EANS-News: Terrex Energy Inc. reports second quarter 2011 results
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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Earnings
CALGARY, Canada (euro adhoc) - Terrex Energy Inc. ("Terrex" or the "Company")
(TSX-V: TER) announces its financial and operating results for the three and six
months ended June 30, 2011.
The Company has filed its unaudited interim financial statements and related
management's discussion and analysis ("MD&A") for the three and six month
periods ended June 30, 2011 on SEDAR at www.sedar.com and the Company's website
at www.terrexenergy.ca. Certain selected financial and operational information
for the period is set out below and should be read in conjunction with the
Company's interim financial statements and related MD&A for the period ended
June 30, 2011.
"We are pleased at the progress made during the second quarter of 2011", stated
Ms. Kim Davies, President and CEO. "The potential from enhanced oil recovery, or
EOR, is considerable, the reserves are known and often significant, there is no
exploration risk, and the technology we use is well established. We continue to
execute our business plan and our initial projects at Strathmore and Two Creek
are moving us forward in achieving our objective of building a unique company
focused on EOR", concluded Ms. Davies.
Q2 FOCUS ACTIVITIES
- Strathmore EOR is project proceeding on schedule, field rehabilitation
activities are ongoing, and construction of the EOR facility is nearing
completion with delivery expected in October.
- EOR planning commenced at Two Creek and an application for an EOR
program for the Jurassic A pool has been made to the Energy Resources
Conservation Board.
- Strengthened technical team with the addition of Dr. N. Mungan, a
recognized EOR expert.
- Identification and evaluation of additional EOR opportunities.
FIELD OPERATIONS
Field activities during the second quarter continued to focus on the development
of the chemical alkaline-surfactant-polymer ("ASP") flood for the Strathmore
property. The project is proceeding on schedule and the overall EOR plan is
being finalized. The Strathmore EOR facilities are being built in Wyoming and
are over 90% complete, with certain metering equipment still to be delivered.
Following final testing, the facilities will be shipped to the Strathmore site
with set-up expected to commence in October 2011. Additionally, activities at
Strathmore continued to concentrate on reactivating well bores and pipelines,
injector well conversions, and facility modifications and repairs in preparation
for the EOR program. Restart of the water flood and chemical injection is
anticipated to begin near year end 2011.
At Two Creek, an application for an EOR program for the Jurassic A pool has been
submitted to the Energy Resources Conversation Board. Specialized technical EOR
analysis work is underway and cores have been delivered for laboratory testing.
This is the initial step in developing an optimum EOR plan. Specifics relating
to the EOR design are expected to be completed by 2011 year end. In the interim,
the Company is proceeding with an optimization program at Two Creek, which
includes drilling one and possibly two horizontal wells prior to implementing an
EOR program.
OPERATIONAL AND FINANCIAL SUMMARY
Three Month Periods ended June 30 2011 2010
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Average production, boe/d 343 78
Capital expenditures, including
acquisitions $ 1,975,055 $ 142,923
Revenue, net of royalties $ 1,689,495 $ 366,169
Funds flow from operations(1) $ 8,836 $ (392,537)
Per share, basic and diluted $ 0.000 $ (0.013)
Operating (loss)(1) $ (286,170) $ (612,625)
Per share, basic and diluted $ (0.003) $ (0.020)
Net (loss) $ (344,546) $ (1,159,785)
Per share, basic and diluted $ (0.004) $ (0.039)
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(1) Funds flow from operations and operating loss are non-IFRS measures
and are addressed in the "Advisories" section.
Six and Five Month Periods ended June 30 2011 2010
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Average production, boe/d 348 75
Capital expenditures, including
acquisitions $ 17,019,347 $ 997,733
Revenue, net of royalties $ 3,340,109 $ 573,488
Funds flow from operations(1) $ (411,576) $ (501,845)
Per share, basic and diluted $ (0.005) $ (0.017)
Operating (loss)(1) $ (1,010,864) $ (928,800)
Per share, basic and diluted $ (0.012) $ (0.032)
Net (loss) $ (1,045,455) $ (1,492,048)
Per share, basic and diluted $ (0.013) $ (0.052)
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(1) Funds flow from operations and operating loss are non-IFRS measures
and are addressed in the "Advisories" section.
Comparative figures for 2010 are for the three and five month periods ended June
30, 2010 and have been restated to reflect International Financial Reporting
Standards ("IFRS") adopted in 2011.
Production and revenue for the three and six month periods ended June 30, 2011
increased significantly over the comparable periods in 2010, primarily as a
result of the acquisition of the Two Creek property, which was effective as of
January 1, 2011. Production averaged 343 boe/d during the second quarter of
2011, an increase of 265 boe/d over the second quarter of 2010. Production for
the six month period ended June 30, 2011 averaged 348 boe/d, an increase of 273
boe/d over 2010. The year over year increase in revenue also reflects an
increase in realized 2011 commodity prices over 2010 realized prices. Realized
2011 commodity prices, on a boe basis, increased approximately 25% over 2010.
As expected, the Company has continued to incur losses in advance of the
implementation of optimization and EOR projects. The net loss for the second
quarter of 2011 was $344,546 as compared to $700,910 for the first quarter of
2011 and $1,159,785 for the second quarter of 2010. The continuing reduction in
reported losses reflects increased production, stronger commodity prices, and
improving operating efficiencies. These factors also had a direct impact on
funds flow from operations and, for the first time, the Company realized
positive funds flow from operating activities during the second quarter of 2011.
