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 nine months ended September
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
-- Record production volumes for the Quarter of 101 boe per day, a 49%
increase from the same period in 2010.
-- Production mix of 52% light oil and 48% natural gas.
-- Valhalla Doe Creek "M" Pool responding to water-flood, with average
daily oil production for the Quarter of 52 bbl per day, up from 15 bbl
per day since implementation.
-- Oil and gas sales increased 177% from the comparable quarter in 2010.
-- Operating netbacks for the Quarter improved 185% from comparable period.
-- Positive operating cash flow for the Quarter.
-- Acquired remaining 60% interest in liquids rich Montney lands at West
Nig for $250,000.
-- Positive working capital of $0.95 million at September 30, 2011.
Three months ended Nine months ended
September 30 September 30
Financial 2011 2010 2011 2010
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Oil and gas sales 537,977 193,864 1,303,197 603,147
Cash flow (1) 69,130 (125,621) (160,335) (754,936)
Per basic and diluted
share 0.00 (0.00) (0.00) (0.02)
Cash used in operating
activites (55,841) (232,711) (318,651) (859,016)
Per basic and diluted
share (0.00) (0.01) (0.01) (0.03)
Net loss (53,555) (233,967) (296,902) (1,074,729)
Per basic and diluted
share (0.00) (0.01) (0.01) (0.03)
Capital expenditures, net 310,403 1,397,076 369,120 2,032,311
Working capital (2) 947,230 2,964,547 947,230 2,964,547
Weighted average shares
Basic and diluted 35,684,319 35,504,971 35,684,319 31,004,504
Notes:
(1) Represents cash flow from operating activities before changes in non-
cash working capital.
(2) Working capital includes cash and cash equivalents, accounts receivable,
deposits and prepaid expenses, and accounts payable and accrued liabilities.
Three months ended Nine months ended
September 30 September 30
Operations 2011 2010 2011 2010
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Average Daily Production
Crude oil (bbl/d) 52 13 39 13
Natural gas (mcf/d) 292 329 282 313
Oil equivalent (boe/d @ 6:1) 101 68 86 65
Crude oil weighting (%) 51 19 45 20
Average Realized Prices
Crude oil ($/bbl) 92.13 71.71 94.65 72.59
Natural gas ($/mcf) 3.63 3.51 3.74 4.08
Oil equivalent ($/boe @ 6:1) 58.12 30.96 55.33 33.97
Netback ($/boe) 28.57 10.01 23.04 11.58
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 50
bbls per day of light oil by the end of the third quarter. The
Company expects to drill an additional water injection well in the
first half of 2012 to further enhance water-injection and light oil
production.
NE British Columbia
During the Quarter, Cumberland acquired the remaining 60%
working interest on its acreage in the liquids-rich Montney natural
gas play in northeast British Columbia from its partner. The
Company now owns 2,816 net acres of land at West Nig, 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 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 (14 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 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 during 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.
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 news release.
Contacts: Cumberland Oil & Gas Ltd. Alan MacDonald Vice
President, Finance and Chief Financial Officer (403)
237-0790www.cumberlandltd.com
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