CALGARY, May 28, 2014 /CNW/ - Ironhorse Oil & Gas Inc. ("Ironhorse" or the "Company") (TSX-V: IOG) announces its financial and operating results for the three months ended March 31, 2014 and provides an operational update on activities to date this year as well as an outlook for the remainder of 2014.
Financial and Operation Summary
The Company's working capital position remained strong with positive working capital of $2.2 million at March 31, 2014 compared to $2.9 million at December 31, 2013. The reduction in working capital is largely due to the Company's working interest share in the drilling and abandonment costs of the 1-8 Pembina Nisku well and facility and completion costs associated with bringing the remaining L2L oil wells on production.
On March 5, 2014 the Company, along with its working interest partners initiated the first production in the Nisku L2L pool from the 100/09-05-050-06W5M/00 well. For the 27 days on production during first quarter 2014, the well produced an average of approximately 123 bbls/d of oil (net 19 bbls/d) and 119 mcf/d (net 19 mcf/d) of natural gas for a combined 143 boe/d (net 22 boe/d). Production was restricted during this period due to insufficient blend gas at the battery facility. The Nisku formation has a high concentration of H2S and additional natural gas is blended to bring the produced natural gas to acceptable specifications for delivery and sales.
Production from the Nisku wells will continue to be restricted to the first quarter rates until a sufficient and stable volume of blend gas is available at the battery facility. The facility operator has commenced the completion of a pipeline to bring natural gas directly from a nearby natural gas processing facility. This will ensure a stable supply of blend gas necessary to produce the Nisku wells at higher rates. The Company anticipates that the pipeline will be complete by mid June 2014. The Company will not participate in the cost of construction of the blend gas pipeline as the need for blend gas was identified and agreed as responsibility of the facility operator.
|SELECTED INFORMATION||For the three months ended|
|March 31,||December 31,||March 31,|
|($ thousands except per share & unit amounts)||2014||2013||2013|
|Petroleum and natural gas revenues (1)||134||130||571|
|Funds from operations (2)||(44)||(73)||37|
|Per share - basic and diluted||-||-||-|
|Per share - basic and diluted||-||(0.01)||(0.01)|
|Capital expenditures (3)||636||756||5|
|Petroleum and natural gas revenues ($/boe)||52.87||38.84||40.06|
|Operating expenses ($/boe)||11.77||0.64||13.17|
|Operating netback ($/boe)||30.25||32.17||15.18|
(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.
Ironhorse's complete results for the three months ended March 31, 2014, including unaudited condensed financial statements and the management's discussion and analysis are available on SEDAR or the Company's web site at www.ihorse.ca
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."
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.
For further information:
Larry J. Parks
President & Chief Executive Officer