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SaskWorks Diversified (Class A - Series A) - 27.5238
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CALGARY, ALBERTA–(Marketwire – April 28, 2011)
THIS NEWS RELEASE IS NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES, TO UNITED STATES NEWS WIRE SERVICES OR TO UNITED STATES PERSONS.
Torquay Oil Corp. (TSX VENUTRE:TOC.A) (TSX VENUTRE:TOC.B) (“Torquay” or the “Company”) is pleased to announce its financial and operating results for the three months and year ended December 31, 2010.
Torquay highlights for 2010 are as follows:
-- Entered into a farm in agreement at Lake Alma, Saskatchewan with a Major
Industry Participant and successfully earned 81 gross (49 net) sections
of land by drilling four earning wells.
-- Closed its initial public offering for gross proceeds of $14,000,000.
-- Acquired approximately 125 bopd at Viewfield, Saskatchewan establishing
a new core area. In conjunction with this acquisition, Torquay completed
a $12,000,000 financing.
-- Tied in solution gas from six wells at Viewfield, Saskatchewan resulting
in higher netbacks due to NGL recovery.
-- Entered into a second farm in agreement at Lake Alma, Saskatchewan with
another Major Industry Participant to earn up to 5.75 gross (5.75 net)
sections of land by drilling two earning wells.
-- Added Total Proved plus Probable reserve volumes of 1.06 mmboe (93%
light oil & NGL's).
-- Invested $33,300,000 in acquisitions and capital projects - drilled nine
gross (7.4 net) wells.
Fourth Quarter 2010 highlights:
-- Earned an additional five gross (3.0 net) sections at Lake Alma. -- Closed a $15,000,000 bought deal financing. -- Produced an average of 510 boepd (95% light oil & NGL's). -- Achieved funds flow of $1.9 million ($0.05 per share)
Subsequent to December 31, 2010, Torquay:
-- Acquired approximately 50 boepd in southeast Saskatchewan establishing a
new core area.
-- Acquired a partner's working interest in the Lake Alma area increasing
the Company's land holdings to 90 gross (86 net) sections at Lake Alma.
-- Completed permitting the 217 km(2) Lake Alma 3D seismic program.
-- Earned 3.75 gross (3.75 net) sections from the second Major Industry
Participant farm in.
-- Defined over 40 conventional, Mississippian, light oil drilling
locations.
-- Increased its operating line of credit from $3.0 million to $9.65
million.
2010 Year End Reserves Summary
This summary of Torquay’s reserves evaluation as at December 31, 2010 was prepared by McDaniel & Associates Consultants Ltd. (“McDaniel”), the Company’s independent reserves evaluator. The National Instrument 51-101 forms F1, F2, F3 and F4 have been included in the Company’s Annual Information Form filed on SEDAR and can be viewed at www.sedar.com or www.torquayoil.com.
Gross Company Interest Reserves (as at Dec. 31/10)
(before deduction of royalties payable, not including royalties receivable)
NGL's Gas Oil Oil Eq.
(Mbbl) (MMcf) (Mbbl) (Mboe)
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Proved Producing 34 197 317 384
Proved Developed Non-producing 10 45 48 66
Proved Undeveloped 3 98 178 197
Total Proved 47 340 543 647
Total Probable 20 133 370 412
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Total Proved Plus Probable 67 473 913 1,058
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Net Present Value of Reserves
Below is a table showing the Company’s net present value of future net revenue attributable to reserves using forecast prices and costs. The prices used were McDaniel Forecast Prices as at January 1, 2011. The estimated future net revenues are presented before deducting future estimated site restoration costs, and are reduced for estimated future abandonment costs and future capital costs associated with non-producing, undeveloped and probable additional reserves. Estimated values disclosed do not necessarily represent fair market value.
