CALGARY, April 30, 2013 /CNW/ - Ironhorse Oil & Gas
Inc. ("Ironhorse" or the "Company") (TSX-V: IOG) announces its 2012
financial and operating results and year-end reserves
information.
The Company's year-end reserves evaluation with
the effective date of December 31,
2012 was prepared by GLJ Petroleum Consultants Ltd. and
Sproule Associates Limited in accordance with definitions,
standards and procedures contained in the Canadian Oil and Gas
Evaluation Handbook ("COGE Handbook") and NI 51-101 "Standards of
Disclosure for Oil & Gas Activities". Reserves included
herein are stated on a company gross basis (working interest before
deduction of royalties without including any royalty interest)
unless otherwise noted.
Highlights of 2012:
- Completed the sale of the Jedney non-core gas property for net
proceeds of $5.3 million with funds
used to reduce bank debt.
- Funds from operations were negative for the year at
$0.4 million ($0.01 per diluted share) compared to positive
funds from operations of $1.9 million
($0.07 per diluted share) in 2011 as
a result of the disposition of the Shackleton properties.
- Reduced net debt by $4.5 million to $3.3
million at December 31, 2012
within credit facilities of $5.0
million compared to net debt of $7.8
million at December 31, 2011
within credit facilities of $10.2
million.
- Reduced G&A expenses by $0.3
million or 29% to $0.7 million
compared to 2011.
- The Company's reserves were 83% oil weighted with a proved to
probable ratio of 71 to 29. The shift in the proved to probable
ratio as compared to 2011 is due to the disposition of the Jedney
asset.
- During Q3 2012 brought on stream a liquids rich Balsam Alberta
area gas well that produced at an average initial production rate
of 122 boe/d net to the Company over the first 5 months of
production.
- Annual production decreased by 82% to 107 boe per day from 599
boe per day in 2011 primarily due to the disposition of the
Shackleton natural gas properties
at the end of October 2011.
- Net asset value per share was $1.30 at December 31,
2012 ($1.52 at December 31, 2011), calculated as the net present
value of future cash flows from proved and probable reserves before
tax discounted at 10% less net debt of $3.3
million.
- The Company incurred capital expenditures of $0.6 million in 2012 compared to $4.6 million in 2011. Of this, $0.4 million was spent to complete and tie-in the
Balsam gas well drilled in late 2011, which was initially targeting
Kiskatinaw oil.
Activities in 2013 will focus on the
following:
- Continuing with plans to place its Pembina, Alberta Nisku oil
wells on production.
- Farm-out of the Leon Lake oil play or potential sale of the
Leon Lake assets.
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SELECTED INFORMATION |
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Three months ended December
31 |
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Year ended December 31 |
($ thousands except per share
& unit amounts) |
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2012 |
2011 |
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2012 |
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2011 |
Financial |
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Petroleum and natural gas revenues
(1) |
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649 |
862 |
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2,053 |
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7,827 |
Funds from operations (2) |
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136 |
233 |
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(368) |
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1,873 |
Per share - basic and diluted |
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0.00 |
0.01 |
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(0.01) |
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0.07 |
Net income (loss) |
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270 |
1,399 |
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(889) |
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217 |
Per share - basic and diluted |
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0.01 |
0.05 |
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(0.03) |
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0.01 |
Capital expenditures (3) |
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73 |
3,338 |
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698 |
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4,566 |
Operation |
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Production |
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Gas (mcf/d) |
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741 |
1,069 |
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277 |
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2,808 |
Oil (bbl/d) |
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60 |
67 |
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61 |
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131 |
Total (boe/d) |
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184 |
245 |
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107 |
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599 |
Petroleum and natural gas revenues ($/boe) |
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38.39 |
38.23 |
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52.54 |
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35.79 |
Royalties ($/boe) |
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6.55 |
10.03 |
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13.48 |
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11.21 |
Operating expenses ($/boe) |
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13.26 |
13.69 |
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20.60 |
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8.00 |
Operating netback ($/boe) |
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18.58 |
14.51 |
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18.46 |
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16.58 |
(1) |
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Petroleum and natural gas revenues are before royalty
expense. |
(2) |
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Funds from operations and net debt are non-GAAP measures as
defined in the Advisory section of the MD&A. |
(3) |
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Capital expenditures are before acquisitions and
dispositions. |
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Reserves Summary - Oil Equivalent
(Mboe) |
(Mboe) |
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Proved
Producing |
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Proved
Developed
Non-Producing |
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Proved
Undeveloped |
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Total
Proved |
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Total
Probable |
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Proved
plus
Probable |
2012 |
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119 |
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617 |
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277 |
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1,012 |
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416 |
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1,428 |
2011 |
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88 |
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669 |
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275 |
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1,032 |
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2,729 |
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3,761 |
Net Present Value Summary |
($ thousands) |
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Proved
Producing |
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Proved
Developed
Non-Producing |
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Proved
Undeveloped |
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Total
Proved |
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Total
Probable |
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Total
Proved plus
Probable |
10% |
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2,252 |
