Sharon Energy Ltd. announces significantly improved results for the first quarter ended June 30, 2008

    Sharon Energy Ltd. (TSX-V: SHY)

    CALGARY, Aug. 18 /CNW/ - Sharon's financial results for the first quarter
ended June 30, 2008, were significantly higher than in any quarter over the
last two years due to higher natural gas and oil prices combined with an
increase in the Company's quarterly production.
    Average production for Q1 2009F increased by 93 BOEd from the previous
quarter. This combined with a 40% increase in commodity price to increase
revenue by 116% and cashflow by 270%.
    In Canada, Sharon's production was unchanged as production declines were
offset by production from the Big Bend 2007 discovery well which was brought
on production at 500 Mcfd on March 20, 2008, and the Leahurst 2007 discovery
well which came on stream at 500 Mcfd on June 6, 2008. Sharon has a 10%
working interest in Big Bend and a 20% working interest in the surrounding
lands. Sharon has a 20% working interest in Leahurst.
    In the United States, new production in the quarter from the Robertson
No. 1 well (N.W. Speaks field) which was brought on production on May 7, 2008,
and averaged 1.4 MMcfd during the quarter helped to improve the U.S. average
production. Sharon has a 35.8% interest in the property.
    Also, late in the first quarter, Sharon participated in drilling the
Ruebush No. 1 well, in Lavaca County, Texas, which had an initial production
rate of 15.95 MMcfd and to date has cumulatively produced over 500 MMcf of
gas. The well is currently producing approximately 3.13 MMcfd. Sharon has a
6.0% working interest which increases to 13.46% after payout. Payout should
occur during the second quarter.


    Sharon reported revenue for the three month period ended June 30, 2008,
of $1.5 million compared with $791,000 in the prior year period and cash flow
for the quarter was $1.0 million compared with $334,000 for the prior year
period. Sharon reported earnings for the quarter of $180,000 or nil per share
versus a loss of $468,000 or $(0.01) per share for the prior year period.
    Capital spending for the three month period ended June 30, 2008, totaled
$1.2 million compared with $1.7 million for the prior year period. Capital
spending was financed from cash flow, capital dispositions and working
    Sharon exited the first quarter with working capital of $191,000 versus
working capital of $412,000 at the beginning of the period.
    All dollar figures are United States dollars.

    Business Outlook

    Commodity prices have remained very volatile in 2008. During the first
quarter, natural gas prices increased to the range of $10.00 to $12.00 per Mcf
reflecting low year-on-year storage inventory levels in Canada and in the
United States. Subsequent to the quarter, gas prices have declined to the
range of $7.50 to $9.00 per Mcf, as a result of increasing gas inventory
levels in the summer months. It is expected by the Company that natural gas
prices will stay in this range until the winter heating season, unless there
is a disruption of the U.S. supply by a hurricane, or increased cooling demand
in the U.S.
    Sharon plans to match capital spending to operating cash flow; however,
at least two development wells are currently scheduled to be drilled in Texas
during the fiscal year and some debt may be incurred to finance these
objectives. Additional development is also planned for the two new discovery
areas in Canada. Sharon's future exploration program will focus on a number of
shallower prospects in Texas that can be managed within the Company's capital

    ($ Thousands, except per share amounts)             Three Months Ended
    (U.S. Dollars, Unaudited)                                June 30
                                                          2008          2007
      Total revenue                                $     1,448   $       791
      Cash flow from operations                    $       971   $       334
        per share, basic and diluted               $      0.01   $      0.01
      Earnings (loss) for the period               $       180   $      (468)
        per share, basic and diluted               $      0.00   $     (0.01)
      Property, plant and equipment
        Capital additions                          $     1,206   $     1,725
        Dispositions                               $        17   $         -
      Working capital                              $       190   $     3,474
      Total assets                                 $    19,831   $    18,696
      Total shares outstanding, at period end           75,359        75,419


        Gas (MMcfd)                                        1.5           1.4
        Oil (Bopd)                                          45            21
        BOEd (6 Mcf equals 1 Bbl)                          292           261

      Product Prices
        Gas ($/Mcf)                                $     10.29   $      7.09
        Oil ($/Bbl)                                $    114.33   $     57.96

        BOE Presentation - the term barrels of oil equivalent (BOE) 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. 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.

    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 exhaustive. Additional information on these and other factors
that could affect 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.


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; TSX-V: SHY

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