CALGARY, Aug. 13 /CNW/ - Trafalgar Energy Ltd. (TSX:TFL) ("Trafalgar" or
the "Company") is pleased to announce the unaudited financial results for the
quarter ended June 30, 2008.
The balance of 2008 will be a very exciting time for the company as
production begins from our recently announced gas discovery at Stowe, Alberta;
our high impact oil prospects at Beaton, Rich and House Mountain, Alberta are
drilled and evaluated; and the preliminary resource evaluation of our Grosmont
bitumen rights at Mackay, Alberta is completed. Each of these activities has
the potential to significantly accelerate Trafalgar's growth.
(000's, except for per share Q2 Q1 Q2 YTD YTD
and production data) 2008 2008 2007 2008 2007
Petroleum and natural gas
revenues ($) 6,521 3,672 3,832 10,193 6,746
Funds from operations ($) 4,200 1,707 1,680 5,907 3,233
Basic and diluted per
share ($) 0.33 0.14 0.14 0.48 0.27
Net earnings (loss) ($) 1,497 (232) (273) 1,265 1,025
Basic and diluted per
share ($) 0.12 (0.02) (0.02) 0.10 0.09
Working capital (deficit)
($)(1) 1,294 (4,278) 2,653 1,294 2,653
Long-term debt ($) 6,612 5,803 - 6,612 -
Net debt ($)(1) 5,318 10,081 - 5,318 -
Capital expenditures ($) 5,937 11,439 2,610 17,376 13,544
Weighted average number of
Basic and diluted 12,629 11,836 11,836 12,232 11,836
Basic 13,405 11,836 11,836 13,405 11,836
Diluted 14,675 12,957 12,927 14,675 12,927
Light Oil (bbls/d) 38 39 41 39 46
Heavy Oil (bbls/d) 57 52 52 54 48
Total Oil (bbls/d) 95 91 93 93 94
Natural Gas (mcf/d) 6,034 4,872 5,367 5,453 4,630
BOE (boe/d) 1,100 903 987 1,002 866
Average Realized Prices(2)
Light Oil ($/bbl) 139.43 82.62 71.24 110.59 69.08
Heavy Oil ($/bbl) 78.89 65.17 47.65 72.34 40.84
Natural Gas ($/mcf) 10.76 7.29 7.13 9.21 7.24
$/boe (6:1) 67.89 46.69 44.22 58.33 44.68
Petroleum and natural
gas revenue 67.89 46.69 44.22 58.33 44.68
Royalties 7.44 9.01 9.21 8.15 9.26
Operating expenses 9.85 9.42 8.69 9.66 9.06
Transportation expenses 2.77 2.00 1.56 2.42 1.64
Operating netback 47.83 26.26 24.76 38.10 24.72
(1) Working capital (deficit) and net debt excludes the fair value of
(2) Average realized prices are before transportation expenses.
LETTER TO SHAREHOLDERS
With strong commodity prices and record levels of production the second
quarter of 2008 has been Trafalgar's best to date. Second quarter highlights
- Record production of 1,100 boe per day.
- Record funds from operations of $4.2 million.
- Record netback of $47.83 per boe.
- Record net earnings of $1.5 million.
- Significant natural gas discovery at Stowe, Alberta.
- Operating costs remain under $10.00 per boe.
- Strong balance sheet maintained.
Our approach remains consistent. Build a proven, experienced team.
Develop a 100% working interest prospect inventory with material upside.
Drill, evaluate and start production in as short a time frame as possible.
The drilling activity for the balance of 2008 is the result of two years
of inventory building. At Stowe in north central Alberta, our first well
tested 2.3 million cubic feet per day of natural gas with 40 barrels per day
of associated condensate and is anticipated to be on-stream by the end of
August, 2008. Future drilling at Stowe is scheduled for the first quarter of
2009. Drilling and initial results are expected on our Beaton, Rich, and House
Mountain oil prospects during the third quarter of this year. Collectively
these projects expose the Company to in excess of 30 potential follow up
locations on existing 100% working interest lands and the potential to
materially increase production levels.
The Mackay carbonate bitumen project is gaining momentum as our
independent engineering consultants have been engaged to complete a
preliminary resource evaluation during the third quarter of this year. This is
a multi year project that provides our shareholders with significant resource
exposure. Several industry projects targeting bitumen recovery in the
carbonates are moving into the pilot project stage over the next year and
Trafalgar is well positioned to capitalize on the success of any of these
Trafalgar achieved record average production of 1,100 boe per day for the
second quarter of 2008 and we are pleased to report that previously announced
production disruptions at Mackay during the first and second quarter of 2008
have been resolved. These disruptions, and surface access delays associated
with our summer program, will impact annual average production rates. We have
revised our annual average production guidance to 1,125-1,225 boe per day from
the original 1,225-1,325 boe per day. Our year end 2008 exit production target
remains unchanged at 1,425-1,525 boe per day. 2008 funds from operations
guidance remains unchanged at $12-14 million dollars based on annual commodity
price assumptions of US$115.00 WTI and $97.00 Edmonton par for crude oil,
US$9.99 NYMEX and $9.22 AECO for natural gas.
The board of directors of Trafalgar has approved an expanded capital
budget totaling $25 million dollars for 2008. This expanded budget will
provide the opportunity to exploit and quickly follow up exploratory drilling
success, and continue to build our prospect inventory while maintaining a
strong balance sheet and financial flexibility.