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17,956 |
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10,261 |
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30,469 |
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9,037 |
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39,507 |
15% |
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1,957 |
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15,460 |
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8,805 |
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26,222 |
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6,693 |
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32,914 |
Reserves Reconciliation - Oil Equivalent
(Mboe) |
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(Mboe) |
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Total
Proved |
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Total
Probable |
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Total
Proved plus
Probable |
December 31, 2011 |
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1,032 |
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2,729 |
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3,761 |
Discoveries and Extensions |
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- |
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- |
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- |
Technical Revisions |
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19 |
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(13) |
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6 |
Dispositions |
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- |
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(2,299) |
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(2,299) |
Economic Factors |
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- |
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(1) |
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(1) |
Production |
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(39) |
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- |
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(39) |
December 31, 2012 |
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1,012 |
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416 |
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1,428 |
Net Asset Value ("NAV") before income tax -
Discounted at 10% |
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($ thousands
except share and per share data) |
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December 31,
2012 |
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December 31,
2011 |
Net present value-proved and probables |
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39,507 |
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50,107 |
Net debt |
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(3,277) |
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(7,808) |
Net asset value |
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36,230 |
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42,299 |
Common shares outstanding |
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27,860,824 |
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27,860,824 |
NAV per share, December 31 |
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1.30 |
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1.52 |
GLJ Price Forecasts as of December 31, 2012
(1) |
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Year |
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Edmonton Par Price
40o API
($Cdn/bbl) |
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AECO
Gas
Price
($Cdn/Mmbtu) |
2013 |
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85.00 |
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3.38 |
2014 |
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91.50 |
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3.83 |
2015 |
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94.00 |
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4.28 |
2016 |
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96.50 |
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4.72 |
2017 |
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96.50 |
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4.95 |
2018 |
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96.50 |
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5.22 |
2019 |
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97.54 |
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5.32 |
2020 |
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99.51 |
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5.43 |
2021 |
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101.52 |
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5.54 |
2022 |
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103.57 |
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5.64 |
2023+ |
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+2.0%/yr |
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+2.0%/yr |
(1) |
This summary table identifies benchmark
reference pricing schedules that might apply to a reporting
issuer. |
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Additional Information
Ironhorse's complete results for the year ended
December 31, 2012, including audited
financial statements and the management's discussion and analysis,
annual information form, statement of reserves data and other oil
and gas information are available on SEDAR or the Company's web
site at www.ihorse.ca.
About Ironhorse:
Ironhorse Oil & Gas Inc. is a Calgary-based junior oil and natural gas
production company trading on the TSX Venture Exchange under the
symbol "IOG."
Forward-looking statements:
Statements throughout this release that are
not historical facts may be considered to be "forward looking
statements." These forward looking statements sometimes include
words to the effect that management believes or expects a stated
condition or result. All estimates and statements that describe the
Company's objectives, goals, or future plans, including
management's assessment of future plans and operations, drilling
plans and timing thereof, expected production rates and additions
and the expected levels of activities 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, volatility of commodity
prices, imprecision of reserve estimates, environmental risks,
competition from other producers, incorrect assessment of the value
of acquisitions, failure to complete and/or 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 and changes
in the regulatory and taxation environment. As a consequence, the
Company's actual results may differ materially from those expressed
in, or implied by, the forward-looking statements. Forward-looking
statements or information are based on a number of factors and
assumptions which have been used to develop such statements and
information but which may prove to be incorrect. Although the
Company 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
the Company can give no assurance that such expectations will prove
to be correct. In addition to other factors and assumptions which
may be identified in this document, assumptions have been made
regarding, among other things: the ability of the Company to obtain
equipment and services in a timely and cost efficient manner;
drilling results; the ability of the operator of the projects which
the Company has an interest in to operate the field in a safe,
efficient and effective manor; and field production rates and
decline rates. 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 elsewhere herein and in reports on
file with Canadian securities regulatory authorities and may be
accessed through the SEDAR website (www.sedar.com). Furthermore,
the forward-looking statements contained in this release are made
as at the date of this release.
Boe Conversion - Certain natural gas volumes
have been converted to barrels of oil equivalent ("boe") whereby
six thousand cubic feet (mcf) of natural gas is equal to one barrel
(bbl) of oil. This conversion ratio is based on an energy
equivalency conversion applicable at the burner tip and does not
represent a value equivalency at the wellhead.
"Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release."
SOURCE Ironhorse Oil & Gas Inc.