SHARON ENERGY LTD. ANNOUNCES RESULTS FOR THE SECOND QUARTER ENDED SEPTEMBER 30, 2010
November 30 2010 - 12:17PM
PR Newswire (Canada)
CALGARY, Nov. 30 /CNW/ -- CALGARY, Nov. 30 /CNW/ - Sharon Energy
Ltd. (TSXV:SHY) announces that it has filed its Q2 2011 MD&A
and Financial Statements for the six months ended September 30,
2010, on SEDAR. During the quarter, Sharon realized approximately
$900,000 from the sale of its Magnum Hunter investment. The
fair value of the remaining investment of 1,832,152 shares was
approximately $7.8 million at September 30, 2010. Subsequent
to the end of the quarter, Sharon sold an additional 936,000 shares
for $4.77 million. To date, Sharon has sold approximately
1,398,000 Magnum Hunter shares to realize $7.0 million. During the
quarter, Sharon participated in the drilling of 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 two zones. Sharon has a 20%
interest in the section along with a 20% interest in six additional
sections of land in the area. The operator will be applying to the
Saskatchewan Government to commingle the Upper Shaunavon and Lower
Shaunavon zones and anticipates bringing the well on production
before the end of the year. Late in the quarter, Sharon acquired a
25% interest in a property at Macklin, Saskatchewan. The
property contains four shut-in oil wells, a water disposal well,
3-D seismic over the lease area, and 3,770 acres under lease.
Sharon believes the property's four wells can be reactivated.
The wells were producing a combined 58 bopd when they were
shut-in. The operator plans to reactivate the first of the
four wells before the end of the year. Sharon continues to be 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 September 30, 2010,
totaled $48,000 compared with $69,000 for the prior year
period. For the six month period, revenue from continuing
operations was $106,000 compared with $241,000 for the prior year
period. Revenue for discontinued operations was nil for the
three and six month periods compared with $77,000 and $248,000
respectively for the prior year periods. Revenue was reduced
by lower natural gas production and lower interest income.
Cash flow from continuing operations for the quarter was negative
$233,000 compared with negative $125,000 for the prior year
period. For the six month period, cashflow was negative
$297,000 compared with negative $36,000 for the prior year
period. Cash flow from discontinued operations for the three
and six month periods was nil compared with negative $71,000 and
positive $29,000 for the prior year periods. Net earnings
from continuing operations for the quarter were $321,000 compared
with a loss of $307,000 for the prior year period. For the
six month period, net earnings from continuing operations were $1.3
million compared with a net loss of $353,000 in the prior year
period. The increase in earnings was primarily driven by the
$1.7 million gain on the sale of Magnum Hunter shares. Net
earnings from discontinued operations for the three and six month
periods were nil compared with net losses of $8.9 million and $9.4
million respectively for the prior year periods. Capital
expenditures for continuing operations for the three and six month
periods totaled $314,000 and $444,000 compared with $36,000 and
$123,000 for the prior year periods. Capital expenditures for
discontinued operations for the three and six month periods were
nil compared with $138,000 and $410,000 for the prior year
periods. Capital expenditures were financed from property
dispositions, working capital and cash flow. Sharon exited the
quarter with working capital of $1.7 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 September, 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. Six Months Ended (Thousands, except per
BOE, BOEd and per share amounts, unaudited) September 30 2010 2009
Financial (Restated, Notes 2 & 3) Total revenue (net of royalty
expense) $ 106 $ 241 Cash flow from operations * $ (297) $ (36) per
share, basic and diluted $ - $ - Earnings (loss) for the period $
1,255 $ (353) per share, basic and diluted $ 0.02 $ 0.00 Capital
additions $ 444 $ 123 Dispositions $ 64 $ - Working capital
(deficiency) $ 1,702 $ (105) Total assets $ 11,419 $ 2,920 Total
shares outstanding, at period end 73,907 74,086 Operations (for
continuing operations) Production Gas (Mcfd) 138 230 Oil (Bopd) 3 9
BOEd (6 Mcf = 1 Bbl) 26 47 Product Prices Gas ($/Mcf) $ 3.64 $ 3.26
Oil ($/Bbl) $ 58.97 $ 74.28 * Non-GAAP measure. Please see
the reconciliation of "cash flow from operations" to "cash flow
from operating activities" after the shareholders message. 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 oil prospects in Alberta and Saskatchewan.
Sharon also wishes to announce today that its Board of Directors
has approved the issuance of stock options, effective November 29,
2010, to purchase 200,000 common shares of the Corporation at a
price of $0.13 per share, exercisable until November 29,
2015. The options are being issued to a Director of the
Corporation in accordance with Sharon's Share Option Plan dated
July 22, 2003. The total number of options outstanding after
the issuance is 3,910,000, or approximately 5% of the issued and
outstanding common shares of the Corporation. Sharon is an oil and
gas exploration and production company based in Calgary, Alberta.
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. 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). 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. 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. p align="justify"iRobert
W. Lamond, President and Chairman/i/p p align="justify"Calgary,
Albertabr/ SHARON ENERGY LTD.br/ Telephone: (403) 269-9889br/
Fax: (403) 269-9890/p
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