Angle Energy Inc.
TSX : NGL

Angle Energy Inc.

March 15, 2011 20:11 ET

Angle Energy Inc. Announces 2010 Year End Financial and Operational Results

CALGARY, ALBERTA--(Marketwire - March 15, 2011) - Angle Energy Inc. ("Angle" or the "Company") (TSX:NGL) is pleased to announce its fourth quarter and year end 2010 financial and operating results.

The Company has filed its audited consolidated financial statements and related management's discussion and analysis ("MD&A") for the year ended December 31, 2010 on www.sedar.com and www.angleenergy.com. Certain selected financial and operational information for the three and twelve month periods ended December 31, 2010 and the 2009 comparatives are set out below and should be read in conjunction with Angle's consolidated financial statements for the year ended December 31, 2010 and related MD&A.

The 2010 year was transformational, in both the development of Angle's asset base and the Company's financial results. Angle's operational results and year end reserves were previously released on February 22, 2011. The following discussion primarily focuses on Angle's financial results for the fourth quarter and full year 2010.

HIGHLIGHTS

The following are selected highlights for the fourth quarter and the year ended December 31, 2010:



-- Achieved record corporate production of 11,612 boe/day for the fourth
quarter, resulting in average production for 2010 of 9,243 boe/day
(increases of 56% and 23% respectively, as compared to the same period
in 2009). Angle recorded exit 2010 production of 13,500 boe/d.
-- Increased light oil production to average 986 bbls/day in the fourth
quarter of 2010, five times the volume from the same period in 2009.
Total light oil and natural gas liquids production in the fourth quarter
of 2010 increased by 47% to 4,481 bbls/day from 3,057 bbls/day in the
comparative fourth quarter of 2009. Light oil and condensate, the
products commanding the highest per barrel prices, were 47% of this oil
and liquids production.
-- Increased operating netback in the fourth quarter of 2010 to $23.60 per
boe (2009 - $21.90) and $22.14 per boe for the full year 2010 (2009 -
$17.03), driving a 54% increase in annual funds from operations to $62
million.
-- Conducted a full year capital expenditure program totalling $355.1
million in 2010, including two material acquisitions to form the Edson
Deep Basin core area, the Company's largest annual drilling program to
date, significant infrastructure projects to increase production out-
take in our core areas and significant land purchases at Crown sales
extending Angle's light oil drilling inventory.
-- Drilled 40 gross (34.5 net) wells with 95% net success. Of the 40 wells,
34 were drilled horizontally, five were drilled directionally and one
was drilled vertically at an overall average working interest of 86%.
-- Exited 2010 with total net debt, including working capital deficiency,
of $152.4 million which is lower than our budgeted expectations due to
higher fourth quarter cash flow from light oil and NGL production.
-- Angle is concluding our semi-annual credit review with our banking
syndicate and the Company is confident of an increase to our borrowing
base to $210 million. Combined with our $60 million convertible
unsecured subordinated debentures that closed January 6, 2011, Angle's
combined credit capacity is expected to be $270 million.


As previously announced on February 22, 2011:



-- Net asset value of the Company increased to $9.24 from $6.14 per diluted
share, a 50% increase. Net asset value has been calculated in a
consistent manner as disclosed in our 2009 annual report.
-- Angle recorded total proved plus probable reserves of 59.7 million
barrels of oil equivalent ("boe"), tripling Angle's reserves as at
December 31, 2009 of 20.0 million boe. The most significant change was
related to light crude oil reserves which increased by 305%, NGLs
increased 170%, while the balance of the increase is attributed to a
209% increase in natural gas reserves.
-- Total proved reserves of 31.9 million boe, an increase of 159% as
compared to 12.3 million boe at year end 2009.
-- Reserve life index increased 66% to approximately 12.1 years on a proved
plus probable basis and 44% to 6.5 years on a proved basis (based on
2010 year end production of 13,500 boe/d).


Angle plans to release an operational update in April 2011 to report on first quarter activities. To date, the Company is encouraged with our drilling results and has recorded production exceeding our type curve expectations, specifically in our Mannville gas condensate play. Further updates on the progress of this project as well as our results in the development of the Viking light oil play are slated for discussion in the April update.

