WINNIPEG, April 30 /CNW/ - Donald Benson, Chairman and Chief Executive
Officer of Nordic Oil and Gas Ltd. ("Nordic" or "the Company") today announced
the Company's financial results from operations for its year ended December
31, 2006. All amounts referenced herein are in Canadian dollars.
Revenue from natural gas and Coal Bed Methane ("CBM") sales for the year
(including liquids and transport revenue) totaled $667,136, a decrease of
$426,671 from the $1,093,807 reported for 2005. The decrease in total revenue
was a largely due to lower natural gas prices, which prevailed throughout the
energy industry for much of the year.
Cash, including term deposits and accounts receivable for 2006, was also
down from a year ago to $767,903 compared to $1,673,000 in 2005. In addition,
net cash flow from operating activities (cash received from operators minus
cash paid to suppliers and for royalties, plus interest earned) totaled
$505,063 for the year ended December 31, 2006, a compared to $884,450 reported
in prior year.
Total assets as at December 31, 2006 were $4,309,480, down slightly from
the $4,448,506 in 2005. General and administrative expenses for the year were
down over 2005 - $422,439 versus $431,402. Furthermore, overall expenses for
the year under review decreased to $1,318,333 compared to $1,353,661 in 2005.
This was due primarily to a decrease in the Company's depletion and
amortization expenses, which declined by more than $100,000.
The Company recorded a net loss before income taxes of $800,556 for the
year, compared to the 2005 loss of $456,644. As was the case last year, the
2005 loss can be attributed in part to the costs related to stock options,
Asset Retirement Obligation (ARO) and higher depletion costs which were
recorded as expenses on the income statement. The stock options had an
estimated cost of $179,710 for the year under review, compared to $77,752 in
Commenting on the financial results Mr. Benson stated: "As was the case
for many junior oil and gas companies, 2006 was a difficult year in terms of
revenue due to the ongoing lower natural gas prices. However, we had a strong
drilling program throughout the year and we did finish 2006 on a high note
with two successful financings. The funds generated from both financings will
be used to assist us in continuing our exploration initiatives in Alberta and
Saskatchewan throughout 2007.
"While much of 2006 was fraught with various difficulties and delays,
combined with a sharp drop in the price of natural gas, we feel that the
company has weathered the storm and we are now poised to have a strong start
to 2007," he added. "Our 2006 Engineering Report, which was issued a short
time ago, states that for conventional gas, our Total Proved Reserves were up
substantially to 244.7MMcf as opposed to 185.5MMcf at the end of 2005. In
evaluating the Company's CBM reserves, Total Proved, as at December 31, 2006,
was 611.9MMcf, compared to nil at the end of last year; and, for Natural Gas
Liquids, Total Proved at the end of 2006 was 0.8Mbbl, compared to 0.4bbl at
the end of 2005. This translated into 143.6Mboe(*) as at the effective date
versus 31.3Mboe(*) at the start of the year."
Mr. Benson went to say that the Report, "also indicates that the
Company's Proved plus Probable Additional for Coal Bed Methane (CBM) had risen
sharply to 1,102.7MMcf as at the effective date, compared to 107.8MMcf at the
end of 2005, however the Proved plus Probable Additional for Natural Gas had
declined to 585.3MMcf from 1,955.6MMcf at the end of last year."
Furthermore, the Report includes 56 new locations of wells to be drilled
in the Joffre area.
Nordic continues to maintain volumes of natural gas generating sufficient
revenue to meet the Company's overhead costs, and, said Mr. Benson, "With the
tie-in of the first of our two new belly river wells earlier this year, and
the other to follow shortly, we believe our production levels will rise in the
coming months at prices that will be meaningful to the company.
"In addition, we continue to be optimistic that the three new CBM wells
that were drilled last year will also be placed on production in the near
future, and this will certainly have a positive impact on our revenue and
bottom line," he added.
Nordic Oil and Gas is a junior oil and gas exploration company, which is
listed on the TSX Venture Exchange and trades under the symbol NOG.
NOTE: BOEs 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.
For further information:
For further information: Donald Benson, Chairman & CEO, Tel. (204)
956-5942, Fax. (204) 897-7154, E-mail: email@example.com