Antrim Energy Inc.
TSX : AEN
AIM : AEY

Antrim Energy Inc.

November 14, 2006 20:42 ET

Antrim Energy Inc. Announces 2006 Third Quarter Financial and Operational Results

CALGARY, ALBERTA--(CCNMatthews - Nov. 14, 2006) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S.

Antrim Energy Inc. (TSX:AEN) (AIM:AEY) ("Antrim") today reported its financial and operational results for the nine month period ended September 30, 2006.

HIGHLIGHTS:

- Successful multi-well drilling program in Tierra del Fuego, Argentina

- 87% increase in cash flow from operations

- Extensive 3D seismic acquisition in Argentina

- Successful test results from the UK East Causeway Discovery

- Acquisition of Fyne and Dandy oil fields, UK Central North Sea

The third quarter of 2006 included several significant developments in the growth of the Company with activity underway on each of the Company's concessions in Argentina, successful drilling and testing of the East Causeway prospect in the UK North Sea and the acquisition of a second North Sea development prospect.

In Argentina, drilling on the Tierra del Fuego concessions continues to deliver exceptional results in the form of new oil and gas discoveries and early cash flow. This success, together with the results from newly acquired 3D seismic on the Capricorn, Medianera and Puesto Guardian concessions, is expected to lead to a significant drilling program across the concessions in 2007 and 2008.

In the United Kingdom, the Company intends to follow-up the East Causeway oil discovery with a drilling program of up to three wells commencing in the second quarter of 2007. In November 2006, the Company acquired a majority interest in the Central North Sea Block 21/28a containing the Fyne and Dandy oil fields. This acquisition provides Antrim with a second core oilfield, further strengthening the Company's position in the UK North Sea.



Financial and Operating Results
(unaudited)
Three Months Nine Months
Ended Sept 30, Ended Sept 30,
2006 2005 2006 2005
---------------------------------------------------------------------------
Financial Results
($000's except per share amounts)
---------------------------------
Revenue 3,862 2,989 9,470 8,023
Cash flow from operations 1,650 891 3,132 1,679
Cash flow from operations per share 0.02 0.02 0.05 0.04
Net income (loss) 644 188 2,100 (759)
Net income (loss) per share - basic 0.01 0.00 0.03 (0.02)
Working capital 16,267 37,266 16,267 37,266
Capital expenditures 23,641 840 47,568 9,750
Debt - - - -

Common Shares Outstanding (000's)
---------------------------------
End of period 71,736 54,834 71,736 54,834
Weighted average - basic 70,685 41,191 63,049 40,105
Weighted average - fully diluted 78,828 43,563 71,882 42,478

Operating Results
-----------------
Wellhead price ($/BOE) 30.76 32.25 33.15 31.36
Royalties ($/BOE) (3.81) (4.08) (4.19) (4.04)
Operating expenses ($/BOE) (8.33) (7.82) (9.41) (8.46)
-------------------------------------
Netback ($/BOE) 18.62 20.35 19.55 18.86
-------------------------------------
-------------------------------------
Production
-----------
Oil, natural gas and NGL production
(BOE) 122,394 92,662 285,701 255,857
Oil , natural gas and NGL
production (BOE per day)(1) 1,330 1,007 1,047 937


(1) The BOE conversion ratio 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.


Oil, gas and NGL (propane and butane) revenue increased to $9,469,772 in the nine months ended September 30, 2006 compared to $8,022,578 for the nine months ended September 30, 2005. Revenues increased following the acquisition effective February 14, 2005 of a 25.78% working interest in three producing exploitation concessions in Tierra del Fuego, Argentina. Average net oil production in the three and nine month periods ended September 30, 2006 was 583 and 523 barrels of oil per day, respectively, compared to 548 and 540 barrels of oil per day respectively, for the comparable periods in 2005. Average net gas production to Antrim in the three and nine month periods ended September 30, 2006 was 4.2 and 2.8 MMcf/d, respectively, compared to 2.5 and 2.1 MMcf/d for the comparable periods in 2005.

