WINNIPEG, Aug. 30 /CNW/ - Nordic Oil and Gas Ltd. (TSXV: NOG) today
announced the Company's financial results from operations for its second
quarter and six months ended June 30, 2007. All amounts referenced herein are
in Canadian dollars.
Revenue from natural gas and Coal Bed Methane ("CBM") sales for the
six-month period (including liquids and transport revenue and interest
revenue) totaled $364,568, down slightly from the $387,217 reported for same
period in 2006. Revenue for the three-month period ended June 30, 2007 totaled
$175,429 down approximately $14,000 over the Q1 2007 total, but an increase of
about $15,000 over the 2006 Q2 total. The marginal decline in quarter over
quarter revenue totals was due to a 5% drop in natural gas prices during the
period under review, coupled with the fact that the Company's 15-12 well,
which is awaiting a fluid lift system, recorded very little production.
Cash, including term deposits and accounts receivable for the first six
months of the year totaled $9,876 compared to $377,669 for the same period in
2006. In addition, net cash flow from operating activities (cash received from
operators minus cash paid to suppliers and for royalties) was down for the
first half of 2007 to $182,877 as compared to $204,269, and was down for the
quarter ended June 30, 2007, to $66,578.
Total assets as at June 30, 2007 were $3,825,864, down slightly from the
$4,039,556 at the end of Q1 2007 and down approximately $200,000 compared to
the first half of 2006.
General and administrative expenses for the first half totaled $108,584,
up about $37,000 from the same period in 2006, while for the quarter, G & A
expenses were up over the comparable period in 2006 - $68,081 this year versus
$43,914 last year. Overall expenses for the first half of 2007 were up
approximately $107,000 at $719,313 compared to the first half of 2006 at
$612,794, while overall expenses for the second quarter under review were also
up from those recorded for Q1 2007 at $414,484 as compared to $304,829. This
was due primarily to the increase in depletion and amortization costs to
$124,698 for the quarter, compared to $96,199 in Q1 2007 and the increase in
professional fees from $7,499 to $41,152.
The Company recorded a net loss before income taxes of $354,746 for the
first six months of 2007, up approximately $130,000 over the same period a
year ago while for the quarter, the Company recorded a net loss of $239,056
compared to a loss of $84,778 reported in Q2 2006.
Average monthly production volume for the six months ended June 30, 2007
was 48.2 BOEs(*)/day, and 46.61 BOEs(*)/day for the second quarter. The Company
received $6.858/GJ as an average gas price during the first half of the year
and $6.7005/GJ for the second quarter.
"While we are disappointed at the drop in gas prices, which adversely
affected our revenue and bottom line totals, overall, we are pleased at the
amount of gas we are producing at this time," Mr. Benson stated. "We are also
excited about the prospects for our new well in Joffre, which was perforated
in late August. Field measurement results from the two-day flow test showed
that the middle Belly River zone had gas rates of 18.5 10(3)m(3) during a one
hour flow test. The Belly River formation where the measurement was taken was
perforated at between 649.5 metres and 651 metres, while the gas rate level at
the 699.5-metre to 702-metre interval tested at 3.5 10(3)M(3)."
In this regard, further to the Company's News Release dated August 24,
2007, the Company wishes to clarify the term 10(3)M(3): the combined
23 10(3)M(3) for the three intervals within the well that was tested, equates
to 820 MCF/day.
The Corporation plans to tie this well into its pipeline system - a
distance of 200 metres - and will begin to produce it during the 4th quarter
once gas prices rise.
One of the highlights of the second quarter came in June when the Company
entered into an agreement to acquire approximately 8,000 acres of Petroleum &
Natural Gas leases in the Peace River Arch and Lloydminster regions of
Alberta. An initial down payment on the purchase was made on August 14, 2007,
with the closing date set at September 14, 2007, subject to customary industry
regulations and conditions.
"As we stated at the time of the announcement, these lands will provide
Nordic with new core areas for the Corporation and will be a strategic fit for
our current production and impending drilling activity at Joffre, Alberta,"
Mr. Benson said. "The lands have been evaluated by independent geological and
in-house geophysical consultants and based on this evaluation, and that of
management, the Corporation is very excited about the potential of these new
Subsequent to the end of the quarter, the Company announced an offering
of up to 1 million Units of Nordic at a price of $0.20 per Unit. Each Unit
will consist of one Class A common share of the Corporation issued as a
"flow-through share" within the meaning of the Income Tax Act (Canada) and
one-half of a Class A common share purchase warrant. Each Warrant will entitle
the holder thereof to purchase one regular Class A common share of the
Corporation at a price of $0.30 per share for a period of two years from the
date of issuance. In early August, the Company went on to announce the closing
of the Offering with the issuance of 1,000,000 units at a price of $0.20 per
Unit for gross proceeds of $200,000 to certain funds in the EnergyFields
Group. A further non-brokered Offering of flow-through shares is expected to
close in early September.
Mr. Benson stated that the Company looks forward to the remainder of 2007
with considerable optimism: "We are extremely pleased at the successful test
results from our new well in Joffre. We intend to continue pursuing Private
Placement Offerings in the coming weeks, which will allow us to proceed with
new drilling initiatives in Joffre and give us the opportunity to begin
drilling in Lloydminster as well.
"We very much look forward to getting into this region, along with the
Peace River Arch area next year, which will allow us to diversify our
production into such areas as heavy oil and Blue Sky gas," he added.
"Furthermore, the three CBM wells that were drilled last year are expected to
be tied-in and on production shortly, and we also expect to have our
15-12-38-25 W4 well in Joffre, which is being fitted with a fluid lift system,
on full production in Q3."
About Nordic Oil and Gas Ltd.
Nordic Oil and Gas Ltd. is a junior oil and gas company engaged in the
exploration and development of oil, natural gas and Coal Bed Methane in
Alberta and Saskatchewan. The Company is listed on the TSX Venture Exchange
and trades under the symbol NOG.
This news release contains certain statements that may be deemed
"forward-looking statements". All statements in this release, other than
statements of historical fact, that address events or developments that the
Corporation expects to occur, are forward looking statements. Forward looking
statements are statements that are not historical facts and are generally, but
not always, identified by the words "expects", "plans", "anticipates",
"believes", "intends", "estimates", "projects", "potential" and similar
expressions, or that events or conditions "will", "would", "may", "could" or
"should" occur. Although the Corporation believes the expectations expressed
in such forward-looking statements are based on reasonable assumptions, such
statements are not guarantees of future performance and actual results may
differ materially from those in forward looking statements. Factors that could
cause the actual results to differ materially from those in forward-looking
statements include market prices, exploration and drilling success, continued
availability of capital and financing and general economic, market or business
conditions. Investors are cautioned that any such statements are not
guarantees of future performance and actual results or developments may differ
materially from those projected in the forward-looking statements. Forward
looking statements are based on the beliefs, estimates and opinions of the
Corporation's management on the date the statements are made. The Corporation
undertakes no obligation to update these forward-looking statements in the
event that management's beliefs, estimates or opinions, or other factors,
(*) The term BOEs may be misleading, particularly if used in isolation. A
BOE conversion ratio of 6 Mcf: 1 barrel is based on an energy equivalency
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.
The TSX Venture Exchange has not reviewed nor accepts responsibility for
the adequacy or accuracy of the contents of this News Release.
For further information:
For further information: Donald Benson, Chairman & CEO, Nordic Oil & Gas
Ltd., Tel: (204) 956-5042, Fax: (204) 897-7154, E-mail: email@example.com