TERREX REPORTS FIRST QUARTER 2011 RESULTS
June 07 2011 - 5:30AM
PR Newswire (Canada)
CALGARY, June 7, 2011 /CNW/ -- /NOT FOR DISSEMINATION IN THE UNITED
STATES OR FOR RELEASE TO US NEWS WIRE SERVICES/ CALGARY, June 7,
2011 /CNW/ - Terrex Energy Inc. ("Terrex" or the "Company") (TSXV -
TER) announces its financial and operating results for the quarter
ended March 31, 2011. The Company has filed its unaudited interim
financial statements and related management's discussion and
analysis (MD&A) for the three month period ended March 31, 2011
on SEDAR at www.sedar.com and the Company's website at
www.terrexenergy.ca. Certain selected financial and operational
information for the period is set out below and should be read in
conjunction with the Company's interim financial statements and for
the period ended March 31, 2011 and the related MD&A. "The
first quarter of 2011 was a very active and productive period for
Terrex", stated Ms. Kim Davies, President and CEO. -- "We received
approval from the Energy Resources Conservation Board for our first
Enhanced Oil Recovery (EOR) project at Strathmore and have
finalized specifications and ordered the necessary equipment; -- We
acquired our second property at Two Creek and are moving ahead with
planning optimization and EOR programs. We anticipate optimization
could include drilling of up to two in-fill development wells prior
to year-end, and we are excited about the longer term EOR potential
of the property. Two Creek and Strathmore combined, have the
potential to add four to six million barrels of crude oil reserves,
based upon analogous projects; and -- We completed a unique
financing through the $14.7 million hydrocarbon purchase agreement
with Sandstorm Metals and Energy Ltd. that permitted us to fund the
Two Creek acquisition without dilution to our shareholders. These
activities and transactions have contributed to, and we are pleased
with, our progress towards achieving our objective of building a
unique oil company focused on Enhanced Oil Recovery", continued Ms.
Davies. Field Operations First quarter field activities continued
to focus on the design of the chemical alkaline-surfactant-polymer
(ASP) flood for the Strathmore property. Additionally, activities
at Strathmore concentrated on reactivating well bores and
pipelines, injector well conversions, and facility modifications
and repairs, in advance of commencing the planned ASP flood later
in the year. At Two Creek, preliminary evaluation and planning of
optimization and EOR programs commenced during the quarter.
Operational and Financial Summary Periods ended March 31 2011 2010
Average production, boe/d 353 69 Capital expenditures, including
acquisitions $ 15,044,293 $ 865,644 Revenue, net of royalties $
1,650,612 $ 207,319 Funds flow from operations (1) $ (420,413) $
(109,308) Per share, basic and diluted $ (0.005) $ (0.004)
Operating (loss) (1) $ (724,695) $ (316,175) Per share, basic and
diluted $ (0.009) $ (0.029) Net (loss) $ (700,910) $ (332,263) Per
share, basic and diluted $ (0.009) $ (0.012) (1) Funds flow from
operations and operating loss are non-IFRS measures and are
addressed in the "Advisories" section. Comparative figures for 2010
are for the two month period from February 1, 2010, date of
commencement of operations, to March 31, 2010 and have been
restated to reflect International Financial Reporting Standards
(IFRS) adopted in 2011. Average production for the first quarter of
2011 increased significantly over the first quarter of 2010 as a
result of the Two Creek acquisition and increased production at
Strathmore. Two Creek production averaged 240 boe/d for the quarter
and average production at Strathmore during the first quarter
increased to 113 boe/d, as the result of reactivation activities,
as compared to 69 boe/d for the two months ended March 31,
2010. Revenue during the first quarter of 2011 increased
significantly over 2010 primarily as a result of the incremental
production realized from the Two Creek acquisition which was
effective as of January 1, 2011. Earnings and funds flow from
operations continued to reflect lower production rates and higher
operating costs typical of mature reservoirs. In addition,
operating costs at Strathmore include certain repair costs
necessary for the EOR project. As the Company's EOR and
optimization programs progress, production and revenue from these
properties is expected to increase significantly. ABOUT TERREX
Terrex Energy Inc. is a Calgary based junior oil company that
focuses on the application of proven Enhanced Oil Recovery (EOR)
methods to improve oil production from existing mature fields.
