President, Phone (403)
513-4200, Email dmonachello@winstar.ca; Mr. Charles de Mestral, Chief
Executive Officer, Phone: Toll-free (Canada and USA) 1-800-875-1217, (Note:
Mr. de Mestral is based in Europe, in a time zone eight hours ahead of Calgary
time), Email: cdemestral@winstar-resources.ch

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Winstar Resources Ltd.

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