Welcome To The Iteration Energy Ltd HUB On AGORACOM
Edit this title from the Fast Facts Section
Message: Financial and operating results as at and for year ended december 31st
Attention Business/Financial Editors Iteration Energy (ITX) announces December 31, 2008 year end results << /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/ (All amounts are in Canadian dollars, unless stated otherwise) >> CALGARY, March 27 /CNW/ - Iteration Energy Ltd. (TSX-ITX) ("Iteration" or the "Company") announced today its audited financial and operating results as at and for the year ended December 31, 2008. The audited financial statements, together with Management's Discussion and Analysis ("MD&A"), have been filed on the Company's SEDAR profile at www.sedar.com. They are also available on the Company's website at www.iterationenergy.com. The Company will be holding a conference call on March 27, 2009 at 9:00 am MST (11 am EST). Please see dial-in details along with contact information at the end of this press release. FINANCIAL AND OPERATIONAL HIGHLIGHTS << The highlights for the year ended December 31, 2008 include:
- On March 7, 2008, acquired Cyries Energy Inc. ("Cyries"), via a plan of arrangement. The audited consolidated financial statements incorporate the results of operations for Cyries for the period from March 8, 2008 to December 31, 2008. - Average production for the year was 16,400 boed, representing a 148% increase over the average production for the year ended December 31,2007. This represents a 6% increase in production per share. - Drilled 68 net wells with a 92% success record. - Funds from operations for the year of $171.8 million, representing a 254% increase over the year ended December 31, 2007. - As a result of the annual impairment assessment of goodwill, a charge of $239.1 million was taken to write-off the Company's goodwill due to current market conditions and uncertainties arising from overall economic conditions and commodity prices.
This charge increased the loss per basic and diluted share for the year by $1.62.
Had this charge not been taken, the Company would have reported basic and diluted earnings of $23.3 million, equivalent to $0.16 per share.
The goodwill impairment charge is non-cash in nature and does not affect our liquidity, funds from operations, debt covenants or future operations.
- Total proved reserves increased by 211% to 39.3 mmboe, an increase in reserves per share of 33% and total proved plus probable reserves increased by 201% to 57.4 mmboe, an increase in reserves per share of 29%, at December 31, 2008 in comparison to December 31, 2007, as set forth in the evaluations prepared by McDaniel and Associates Consultants Ltd. and GLJ Petroleum Consultants Ltd. effective as at December 31, 2008 and 2007.
- Total undeveloped land increased by 242% to 913,000 net acres at December 31, 2008.
- Production averaged 18,300 boed for the final week of December, 2008.
The highlights for the three months ended December 31, 2008 include:
- Average fourth quarter 2008 production of 18,000 boed which is 125% higher than the fourth quarter of 2007. - Drilled 14.4 net wells with a 93.1% success record in the fourth quarter of 2008.
- Total capital program in the fourth quarter of 2008 was $74.0 million, which includes $18.4 million for property acquisitions. - Funds from operations of $31.2 million increased 181% compared to the fourth quarter of 2007. - Net debt on December 31, 2008 was $276 million resulting in a debt to annualized fourth quarter funds from operations ratio of 2.2:1.
