Tuscany Announces Q2 2013 Results
29 Agosto 2013 - 3:00PM
Marketwired Canada
Tuscany Energy Ltd. (TSX VENTURE:TUS) announces that it has filed on SEDAR its
Interim Financial Statements and MD&A for the six months ended June 30, 2013.
Tuscany is pleased to report on the progress of its business plan to June 30, 2013.
During Q2 2013 Tuscany focused its efforts on completing the acquisition of Diaz
Resources Ltd. and preparing for the development of its heavy oil properties in
Saskatchewan. The acquisition of Diaz simplifies the Company's operations and
increases management's flexibility to undertake planned development operations
in Saskatchewan.
Subsequent to the period end Tuscany commenced this development with the
drilling of 3 development heavy oil wells at Macklin and Evesham in
Saskatchewan, which are now completed and on production.
The Acquisition of Diaz Resources Ltd.
On July 16, 2013, Tuscany completed the acquisition of Diaz and the
consolidation of its shares on the basis of 1 new share for every 8 shares
outstanding. Tuscany issued approximately 3.7 million post-consolidated common
shares for the acquisition and as a result Tuscany has approximately 18.4
million common shares outstanding.
Tuscany anticipates that the acquisition will result in reduced overhead
expenses per BOE and increase management's efficiency and control over the
timing of drilling operations.
The following table is a summary of selected operating and financial information
of Tuscany and Diaz, for the six months ended June 30, 2013 and the reserves and
land holdings at December 31, 2013 and the net debt of Tuscany and Diaz at June
30, 2013.
Six months ended
June 30, 2013
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($ Thousands, unless otherwise indicated,
unaudited) Tuscany Diaz Combined
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Financial ($ thousands)
Revenue, net of royalties 2,886 2,289 5,175
Cash flow from operations 621 51 672
Loss for the period (877) (1,267) (2,144)
Capital expenditures 1,248 361 1,609
Net Debt (322) (4,352) (4,674)
Operations
Production
Oil (Bopd) 264 157 421
Gas (Mcfd) 185 1,158 1,343
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BOEd (6 Mcf = 1 Bbl) 295 350 645
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Reserves and Land (December 31, 2012) (i)
Reserves (proved plus probable, forecast
costs
Gas (MMcf) 210 2,008 2,218
Oil (MBbl) 1,485 671 2,156
BOE (Thousands) 1,520 1,006 2,526
Net present value of future net revenue,
before tax, of proved plus probable
reserves, discounted at 10% ($ millions) 29.1 12.1 41.2
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Undeveloped land holdings (net acres)
Alberta 9,800 52,640 62,440
Saskatchewan 10,700 12,360 23,060
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Total net acreage 20,500 65,000 85,500
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(i) The reserve information and net present value is based on the
independent reserves reports of Tuscany and Diaz prepared by McDaniel &
Associates Consultants effective December 31, 2012 in accordance with
National Instrument 51-101 and the COGE Handbook. It should not be assumed
that the estimate of the net present value of the future net revenue
attributable to Tuscany and Diaz's reserves represents the fair market value
of the reserves. There can be no assurances that the assumptions contained
in such estimate will be attained and variances could be material.
Operations
During the second quarter of 2013, Tuscany's results were positively influenced
by increasing heavy oil price however, production modestly declined from Q1
2013. Low heavy oil prices in the first half of 2013 resulted in Tuscany:
-- restricting drilling related capital expenditures,
-- focusing on increasing water handling capacity at its existing oil
pools,
-- maintaining production levels by adding high capacity pumps,
-- displacing propane use for natural gas to reduce operating costs, and
-- maintaining a strong balance sheet with limited debt leverage.
To view the Operations bar graphs, please visit the following link:
http://media3.marketwire.com/docs/TUS829A.pdf.
During 2013, Tuscany completed an additional water disposal well at the Evesham
field and installed larger pumps at Macklin. The additional water handling
capacity allowed the Company to install larger pumps at both Macklin and Evesham
subsequent to the end of the quarter. With the resulting increased fluid
production Tuscany should ultimately see an increase in oil production at a
reduced cost.
