TORONTO, April 30 /CNW/ - Alange Energy Corp. (TSXV: ALE) ("Alange Energy" or the "Company") announced today the release of its audited consolidated financial results for the year ended December 31, 2009, together with its Management's Discussion and Analysis and its 2009 Statement of Reserves, Form 51-101F1. These documents are available on the Company's website at www.alangeenergy.com and at www.SEDAR.com.
The Company announced a 143% increase in revenues in the fourth quarter of 2009 to $8.3 million compared with revenues of $3.4 million in the immediately preceding quarter. This reflects the rapid growth in production from the Company's operations following the acquisitions of working interests in eight oil and gas properties in Colombia during the second half of the year. Reaching a high point on December 26, 2009 of 3,773 barrels of oil-equivalent ("boe") net working interest in production (before deduction of royalties), the Company exited 2009 with a daily production rate of 2,129 boe, a 139% increase from the end of September 2009. For the full year, revenues totaled $12.8 million based on the Company's share of net production of 228.5 Mboe.
Recently, the Company announced that it had received an independent reserves evaluation report for the year ended December 31, 2009 in respect of seven of its blocks in Colombia. The combined proved plus probable (2P) reserves for these blocks increased by 180% compared to those reported on March 31, 2009. Total gross (before royalties) 2P reserves to the Company increased during 2009 to 31.66 million barrels of oil equivalent (MMboe) as at December 31, 2009, having a total net present value (NPV) (10% discount, before tax) of US$358.9 million. The report's evaluation also reflects a fourfold increase in the gross proved reserves (1P) to a total of 8.48 MMboe at year end. The growth reflected in the Company's reserves is the result of a combination of successful drilling and the completion of value accretive acquisitions.
Luis E. Giusti, the Company's Chief executive Officer, stated "the results of the last quarter of 2009 demonstrate the positive impact resulting from the consolidation of Alange's operations in Cubiro in the Llanos Basin and in the Catatumbo Basin. With six drill rigs now in operation, we have set the stage for a ramp up in production in 2010".
For the year ended December 31, 2009, the Company reported a net loss of $17.8 million or $0.05 per share compared with a net loss of $8.9 million or $0.15 per share in the prior year.
The Company raised $111.5 of net proceeds from a brokered private placement in July 2009. After repayment of a $30.0 million of bridge loan, the Company had $81.5 million to fund its acquisition commitments, its exploration and development program and its initial working capital requirements. The Company used $53.8 million (net) to fund its acquisitions of working interests in several properties and to commence its capital investment program. After cash used in operations and working capital requirements, the Company ended 2009 with $25.0 million of cash and a debt-free balance sheet.
The Company is currently in the midst of its 18-month exploration and capital investment program that commenced in July 2009 following the successful completion of the Alange Transaction. Aimed at increasing its production, initially through optimization of its producing properties by improving operations and investing in the fields, the Company is also undertaking an aggressive exploration program on all of its properties in order to identify targets and prove reserves that will capitalize on the upside potential of such properties, especially in the Putumayo and Catatumbo basins. The Company currently has six drill rigs in operation and expects to drill 21 exploratory and development wells and to complete 15 well workovers in 2010.
At the end of December 2009, the Company's gross share of production, before deduction of royalties, from its properties was 2,129 boe/d. Through the first quarter of 2010, the Company's share of gross production (before the deduction of royalties) averaged 2,300 boe/d, below its previous expectations, but surpassing the 2,800 boe/d level on several occasions. Transportation restrictions related to availability of trucking units and oil infrastructure bottlenecks have forced the Company to shut down some of the wells at its Cubiro property for limited periods of time through the first few months of 2010. With development activities currently in process at Cubiro, daily production rates are expected to double by the end of the second quarter. As a result of its greater understanding of the Cubiro reservoir, and some changes to timing of its planned exploration activities at Topoyaco and Santa Cruz, the Company is now projecting that its gross share of production (before royalties) from its properties will increase at a more moderate rate through the second half of the year to approximately 8,000 boe/d by the end of 2010. At Topoyaco, the 2010 drilling program has been delayed to facilitate an additional 75 km(2) of seismic surveys that were deemed necessary to allow for a better interpretation and which has since translated into a relocation of the well, aimed at the deepest prospect. While the delay was essential to the maximizing the potential of Topoyaco, it affected the confluence of production from this property with the Cubiro production profile. At Santa Cruz, the 2010 drilling campaign was pushed back until later in 2010 to accommodate the additional capital investment recently announced for the development of the Cubiro Block in light of its exploration/ appraisal success in recent months. This re-scheduling of the Santa Cruz drilling campaign will still enable the Company to meet its commitments with the ANH for this property ahead of the June 2011 deadline.
Management will hold a conference call on Monday, May 3, 2010 at 9:00 a.m. Eastern Standard Time to provide an operational update and to discuss the year end results. Analysts and interested investors are invited to participate as follows:
Toronto & International: 1 (647) 427-7450
North America: 1 (888) 231-8191
Conference ID: 72405288
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 www.alangeenergy.com.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding estimates and/or assumptions in respect of production, revenue, cash flow and costs, reserve and resource estimates, potential resources and reserves and the company's exploration and development plans and objectives) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the company based on information currently available to the company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; the possibility that actual circumstances will differ from the estimates and assumptions; failure to establish estimated resources or reserves; fluctuations in petroleum prices and currency exchange rates; inflation; changes in equity markets; political developments in Colombia; changes to regulations affecting the company's activities; uncertainties relating to the availability and costs of financing needed in the future; the uncertainties involved in interpreting drilling results and other geological data; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the company's periodic reports filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
Information in this press release expressed in barrels of oil equivalent (boe) is derived by converting natural gas to oil in the ratio of six thousand cubic feet (mcf) of natural 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 on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
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: For further information: Michael Davies, Chief Financial Officer, (416) 360-4653, ext. 224