Tango Energy Inc.

Tango Energy Inc.

May 28, 2009 17:40 ET

Tango Reports 2009 Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - May 28, 2009) - Tango Energy Inc. ("Tango") (TSX VENTURE:TEI) is pleased to report on its unaudited financial and operating results for the three months ended March 31, 2009.

Three Months Ended
March 31,
2009 2008
Financial Results ($000s, except per share amounts)
Gross revenues 1,304 2,786
Loss before taxes (1,555) (482)
Net loss (1,126) (371)
Per share - basic $ (0.02) $ (0.01)
Per share - diluted $ (0.02) $ (0.01)
Additions to property and equipment,
net of proceeds 1,144 190
Total assets 35,662 42,579
Working capital (deficiency) 572 (4,014)
Asset retirement obligation 700 537
Flow-through share obligations - 2,000
Share Data (000s)
Equity outstanding
Common shares 65,775 65,725
Stock options and warrants 5,375 5,160
Fully diluted 71,150 70,885
Sales Volumes (average)
Natural gas (mcf/d) 2,673 3,333
Crude oil and liquids (bbls/d) 14 24
Average boe/d 459 583
Product Prices (average)
Natural gas ($/mcf) 5.13 8.41
Crude oil and liquids ($/bbl) 42.99 98.44
Netback Analysis ($/boe)
Oil and gas revenue 31.18 52.16
Gathering income 0.39 0.32
Royalty expense 9.17 14.93
Operating costs 10.19 7.39
Netback 11.37 30.16

Sales volumes averaged 459 barrels of oil equivalent per day ("boepd") during the three months ended March 31, 2009, a 50% increase over the 305 boepd over the three months ended December 31, 2008. This increase in production was attributable to Quaich. Tango's production is currently approximately 480 boepd.

During the three months ended March 31, 2009, the Quaich well operated by Tango's partner and tied into that Operator's facility continued to produce favourably. The Operator and Tango have been slowly increasing the production rate of the Quaich well to test the performance of the reservoir prior to drilling the second follow-up well, in which Tango will also have a 60% working interest. Tango participated in the completion and evaluation of three exploratory wells in the Worsley, Beaton and Ferrier areas of Alberta. The Worsley and Beaton well were tied into third party facilities and placed on production by the respective operators, and the Ferrier well was suspended until natural gas prices increase.

Tango has 46,402 gross (26,750 net) acres of land located west of the fifth and sixth meridian within the foothills and deep basin portion of the Western Canadian Sedimentary Basin. Of this amount 20,320 net acres of land were undeveloped at the end of March 2009.

During 2009, Tango will prudently deploy available capital towards recompletion and tie-in operations where immediate increases in production, cash flow, and reserves are achievable and economic. In addition, Tango currently plans to participate in the drilling of a second well in Quaich during the second half of the year. Tango's share of the second well at Quaich is expected to cost approximately $1.5 million including drilling, completion, equipping and tie-in. Drilling of this well is dependant on economic conditions at that time.

Equity markets and gas prices are expected to remain weak throughout the remainder of the year. Capital spending will be funded by cash flow and draws upon our existing line of credit. Tango currently has no debt and available bank lines in excess of $4 million. Tango bank lines are reviewed quarterly.

The Company is currently seeking merger candidates in order to grow cash flow, improve efficiencies, and broaden our asset base. There are no assurances these efforts will be successful.

For a copy of Tango's March 31, 2009 Financial Statements and Management Discussion and Analysis please visit www.sedar.com.

Tango Energy Inc. is listed on the TSX-Venture Exchange under the Symbol TEI.

This release contains forward-looking information. By their nature, forward-looking statements involve assumptions and known and unknown risks and uncertainties that may cause actual future results to differ materially from those contemplated. These risks include such things as volatility of oil and gas prices, commodity supply and demand, fluctuations in currency and interest rates, ultimate recoverability of reserves, timing and costs of drilling activities and pipeline construction, new regulations and legislation and availability of capital. Tango does not undertake to update any such forward-looking statements except as required by law. Please refer to Tango's Annual Report for more detail as to the nature of these risks and uncertainties. Although Tango believes that the expectations represented by these forward looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

Natural gas volumes have been converted to a barrel of oil equivalent ("boe") using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with Canadian Securities Regulators National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Boe's may be misleading, particularly if used in isolation.

Funds flow from operations and funds flow from operations per share and netback are not recognized measures under Canadian generally accepted accounting principles. Management believes that these items are a useful measure of financial performance. Funds flow from operations is defined as net income plus non-cash charges including, depletion, depreciation and accretion, future taxes and stock-based compensation, after asset retirement costs. Funds flow from operations per share is calculated by dividing the weighted average number of shares outstanding during the year into funds flow from operations. Netback is the average per unit of volume for oil and gas revenues less royalties and production costs incurred. Netback is expressed in terms of dollars per boe.

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

Contact Information

  • Tango Energy Inc.
    John M. Gunn
    Chief Executive Officer
    (403) 266-5688
    (403) 266-8817 (FAX)
    Tango Energy Inc.
    Jeremy P. Newton
    President & Chief Operating Officer
    (403) 266-5688
    (403) 266-8817 (FAX)