FINANCIAL SUMMARY Quarter over quarter and annual comparative results are as follows: ------------------------------------... Three Months Ended Year Ended December 31, December 31, ------------------------------------... 2008 2007 2008 2007 ------------------------------------... ------------------------------------... Production ------------------------------------... Natural gas (mcf/d) 75,486 37,885 68,909 35,448 ------------------------------------... Natural gas liquids (bbls/day) 1,360 708 1,379 311 ------------------------------------... Light oil (bbls/day) 3,873 753 3,323 293 ------------------------------------... Heavy oil (bbls/day) 187 214 209 108 ------------------------------------... Total production (boed) 18,001 7,989 16,396 6,620 ------------------------------------... ------------------------------------... Realized commodity price ------------------------------------... Natural gas ($/mcf) 6.81 6.11 8.44 6.76 ------------------------------------... Natural gas liquids ($/bbl) 46.36 40.12 57.96 48.55 ------------------------------------... Light oil ($/bbl) 50.63 66.21 95.67 68.77 ------------------------------------... Heavy oil ($/bbl) 47.57 40.35 76.22 42.68 ------------------------------------... Blended ($/boe) 43.08 39.84 60.63 42.24 ------------------------------------... ------------------------------------... Royalty expense ($/boe) (7.61) (8.12) (12.51) (8.60) ------------------------------------... Production expense ($/boe) (11.02) (11.97) (11.27) (8.97) ------------------------------------... Transportation expense ($/boe) (0.71) (1.09) (0.99) (1.29) ------------------------------------... Operating netbacks ($/boe) 23.75 18.66 35.86 23.37 ------------------------------------... ------------------------------------... General and admin expense ($/boe) 1.19 2.37 1.70 2.26 ------------------------------------... ------------------------------------... Production revenue before royalties ($M) $ 70,656 $ 29,265 $ 361,840 $ 101,976 ------------------------------------... ------------------------------------... Net loss ($M) $(244,894) $ (3,149) $(215,834) $ 9,442 ------------------------------------... Loss per basic and diluted share ($) $ (1.48) $ (0.05) $ (1.46) $ (0.15) ------------------------------------... ------------------------------------... Funds from operations ($M)(1) $ 31,152 $ 11,103 $ 171,830 $ 48,506 ------------------------------------... Funds from operations per basic and diluted share ($) $ 0.19 $ 0.16 $ 1.16 $ 0.76 ------------------------------------... ------------------------------------... Capital expenditures ------------------------------------... Property acquisitions, net of dispositions ($ M) 18,398 602 59,742 55,670 ------------------------------------... Exploration and development ($M) 55,645 17,008 156,187 88,580 ------------------------------------... ------------------------------------... Bank Indebtedness ------------------------------------... Bank loans 266,800 50,370 266,800 50,370 ------------------------------------... Working capital deficiency(2) 9,330 10,642 9,330 10,642 --------- --------- --------- --------- ------------------------------------... Net bank indebtedness 276,130 61,012 276,130 61,012 ------------------------------------... ------------------------------------... Net debt to annualized quarter funds flow 2.2 : 1 1.4 : 1 2.2 : 1 1.4 : 1 ------------------------------------... ------------------------------------... Net undeveloped land (acres) 913,000 267,000 913,000 267,000 ------------------------------------... Notes: (1) Management uses funds from operations and funds from operations per share (before changes in non-cash working capital and asset retirement expenditures) to analyze operating performance and leverage. Funds and funds per share as presented do not have any standardized meaning prescribed by Canadian GAAP and therefore they may not be comparable with the calculation of similar measures for other entities. Funds as presented is not intended to represent operating cash flow or operating profits for the period nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with Canadian GAAP. All references to funds and funds per share throughout this release are based on cash flow from operating activities before changes in non-cash working capital and asset retirement expenditures. (2) Working capital deficiency (surplus) does not include stock based compensation payable. At December 31, 2008, the Company had drawn $267 million on its syndicated credit facility of $300 million. There are three components of the facility: -a $260 million term facility which matures on April 30, 2009, -a $15 million working capital revolving facility, which is payable on demand, and -a supplemental facility for $25 million which matures on April 30, 2009. Iteration's credit facility is currently under review. Reviews focus : on the borrowing base supporting lending limits and are influenced by the lenders 'willingness to lend in general, commodity price forecasts used to determine the lending base, reserves, lenders' interest in particular business sectors, such as energy, and the relative strength of the borrower. There can be no assurance that Iteration will be able to maintain its current borrowing base under its facility or that financing will be available or sufficient to meet the requirements of Iteration or, if financing is vailable, that it will be on terms appropriate and acceptable to Iteration. In such a case, Iteration may seek to supplement its cash from operations by equity or debt financings, negotiate incremental borrowings with subordinated