Sharon Energy Ltd. announces results for the year ended March 31, 2009

    CALGARY, June 29 /CNW/ - Sharon Energy Ltd. (TSX-V: SHY) ("Sharon")
announces that is has filed its 2009 MD&A, Financial Statements, and Reserves
Data Report.
    Sharon's revenue and cash flow results for the year ended March 31, 2009,
were higher than those of the prior year as strong oil and natural gas prices
combined with flush production from new wells during the spring and summer
quarters (Q1 and Q2). Unfortunately, declines in production rates during the
second half of the fiscal year combined with a considerable drop in oil and
natural gas prices offset most of the gains from the first half.


    Revenue for the year totalled $3.7 million compared with $2.8 million for
the prior year. Cash flow from operations for the year totalled $2.1 million
or $0.03 per share compared with $1.2 million or $0.02 per share for the prior
year. Sharon had a loss of $3.6 million versus a loss of $757,000 in the prior
year primarily due to an impairment of the carrying value of the Company's oil
and gas assets of $1.6 million in 2009 compared with an impairment of $379,000
in the prior year.
    Capital expenditures during the 2009 fiscal year totalled $3.4 million
compared with $6.0 million for the prior year. Capital expenditures were
financed from cash flow and proceeds from property dispositions.
    Sharon exited the year with working capital of $310,000 versus working
capital of $412,000 at the beginning of the year.
    All dollar figures are United States dollars.

    Exploration and Development

    Unites States
    In the U.S., Sharon has acquired approximately 8,500 gross acres (3,621
net acres) in the Eagleford fractured shale play. Sharon's acreage is on trend
with a large development program operated by Apache Corporation. However, the
Company is actively looking to sell or farmout this project as individual well
costs may be significant.

    In Canada, Sharon has acquired 9,611 acres (2,816 net acres) in Alberta
and Saskatchewan. The Alberta lands were acquired to expand existing holdings
at Big Bend. Sharon's primary Canadian exploration focus is in Saskatchewan
where the Company now has acreage on prospective Viking, Shaunavon and Bird
Bear oil plays.


    For the year ended March 31, 2009, production increased 17% to 254 BOEd
compared with 217 BOEd for the prior year. New fields added to production
during the year from Canada at Leahurst, Carstairs and Big Bend and in the
United States at NW Speaks combined to offset production rate declines at the
Hound Dog field in Lavaca County, Texas, and the Allen Ranch field in Colorado
County, Texas.

    Reserves and Reserve Values

    The independent engineering evaluation of Sharon's properties assigned
proved reserves before royalties of 256.8 MBOE and total reserves before
royalties of 1,097.5 MBOE at March 31, 2009. These reserve estimates result in
a before tax present value of estimated future net revenues, discounted at
10%, of $13.6 million CDN. There is no assurance that this represents the fair
value of the assets.

    Business Outlook

    A weak natural gas pricing environment has led to a sharp reduction in
the number of rigs drilling for natural gas over the last six months. The drop
of rig activity in Canada and the U.S. should decrease domestic supply as
rates from producing wells decline without new well production replacing the
declines. However, even though natural gas prices have shown signs of
strengthening recently, there is still considerable uncertainty as to when
prices will again rise to above $7.00 Mcf. Because of the uncertainty in the
gas market and the underlying economy Sharon expects that natural gas prices
will stay in the range of $4.00 to $6.00 per Mcf for the remainder of 2009.
    Sharon plans to match capital spending to operating cashflows and has
halted the majority of new projects until gas prices improve over current
    Sharon's future exploration program will focus on a number of shallower
prospects in Texas that can be managed within the Company's capital budget.
However, Sharon is also considering various alternatives to its normal
operations such as the selling of assets, a reduction of overhead costs, and
other corporate transactions to optimize shareholder value.

    Corporate Summary

                                                             Years Ended
    ($ Thousands, except per share amounts)                    March 31
    (U.S. Dollars)                                   ------------------------
                                                            2009        2008
      Total revenue                                   $    3,733  $    2,835
      Cash flow from operations                       $    2,075  $    1,174
       per share, basic and diluted                   $     0.03  $     0.02
      Loss for the period                             $   (3,626) $     (757)
       per share, basic and diluted                   $    (0.05) $    (0.01)
      Property, plant and equipment
        Capital additions                             $    3,428  $    5,984
        Dispositions                                  $    1,412  $      330
      Working capital                                 $      310  $      412
      Total assets                                    $   14,679  $   21,902
      Total shares outstanding, at period end             74,086      75,394


        Gas (MMcfd)                                          1.3         1.2
        Oil (Bopd)                                            32          25
        BOEd (6 Mcf equals 1 Bbl)                            254         217
      Product Prices
        Gas ($/Mcf)                                   $     8.01  $     6.78
        Oil ($/Bbl)                                   $    85.03  $    67.19
      Reserves (proved plus probable)
        Gas (Mmcf)                                         6,241      11,183
        Oil (MBbl)                                            57         145
        BOE (MBbls)                                        1,097       2,009
        Present value, before tax ($ CDN MM at 10%)   $     13.6  $     35.7

        BOE Presentation - the term barrels of oil equivalent (BOE) may be
        misleading, particularly if used in isolation. A BOE conversion ratio
        of 6 Mcf: 1Bbl is based on an energy equivalency conversion method
        primarily applicable at the burner tip and does not represent a value
        equivalency at the wellhead. All BOE conversions in this report are
        derived by converting gas to oil in the ratio of six Mcf of gas to
        one Bbl of oil.

        Financial Reporting - all numbers are reported in U.S. dollars.

    Sharon is an oil and gas exploration and production company based in
Calgary, Alberta. Sharon's current focus is on shallow gas developments in
southern Alberta, natural gas exploration in central and southern Alberta and
deep gas exploration in Texas.

    TSX-V: SHY

    ADVISORY: Certain information regarding the Company in this News Release
including management's assessment of future plans and operations, the use of
proceeds from the offering and the anticipated closing date of the offering,
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, loss of markets, volatility of commodity prices, currency
fluctuations, imprecision of reserve estimates, environmental risks,
competition from other producers, inability to retain drilling rigs and other
services, capital expenditure costs, including drilling, completion and
facilities costs, unexpected decline rates in wells, wells not performing as
expected, incorrect assessment of the value of acquisitions, failure to
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. As a consequence,
actual results may differ materially from those anticipated in the
forward-looking statements. Readers are cautioned that the foregoing list of
factors is not exhausted. Additional information on these and other factors
that could effect the Company's operations and financial results are included
in reports on file with Canadian securities regulatory authorities and may be
accessed through the SEDAR website ( and at the Company's
website ( Furthermore, the forward-looking statements
contained in this news release are made as at the date of this news release
and the Company does not undertake any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a result of
new information, future events or otherwise, except as may be required by
applicable securities laws.
    Where amounts are expressed on a barrel of oil equivalent (boe) basis,
natural gas volumes have been converted to barrels of oil at six thousand
cubic feet (mcf) per barrel (bbl). Boe figures may be misleading, particularly
if used in isolation. A boe conversion of six thousand cubic feet per barrel
is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wel head.
References to oil in this discussion include crude oil and natural gas liquids


For further information:

For further information: H.C. (Kip) Ferguson, III, President, Houston,
Texas, SHARON ENERGY LTD., Telephone: (713) 789-5395, Fax: (713) 789-8454;
Robert W. Lamond, Chairman, Calgary, Alberta, SHARON ENERGY LTD., Telephone:
(403) 269-9889, Fax: (403) 269-9890

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890