Additional selected operational and financial information for the years ended December 31, 2010 and 2009 is as follows:



ANGLE ENERGY INC.
SELECTED HIGHLIGHTS
Years Ended December 31 2010 2009 Change
----------------------------------------------------------------------------
(000s, except per share
data) ($) ($) (%)
Financial
Commodity revenues (1) 121,468 79,998 52
Funds from operations (2) 62,003 40,154 54
Per share - basic 0.98 0.92 7
Per share - diluted 0.96 0.90 7
Cash flow from operating
activities 53,566 27,843 92
Net loss (5,098) (3,032) 68
Per share - basic (0.08) (0.07) 14
Per share - diluted (0.08) (0.07) 14
Capital expenditures (3) 355,071 64,575 450
Total assets 558,969 246,465 127
Net debt (working capital)
(4) 152,378 (38,255) 498
Shareholders' equity 343,167 212,201 62
----------------------------------------------------------------------------
(000s)
Common Share Data
Shares outstanding
At end of year 71,969 54,481 32
Weighted average - basic 63,224 43,748 45
Weighted average - diluted 64,481 44,533 45
----------------------------------------------------------------------------
Operating
Sales
Natural gas (mcf/d) 34,248 26,334 30
NGL (bbls/d) 2,892 2,995 (3)
Light crude oil (bbls/d) 643 144 347
Combined average (boe/d) 9,243 7,528 23
Average wellhead prices (1)
Natural gas ($/mcf) 4.47 4.06 10
NGLs ($/bbl) 45.42 34.46 32
Light crude oil ($/bbl) 75.39 61.74 22
Total oil equivalent
($/boe) 36.00 29.11 24
Netbacks ($/boe)
Operating (5) 22.14 17.03 30
Funds from operations (2) 18.38 14.63 26
Reserves (December 31, 2010
evaluation)
Proved (mboe) 31,900 12,309 159
Proved plus probable
(mboe) 59,696 20,033 198
Total net present value -
proved plus probable
(10% discount) ($000s) 749,296 276,847 171

Gross (net) wells drilled
(#)
Natural gas 19 (17.2) 9 (7.9) 111 (118)
Oil 18 (15.6) - (-) 100 (100)
Dry and abandoned 3 (1.7) 4 (4.0) (25) (-58)
----------------------------------------------------------------------------
Total 40 (34.5) 13 (11.9) 208 (190)
Average working interest
(%) 86 92 (6)
----------------------------------------------------------------------------
----------------------------------------------------------------------------


(1) Commodity revenues and prices include realized gains or losses from
derivative instruments.
(2) Funds flow from operations, funds from operations per share and funds
from operations netback are not recognized measures under Canadian
generally accepted accounting principles (GAAP). Refer to the
Management's Discussion and Analysis for further discussion.
(3) Total capital expenditures, including acquisitions.
(4) Current assets less current liabilities and bank debt, excluding
derivative instruments and the related tax effect.
(5) Operating netback equals total revenues (including realized derivative
gains and losses) less royalties, transportation and operating costs
calculated on a per boe basis. Operating netback is not a recognized
measure under Canadian GAAP and therefore may not be comparable with
the calculations of similar measures presented by other companies.
(5) For a description of the boe conversion ratio, refer to the commentary
at the end of the Management's Discussion and Analysis.


CONSOLIDATED BALANCE SHEETS
----------------------------------------------------------------------------
As at December 31, 2010 2009
----------------------------------------------------------------------------
(000s) ($) ($)
Assets
Current
Cash and cash equivalents - 34,644
Accounts receivable 19,724 11,988
Prepaid expenses and other 3,894 3,722
Derivative instruments (note 10) - 226
Future tax asset (note 8) 520 -
----------------------------------------------------------------------------
24,138 50,580
Property and equipment (note 4) 534,831 195,885
----------------------------------------------------------------------------
558,969 246,465
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
Current
Accounts payable and accrued liabilities 37,080 12,099
Derivative instruments (note 10) 1,047 -
----------------------------------------------------------------------------
38,127 12,099
Bank debt (note 5) 138,916 -
Derivative instruments (note 10) 810 -
Future tax liability (note 8) 31,678 19,453
Asset retirement obligations (note 6) 6,271 2,712
----------------------------------------------------------------------------
215,802 34,264

Shareholders' equity
Share capital (note 7) 309,648 175,710
Contributed surplus (note 7) 7,244 5,118
Retained earnings 26,275 31,373
----------------------------------------------------------------------------
343,167 212,201
----------------------------------------------------------------------------
558,969 246,465
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Commitments (note 7 and 12)
Subsequent events (note 10 and 13)

See accompanying notes to the consolidated financial statements on
www.sedar.com.

CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
----------------------------------------------------------------------------
Years Ended December 31, 2010 2009
----------------------------------------------------------------------------
(000s, except per share data) ($) ($)
Revenue
Oil and natural gas revenues 119,355 79,998
Realized derivative instrument gain 2,113 -
Unrealized derivative instrument (loss) gain (2,084) 226
----------------------------------------------------------------------------
119,384 80,224
Royalty expense (23,720) (19,902)
----------------------------------------------------------------------------
95,664 60,322
----------------------------------------------------------------------------
Expenses
Operating 23,053 13,312
General and administrative 7,920 6,350
Interest 4,595 245
Stock-based compensation (note 7) 2,946 1,556
Depletion, depreciation and accretion 64,004 42,350
----------------------------------------------------------------------------
102,518 63,813
----------------------------------------------------------------------------
Loss before income taxes (6,854) (3,491)
Income taxes
Future tax reduction (note 8) (1,756) (459)
----------------------------------------------------------------------------
Net loss for the year (5,098) (3,032)
Retained earnings - beginning of year 31,373 34,405
----------------------------------------------------------------------------
Retained earnings - end of year 26,275 31,373
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net loss per share (note 7)
Basic (0.08) (0.07)
Diluted (0.08) (0.07)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements on
www.sedar.com.

