Cumberland Oil & Gas Ltd. Announces Filing of June 30, 2011 Interim Financial Statements and MD&A
August 17 2011 - 6:03PM
Marketwired Canada
Cumberland Oil & Gas Ltd. (TSX VENTURE:COG) ("Cumberland" or the "Company") has
filed its unaudited interim financial statements and related Management's
Discussion and Analysis ("MD&A") for the three months (the "Quarter") and six
months ended June 30, 2011. Copies of these documents may be obtained under
Cumberland's SEDAR profile via the SEDAR website at www.sedar.com or through the
Company's website at www.cumberlandltd.com.
Highlights
-- Production averaged 89 boe per day for the Quarter, a 24% increase from
the same period in 2010.
-- Valhalla Doe Creek "M" Pool responding to water-flood, with average
daily oil production for the Quarter of 42 bbl per day, up from 23 bbl
per day in the previous quarter.
-- Oil and gas sales increased 97% from the comparable quarter in 2010.
-- Reduced total expenses by 10% and specifically, reduced general and
administrative expenses by 28%, from the comparable quarter in 2010.
-- Positive working capital of $1.34 million at June 30, 2011.
Three months ended Six months ended
June 30 June 30
Financial 2011 2010 2011 2010
----------------------------------------------------------------------------
Oil and gas sales 479,886 244,024 76,520 409,283
Cash flow (1) (60,341) (304,752) (229,465) (629,315)
Per basic and diluted
share (0.00) (0.01) (0.01) (0.02)
Cash used in operating
activites 20,186 (543,594) (262,810) (626,305)
Per basic and diluted
share 0.00 (0.02) (0.01) (0.02)
Net loss (171,706) (417,655) (243,347) (840,762)
Per basic and diluted
share (0.00) (0.01) (0.01) (0.03)
Capital expenditures, net 17,592 230,128 58,717 635,234
Working capital (2) 1,338,503 3,590,095 1,338,503 3,590,095
Weighted average shares
Basic and diluted 35,684,319 32,384,319 35,684,319 28,716,973
Notes:
(1) Represents cash flow from operating activities before changes in non-cash
working capital.
(2) Working capital includes cash and cash equivalents, accounts receivable,
deposits and prepaid expenses, and accounts payable and accrued liabilities.
Three months ended Six months ended
June 30 June 30
Operations 2011 2010 2011 2010
----------------------------------------------------------------------------
Average Daily Production
Crude oil (bbl/d) 42 21 33 13
Natural gas (mcf/d) 279 307 277 305
Oil equivalent (boe/d @
6:1) 89 72 79 63
Average Realized Prices
Crude oil ($/bbl) 99.49 71.73 96.68 73.06
Natural gas ($/mcf) 3.85 3.88 3.80 4.39
Oil equivalent ($/boe @
6:1) 59.46 37.28 53.52 35.61
Valhalla Doe Creek "M" Pool
In late 2010, the Company successfully completed construction and installation
of water-flood facilities at its Valhalla Doe Creek "M" Pool (the "Pool"). The
Company has seen Pool volumes increase from less than 15 bbls per day in January
2011, to over 40 bbls per day of light oil by the end of the second quarter and
approximately 50 bbls per day in July 2011. The Company expects production
response from the water-flood will continue through 2011.
NE British Columbia
During the first half of 2011, Cumberland doubled its land position in the
liquids-rich Montney natural gas play in northeast British Columbia. The Company
has 1,128 net acres of land at Aitken Creek, highly prospective for development
of liquids rich natural gas and condensate, in both the Upper and Lower Montney
formations. The lands are situated on a well defined structure proximal to
recent drilling success by competitors and are adjacent to infrastructure and
afford year round access. The Company plans to recomplete and test an existing
cased wellbore during the third quarter to evaluate the productive capability of
both the Upper and Lower Montney zones on its land. Both zones have been
successfully developed by competitors in this region. The potential exists for
up to fourteen (5.6 net) horizontal legs in each Montney zone.
SW Saskatchewan
The Company has over 1,150 net acres of land at Chambery and Dollard in the
Shaunavon medium gravity oil trend in southwest Saskatchewan. The lands off-set
both existing Upper Shaunavon producing wells and recently drilled horizontal
Lower Shaunavon wells. The Company's qualified independent engineering
consultants assigned over 100,000 bbls of probable undeveloped reserves to a
100% horizontal well location at Chambery, with an initial estimated production
rate of approximately 100 bbls per day of oil pursuant to a report dated March
18, 2011. Cumberland expects to drill this well by 2012 and has identified six
additional Shaunavon horizontal locations for a total of 7 (5.2 net) horizontal
locations on its lands.
