Canadian Phoenix Resources Corp.
TSX VENTURE : CXP

Canadian Phoenix Resources Corp.

April 30, 2010 20:32 ET

Canadian Phoenix Releases Annual Results and Announces the Filing of Its 2009 Annual Financial Statements, MD&A and NI 51-101 Reserves Data

CALGARY, ALBERTA--(Marketwire - April 30, 2010) - CANADIAN PHOENIX RESOURCES CORP. ("Canadian Phoenix") (TSX VENTURE:CXP) announces that it has filed its audited consolidated financial statements for the year ended December 31, 2009, the corresponding management's discussion and analysis, and reserves data under National Instrument 51-101 as at December 31, 2009 on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

SUMMARY OF 2009 FINANCIAL RESULTS  
  For the three months   For the year ended  
($000's except as indicated) ended December 31   December 31  
  2009   2008   2009   2008  
   
  Avg P&NG Production (boe/d) 1,016   1,076   974   453  
  Avg realized price – oil ($/bbl) 62.93   39.27   53.01   56.03  
  Avg realized price – nat gas ($/mcf) 4.69   7.13   4.29   7.14  
   
  P&NG revenue 5,793   3,887   18,414   9,185  
  Netbacks - $/boe 24.13   7.33   20.63   22.81  
  Investment loss (2,144 ) (2,676 ) (10,254 ) (2,812 )
   
Loss for the period (5,583 ) (52,768 ) (30,452 ) (61,462 )
  Per share – basic & diluted* ($0.12 ) ($1.17 ) ($0.66 ) ($2.35 )
Funds from Operations (92 ) (2,802 ) 270   (6,216 )
   
Capital Expenditure 1,779   19,197   9,856   25,998  
Cash on hand 459   10,403   459   10,403  
Working Capital (Deficiency) (13,226 ) (5,870 ) (13,226 ) (5,870 )
Total assets 99,465   145,675   99,465   145,675  
   
Weighted Average Number of Shares                
Outstanding - Basic & Diluted* 45,316   45,080   45,316   26,264  
                 
Number of Shares Outstanding* 46,252   45,276   46,252   45,276  
Number of Shares Outstanding – Diluted* 74,544   75,948   74,544   75,948  
                 
*all figures have been adjusted to reflect the 25 for 1 share consolidation effective Nov 16, 2009  

The consolidated financial and operating results include Canadian Phoenix and its controlled subsidiary Serrano Energy Ltd. ("Serrano") (defined as the "Group"). Canadian Phoenix's investment in Marble Point Energy Ltd. ("Marble Point") is reflected in the investment loss and loss for the year.

The Corporation's interest in Serrano increased from 47.0% at December 31, 2008 to 54.3% at December 31, 2009. The movement relates to several share issuances and cancellations by Serrano during the year.

Canadian Phoenix's equity investment in Marble Point stood at 58.2% at December 31, 2009, up slightly from 56.5% at December 31, 2008.

For the year ended December 31, 2009 the Corporation recorded a loss after tax of $30.5 million. Contributing significantly to the loss were the second quarter impairment of property, plant and equipment of $7.7 million and a loss of $10.3 million associated with the Corporation's equity investment in Marble Point. The loss otherwise reflects operating, administrative, and depletion charges in excess of the Group's revenue from operations of $18.4 million.

At December 31, 2009 the Group had a working capital deficit of $13.2 million and net assets of $72.9 million. During the fourth quarter the Group (via Serrano) finalized a $12 million operating line of credit with a financial institution, of which $10 million had been drawn by year-end. The line was used to repay a loan of $8.1 million, and alleviate immediate working capital needs. The Corporation also secured a $2.1 million loan from a private arm's length mezzanine lender in the fourth quarter.

On November 12, 2009, the shareholders approved a consolidation of the outstanding common shares of the Corporation on the basis of one new share for every 25 old shares. This resulted in 45,275,723 post- consolidated shares being outstanding which started trading on the TSX Venture Exchange on November 17, 2009 under the new trading symbol of "CXP".

Also on November 12, 2009, the shareholders approved amendments to the outstanding share purchase warrants such that the exercise price of the outstanding warrants will be decreased to $1.25 (post share consolidation) for the first year following the date of the amendment and $2.50 for the balance of the term of the warrants. The expiry of the outstanding warrants was also extended by one year.

Recent Events

In seeking to maximize value for its shareholders, the Corporation constituted a Special Committee of independent directors in mid 2009 to investigate and evaluate strategic alternatives available to the Corporation, including opportunities to divest certain of its oil and gas assets. In April 2010, two agreements were reached:

  • On April 27, 2010 the Corporation entered into a voting agreement with Marble Point and 7515197 Canada Ltd ("AcquisitionCo") pursuant to which the Corporation agreed to vote its shares held in Marble Point in favour of an amalgamation between Marble Point and AcquisitionCo, subject to receipt of requisite shareholder and regulatory approval. The Corporation's shareholders will be asked to approve the transaction at a special meeting of shareholders scheduled for May 26, 2010
  • On April 14, 2010, an agreement was signed between the Corporation's subsidiary Serrano and an intermediate oil and gas producer ("Purchaser") whereby the Purchaser will acquire all of the shares in Serrano. The Corporation's shareholders will be asked to approve the transaction at a special meeting of shareholders scheduled for May 26, 2010.

Should both transactions close, the Corporation will receive proceeds of approximately $66.7 million after transaction costs and the settlement of the Corporation's mezzanine debt of $2.1 million, which will be available for general corporate purposes and oil and gas investment, exploration and development activities.

The Corporation and its Special Committee will continue with its ongoing strategy of maximizing shareholder value by analyzing its own assets and evaluating other opportunities in the resources sector.

The consolidated financial statements and related MD&A can be found on SEDAR's website at www.sedar.com and the Corporation's website at www.canadian-phoenix.com.

About Canadian Phoenix

Canadian Phoenix Resources Corp. is a publicly-traded junior oil and gas exploration, development and production company with operations in Western Canada. Canadian Phoenix's shares trade on the TSX Venture Exchange under the symbol "CXP".

FORWARD-LOOKING STATEMENTS: This news release may contain forward-looking information. All statements and information other than statements of historical fact are forward-looking information. In some cases, forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the control of Canadian Phoenix, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Canadian Phoenix will derive therefrom. The forward-looking statements and information contained in this news release are made as of the date hereof and Canadian Phoenix undertakes no obligation 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.

Contact Information

  • Canadian Phoenix Resources Corp.
    Michael Atkinson
    President & CEO
    (604) 689-1428
    or
    Canadian Phoenix Resources Corp.
    Tim Moran
    Chief Financial Officer
    (403) 920 0040
    www.canadian-phoenix.com