Ironhorse Announces 2012 Financial and Operating Results and Year-end Reserves

CALGARY, April 30, 2013 /CNW/ - Ironhorse Oil & Gas Inc. ("Ironhorse" or the "Company") (TSX-V: IOG) announces its 2012 financial and operating results and year-end reserves information.

The Company's year-end reserves evaluation with the effective date of December 31, 2012 was prepared by GLJ Petroleum Consultants Ltd. and Sproule Associates Limited in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and NI 51-101 "Standards of Disclosure for Oil & Gas Activities".  Reserves included herein are stated on a company gross basis (working interest before deduction of royalties without including any royalty interest) unless otherwise noted.

Highlights of 2012:

• Completed the sale of the Jedney non-core gas property for net proceeds of $5.3 million with funds used to reduce bank debt.
  
  
• Funds from operations were negative for the year at $0.4 million ($0.01 per diluted share) compared to positive funds from operations of $1.9 million ($0.07 per diluted share) in 2011 as a result of the disposition of the Shackleton properties.
  
  
• Reduced net debt by $4.5 million to $3.3 million at December 31, 2012 within credit facilities of $5.0 million compared to net debt of $7.8 million at December 31, 2011 within credit facilities of $10.2 million.
  
  
• Reduced G&A expenses by $0.3 million or 29% to $0.7 million compared to 2011.
  
  
• The Company's reserves were 83% oil weighted with a proved to probable ratio of 71 to 29. The shift in the proved to probable ratio as compared to 2011 is due to the disposition of the Jedney asset.
  
  
• During Q3 2012 brought on stream a liquids rich Balsam Alberta area gas well that produced at an average initial production rate of 122 boe/d net to the Company over the first 5 months of production.
  
  
• Annual production decreased by 82% to 107 boe per day from 599 boe per day in 2011 primarily due to the disposition of the Shackleton natural gas properties at the end of October 2011.
  
  
• Net asset value per share was $1.30 at December 31, 2012 ($1.52 at December 31, 2011), calculated as the net present value of future cash flows from proved and probable reserves before tax discounted at 10% less net debt of $3.3 million.
  
  
• The Company incurred capital expenditures of $0.6 million in 2012 compared to $4.6 million in 2011.  Of this, $0.4 million was spent to complete and tie-in the Balsam gas well drilled in late 2011, which was initially targeting Kiskatinaw oil.

Activities in 2013 will focus on the following:

• Continuing with plans to place its Pembina, Alberta Nisku oil wells on production.
  
  
• Farm-out of the Leon Lake oil play or potential sale of the Leon Lake assets.

SELECTED INFORMATION				Three months ended December 31					Year ended December 31
($ thousands except per share & unit amounts)					2012	2011			2012		2011
Financial
Petroleum and natural gas revenues ^(1)					649	862			2,053		7,827
Funds from operations ^(2)					136	233			(368)		1,873
Per share - basic and diluted					0.00	0.01			(0.01)		0.07
Net income (loss)					270	1,399			(889)		217
Per share - basic and diluted					0.01	0.05			(0.03)		0.01
Capital expenditures ^(3)					73	3,338			698		4,566
Operation
Production
Gas (mcf/d)					741	1,069			277		2,808
Oil  (bbl/d)					60	67			61		131
Total (boe/d)					184	245			107		599
Petroleum and natural gas revenues ($/boe)					38.39	38.23			52.54		35.79
Royalties ($/boe)					6.55	10.03			13.48		11.21
Operating expenses ($/boe)					13.26	13.69			20.60		8.00
Operating netback ($/boe)					18.58	14.51			18.46		16.58

(1)		Petroleum and natural gas revenues are before royalty expense.
(2)		Funds from operations and net debt are non-GAAP measures as defined in the Advisory section of the MD&A.
(3)		Capital expenditures are before acquisitions and dispositions.

Reserves Summary - Oil Equivalent (Mboe)
(Mboe)				Proved Producing			Proved Developed Non-Producing			Proved Undeveloped			Total Proved			Total Probable			Proved plus Probable
2012				119			617			277			1,012			416			1,428
2011				88			669			275			1,032			2,729			3,761

Net Present Value Summary
($ thousands)				Proved Producing			Proved Developed Non-Producing			Proved Undeveloped			Total Proved			Total Probable			Total Proved plus Probable
10%				2,252			17,956			10,261			30,469			9,037			39,507
15%				1,957			15,460			8,805			26,222			6,693			32,914

Reserves Reconciliation - Oil Equivalent (Mboe)
(Mboe)				Total Proved				Total Probable				Total Proved plus Probable
December 31, 2011				1,032				2,729				3,761
Discoveries and Extensions				-				-				-
Technical Revisions				19				(13)				6
Dispositions				-				(2,299)				(2,299)
Economic Factors				-				(1)				(1)
Production				(39)				-				(39)
December 31, 2012				1,012				416				1,428

Net Asset Value ("NAV") before income tax - Discounted at 10%
($ thousands except share and per share data)				December 31, 2012				December 31, 2011
Net present value-proved and probables				39,507				50,107
Net debt				(3,277)				(7,808)
Net asset value				36,230				42,299
Common shares outstanding				27,860,824				27,860,824
NAV per share, December 31				1.30				1.52

GLJ Price Forecasts as of December 31, 2012 ^(1)
Year				Edmonton Par Price 40^o API ($Cdn/bbl)				AECO Gas Price ($Cdn/Mmbtu)
2013				85.00				3.38
2014				91.50				3.83
2015				94.00				4.28
2016				96.50				4.72
2017				96.50				4.95
2018				96.50				5.22
2019				97.54				5.32
2020				99.51				5.43
2021				101.52				5.54
2022				103.57				5.64
2023+				+2.0%/yr				+2.0%/yr

(1)	This summary table identifies benchmark reference pricing schedules that might apply to a reporting issuer.

Additional Information

Ironhorse's complete results for the year ended December 31, 2012, including audited financial statements and the management's discussion and analysis, annual information form, statement of reserves data and other oil and gas information are available on SEDAR or the Company's web site at www.ihorse.ca.

About Ironhorse:

Ironhorse Oil & Gas Inc. is a Calgary-based junior oil and natural gas production company trading on the TSX Venture Exchange under the symbol "IOG."

Forward-looking statements:

Statements throughout this release that are not historical facts may be considered to be "forward looking statements." These forward looking statements sometimes include words to the effect that management believes or expects a stated condition or result. All estimates and statements that describe the Company's objectives, goals, or future plans, including management's assessment of future plans and operations, drilling plans and timing thereof, expected production rates and additions and the expected levels of activities may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, incorrect assessment of the value of acquisitions, failure to complete and/or realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources and changes in the regulatory and taxation environment. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: the ability of the Company to obtain equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manor; and field production rates and decline rates. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included elsewhere herein and in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this release are made as at the date of this release.

Boe Conversion - Certain natural gas volumes have been converted to barrels of oil equivalent ("boe") whereby six thousand cubic feet (mcf) of natural gas is equal to one barrel (bbl) of oil. This conversion ratio is based on an energy equivalency conversion 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 release."

SOURCE: Ironhorse Oil & Gas Inc.

Larry J. Parks
President & Chief Executive Officer
[phone]
[email protected]

Karen Hutson
VP Finance & Chief Financial Officer
[phone]
[email protected]
www.ihorse.ca