Marksmen Resources Ltd.

Marksmen Resources Ltd.

May 29, 2009 13:34 ET

Marksmen Resources Ltd.: First Quarter Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - May 29, 2009) - Marksmen Resources Ltd. (TSX VENTURE:MA) ("the Company or Marksmen") announces the Company's financial and operating results for the quarter ended March 31, 2009.


Quarter Ended
Period Ended 31-Mar-09 31-Mar-08
Financial ($Cdn)
Oil and Gas Revenue $ 236,375 $ 468,645
Funds Flow from Operations (1) ($137,022) $ 85,447
Per Share - Basic ($0.01) $ 0.00
Net Loss ($346,713) ($252,205)
Per Share - Basic $ 0.00 ($0.01)
Capital Expenditures and Dispositions
Operations $ 43,546 $ 316,507
Sale of Property $ 0 ($1,000,000)
Net Capital $ 43,546 ($683,493)
Weighted Average Shares Outstanding
Basic and Diluted 53,689,301 49,689,301
Total Shares Outstanding (Basic) 53,689,301 49,689,301

Average Daily Production (boe per day) 87 98
Wells Drilled
Gross 0.00 1.00
Net 0.00 0.11

Funds from operations and funds from operations per share are not
recognized measures under Canadian generally accepted accounting principles
("GAAP"). Funds from operations is calculated by taking net income and
adding back non-cash balances such as depletion, depreciation and accretion,
stock compensation expense, future income taxes and unrealized financial
derivative costs. Management believes that in addition to net income, funds
from operations is a useful supplemental measure to analyze operating
performance and provide an indication of the results generated by the
Company's principal business activities.

Operating Results

Total production for the quarter ended March 31, 2009 was 7,821 boe or an average of 87 boe per day. This compares to an average of 98 boe per day in the quarter ended March 31, 2008 and 90 boe for the fourth quarter of 2008. Production was 13% lower in 2009 compared to the same period in 2008. One well at Alderflats was shut in due to weather and road bans totalled about half of the reduction while a compressor shut down at Penhold and natural declines at Eastmont, Ferrier, Namao and Antler accounted for the remaining difference.

Natural gas production represented 87% of total production and crude oil was 13% in the three months ended March 31, 2009. This compared to 85% natural gas and 15% of crude oil in the same period of 2008.

Oil and gas revenue decreased by 49.5% to $236,400 or $30.22 per boe in the quarter ended March 31, 2009 from $468,600 or $52.06 per boe in the quarter ended March 31, 2009.

Operating expenses, including transportation expense were $90,300 or $11.54 per boe in the three months ended March 31, 2009 compared to $119,000 $13.21 per boe for the same period in 2008. This was a decrease of $1.67 per boe or 12.6%.

Operating netbacks were $14.97 for the quarter ended March 31, 2009 compared to $33.30 per boe in the three months ended March 31, 2008, a decrease of $18.33 or 55.0%.

Cash-flows from operations were a negative $137,000 in the quarter ended March 31, 2009. This compares to a cash flow of $85,500 in the same period of 2008.

Reduced revenues, netbacks and cash-flows are directly related to significantly lower commodity prices for both oil and natural gas.

Currently Marksmen is producing approximately 90 boe per day. The Company is in the final stages of negotiations to sell one of its minor non-operated properties. If the sale closes successfully, management's plans are to deploy a portion of the sale proceeds to tie-in two wells and workover a third well for a net gain in production of approximately 30 boe per day.


The unprecedented changes in the global economy in the second half of 2008 continue to have a significant impact on businesses in the oil and gas industry and Marksmen is no exception.

West Texas Intermediate ("WTI") oil prices peaked in July of 2008 at over $145 USD per barrel and declined very sharply to close out the year in the $40 USD per barrel range. In the first quarter of 2009 the prices for oil have improved with a high in March for WTI oil of $53 USD. Currently the price for WTI oil is in the $62 USD range.

Natural gas prices ("AECO") peaked in June of 2008 at over $10.50 CDN per mcf and closed out the year in the $6.15 CDN per mcf range. The prices in the first quarter ranged from a high of $5.60 CDN per mcf to a low of $3.90 CDN per mcf. May's weighted average price is in the $3.50 range with current spot prices in the $3.25 CDN per mcf range.

Marksmen is currently actively seeking merger opportunities or property divestment opportunities with an overall objective to improve the balance sheet, grow reserves, increase production and increase cash flow.

On behalf of the Board of Directors

Peter Malenica, President & CEO

This News Release may contain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein may be forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "proposed", "is expected", "budgets", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. This forward-looking information reflects the Company's current beliefs and is based on information currently available to the Corporation and on assumptions the Company believes are reasonable. These assumptions include, but are not limited to, the actual results of drilling and exploration being equivalent to or better than anticipated or historical results and future costs and expenses being based on historical costs and expenses, adjusted for inflation. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Corporation to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: the early stage development of the Corporation and its projects; general business, economic, competitive, political and social uncertainties; commodity prices; the actual results of current exploration and development or operational activities; competition; changes in project parameters as plans continue to be refined; accidents and other risks inherent in the natural resources industry; lack of insurance; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting the Corporation; timing and availability of external financing on acceptable terms; conclusions of economic evaluations; and lack of qualified, skilled labour or loss of key individuals. Although the Corporation has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The Corporation does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

References herein to "boe" mean barrels of oil equivalent derived by converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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