SHARON ENERGY LTD. ANNOUNCES RESULTS FOR THE FIRST QUARTER ENDED JUNE 30, 2010
August 30 2010 - 8:00AM
PR Newswire (Canada)
CALGARY, Aug. 30 /CNW/ -- CALGARY, Aug. 30 /CNW/ - Sharon Energy
Ltd. (TSX-V: SHY) ("Sharon") announces that it has filed its Q1
2011 MD&A and Financial Statements for the three months ended
June 30, 2010, on SEDAR. During the quarter, Sharon realized $1.5
million from the sale of a portion of its Magnum Hunter holdings.
The fair value of the remaining investment of 2,022,631 shares was
approximately $9.3 million at June 30, 2010. Subsequent to the end
of the quarter, Sharon sold an additional 180,000 shares for
$858,000. To date Sharon has sold approximately 452,000 shares at
an average price of $4.88 per share, realizing $2.2 million.
Sharon's remaining share holdings have a market value of
approximately $7.7 million at the date of this report. Sharon plans
to continue to prudently sell a portion of these shares to fund its
ongoing activities. Subsequent to the quarter, Sharon drilled a
vertical Shaunavon oil well, 91/13-19-7-18W3, located in the
Chambery field, Saskatchewan. Based on Sharon's analysis, the open
hole logs indicate potential oil pay in the lower Shaunavon
formation. Sharon has a 20% interest in the section along with an
20% interest in six additional sections of land in the area.
Completion operations are planned for the Fall. Sharon is now in an
enviable position, for a growth oriented junior exploration
company, with a: - Significant cash position. - Substantial and
highly liquid holding in Magnum Hunter Resources. - Growing
inventory of oil focused prospects. - Joint venture program with
two related junior exploration companies which will allow Sharon to
minimize overhead costs and maximize the amount of expenditure used
to grow its production and reserves base. Financial Revenue from
continuing operations for the quarter ended June 30, 2010, totaled
$58,000 compared with $172,000 for the prior year period. Revenue
from discontinued operations for the quarter was nil compared with
$171,000 for the prior year period. Cash flow from continuing
operations for the quarter was negative $65,000 compared with
positive $89,000 for the prior year period. Revenue was reduced by
lower natural gas production and lower interest income. Cash flow
from discontinued operations for the quarter was nil compared with
positive $100,000 for the prior year period. Net earnings from
continuing operations for the quarter was $934,000 compared with a
loss of $46,000 for the prior year period; however, this was
primarily driven by the $1.0 million gain on the sale of Magnum
Hunter shares. Net loss from discontinued operations for the
quarter was nil compared with a net loss income of $510,000 for the
prior year period. Capital expenditures for continuing operations
for the quarter totaled $130,000 compared with $87,000 for Q1
2010F. Capital expenditures for discontinued operations for the
quarter totaled nil compared with $272,000 for the prior year
period. Capital expenditures were financed from property
dispositions, working capital and cash flow. Sharon exited the
quarter with working capital of $1.3 million versus working capital
from continuing operations of $133,000 at the beginning of the
fiscal year. The MD&A and financial statements of Sharon
Resources Ltd. for the three month period ended June 30, 2010 is
available on SEDAR at www.sedar.ca The following table summarizes
the financial and operating results of Sharon from continuing
operations for the year. (Thousands, except per BOE, BOEd and per
share Three Months Ended amounts, unaudited) June 30
------------------------- 2010 2009
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Financial (Restated) Total revenue (net of royalty expense) $ 58 $
172 Cash flow from operations * $ (65) $ 89 per share, basic and
diluted $ - $ - Earnings (loss) for the period $ 934 $ (46) per
share, basic and diluted $ 0.01 $ 0.00 Capital additions $ 130 $ 87
Dispositions $ 48 $ - Working capital $ 1,332 $ 187 Total assets $
12,353 $ 3,367 Total shares outstanding, at period end 74,004
74,086 Operations (for continuing operations) Production Gas (Mcfd)
173 253 Oil (Bopd) 3 11 BOEd (6 Mcf = 1 Bbl) 32 53 Product Prices
Gas ($/Mcf) $ 3.66 $ 3.61 Oil ($/Bbl) $ 64.80 $ 61.08
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* Non-GAAP measure. Please see the reconciliation of "cash flow
from operations" to "cash flow from operating activities" after the
shareholders message in the Q1 2011 interim report. Business
Outlook After the completion of the sale of the U.S. properties and
the Parkman oil pool, Sharon has significantly increased its
financial flexibility. Over the last few months oil prices have
stabilized at relatively high levels and natural gas prices have
recovered from the very low prices of the Fall of 2009. Sharon
plans to use its strong financial base to focus its efforts on the
development of its heavy oil prospects in Alberta and Saskatchewan.
Financial Reporting - all numbers are reported in Canadian dollars.
ADVISORY: This press release contains forward looking statements.
Although Sharon believes that the expectations reflected in these
forward looking statements are reasonable, undue reliance should
not be placed on them because Sharon 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. The forward looking
statements contained in this press release are made as of the date
hereof and Sharon undertakes no obligations 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. 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. Robert W. Lamond, President &
Chairman; Donald K. Clark, VP Operations, Calgary, Alberta, SHARON
ENERGY LTD., Telephone: (403) 269-9889, Fax: (403) 269-9890, TSXV:
SHY
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