Alange Energy Revises Production Numbers Reported in Third Quarter of 2010, Announces Fourth Quarter Production and Appoints Interim Chief Operating Officer

TORONTO, Jan. 13 /CNW/ - Alange Energy Corp (TSXV: ALE) revised today production numbers it earlier provided in its Management's Discussion and Analysis for the quarter ended September 30, 2010 (the "Third Quarter 2010") and announced on November 29, 2010.  Average production for the Third Quarter 2010 was 2,561 barrels of oil equivalent per day (boe/d) rather than the reported 3,179 boe/d.  Exit rate production for the Third Quarter 2010 (defined as the average daily production for September 2010) was 2,622 boe/d rather than the reported 3,330 boe/d and the daily production rate as at November 29, 2010 was 2,609 boe/d rather than the reported 4,300 boe/d.

The production numbers that were reported on November 29, 2010 related to production capacity rather than production as of the referenced dates.  Production capacity is based on management's estimate of the capability that the Company has to produce oil and/or gas, which at any moment may be partially limited by diverse factors. The difference between capacity and production, called deferred production, is generally readily available when the extraordinary factors that cause it are removed. These factors can include a normal structural time delay when production is expanding by drilling new wells, or transportation restrictions and seasonal weather difficulties. The latter has been especially severe during the past three months, as Colombia experienced unusually high rainfall resulting in landslides and floods.

During the Third Quarter 2010, the Company instituted a new internal production reporting system for better operational control, which allowed it to better pinpoint each field's production capacity and improve optimization.  These capacity numbers were reported on November 29, 2010 rather than the production numbers, which had been used appropriately for all previous quarters. This revision has no impact on the unaudited consolidated financial statements for the three and nine month periods ended September 30, 2010 previously filed on SEDAR since they were based on production rather than capacity.  The revised Third Quarter 2010 production numbers do not include any results from Topoyaco.

The Company also reported that its exit rate production for the fourth quarter of 2010 was 2,374 boe/d.  The Company's share of daily production averaged 2,515 boe/d for the fourth quarter, bringing the daily average for 2010 to 2,413 boe/d.  The Company's production statistics for the third and fourth quarters of 2010 are summarized below:

Daily average production (boe/d)           Actual     Previously Disclosed
Q3 2010 Exit Rate (1)           2,622     3,330
Three months ended September 30, 2010           2,561     3,179
Nine months ended September 30, 2010           2,378     2,579
November 29, 2010           2,609     4,300
Q4 2010 Exit Rate (1)           2,374     N/A
Three months ended December 31, 2010           2,515     N/A
Twelve months ended December 31, 2010           2,413     N/A

(1)  Measured as the average of the daily production rates for the last month of the fiscal quarter.

As at December 31, 2010, Alange Energy had a cash balance of approximately US$6 million and total debt (current and long-term) of approximately US$47 million. At current production levels, the Company estimates that its operating cash flow is sufficient to cover its day to day operations and monthly debt service requirements.  However, all previous guidance provided by the Company, including capital expenditure budgets, is currently under review by the board of directors.

The board of directors of the Company has formed a committee of its independent directors which, in conjunction with its Audit Committee, has reviewed and approved the revised production numbers.  The committee of independent directors has also instituted a review of the Company's internal controls and procedures, management systems and corporate governance practices to ensure that production is consistently reported and has engaged professional and financial advisors, including GMP Securities Inc., to assist it in this review.  The committee will report the results of this review to the market on a timely basis and has taken all steps necessary to ensure that the market is fully informed.  Moreover, the committee has also mandated various steps towards improving the Company's disclosure checks and controls.

In conjunction with the procedures the Company has put in place, it has appointed Gregg Vernon as Interim Chief Operating Officer, reporting directly to the board of directors and the Chief Executive Officer.  Mr. Vernon will be responsible for the review of controls and systems mentioned above, as well as implementing management and systemic adjustments that the review requires.  Mr. Vernon has been acting as a consultant to Alange Energy since September 2009 and was the Chairman of Prospero Hydrocarbons from August 2007 until it was acquired by the Company in September 2009.  Mr. Vernon is an engineer by training with over 30 years' experience in the oil and gas business in various executive positions.

Luis Giusti, Chief Executive Officer of Alange Energy stated "Our production was affected by a number of factors in the third and fourth quarters of 2010, but as a result of our successful drilling efforts, our potential production capacity has increased and continues to do so, and we expect actual production to start catching up to capacity in due course.  The board has made some important recommendations based on the disclosure issues that are now apparent, and we will do everything necessary to meet their internal review process requirements. I particularly welcome Gregg Vernon's increased role in the Company to ensure the implementation is handled in a proper and timely manner."

Production capacity rather than production was reported in a press release dated November 29, 2010 and the Third Quarter 2010 Management's Discussion and Analysis filed on SEDAR on the same day.  The Company has re-filed its Management's Discussion and Analysis on SEDAR; it is also available on the Company's website (  The Third Quarter 2010 financial statements were not affected by this correction to the production numbers and have not been re-filed.

About Alange Energy Corp.

Alange Energy is a Canadian-based oil and gas exploration and production company, with working interests in 12 properties in four basins in Colombia. Further information can be obtained by visiting our website at

All monetary amounts in U.S. dollars unless otherwise stated. This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities laws concerning the business, operations and financial performance and condition of Alange Energy Corp. ("Alange Energy"). Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production and reserve life of the various oil and gas projects of Alange Energy; the estimation of oil and gas reserves; the realization of oil and gas reserve estimates; the timing and amount of estimated future production; costs of production; success of exploration activities; currency exchange rate fluctuations; expectations regarding sufficiency of operating cash flows and the timing for reporting results of the review of the Company's internal controls and procedures, management systems and corporate governance practices. Except for statements of historical fact relating to the company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Alange Energy and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions, risks relating to international operations, fluctuating oil and gas prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes, other risks of the oil and gas industry, failure of plant, equipment or processes to operate as anticipated and completion of the review of internal controls and procedures, management systems and corporate governance practices. Although Alange Energy has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Alange Energy undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

Statements concerning oil and gas reserve estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the oil and gas that will be encountered if the property is developed. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Estimated values of future net revenue disclosed do not represent fair market value.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

SOURCE Alange Energy Corp.

For further information:

Peter Volk
General Counsel & Secretary

Profil de l'entreprise

Alange Energy Corp.

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