Antrim generated cash flow from operations in the nine month period ended September 30, 2006 of $3,132,473 ($0.05 per share) compared to cash flow from operations of $1,678,669 ($0.04 per share) in the comparable period in 2005. Net income in the first nine months of 2006 was $2,100,193 ($0.03 per share) compared to a net loss of $758,707 ($0.02 per share) in 2005. Net income increased due to higher revenues on increased oil, gas and NGL prices over the comparable period and gain on sale of non-core assets.

At September 30, 2006, Antrim had working capital of $16,266,798 (December 31, 2005 -$29,969,247) including cash of $16,922,643 (December 31, 2005 - $33,209,478) and no debt. Working capital decreased as a result of Antrim's capital expenditure program in Argentina and the UK partially offset by the completion of a public offering in May 2006 of 14,750,000 Common Shares at a price of $1.95 per share for gross proceeds of $28,762,500.

OVERVIEW OF OPERATIONS

Argentina - Tierra del Fuego

In the fourth quarter of 2005, the Company and its partners began a multi-well drilling program on three concessions in Tierra del Fuego, Argentina. Drilling locations for the program were determined following the acquisition in 2005 of 3D seismic on three areas within the concessions.

To date nineteen wells have been drilled on the concessions, eighteen of which have been cased as potential producers. Initial flow rates from the first four wells in the program were 12, 14, 3 and 10 million cubic feet per day ("MMcf/d") plus associated natural gas liquids (propane and butane) and condensate. Longer-term multi-rate flow tests from the first four wells flowed at rates of 24, 24, 2 and 18 MMcf/d plus associated liquids. In July 2006, Antrim began to deliver a portion of this gas to the San Luis gas plant through a newly completed 10 km high pressure gas pipeline. Of the remaining fifteen wells, seven have been classified as oil and gas wells, four await fracture stimulation, three wells are waiting on completion and one, Rio Cullen 1001, has been abandoned. The wells are tested using a completion rig once the drilling equipment has been removed from site. Antrim's working interest in the Tierra del Fuego concessions is 25.78% .

Argentina - Medianera

In February 2006, Antrim completed the acquisition of a 70% working interest in the producing Medianera Block in Rio Negro Province, Argentina. Antrim believes the Medianera block has significant exploitation and exploration potential, both uphole and from deeper horizons. No deep wells have been drilled on the block to date. In August 2006, Antrim acquired 83 km2 3D seismic over the entire block. Processing of the seismic data has been completed and interpretive work is now underway. Antrim plans to drill an exploration well on the block in the first quarter of 2007. A small workover rig has been acquired and recently commenced operations on the block.

Argentina - NorthWest Basin

Antrim has completed the acquisition of 330 km2 of 3D seismic in the Puesto Guardian concession. Processing of the seismic data is expected to be completed in the fourth quarter of 2006 leading to a drilling program on the concession starting in 2007. Antrim has a 40% working interest in the Puesto Guardian concession.

Antrim has completed the acquisition of 54 km2 of 3D seismic in the Capricorn concession. Processing of the seismic data has been completed and interpretative work has started. Antrim has a 50% working interest in the Capricorn concession, subject to the terms of a farm-out agreement entered into in October 2006 with respect to a portion of its interest in the concession. The prospect covers approximately 30 km2 of the 4,008 km2 that comprises the total concession. Following drilling of the prospect, the third party has the option to earn a 25% interest in the entire concession by funding 50% of the acquisition of up to 300 km2 of 3D seismic and 50% of the costs of two additional exploration wells. At the conclusion of the farm-out, Antrim would retain a 37.5% working interest in the Capricorn concession.

United Kingdom - Block 211/22a South East and Block 211/23d

In early June 2006, drilling operations began on the Antrim operated East Causeway well 211/23d-17z in the UK North Sea. The East Causeway Structure is on the prospective Osprey Ridge Trend which consists of a series of fault-bounded, staircase like structures extending northeast from Block 211/22 SE onto Block 211/23d. In August 2006, Antrim announced the results of tests from the Tarbert and Ness Reservoirs located in the westernmost of the two fault compartments drilled. Combined test rates from these reservoirs were 14,500 barrels of oil per day. Test results did not include the combined intervals tested at rates up to 8,100 barrels of oil per day in the previously drilled and now suspended well 211/23b-11. These previously tested intervals were also intersected and logged in the horizontal section of the current well 211/23d-17z. Based on the results of these tests, Antrim intends to follow-up the discovery with a drilling program of up to three wells commencing in the second quarter of 2007. Antrim has operatorship and a 65.5% working interest in Blocks 211/22 SE and 211/23d.