Consolidation in the junior sector of the Canadian oil and gas industry
continues as several private and public companies lost momentum over the past
year. If the right opportunity is identified, Trafalgar, with our solid
production base, strong balance sheet, deep exploration inventory and
committed shareholder base, is in an enviable position to act.
The next few months will be a very exciting time for Trafalgar and I look
forward to reporting on our progress and seeing our successes reflected in an
improving capital market.
On behalf of the Management, Staff and Board of Directors,
August 12, 2008
President and CEO
Trafalgar has filed with Canadian securities regulatory authorities its
unaudited financial statements for the quarter ended June 30,, 2008 and the
accompanying Managements' Discussion and Analysis. These filings are available
under Trafalgar's SEDAR profile at www.sedar.com starting August 14, 2008.
Full pdf versions of our Q2 2008 unaudited financial statements and the
accompanying Managements' Discussion and Analysis are available on our website
DESCRIPTION OF COMPANY
Trafalgar is a Calgary, Alberta based oil and natural gas exploration,
production and development company, with operations in the Canadian provinces
of Alberta and British Columbia. Trafalgar trades on the Toronto Stock
Exchange ("TSX") under the symbol TFL.
BOE PRESENTATION AND OTHER NI 51-101 INFORMATION
In conformity with National Instrument 51-101, Standards for Disclosure
of Oil and Gas Activities ("NI 51-101"), natural gas volumes have been
converted to barrels of oil equivalent ("boe") using a conversion rate of six
thousand cubic feet of natural gas to one barrel of oil. This ratio is based
on an energy equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead. Readers are
cautioned that the term "boe" may be misleading, particularly if used in
isolation. Full NI 51-101 disclosures respecting net asset value and finding
and development costs are contained in the Management's Discussion and
Analysis filed on SEDAR.
This press release contains certain forward-looking statements and
forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of applicable Canadian
securities laws. All statements other than statements of present or historical
fact are forward-looking statements. Forward-looking information is often, but
not always, identified by the use of words such as "anticipate", "believe",
"plan", "intend", "objective", "continuous", "ongoing", "estimate", "expect",
"may", "will", "project", "should", or similar words suggesting future
outcomes. In particular, this press release contains forward-looking
statements relating to:
- forecast capital expenditures and drilling plans;
- anticipated production rates;
- anticipated funds from operations;
- Trafalgar's business strategy;
- future development and growth opportunities;
- Trafalgar's asset base and future prospects;
- exploration, drilling and development plans and the results
anticipated therefrom; and
- the timing of the tie-in of the Stowe well.
In addition, statements relating to "reserves" or "resources" are deemed
to be forward looking statements, as they involve the implied assessment,
based on certain estimates and assumptions, that the resources and reserves
described can be profitably produced in the future.
Forward-looking statements regarding Trafalgar are based on certain key
expectations and assumptions of Trafalgar concerning anticipated financial
performance, business prospects, strategies, regulatory developments, current
commodity prices and exchange rates, applicable royalty rates, tax laws,
future well production rates and reserve volumes, future operating costs, the
performance of existing wells, the success of its exploration and development
activities, the sufficiency and timing of budgeted capital expenditures in
carrying out planned activities, the availability and cost of labor and
services, the impact of increasing competition, conditions in general economic
and financial markets, availability of drilling and related equipment; effects
of regulation by governmental agencies, the ability to obtain financing on
acceptable terms which are subject to change based on commodity prices, market
conditions, drilling success and potential timing delays.
These forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond Trafalgar's control, including the
impact of general economic conditions; volatility in market prices for crude
oil and natural gas; industry conditions; currency fluctuation; imprecision of
reserve estimates; liabilities inherent in crude oil and natural gas
operations; environmental risks; incorrect assessments of the value of
acquisitions and exploration and development programs; competition from other
producers; the lack of availability of qualified personnel or management;
changes in income tax laws or changes in royalty rates and incentive programs
relating to the oil and gas industry; hazards such as fire, explosion,
blowouts, cratering, and spills, each of which could result in substantial
damage to wells, production facilities, other property and the environment or
in personal injury; stock market volatility; and ability to access sufficient
capital from internal and external sources.
Management has included the above summary of assumptions and risks
related to forward-looking information provided in this press release in order
to provide readers with a more complete perspective on Trafalgar's future
operations and such information may not be appropriate for other purposes.
Trafalgar's actual results, performance or achievement could differ materially
from those expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any of them do
so, what benefits that Trafalgar will derive there from. Readers are cautioned
that the foregoing lists of factors are not exhaustive. These forward-looking
statements are made as of the date of this press release and Trafalgar
disclaims any intent or obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or results
or otherwise, other than as required by applicable securities laws. However,
in the event that subsequent events are reasonably likely to cause actual
results to differ materially from material forward-looking information
previously disclosed by Trafalgar for a period that is not yet complete,
Trafalgar will provide disclosure on such events and the anticipated impact of
Additional information regarding Trafalgar including its annual
information form is available under the Company's profile on SEDAR at
www.sedar.com or on the Company's website at www.trafalgarenergy.ca.
For further information:
For further information: TRAFALGAR ENERGY LTD.: Robert Wollmann,
President and CEO, Telephone: (403) 216-2706, Email:
email@example.com or visit www.trafalgarenergy.ca; Daniel Belot,
Vice President Finance and CFO; Telephone: (403) 216-2707, Email:
firstname.lastname@example.org, Toll-free: 1-877-216-2705, Investor Relations: