CALGARY, Nov. 14, 2014 /CNW/ - Ironhorse Oil &
Gas Inc. ("Ironhorse" or the "Company") (TSX-V: IOG) announces its
financial and operating results for the three and nine months ended
September 30, 2014 and provides an
operational update on activities to date this year as well as an
outlook for the remainder of 2014.
Financial and Operation Summary
The Company's funds from operations increased to $358 thousand in Q3, compared with $98 thousand in Q2 as a result of increased
production during Q3. Production from the Pembina Nisku wells
has continued to be restricted during Q3 as a result of limitations
at the Sinopec Daylight Energy Ltd's (Sinopec) 13-2 facility.
With a consistent supply of blend gas now available, production in
Q3 has increased to 86 boe/d from 30 boe/d in Q2. Production
through the Sinopec 13-2 facility was shut in for approximately
nine days in September due to curtailments by TransCanada Pipeline
for scheduled maintenance requirements which did limit the
Company's Pembina September production rate to 62 boe/d.
Although sufficient blend gas is currently available to meet
regulatory H2S pipeline specifications and to allow for increased
production rates of both Nisku
wells, as compared to the previous quarter, additional upgrades by
Sinopec at the 13-2 battery are required in order to produce the
wells at significantly higher rates. The current plant capacity
limitations have resulted in only one well being produced at any
one time. Maximum production rates are restricted to 600 boe/d
(gross), 94 boe/d (Company net). Limitations at Sinopec's
facility affects the production of all area wells producing into
the facility which may restrict the Company's Nisku production due to a variety of issues
not related to the Pembina L2L pool's capability. As a
result, until the facility upgrades are installed, tested and fully
operational, the Company's Pembina Nisku production will be subject
to inconsistent production levels. Sinopec has recently
informed the Company that construction has started at the facility
with an estimated completion date of February 1, 2015, provided there are no delays
caused by weather or equipment issues. These upgrades include, in
part, installation of a new separator, additional compression, and
a larger vapour recovery unit.
The Pembina 10-5 water injection well commenced injection during
the latter part of September. Concurrent with the onset of water
injection and AER approval of the Enhanced Recovery Scheme, the
Nisku pool has been granted Good
Production Practice.
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SELECTED
INFORMATION
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For three months
ended
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Sept
30,
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June 30,
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Sept 30,
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($ thousands except
per share & unit amounts)
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2014
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2014
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2013
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Financial
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Petroleum and natural
gas revenues (1)
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593
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157
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441
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Funds from operations
(2)
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358
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98
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24
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Per share – basic and
diluted
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0.01
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-
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-
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Net income
(loss)
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141
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51
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(1,015)
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Per share – basic and
diluted
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0.01
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-
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(0.03)
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Capital expenditures
(3)
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18
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-
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65
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Operation
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Production
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Oil & NGL
(bbl/d)
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64
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11
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41
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Gas
(mcf/d)
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130
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112
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285
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Total
(boe/d)
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86
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30
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89
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Petroleum and natural
gas revenues ($/boe)
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74.65
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57.59
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53.34
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Royalties
($/boe)
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(5.03)
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3.53
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(14.28)
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Operating expenses
($/boe)
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(13.11)
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(11.36)
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(18.33)
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Operating netback
($/boe)
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56.51
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49.76
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20.73
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(1)
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Petroleum and
natural gas revenues are before royalty expense.
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(2)
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Funds from
operations is a non-GAAP measure as defined in the Advisory section
of the MD&A.
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(3)
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Capital
expenditures are before acquisitions and
dispositions.
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Additional Information
Ironhorse's complete results for the three and nine months ended
September 30, 2014, including
unaudited condensed financial statements and the management's
discussion and analysis are available on SEDAR or the Company's web
site at www.ihorse.ca
About Ironhorse:
Ironhorse Oil & Gas Inc. is a Calgary-based junior oil and natural gas
production company trading on the TSX Venture Exchange under the
symbol "IOG."
Forward-looking statements:
Statements throughout this release that are not historical
facts may be considered to be "forward looking statements." These
forward looking statements sometimes include words to the effect
that management believes or expects a stated condition or result.
All estimates and statements that describe the Company's
objectives, goals, or future plans, including management's
assessment of future plans and operations, drilling plans and
timing thereof, expected production rates and additions and the
expected levels of activities may constitute forward-looking
statements under applicable securities laws and necessarily involve
risks including, without limitation, risks associated with oil and
gas exploration, development, exploitation, production, marketing
and transportation, volatility of commodity prices, imprecision of
reserve estimates, environmental risks, competition from other
producers, incorrect assessment of the value of acquisitions,
failure to complete and/or 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 changes in the regulatory and
taxation environment. As a consequence, the Company's actual
results may differ materially from those expressed in, or implied
by, the forward-looking statements. Forward-looking statements or
information are based on a number of factors and assumptions which
have been used to develop such statements and information but which
may prove to be incorrect. Although the Company 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 the Company can give no
assurance that such expectations will prove to be correct. In
addition to other factors and assumptions which may be identified
in this document, assumptions have been made regarding, among other
things: the ability of the Company to obtain equipment and services
in a timely and cost efficient manner; drilling results; the
ability of the operator of the projects which the Company has an
interest in to operate the field in a safe, efficient and effective
manor; and field production rates and decline rates. 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
elsewhere herein and in reports on file with Canadian securities
regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com). Furthermore, the forward-looking
statements contained in this release are made as at the date of
this release.
Boe Conversion – Certain natural gas volumes have been
converted to barrels of oil equivalent ("boe") whereby six thousand
cubic feet (mcf) of natural gas is equal to one barrel (bbl) of
oil. This conversion ratio is based on an energy equivalency
conversion applicable at the burner tip and does not represent a
value equivalency at the wellhead.
"Neither 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."
SOURCE Ironhorse Oil & Gas Inc.