Reader Advisories
Forward-Looking Statements
This news release contains certain forward-looking information and statements
within the meaning of applicable securities laws. The use of any of the words
"expect', "anticipate", "continue", "estimate", "may", "will", "should",
"believe", "intends" and similar expressions are intended to identify
forward-looking information or statements. In particular, but without limiting
the foregoing, this news release contains forward-looking information and
statements pertaining to the following: the volumes and estimated value of
Cumberland's oil and gas reserves; anticipated production volumes from the
expected well at Chambery and from the Pool with continued water-flood
activities; anticipated operational activities; the sources of funding for
certain of the company's future operations; the life of Cumberland's reserves,
the volume and product mix of Cumberland's production; future oil and natural
gas prices; future liquidity and financial capacity; the total future capital
associated with development of reserves and resources; future operating costs,
royalty rates and exchange rates.
The recovery and reserve estimates of Cumberland's reserves provided herein are
estimates only and there is no guarantee that the estimated reserves will be
recovered. In addition, forward-looking statements or information are based on a
number of material factors, expectations or assumptions of Cumberland which have
been used to develop such statements and information but which may prove to be
incorrect. Although Cumberland believes that the expectations reflected in such
forward-looking statements or information are reasonable, undue reliance should
not be placed on forward-looking statements because Cumberland can give no
assurance that such expectations will prove to be correct. In addition to other
factors and assumptions which may be identified herein, assumptions have been
made regarding, among other things: results from drilling and development
activities consistent with past operations and offsetting wells; the effect of
water-flood activities at the Pool; continued and timely development of
infrastructure in areas of new production; availability of debt and equity
financing and cash flow to fund Cumberland's current and future plans and
expenditures; the impact of increasing competition; stability of the economic
and political environment in which Cumberland operates; timely receipt of any
required regulatory approvals; ability of Cumberland to obtain qualified staff,
equipment and services in a timely and cost efficient manner; drilling results;
ability of the operator of the projects in which Cumberland has an interest in
to operate the field in a safe, efficient and effective manner; ability of
Cumberland to obtain financing on acceptable terms; field production and decline
rates; ability to replace and expand oil and gas reserves through acquisition,
development and exploration; timing and cost of pipeline, storage and facility
construction and expansion and the ability of Cumberland to secure product
transportation; future commodity prices; currency, exchange and interest rates;
regulatory framework regarding royalties, taxes, and environmental matters in
the jurisdictions in which Cumberland operates; and the ability of Cumberland to
successfully market its oil and natural gas products.
The forward-looking information and statements included in this news release are
not guarantees of future performance and should not be unduly relied upon. Such
information and statements, including the assumptions made in respect thereof,
involve known and unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those anticipated in such
forward-looking information or statements including, without limitation; changes
in commodity prices; changes in the demand for or supply of Cumberland's
products; unanticipated operating results or production declines; changes in tax
or environmental laws, royalty rates or other regulatory matters; changes in
development plans of Cumberland or by third party operators of Cumberland's
properties, inaccurate estimation of Cumberland's oil and gas reserve and
resource volumes; limited or a lack of access to capital markets; increased
costs; inadequate insurance coverage; impact of competitors and certain other
risks detailed from time-to-time in Cumberland's public disclosure documents
(including, without limitation, those risks identified in this news release and
Cumberland's Annual Information Form).
The forward-looking information and statements contained in this news release
speak only as of the date of this news release and Cumberland does not assume
any obligation to publicly update or revise any of the included forward-looking
statements or information, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities laws.
Boe's may be misleading, particularly if used in isolation. A boe conversion 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.
Non-IFRS Measures
This news release includes references to financial measures commonly used in the
oil and gas industry such as "cash flow" which does not have any standardized
meaning prescribed by International Financial Reporting Standards ("IFRS").
Management believes that in addition to net income (loss), cash flow is a useful
supplemental measure as it is a measure of a company's ability to generate the
cash necessary to repay debt or fund future growth through capital investment.
However, investors are cautioned that this measure should not be construed as an
alternative to net income (loss) determined in accordance with IFRS as an
indication of performance. The method of calculating this measure may differ
from other companies and accordingly, they may not be comparable to similar
measures used by other companies.
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