Twoco Petroleums Ltd.
TSX VENTURE : TWO

Twoco Petroleums Ltd.

November 26, 2008 17:04 ET

Twoco Petroleums Ltd. Third Quarter Highlights and 2008 Update

CALGARY, ALBERTA--(Marketwire - Nov. 26, 2008) - Twoco Petroleums Ltd. ("Twoco") (TSX VENTURE:TWO) is pleased to announce financial and operating results for the quarter ended September 30, 2008 and an update of its 2008 activities.

Twoco has filed the following documents on the System for Electronic Document Analysis and Retrieval (SEDAR):

1. Unaudited financial statements as at and for the quarter ended September 30, 2008, together with the notes thereto; and

2. Management's discussion and analysis of financial condition and results of operations as at and for the quarter ended September 30, 2008.

Copies of these documents may be obtained via SEDAR at www.sedar.com.

Highlights of the Third Quarter 2008 include:

- Acquisition in September of natural gas assets in the Tofield area of Alberta for total cash consideration of $12.5 million before closing adjustments and related costs (the "Tofield Property"). The Tofield Property comprises approximately 5,128 gross (4,445 net) acres of developed and 5,760 gross (5,760 net) acres of undeveloped lands, approximately 70 km(2) of proprietary 3-D seismic data and production of approximately 500 boe per day;

- Average production of 1,601 boe per day, including production from the Tofield Property from the July 1, 2008 effective date of the acquisition of the Tofield Property;

- Participation in the drilling of 7 gross (6.7 net) wells;

- Petroleum and natural gas sales revenue growth to $4,263,059 - a 22% increase from the Third Quarter 2007;

- Cash flow from operations of $2,260,569 ($0.15 per share) - a 26% increase from the Third Quarter 2007;

- Net Income of $98,857 ($0.01 per share) compared to a loss of $436,064 in the Third Quarter 2007 (loss of $0.03 per share);

- Capital expenditures of $14,391,766;

- Current land position of 140,399 gross (105,942 net) acres;

- Operating costs of $6.78 per boe;

- Operating netback of $27.97 per boe compared to $18.11 in the Third Quarter 2007; and

- General and administrative expenses of $1.14 per boe.

Highlights of Twoco's anticipated 2008 work program and summary of operations for the year to date includes:

- To date, Twoco has participated in the drilling of 16 gross (13.8 net) wells that have resulted in 13 gross (11.1 net) wells being cased for potential natural gas production and 3 gross (2.7 net) wells were dry and abandoned. Initial production from the natural gas wells has or will commence in the third and fourth quarters of this year;

- Amendment of 2008 Capital Budget to $21.7 million - a reduction of $2 million due to lower than anticipated commodity prices;

- Participation in the drilling of 1 additional well for the balance of 2008 - targeting natural gas;

- Current production of 1,800 boe per day and estimated current additional production capability of 200 boe per day;

- Currently available unutilized bank line of credit of approximately $4.0 million;

- Pursuant to its current Normal Course Issuer Bid that commenced on October 16, 2008, Twoco has not acquired any shares as at today's date. Up to October 15, 2009, under the terms of the current Normal Course Issuer Bid, Twoco is authorized to acquire up to an aggregate of 750,000 of its common shares representing approximately 5% of its issued and outstanding common shares; and

- Twoco anticipates investigating several drilling and acquisition opportunities as they are identified during the balance of 2008. The combination of increasing cash flows from improving commodity prices and increasing production levels along with available loan facilities will enable Twoco to be in a position to consider such opportunities as they arise.

Twoco is an oil and gas company engaged in the exploration for, and the acquisition, development and production of, oil and natural gas reserves primarily in the Province of Alberta. Twoco has 15,267,006 common shares issued and outstanding as at today's date.

In this news release the calculation of barrels of oil equivalent (boe) is calculated at a conversion rate of six thousand cubic feet (Mcf) of natural gas for one barrel (Bbl) of oil based on an energy equivalency conversion method. boes may be misleading particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1Bbl is based on an energy equivalency conversion method primarily applicable to the burner tip and does not represent a value equivalency at the wellhead.

Forward Looking Statements:

Certain information set forth in this news release contains forward-looking statements, including production timing and drilling and acquisition opportunity investigation. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Twoco's control, 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 the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Twoco's actual results, performance or achievement 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 Twoco will derive therefrom. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at www.sedar.com. Twoco disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities laws.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy securities in any jurisdiction.

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

Contact Information

  • Twoco Petroleums Ltd.
    Wayne A. Malinowski
    President and Chief Executive Officer
    (403) 231-8653
    (403) 237-6048 (FAX)
    Website: www.twoco.ca