lenders, sell certain of its oil and gas properties and assets, or reduce its planned capitalexpenditures. OUTLOOK FOR 2009 The following discussion is qualified in its entirety by the caution under the heading "Advisory - Forward Looking Information" at the beginning of the MD&A and the Advisory at the end of this release. The Company has issued the following guidance for the first and second quarters of 2009. << ------------------------------------... First Second Expected Q1-Q2 2009 Program Quarter 2009 Quarter 2009 ------------------------------------... Average production (boed) 18,300 17,400 Capital program ($ million) 26 6 Funds from operations ($ million) 19 14 Quarter end net debt ($ million) 283 275 Net wells 6 1 Projected commodity prices Natural Gas ($ Cdn/GJ) 5.15 4.35 Light Crude Oil ($ Cdn/bbl) 47.00 55.00 Projected operating netback ($/boe) 15.40 13.40 Projected general and administrative ($/boe) 1.70 1.70 ------------------------------------... >> As a result of the global credit crisis and deteriorating expectations for global economic growth, commodity prices have fallen sharply over the last several months. If the volatility in commodity prices continues, or softens further, the Company can expect to experience decreased earnings and funds from operations in comparison to previous quarters. While these factors may be mitigated to a certain extent from a weakening of the Canadian dollar, the unprecedented volatility of the exchange rate makes it difficult to project where the rate will ultimately settle, and therefore what prices and funds from operations will be realized. Should realized prices strengthen, the Company has an inventory of high grade exploration opportunities that can be undertaken. However, should realized prices further weaken, the Company intends to scale back its proposed program to ensure that the projected capital program remains in line with projected funds from operations. Despite the challenges that have arisen in recent months, the Company continues to manage its business with prudence and a commitment to creating long term shareholder value. << Conference Call Details Please dial the number below that corresponds to the city you are calling from Vancouver 604-899-4201 Toronto 416-883-7132 Edmonton 780-429-3832 Montreal 514-798-1229 Ottawa 613-212-0152 Calgary or International 403-269-4703 Toll Free Dial In Number From Canada and USA 1-800-205-4499 Participant Pass Code: 99016 followed by the number sign >> Natural gas is converted to crude oil equivalent at a ratio of six thousand cubic feet to one barrel of energy equivalent ("boe"). Boe's may be misleading, particularly if used in isolation. A boe conversion ratio 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. ADVISORY - FORWARD-LOOKING INFORMATION This press release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes. In particular, this Annual Information Form contains forward-looking statements pertaining to the following: business plans and strategies; the quantity of natural gas, oil, and NGL reserves; projections of market prices for natural gas, oil, and NGL commodities; projections of capital expenditure programs and other expenditures; oil and natural gas production levels; supply and demand for oil and natural gas; expected operating costs; Iteration's future operating and financial results. Statements relating to "reserves" are forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described exist in the quantities predicted or estimated and can profitably be produced in the future. 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 the Company and its shareholders. Forward-looking statements and information are based on the Company's current beliefs as well as assumptions made by, and information currently available to, the Company concerning anticipated financial performance, business prospects, strategies, regulatory developments, future commodity prices, future production levels, the ability to obtain equipment in a timely manner to carry out development activities, the ability to market natural gas, oil, and NGLs successfully to current and new customers, the impact of increasing competition, the ability to obtain financing on acceptable terms, and the ability to add production and reserves through development and exploration activities. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward-looking statements will not be achieved. These factors include, but are not limited to, risks associated with oil and gas exploration, development and production, insurance, prices, financial risks, substantial capital requirements, bank financing, third party risk, reserve replacement, competition, environment, reliance on operators and key employees, corporate matters, permits and licences, incorrect assessments of value, foreign exchange rates, aboriginal claims, issuance of debt, title defects, availability of drilling equipment and uncertainty of reserve information. Further information regarding these factors may be found under the heading "Risk Factors" in the Company's most recent Annual Information Form and its financial statements and management's discussion and analysis for the year ended December 31, 2008. Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive. The forward-looking statements contained in this release are made as of the date hereof and the Company 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. -30- /For further information: Iteration Energy Ltd., Brian Illing, President and CEO Or Sean Johnson, CFO, (403) 261-6883/
Loading...
Loading...
New Message
Please
login
to post a reply