Terrex Energy Inc. - Third Quarter 2010 Report
November 25 2010 - 5:59PM
PR Newswire (Canada)
CALGARY, Nov. 25 /CNW/ -- CALGARY, Nov. 25 /CNW/ - Terrex Energy
Inc. ("Terrex" or the "Company") (TSX-V - TER) reports its
financial and operating results for the third quarter of 2010. "We
are encouraged by the progress made to date in building a unique
oil company in Western Canada focused on extending the life of
mature oil fields through technical advances," said Kim Davies,
president and CEO of Terrex. "Significant progress has been
achieved during the quarter on the development of our first
Enhanced Oil Recovery (EOR) project at Strathmore and discussions
for access, through acquisition or joint venture, of a number of
additional properties with EOR potential were initiated and are
progressing." HIGHLIGHTS Achievements during the Company's first
eight months of operations include: -- Securing a total of $15
million of equity financing -- Listing on the TSX Venture Exchange
-- Developing, refining and implementing a comprehensive EOR
selection program -- Acquiring and commencing development of the
Company's first EOR project -- Establishing a strong Board of
Directors -- Building an experienced management team and technical
group. OPERATIONS Terrex accelerated field operations at Strathmore
during the third quarter. Activities focused on the design of a
chemical alkaline-surfactant polymer (ASP) flood for the Strathmore
property. Much of the up-front technical work, including fluid
analysis, core flood analysis and reservoir simulations, has been
completed and the overall plan is being finalized. Additionally,
Terrex has largely completed field rehabilitation activities,
including the re-activation of well bores and pipelines, injector
well conversions, and repairs and modifications to existing
facilities necessary for the EOR project. An EOR development
application has been submitted to the Energy Resources Conservation
Board (ERCB) for approval and equipment procurement has commenced.
The 100% working interest Strathmore pool, located approximately 60
kilometers southeast of Calgary, was acquired on February 1, 2010,
for $659,791. To date the Strathmore pool has produced nearly 5
million barrels of oil; production has declined to 50 barrels per
day (b/d), from a peak of 1,650 b/d in 1993. Terrex estimates that,
with a chemical injection program, production can be increased
significantly and recovery, based upon analogs, may be as much as
an additional 15% of the total petroleum initially in place. Also
during the quarter, Terrex initiated discussions with several
parties regarding acquisitions and joint venture arrangements
relating to properties where significant EOR potential has been
identified. Ideally, in addition to EOR potential, these
projects would offer Improved Oil Recovery (IOR) opportunities,
such as in-fill drilling, water flooding and other optimization
processes. The Company intends to implement an aggressive business
plan with a long-term objective to grow reserves to 50 million
barrels over the next five years. Operational and Financial
Summary Periods ending Sept. 30, 2010 Three Months Eight Months
Average production (boe/d) 72 74 Revenue, net of royalties $
297,045 $ 870,534 Capital expenditures, including $ 541,320 $
1,539,053 acquisitions Funds flow from operations((1)) $ (412,734)
$ (950,898) Per share: basic and diluted $ (0.006) $ (0.020)
Operating loss((1)) $ 489,155 $ 1,053,940 Per share: basic and
diluted $ 0.006 $ 0.022 Net loss $ 610,247 $ 1,733,234 Per share:
basic and diluted $ 0.008 $ 0.037 (1) non-GAAP measures As
expected, the Company incurred losses during its initial start-up.
Losses of $610,247 and $1,733,234 respectively, for the three and
nine month periods ended September 30, 2010, include non-cash,
stock based compensation costs of $103,631 and $644,374,
respectively, relating to the Company's stock option plan
instituted in June. The company's only revenue producing property
is the Strathmore field. High operating costs and low production
rates typical of a very mature field have resulted in the field
operating at losses of $53,210 and $158,954, respectively, for the
three and eight months ended Sept. 30, 2010. Operating costs
reflect relatively high repair and maintenance costs including
labour costs associated with field reactivation, totaled $49,033
and $176,570, respectively, for the three and eight month periods
ending September 30, 2010. Field operating loss is determined
as revenue less operating and transportation costs. Capital
spending during the periods, excluding acquisition of the
Strathmore property, related primarily to facility modification and
improvements in the area. Completion and facility expenditures
include $300,989 and $363,989 for the three and eight months
respectively specifically associated with preparing the property
for the EOR project. OUTLOOK Capital expenditures necessary to
complete the initial phase of the Strathmore EOR project are
budgeted to be $6.5 million, of which $2.0 million are expected to
be incurred during the fourth quarter of 2010 and the remaining
$4.5 million during 2011. Currently the Company has sufficient cash
reserves to fund the first phase of the project through to
start-up. Initial EOR results are anticipated during the fourth
quarter of 2011. In Terrex's early stage of development,
uncertainties relating to future performance are affected by timing
issues, including regulatory approvals and equipment availability,
all of which are compounded by the lack of historical corporate
data. As a result, the Company is not in a position to provide
meaningful guidance for 2011. The full text of the Company's
Management Discussion and Analysis and unaudited financial
statements is available on the Company's website,
www.terrexenergy.ca and on SEDAR at www.sedar.com. Terrex Energy
Inc. is a Calgary-based junior oil company that specializes in the
application of proven Enhanced Oil Recovery (EOR) methods to
improve oil production from mature pools. Terrex targets
underexploited and undercapitalized light-to-medium oil reservoirs
in Western Canada. Terrex shares are listed on the TSX Venture
Exchange under the symbol 'TER' and on the Frankfurt Exchange under
the symbol 'TRX/WKN: 763600.' Neither the TSV Venture Exchange nor
its Regulation Service Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release. Forward-Looking
Statements This news 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. In particular, this
press release contains forward-looking statements pertaining to the
amount of oil recoverable from the Strathmore property; Terrex
receiving regulatory approval in respect to the implementation o
the chemical flood at the Strathmore property; anticipated
production in respect to the Strathmore property and the timing
thereof; the recovery rates in respect to chemical floods; and
Terrex's plans to grow reserves to more than 50 million barrels
over the next five year. 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 Terrex and its shareholders.
Forward-looking statements are based on Terrex's current beliefs as
well as assumptions made by, and information currently available
to, Terrex concerning business prospects, strategies, and market
conditions. 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. The forward-looking statements contained in this press
release are made as of the date hereof and Terrex 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. p
align="justify"bContact Information:/b/p p align="justify"Kim
Davies, President & CEO, or Norm Knecht, VP Finance & CFO,
at (403) 264-4430, or visit Terrex's website at a
href="http://www.terrexenergy.ca"terrexenergy.ca/a for the latest
news./p
Copyright
Terrex Energy (TSXV:TER)
Historical Stock Chart
From Jun 2024 to Jul 2024
Terrex Energy (TSXV:TER)
Historical Stock Chart
From Jul 2023 to Jul 2024