United Kingdom - Block 21/28a

In September 2006, Antrim announced that it had reached agreement to acquire a 75% working interest in Block 21/28a in the Central North Sea. The Block contains the Fyne and Dandy oil fields, which have been delineated with eight wells drilled from 1971 - 1998. Antrim intends to implement a work programme in 2007 that includes seismic acquisition, processing and interpretation. A decision on additional drilling will be reached by the fourth quarter of 2007, with a target of early 2008 for drilling the first development well.

Certain statements contained in this press release may be considered as "forward looking". Such "forward looking" statements are subject to risks and uncertainties that could cause actual results to differ materially from estimated or implied results. In accordance with AIM guidelines, Mr. Kerry Fulton, P. Eng and Chief Operating Officer of Antrim, is the qualified person that has reviewed the technical information contained in this press release.

Copies of Antrim's 2006 third quarter financial statements and related MD&A are available on Antrim's website at www.antrimenergy.com as well as on the SEDAR website at www.sedar.com.



Antrim Energy Inc.
Consolidated Balance Sheets
As at September 30, 2006 and December 31, 2005
(unaudited)
----------------------------------------------------------------------------

2006 2005
$ $
------------- ------------
Assets
Current assets
Cash and cash equivalents 16,922,643 33,209,478
Restricted cash - -
Accounts receivable 3,803,932 2,208,801
Inventory and prepaid expenses 504,027 354,121
Other current assets 700,106 1,209,615
------------- ------------
21,930,708 36,982,015

Petroleum and natural gas properties 68,590,525 22,950,936
Office equipment 107,393 103,547
Future income taxes - 14,537
Other non-current assets 2,745,247 175,986
------------- ------------
Total Assets 93,373,873 60,227,021
------------- ------------
------------- ------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 5,526,369 6,981,538
Income taxes payable 137,541 31,230
------------- ------------
5,663,910 7,012,768

Future income taxes - 30,508

Asset retirement obligation 1,463,390 554,603
------------- ------------
7,127,300 7,597,879
Shareholders' Equity

Share capital 99,832,050 70,046,407
Contributed surplus 3,848,950 2,117,355
Deficit (17,434,427) (19,534,620)
------------- ------------

86,246,573 52,629,142
------------- ------------

Total Liabilities and Shareholders' Equity 93,373,873 60,227,021
------------- ------------
------------- ------------



Antrim Energy Inc.
Consolidated Statements of Income (Loss) and Deficit
For the periods ended September 30, 2006 and 2005 (unaudited)
----------------------------------------------------------------------------

Three months ended Nine months ended
September 30, September 30,
2006 2005 2006 2005
$ $ $ $
-----------------------------------------------------
Revenue
Oil and gas sales 3,862,264 2,988,760 9,469,772 8,022,578
Royalties (466,134) (378,340) (1,197,002) (1,033,582)
------------ ------------ ----------- ------------

3,396,130 2,610,420 8,272,770 6,988,996

Interest and other
income 268,879 89,932 857,814 262,418
Gain on sale of
petroleum and natural
gas properties - - 1,466,864 -
------------ ------------ ----------- ------------

3,665,009 2,700,352 10,597,448 7,251,414
------------ ------------ ----------- ------------
Expenses
Operating 1,019,469 724,227 2,688,678 2,163,533
General and
administrative 820,199 619,319 2,334,369 2,223,441
Stock-based
compensation 335,516 141,178 902,049 380,208
Depletion and
depreciation 643,481 498,884 1,540,923 1,384,490
Accretion of asset
retirement obligations 41,538 15,300 65,669 45,722
Foreign exchange loss 173,473 294,973 659,536 402,915
Write-off of impaired
assets - 50,729 - 629,391
------------ ------------ ----------- ------------

