CALGARY, ALBERTA–(Marketwired – Nov. 26, 2015) – Tuscany Energy Ltd. (TSX VENTURE:TUS).
Tuscany is pleased to report on its financial and operating results for the third quarter and nine months ended September 30, 2015.
The nine months ended September 30, 2015 have been difficult for energy producers, and the low price for heavy oil in Canada resulted in a decline in Tuscany’s financial and operating results.
Tuscany reported $8.4 million revenues for the nine month period compared with $12.9 million in 2014. For the nine months the Company reported cash flow of $1.9 million compared to $6.2 million for the same period in 2014. Lower commodity prices resulted in Tuscany reporting a $1.8 million impairment of its Alberta oil and gas assets during the third quarter which contributed to a loss of $4.3 million for the nine months ended September 30, 2015.
The Company reported average production of 816 BOEd for the first nine months of 2015, substantially higher than the 696 BOEd for the same period in 2014, though lower than the 844 BOEd reported for the first half of 2015.
Tuscany anticipates that the last quarter of 2015 will be challenging for the industry. Moreover, the current “beggar-thy-neighbor” approach in increasing oil production in the face of low oil prices should lead to significant financial problems for many energy companies in the U.S. and Canada. The continued low commodity prices are expected to result in additional cuts in activity levels, personnel levels and an ongoing slump in service industry activity. This in turn is expected to result in a significant reduction in supply. One can therefore anticipate an oil price turn-around over the next year or two.
Of great significance to the industry is the upcoming OPEC meeting where the members will have time to reflect on the financial damage they have caused themselves by sacrificing price for market share. Recent comments by the energy ministers of Saudi Arabia, Russia and Venezuela all indicate a willingness to cooperate in reducing production in order to stabilize prices at a higher level. We believe that higher oil prices could result from this meeting.
Management believes the Company will also benefit indirectly from avoiding any negative repercussions resulting from the recent government change in Alberta, as almost 90% of the Company’s revenue comes from assets in Saskatchewan, which over the intermediate term, Management expects will represent a more certain and stable environment.
|Three months ended||Nine months ended|
|September 30,||September 30,|
|($ Thousands, unless otherwise indicated)|
|Oil & gas revenue||2,337||3,937||8,363||12,920|
|Cash flow from operations (1)||265||1,857||1,876||6,152|
|$ per share, diluted (1)||0.01||0.04||0.04||0.15|
|Net earnings (loss) for the period||(2,468||)||615||(4,259||)||835|
|$ per share, diluted||(0.05||)||0.01||(0.08||)||0.02|
|Comprehensive earnings (loss) for the period||(2,468||)||612||(4,259||)||832|
|Capital expenditures, net of dispositions||961||4,547||1,741||7,941|
|Net debt (1)||(7,213||)||(6,555||)||(7,213||)||(6,555||)|
|Total shares outstanding at period end||50,637||46,153||50,637||46,153|
|Oil and NGLs (Bopd)||572||502||670||553|
|BOEd (6 Mcf = 1 Bbl)||762||654||816||696|
|(1) See Non-GAAP and Additional GAAP Measures in MD&A.|
Tuscany has filed its Interim Financial Statements and MD&A for the nine months ended September 30, 2015 on SEDAR at www.sedar.com.
ADVISORY: 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”, “project”, “should”, “believe”, “plans”, “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 commodity price trends. 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 planned drilling involves known and unknown risks, uncertainties and other factors that may cause actual drilling plans to differ materially from those anticipated.
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.
Where amounts are expressed on a barrel of oil equivalent (BOE) basis, natural gas volumes have been converted to barrels of oil on the basis of six thousand cubic feet (mcf) per barrel (bbl). BOE figures may be misleading, particularly if used in isolation. A BOE conversion of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 mcf : 1 bbl, using a conversion on a 6 mcf : 1 bbl basis may be misleading as an indication of value. References to oil in this discussion include crude oil and natural gas liquids (NGLs).
NEITHER THE 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.
Tuscany Energy Ltd.
Robert W. Lamond
President & CEO
(403) 269-9890 (FAX)
Tuscany Energy Ltd.
Donald K. Clark
Vice President Operations
(403) 269-9890 (FAX)