Cumberland Oil & Gas Ltd.
TSX VENTURE : COG

August 18, 2010 18:44 ET

Cumberland Oil & Gas Ltd. Announces Filing of June 30, 2010 Interim Financial Statements and MD&A and Provides Operational Update

CALGARY, ALBERTA--(Marketwire - Aug. 18, 2010) - Cumberland Oil & Gas Ltd. ("Cumberland") (TSX VENTURE:COG) has filed its unaudited interim financial statements and related Management's Discussion and Analysis ("MD&A") for the period ended June 30, 2010. Copies of these documents may be obtained via the SEDAR website at www.sedar.com.

Highlights

    Received regulatory approval to commence drilling infill oil wells as the first step of the Valhalla Doe Creek 'M" Pool secondary recovery project.
    Completed a water source well at Valhalla capable of high rate water injection volumes for the Valhalla waterflood.
    Licensed two infill oil well locations in the Valhalla Doe Creek "M" Pool, both of which were drilled in the third quarter.
    Assembled exploration lands in the Peace River Arch area of Alberta with four drillable prospects for both Doe Creek light oil and high impact natural gas.
    Achieved record production volumes of 72 boepd, 24% higher than the same period last year.
    Announced a flow-through common share private placement for gross proceeds of $907,500 that closed July 5, 2010.
    Positive working capital of $3.59 million at June 30, 2010.

 

      Three months ended     Six months ended  
      June 30     June 30  
Financial   2010     2009     2010     2009  
                           
 Oil and gas sales   244,024     108,547     409,283     215,532  
 Funds used in operations (1)   (304,752 )   (233,172 )   (629,315 )   (349,329 )
  Per basic and diluted share   (0.01 )   (0.01 )   (0.02 )   (0.02 )
 Cash used in operating activites   (543,594 )   (241,302 )   (626,305 )   (411,908 )
  Per basic and diluted share   (0.02 )   (0.01 )   (0.02 )   (0.02 )
 Net loss   (483,572 )   (368,830 )   (951,119 )   (467,613 )
  Per basic and diluted share   (0.01 )   (0.02 )   (0.03 )   (0.02 )
 Capital expenditures, net   230,128     48,219     635,234     854,732  
 Working capital (2)   3,590,095     2,069,582     3,590,095     2,069,582  
 Weighted average shares                        
  Basic and diluted   32,384,319     21,141,085     28,716,973     21,239,439  

Notes:

  1.   Funds used in operations is calculated as cash used in operating activities and adding changes in non-cash working capital, if any. Funds used in operations per share is calculated using the basic and diluted weighted-average number of shares for the period. Funds used in operations and funds used in operations per share are used to analyze Cumberland's operating performance. Funds used in operations and funds used in operations per share do not have standardized measures prescribed by Canadian GAAP and therefore may not be comparable with calculations of similar measures for other companies.
  2.   Working capital includes cash and cash equivalents, accounts receivable, deposits and prepaid expenses, and accounts payable and accrued liabilities.

 

    Three months ended   Six months ended
    June 30   June 30
Operations   2010   2009   2010   2009
                 
Daily production                
  Crude oil (bbl/d)   21   -   13   -
  Natural gas (mcf/d)   307   349   305   296
  Oil equivalent (boe/d @ 6:1)   72   58   63   49
                 
Average prices                
  Crude oil ($/bbl)   71.73   -   73.06   -
  Natural gas ($/mcf)   3.88   3.42   4.39   4.03
  Oil equivalent ($/boe)   37.28   20.52   35.61   24.18
                 
Netback                
  Operating netback ($/boe) (1)   12.39   7.32   12.44   10.08

 Note:

  1.   Operating netback equals oil and gas sales less royalties, operating expenses and transportation costs, calculated on a boe basis. Operating netback does not have a standardized measure prescribed by Canadian GAAP and therefore may not be comparable with the calculation of similar measures for other companies.

Valhalla Doe Creek "M" Pool

During the month of July, Cumberland drilled, cased and completed two new light oil wells at Valhalla. The new wells were completed in the Doe Creek interval and placed on production in early August. Coincident with the drilling of these new producing wells, two existing producing oil wells were re-stimulated and converted to water injection wells. Water injection tests were conducted on these wells and Cumberland has submitted an application for water injection approval to the Alberta Energy and Utilities Board.

The construction of injection and gathering facilities at Valhalla is underway and Cumberland expects to commence full scale water injection in October, subject to receipt of all regulatory approvals.

Reader Advisories

Forward-Looking Statements: This news release contains certain forward-looking statements, including management's assessment of future plans and operations, including expectations on the commencement of water injection operations at Valhalla and the timing thereof, that involve substantial unknown risks, uncertainties and assumptions, some of which are beyond the Company's control. Such risks, uncertainties and assumptions include, without limitation, those associated with oil and gas exploration, development, exploitation, production, marketing, processing and transportation, loss of markets, volatility of commodity prices, imprecision of reserve estimates, environmental risks, failure to receive the requisite regulatory approvals, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions globally and in Canada, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. Cumberland's actual results, performance or achievements could differ materially from those expressed in, or implied by, those forward-looking statements and, accordingly, no assurances 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 that Cumberland will derive therefrom. Readers are cautioned that the foregoing list is not exhaustive. Additional information on these and other factors that could affect Cumberland's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). All subsequent forward-looking statements, whether written or oral, attributable to Cumberland or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Cumberland does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Boe's may be misleading, particularly if used in isolation. A boe conversion of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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 news release.

Contact Information

  • Cumberland Oil & Gas Ltd.
    Alan MacDonald
    Vice President, Finance and Chief Financial Officer
    (403) 237-0790