Summary of Future Net Revenue Before Income Taxes ($(000's) Discounted at: 0% 5% 10% ---------------------------------------------------------------------------- Total Proved 23,730 15,261 13,747 ---------------------------------------------------------------------------- Total Probable 19,381 14,356 11,256 ---------------------------------------------------------------------------- Total Proved Plus Probable 43,111 29,617 25,003 ----------------------------------------------------------------------------
Financial and Operational Highlights
Torquay has filed on SEDAR its audited Financial Statements and related Management Discussion and Analysis (“MD&A) for the three months and year ended December 31, 2010. Selected financial and operational information is outlined below and should be read in conjunction with Torquay’s audited financial statements and related MD&A which are available for review at www.sedar.com or www.torquayoil.com.
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Year Ended
($000's except per unit amounts) Dec. 31, 2010
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Petroleum & natural gas revenue 4,483
Funds flow from operations 1,971
Per share (diluted) $ 0.09
Net loss (1,590)
Per share (diluted) $ (0.07)
Capital expenditures 33,284
Net positive cash & working capital 13,226
Weighted common shares outstanding (diluted) (1) 22,666
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Production
Crude oil (bbls/d) 286
NGL's (bbls/d) 42
Natural gas (mcf/d) 177
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Total boe/d (2) 358
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Pricing
Crude oil ($/bbl) 77.35
NGL's ($/bbl) 38.00
Natural gas ($/mcf) 4.21
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Average ($/boe) 68.45
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Netbacks ($/boe)
Petroleum & Natural gas revenue 68.45
Royalties (10.01)
Operating costs (7.63)
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Field netback 50.81
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(1) Basic per share amounts are calculated by dividing net income or loss by
the weighted average number of Class A and Class B shares outstanding
during the period. In addition, Class B shares are converted into Class
A shares at $10 divided by the current market price, defined as the
weighted average trading price per Class A share for the prior 30
consecutive trading days which was $1.65.
(2) BOE/d calculation from first day of production, July 4, 2010.
Torquay is a uniquely positioned, oil focused, junior exploration company formed to generate and develop its own prospects, acquire oil-weighted properties and participate with joint venture partners in oil exploration and development in the Western Canadian Sedimentary Basin. The Company’s Class A Shares and Class B Shares trade on the TSX Venture Exchange under the symbols TOC.A and TOC.B. The Company currently has 35,669,572 Class A Shares and 1,260,000 Class B Shares outstanding.
FORWARD LOOKING STATEMENTS:
This news release contains forward-looking statements and forward-looking information (collectively “forward looking information”) within the meaning of applicable securities laws. Forward-looking information typically use words such as “anticipate”, “believe”, “project”, “expect”, “goal”, “plan”, “intend” or similar words suggesting future outcomes, statements that actions, events or conditions “may”, “would”, “could” or “will” be taken or occur in the future. In particular, forward looking information in this news release includes, but is not limited to: statements with respect to, drilling, completion, seismic and facility plans, capital expenditures and the expected results from operations. The forward-looking information is based on certain key expectations and assumptions made by Torquay, including expectations and assumptions concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; future well production rates and estimates of operating costs; reserve and resource volumes; the state of the economy and the exploration and production business; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition; ability to market oil and natural gas successfully and the ability of the Company to access capital. Although Torquay believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Torquay can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, results from operations will not meet with expectations and risks associated with the oil and gas industry generally. Additional information on the foregoing risks and other factors that could affect Torquay’ operations and financial results are included in Torquay’s annual information form and other reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements contained in this news release are made as of the date hereof and Torquay undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. The term BOE 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 necessarily represent a value equivalency at the wellhead.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CONTACT INFORMATION:
Torquay Oil Corp.
Mr. Brent McKercher
President & Chief Executive Officer
403 233 2444 ext. 30
Fax: 403 262 6991
brent@torquayoil.com
or
Torquay Oil Corp.
Mr. Darwin Little
Vice President, Finance & Chief Financial Officer
403 233 2444 ext. 31
Fax: 403 262 6991 (fax)
darwin@torquayoil.com
INDUSTRY: Energy and Utilities – Oil and Gas
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