3,033,676 2,344,610 8,191,224 7,229,700
------------ ------------ ----------- ------------
Income (loss) for the
period before income
taxes 631,333 355,742 2,406,224 21,714
Income taxes
Current 1,644 170,369 315,528 782,856
Future (14,537) (2,435) (9,497) (2,435)
------------ ------------ ----------- ------------

(12,893) 167,934 306,031 780,421
------------ ------------ ----------- ------------
Net Income (Loss) for
the Period 644,226 187,808 2,100,193 (758,707)
Deficit - Beginning of
Period (18,078,653) (17,291,566)(19,534,620) (16,345,051)
------------ ------------ ----------- ------------
Deficit - End of
Period (17,434,427) (17,103,758)(17,434,427) (17,103,758)
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
Net Income (Loss) Per
Common Share - Basic 0.01 - 0.03 (0.02)
Net Income (Loss) Per
Common Share - Diluted 0.01 - 0.03 (0.02)



Antrim Energy Inc.
Consolidated Statements of Cash Flows
For the periods ended September 30, 2006 and 2005 (unaudited)
----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
2006 2005 2006 2005
$ $ $ $
-----------------------------------------------------
Operating Activities
Net income (loss) for
the period 644,226 187,808 2,100,193 (758,707)
Items not involving
cash
Gain on sale of
petroleum and natural
gas properties - - (1,466,864) -
Depletion and
depreciation 643,481 498,884 1,540,923 1,384,490
Write-off of impaired
assets - 50,729 - 629,391
Accretion of asset
retirement obligations 41,538 15,300 65,669 45,722
Stock based
compensation expense 335,516 141,178 902,049 380,208
Future income taxes (14,537) (2,435) (9,497) (2,435)
------------ ------------ ----------- ------------
1,650,224 891,464 3,132,473 1,678,669
Change in non-cash
working capital items (3,056,608) 808,564 591,935 (2,634,343)
------------ ------------ ----------- ------------

(1,406,384) 1,700,028 3,724,408 (955,674)
------------ ------------ ----------- ------------
Financing Activities
Issue of common shares 3,263,067 26,918,033 32,401,314 27,408,571
Share issue expenses - (2,083,239) (1,845,759) (2,083,239)
------------ ------------ ----------- ------------

3,263,067 24,834,794 30,555,555 25,325,332
------------ ------------ ----------- ------------
Investing Activities
Office equipment (40,739) (3,563) (86,084) (16,429)
Petroleum and natural
gas properties (23,599,859) (836,742)(47,482,033) (9,733,285)
Proceeds on sale of
petroleum and natural
gas properties - - 1,300,801 -
Restricted cash 28,704,807 - - -
Other current assets 119,106 - 509,509 -
Other non-current
assets (67,441) 399,910 (1,197,332) (1,462,490)
Change in non-cash
working capital items (21,395,007) (220,955) (3,611,659) (285,487)
------------ ------------ ----------- ------------

(16,279,133) (661,350)(50,566,798) (11,497,691)
------------ ------------ ----------- ------------
Net increase
(decrease) in cash and
cash equivalents (14,422,450) 25,873,472 (16,286,835) 12,871,967
Cash and Cash
Equivalents -
Beginning of Period 31,345,093 8,476,200 33,209,478 21,477,705
------------ ------------ ----------- ------------
Cash and Cash
Equivalents - End of
Period 16,922,643 34,349,672 16,922,643 34,349,672
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------

Supplemental Cash Flow
Information
Interest received 213,300 114,270 763,727 217,050
Taxes paid 177,987 294,424 177,987 639,060


Contact Information

  • Antrim Energy Inc.
    Stephen Greer
    President & CEO
    (403) 264-5111
    (403) 264-5113 (FAX)
    Email: greer@antrimenergy.com
    or
    Antrim Energy Inc.
    Anthony J. Potter
    Chief Financial Officer
    (403) 264-5111
    (403) 264-5113 (FAX)
    Website: www.antrimenergy.com