Terrex targets underexploited and undercapitalized light to medium
oil reservoirs in Western Canada. The Company's shares are listed
on the TSX Venture Exchange under the trading symbol "TER". Neither
the TSX 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. ADVISORIES Barrels of Oil Equivalent Production volumes
and reserve information are commonly expressed on a barrel of oil
equivalent ("Boe") basis whereby natural gas volumes are converted
at the ratio of six thousand cubic feet of natural gas to one
barrel of oil based on an energy equivalency at the burner tip and
does not represent a value equivalency at the well head. Used in
isolation, barrels of oil equivalent may be misleading. Non-IFRS
Information Included in this news release are references to terms
commonly used in the oil and gas industry including funds flow from
operations and operating loss. Such terms do not have standard
meaning as prescribed under IFRS and therefore may not be
comparable with the determination of similar measures for other
entities. As used in this news release, funds flow from
operations is calculated as cash flow from operating activities
less changes in non-cash working capital and, operating loss is
calculated as net loss before stock based compensation and
accretion of asset retirement obligations. Funds flow from
operations is used by management in assessing the Company's ability
to fund capital programs and operations and operating loss provides
a comparison of operating results between periods, excluding
non-cash items subject to significant volatility. The foregoing
non-IFRS measures should not be considered an alternative to, or
more meaningful than cash provided by operating activities and net
loss determined in accordance with IFRS. Forward-Looking Statements
Certain statements contained in this news release constitute
forward-looking statements and forward-looking information
(collectively referred to herein as "forward-looking statements")
within the meaning of applicable Canadian securities laws.
Such forward-looking statements relate to future events or future
performance and are based on Terrex's current internal
expectations, estimates, projections, assumptions and beliefs,
including, among other things, assumptions with respect to
production, future capital expenditures and cash flow.
Readers are cautioned that the assumptions used in the preparation
of such information may prove incorrect. All statements other
than statements of historical fact may be forward-looking
statements. Such forward-looking statements are often, but
not always, identified by the use of words such as "seek",
"anticipate", "budget", "plan", "continue", "estimate", "expect",
"forecast", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe" and
similar expressions. These statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those
anticipated in such forward-looking statements. Terrex
believes the expectations reflected in those forward-looking
statements are reasonable but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements included in, or incorporated by reference into, this
news release should not be unduly relied upon. These
forward-looking statements speak only as of the date of this news
release. In particular, this news release contains forward-looking
statements pertaining to the following: -- business strategies --
exploration and development plans -- the potential of Two Creek
Property -- implementation, benefits and timing of enhanced oil
recovery ("EOR") programs -- other expectations, beliefs, plans,
goals, objectives, assumptions or statements about future events or
performance 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, regulatory developments, the ability to obtain
equipment in a timely manner to carry out development activities,
the ability to obtain financing on acceptable terms, the benefits
of IOR and EOR programs and the terms of the Hydrocarbon Purchase
Agreement. Although management considers these assumptions to
be reasonable based on information currently available to it, they
may prove to be incorrect. 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. These factors include, but are not
limited to risks associated with oil and natural gas exploration,
financial risks, the history of losses, substantial capital
requirements, political and government risks, government
regulation, environmental, prices, dependence on key personnel,
availability of drilling equipment and access, risks may not be
insurable, licenses, resource estimates, variations in exchange
rates. Further information regarding these factors may be
found under the heading "Risk Factors" in the company's Annual
Information Form. Readers are cautioned the foregoing list of
factors that may affect future results is not exhaustive. The
forward-looking statements contained in this news 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. To view this
news release in HTML formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/June2011/07/c3360.html p
please contact Kim Davies, President & CEO, or Norm Knecht, VP
Finance and CFO, at (403) 264-4430, or visit the Company's website
at a href="http://www.terrexenergy.ca"www.terrexenergy.ca/a.
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