Financial
For the first six months of 2013, Tuscany's revenues decreased to $2.9 million
compared with $4.1 million for the same period in 2012 and cash flow from
operations decreased to $621,000 from $1.7 million in 2012. The decrease in
revenue resulted primarily from the combined effect of a decline in heavy oil
prices from $67.48 per barrel for the first six months of 2012 to $59.81 per
barrel in the current year and a decline in production during the same period
from 368 BOEd to 295 BOEd respectively.
To view the Financial bar graphs, please visit the following link:
http://media3.marketwire.com/docs/TUS829B.pdf.
Operating costs during the first half of 2013 were $1.5 million or $28.80 per
BOE compared with $1.5 million or $21.93 per BOE in 2012. Tuscany incurred $1.2
million in capital expenditures during the period compared with $3.1 million in
2012. Capital expenditures for the six month period ended June 30, 2013
consisted primarily of water disposal facilities and increased pumping capacity.
At June 30, 2013, Tuscany had net debt of $322,000 compared with positive
working capital of $380,000 at the beginning of the year. The Company also had
access to an unused credit facility of $8.5 million
Corporate Summary
Three Months Ended Six months ended
June 30 June 30
($ Thousands, unless otherwise
indicated, unaudited) 2013 2012 2013 2012
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Financial
Revenue, net of royalties $ 1,641 $ 1,889 $ 2,886 $ 4,127
Cash flow from operations 324 549 621 1,697
per share, diluted 0.00 0.00 0.01 0.01
Loss for the period (445) (559) (877) (473)
per share, diluted (0.00) (0.00) (0.01) (0.00)
Capital: expenditures 478 729 1,248 3,177
dispositions - - - (76)
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Net capital expenditures 478 729 1,248 3,101
Working capital (net debt) (322) 461 (322) 461
Total assets 22,824 25,626 22,824 25,626
Total shares outstanding at period
end 119,499 122,919 119,499 122,919
Operations
Production
Oil (Bopd) 255 357 264 356
Gas (Mcfd) 208 50 185 72
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BOEd (6 Mcf = 1 Bbl) 290 365 295 368
Product Prices
Oil ($/Bbl) $ 69.34 $ 62.83 $ 59.81 $ 67.48
Gas ($/Mcf) $ 2.22 $ 2.20 $ 2.39 $ 2.21
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Please refer to Tuscany's website at www.tuscanyenergy.com for more information
on the Company's Evesham and Macklin fields and other prospects in Alberta and
Saskatchewan.
ADVISORY: Certain information regarding the Company in this News Release herein
including, without limitation, management's assessment of future plans and
operations the anticipated benefits from the acquisition of Diaz, drilling plans
and the timing thereof, the effect of increased fluid production at Evesham,
expected higher oil prices in Q3 2013 and impact thereof, expectation that total
overhead costs will increase but the costs per boe should decline, method of
financing continuing exploration and development timing of completion of new
facilities and the effect thereof, reserve estimates and the net present value
of the future net revenue attributable to such reserves, expected commodity
prices, expected trend in management fees and plans to finance capital
expenditures and to minimize use of debt to finance operations may be
forward-looking statements. Words such as "may", "will", "should", "could",
"anticipate", "believe", "expect", "intend", "plan", "potential", "continue" and
similar expressions may be used to identify these forward-looking statements.
These statements reflect management's beliefs at the date of the report and are
based on information available to management at that time. Forward-looking
statements involve significant risk and uncertainties.
A number of factors could cause actual results to differ materially from the
results discussed in the forward-looking statements including, but not limited
to, risks associated with oil and gas exploration, development, exploitation,
production, marketing and transportation, loss of markets, volatility of
commodity prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, competition from other producers, inability to retain
drilling rigs and other services, incorrect assessment of the value of
acquisitions, failure to 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 the
risk factors outlined under "Risk Factors" in the Company's Annual Information
Form and elsewhere herein. As a consequence, actual results may differ
materially from those anticipated in the forward-looking statements. 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 in reports on file with Canadian
securities regulatory authorities and may be accessed through the SEDAR website
(www.sedar.com) and at the Company's website (www.tuscanyenergy.com).
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 at 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. 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Tuscany Energy Ltd.
Robert W. Lamond
President & CEO
(403) 269-9889
(403) 269-9890 (FAX)
Tuscany Energy Ltd.
Donald K. Clark
Vice President Operations
(403) 269-9889
(403) 269-9890 (FAX)
www.tuscanyenergy.com
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