As the Company's EOR and optimization projects progress this trend is expected
to continue, and production and revenue are anticipated to increase
significantly.
ABOUT TERREX
Terrex Energy Inc. is a Calgary based junior oil company that focuses on the
application of proven Enhanced Oil Recovery (EOR) methods to improve oil
production from existing mature fields. Terrex targets underexploited and
undercapitalized light to medium oil reservoirs in Western Canada. The Company's
shares are listed on the TSX Venture Exchange under the trading symbol "TER".
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
ADVISORIES
Barrels of Oil Equivalent
Production volumes and reserve information are commonly expressed on a barrel of
oil equivalent ("Boe") basis whereby natural gas volumes are converted at the
ratio of six thousand cubic feet of natural gas to one barrel of oil based on an
energy equivalency at the burner tip and does not represent a value equivalency
at the well head. Used in isolation, barrels of oil equivalent may be
misleading.
Non-IFRS Information
Included in this news release are references to terms commonly used in the oil
and gas industry including funds flow from operations and operating loss. Such
terms do not have standard meaning as prescribed under International Financial
reporting Standards ("IFRS") and therefore may not be comparable with the
determination of similar measures for other entities. As used in this news
release, funds flow from operations is calculated as cash flow from operating
activities less changes in non-cash working capital and, operating loss is
calculated as net loss before stock based compensation and accretion of asset
retirement obligations. Funds flow from operations is used by management in
assessing the Company's ability to fund capital programs and operations and
operating loss provides a comparison of operating results between periods,
excluding non-cash items subject to significant volatility. The foregoing
non-IFRS measures should not be considered an alternative to, or more meaningful
than cash provided by operating activities and net loss determined in accordance
with IFRS.
Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking
statements and forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of applicable Canadian
securities laws. Such forward-looking statements relate to future events or
future performance and are based on Terrex's current internal expectations,
estimates, projections, assumptions and beliefs, including, among other things,
assumptions with respect to production, future capital expenditures and cash
flow. Readers are cautioned that the assumptions used in the preparation of such
information may prove incorrect. All statements other than statements of
historical fact may be forward-looking statements. Such forward-looking
statements are often, but not always, identified by the use of words such as
"seek", "anticipate", "budget", "plan", "continue", "estimate", "expect",
"forecast", "may", "will", "project", "predict", "potential", "targeting",
"intend", "could", "might", "should", "believe" and similar expressions. These
statements 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 statements. Terrex believes the expectations reflected
in those forward-looking statements are reasonable but no assurance can be given
that these expectations will prove to be correct and such forward-looking
statements included in, or incorporated by reference into, this news release
should not be unduly relied upon. These forward-looking statements speak only as
of the date of this news release.
In particular, this news release contains forward-looking statements pertaining
to the following:
- business strategies
- exploration and development plans
- implementation, anticipated benefits and timing of enhanced oil
recovery ("EOR") programs
- other expectations, beliefs, plans, goals, objectives, assumptions or
statements about future events or performance
Forward-looking statements are based on Terrex's current beliefs as well as
assumptions made by, and information currently available to, Terrex concerning
business prospects, strategies, regulatory developments, the ability to obtain
equipment in a timely manner to carry out development activities, the ability to
obtain financing on acceptable terms, the benefits of IOR and EOR programs and
the terms of the Hydrocarbon Purchase Agreement. Although management considers
these assumptions to be reasonable based on information currently available to
it, they may prove to be incorrect.
Undue reliance should not be placed on forward-looking statements, which are
inherently uncertain, are based on estimates and assumptions, and are subject to
known and unknown risks and uncertainties (both general and specific) that
contribute to the possibility that the future events or circumstances
contemplated by the forward-looking statements will not occur. There can be no
assurance that the plans, intentions or expectations upon which forward-looking
statements are based will in fact be realized. Actual results will differ, and
the difference may be material and adverse to Terrex and its shareholders. These
factors include, but are not limited to risks associated with oil and natural
gas exploration, financial risks, the history of losses, substantial capital
requirements, political and government risks, government regulation,
environmental, prices, dependence on key personnel, availability of drilling
equipment and access, risks may not be insurable, licenses, resource estimates,
variations in exchange rates. Further information regarding these factors may be
found under the heading "Risk Factors" in the company's Annual Information Form.
Readers are cautioned the foregoing list of factors that may affect future
results is not exhaustive.
The forward-looking statements contained in this news release are made as of the
date hereof and Terrex does not undertake any obligation to update publicly or
to revise any of the included forward-looking statements, except as required by
applicable law. The forward-looking statements contained herein are expressly
qualified by this cautionary statement.
(TER.)
Further inquiry note:
Kim Davies, President & CEO, or Norm Knecht, VP Finance and CFO, at (403)
264-4430, or visit the Company's website at www.terrexenergy.ca
end of announcement euro adhoc
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company: Terrex Energy Inc
950, 630 - 6 Avenue S.W.
CA-T2P 0S8 Canada
phone: +1-403-264-4430
WWW: http://www.terrexenergy.ca/
sector: Oil & Gas - Upstream activities
ISIN: CA8814551096
indexes:
stockmarkets: stock market: Frankfurt
language: English
