Ironhorse Announces Q3 2014 Financial and Operating Results

CALGARY, Nov. 14, 2014 /CNW/ – Ironhorse Oil & Gas Inc. (“Ironhorse” or the “Company”) (TSX-V: IOG) announces its financial and operating results for the three and nine months ended September 30, 2014 and provides an operational update on activities to date this year as well as an outlook for the remainder of 2014. 

Financial and Operation Summary

The Company’s funds from operations increased to $358 thousand in Q3, compared with $98 thousand in Q2 as a result of increased production during Q3.  Production from the Pembina Nisku wells has continued to be restricted during Q3 as a result of limitations at the Sinopec Daylight Energy Ltd’s (Sinopec) 13-2 facility.  With a consistent supply of blend gas now available, production in Q3 has increased to 86 boe/d from 30 boe/d in Q2. Production through the Sinopec 13-2 facility was shut in for approximately nine days in September due to curtailments by TransCanada Pipeline for scheduled maintenance requirements which did limit the Company’s Pembina September production rate to 62 boe/d.

Although sufficient blend gas is currently available to meet regulatory H2S pipeline specifications and to allow for increased production rates of both Nisku wells, as compared to the previous quarter, additional upgrades by Sinopec at the 13-2 battery are required in order to produce the wells at significantly higher rates. The current plant capacity limitations have resulted in only one well being produced at any one time. Maximum production rates are restricted to 600 boe/d (gross), 94 boe/d (Company net).  Limitations at Sinopec’s facility affects the production of all area wells producing into the facility which may restrict  the Company’s Nisku production due to a variety of issues not related to the Pembina L2L pool’s capability.  As a result, until the facility upgrades are installed, tested and fully operational, the Company’s Pembina Nisku production will be subject to inconsistent production levels.   Sinopec has recently informed the Company that construction has started at the facility with an estimated completion date of February 1, 2015, provided there are no delays caused by weather or equipment issues. These upgrades include, in part, installation of a new separator, additional compression, and a larger vapour recovery unit.

The Pembina 10-5 water injection well commenced injection during the latter part of September. Concurrent with the onset of water injection and AER approval of the Enhanced Recovery Scheme, the Nisku pool has been granted Good Production Practice.

Additional Information

Ironhorse’s complete results for the three and nine months ended September 30, 2014, including unaudited condensed financial statements and the management’s discussion and analysis 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.

For further information: Larry J. Parks, President & Chief Executive Officer, (403) 355-3620; Karen Hutson, VP Finance & Chief Financial Officer, (403) 355-3620