CONSOLIDATED STATEMENTS OF CASH FLOWS
----------------------------------------------------------------------------
Years Ended December 31, 2010 2009
----------------------------------------------------------------------------
(000s) ($) ($)
Cash provided by (used in):
Operating activities
Net loss for the year (5,098) (3,032)
Cash settlement of share appreciation rights
plan (note 7) - (35)
Add back non-cash items:
Depletion, depreciation and accretion 64,004 42,350
Stock-based compensation 2,946 1,556
Unrealized gain (loss) on derivative
instruments (note 10) 2,084 (226)
Future tax reduction (1,756) (459)
Asset retirement expenditures (177) -
----------------------------------------------------------------------------
62,003 40,154
Change in non-cash working capital (note 9) (8,437) (12,311)
----------------------------------------------------------------------------
53,566 27,843
----------------------------------------------------------------------------
Financing activities
Issue of common shares, net of share issue
expenses 130,414 71,636
Increase in bank debt 116,216 -
Change in non-cash working capital (note 9) (112) 68
----------------------------------------------------------------------------
246,518 71,704
----------------------------------------------------------------------------
Investing activities
Property and equipment additions (184,979) (42,124)
Corporate acquisition (note 3) (46,148) -
Property and equipment acquisitions (note 3) (123,944) (22,451)
Change in non-cash working capital (note 9) 20,343 (1,267)
----------------------------------------------------------------------------
(334,728) (65,842)
----------------------------------------------------------------------------
Net increase (decrease) in cash (34,644) 33,705
Cash - beginning of year 34,644 939
----------------------------------------------------------------------------
Cash - end of year - 34,644
----------------------------------------------------------------------------


See accompanying notes to the consolidated financial statements on www.sedar.com.

About Angle

Angle Energy Inc. is a Calgary based public oil and gas exploration and development company that was incorporated in 2004 and commenced active oil and gas operations in 2005. Angle's goal is to grow our high quality, focused asset base through a combination of drilling and strategic acquisitions. Angle started in 2004 as a "blind pool" and has grown production while maintaining top decile operating costs, finding costs and recycle ratio. Angle's proven and dedicated team of industry specialists are focused on identifying and developing high quality assets in the Western Canada Sedimentary Basin, with an emphasis in west central Alberta. Common shares of Angle are listed for trading on the Toronto Stock Exchange under the symbol "NGL."

Basis of Presentation

Production information is commonly reported in units of barrel of oil equivalent ("boe"). For purposes of computing such units, natural gas is converted to equivalent barrels of crude oil using a conversion factor of six thousand cubic feet of gas to one barrel of oil. This conversion ratio of 6:1 is based on an energy equivalent conversion for the individual products, primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Such disclosure of boes may be misleading, particularly if used in isolation.

Future Outlook and Forward-Looking Information

Information set forth in this press release contains estimates and forward-looking statements and are made as of March 15, 2011 and based on assumptions as of that date. By their nature, estimates and forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Angle's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserves estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility, ability to access sufficient capital from internal and external sources and specifically, final approval of increased commercial credit borrowing base under the terms of our syndicated credit facility. Readers are cautioned that the assumptions and factors discussed in this press release are not exhaustive and 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. Angle's actual results, performance or achievement could differ materially from those expressed in, or implied by, these estimates and forward-looking statements, and accordingly, no assurance can be given that any of the events anticipated by the estimates and forward-looking statements will transpire or occur, or if any of them do so, what benefits that Angle will derive there from. Unless required by law, Angle disclaims any intention or obligation to update or revise any estimates and forward-looking statements, whether as a result of new information, future events or otherwise. The estimates and forward looking statements are expressly qualified by these cautionary statements.

Contact Information

  • Angle Energy Inc.
    Heather Christie-Burns
    President and Chief Operating Officer
    (403) 263-4534
    or
    Angle Energy Inc.
    Gregg Fischbuch
    Chief Executive Officer
    (403) 263-4534
    or
    Angle Energy Inc.
    Stuart Symon
    Chief Financial Officer
    (403) 263-4534
    or
    Angle Energy Inc.
    Suite 700 - 324 Eighth Avenue SW
    Calgary, Alberta T2P 2Z2
    (403) 263-4534
    (403) 263-4179 (FAX)
    www.angleenergy.com