Antrim Energy Inc.

Antrim Energy Inc.

November 14, 2008 02:00 ET

Antrim Energy Inc. Announces 2008 Third Quarter Financial and Operational Results

CALGARY, ALBERTA--(Marketwire - Nov. 14, 2008) -


Antrim Energy Inc. ("Antrim" or "the Company") (TSX:AEN) (AIM:AEY), an international oil and gas exploration and production company, today reported its financial and operational results for the three and nine month periods ended
September 30, 2008.

All financial figures are unaudited and in US dollars unless otherwise noted


- Financial flexibility with strong cash position

- Continued drilling success in the UK North Sea

- Successful drilling and infrastructure development in Argentina

- Completed Cdn $53 million equity offering and US $50 million working capital facility

Antrim completed its 2008 drilling program in the UK North Sea successfully drilling the final well before first production on the Causeway property, and successfully testing the latest appraisal well on the Fyne property at up to 4,000 barrels of oil per day (bopd). The Company is in a strong financial position with unrestricted cash available of $49.0 million and no debt as at September 30, 2008, providing Antrim with flexibility during a period of uncertain economic conditions.

Antrim will continue to develop its Causeway and Fyne discoveries, while minimizing further financial commitments. Our target of obtaining first production from Causeway in mid 2010 can be met without making major capital expenditures until the third quarter of 2009. We will continue to assess market conditions to ensure that we execute our strategy in a prudent manner.

At Causeway, the Antrim operated 211/23d-18 well drilled in June 2008 identified a significant oil column, including a new oil accumulation in the Etive Formation. This well has been cased and will be used to provide pressure support to the 211/23d-17z discovery well, which previously tested at a rate of up to 14,500 bopd. An updated reserve report dated August 31, 2008 estimates Causeway gross proved plus probable reserves of 21.6 million barrels recoverable (net 14.2 million barrels), an increase of 1.1 million barrels (net 0.7 million barrels) over the estimate at December 31, 2007.

Two successful Antrim operated wells have been drilled in the Fyne Field this year. In April, the well 21/28a-9 in a multi-lateral drilling program in the central Fyne field encountered significant oil columns in each leg and 21/28a-9y was cased as a future production well with measured oil and gas pay thicknesses in the Tay Sandstone of 120 and 47 feet respectively. In July 2008, appraisal drilling of the western lobe of the Fyne Field encountered 32 feet of net oil pay in the Tay Sandstone. Results from this well, combined with results from the previously drilled successful 21/28a-9y well and sidetracks and the 21/28a-2 well, demonstrated reservoir and structural continuity across the field and the significant extent of the oil accumulation. In August, further appraisal of the Fyne Field by well 21/28a-10z, a sidetrack to 21/28a-10, encountered 60 feet of net oil pay in the Tay Sandstone. The well has been successfully completed and tested at rates up to 4,000 bopd. An additional 45 feet of gas pay in the Upper Tay Sandstone remains untested.

In August, Antrim signed a rig contract which provided the Company with a drilling rig in the UK for a 60 day period during 2009 at $425,000 per day. Based on announcements by the prospective rig owner, it appears that this rig is no longer available for contract and Antrim does not anticipate utilizing the rig in 2009.

In Argentina, Antrim has drilled 16 wells in the year to date, resulting in five oil wells, five gas wells, four wells waiting on completion or other work and two wells were plugged and abandoned. Quarterly production in Argentina declined slightly to 1,350 barrels of oil equivalent per day (boepd) from 1,394 boepd in the second quarter, primarily due to reductions in oil volumes. Subsequent to the end of the quarter, production rates have risen to approximately 1,600 boepd with the commissioning in mid-September of the pipeline linking the Company's gas producing fields with the San Martin pipeline across the Straits of Magellan. Although the drilling program has been very successful adding reserves and future production potential, current economic conditions dictate a shift in Antrim's focus in Argentina away from drilling and reserves additions to increasing production through tying in existing wells which should lead to further production increases after July 2009 of up to approximately 3,000 boepd.

As previously reported, Antrim completed a Cdn $53 million equity financing and signed a US $50 million working capital facility with the Bank of Scotland. The working capital facility is available, subject to certain conditions, for pre-development costs associated with the Causeway and Fyne Fields. To date, no amounts have been drawn on the debt facility.

In the first quarter of 2008, Antrim changed its reporting currency from Canadian to US dollars. All comparative financial information has been translated and restated as if the US dollar had been used as the Company's reporting currency.

Three Months Ended Nine Months Ended
Financial and Operating Results September 30, September 30,
(unaudited) 2008 2007 2008 2007
Financial Results (US$000's except
per share amounts)
Revenue 3,338 3,462 9,383 10,691
Cash flow from operations 886 882 1,339 3,398
Cash flow from operations per
share 0.01 0.01 0.01 0.03
Net income (loss) (1,507) (2,260) (5,879) (6,674)
Net income (loss) per share -
basic (0.01) (0.02) (0.05) (0.07)
Working capital 49,671 48,946 49,671 48,946
Expenditures on petroleum and
natural gas properties 32,939 54,851 85,191 80,642
Debt - - - -

Common Shares Outstanding (000's)
End of period 135,054 107,882 135,054 107,882
Weighted average - basic 132,489 107,765 122,629 99,494
Weighted average - fully diluted 132,489 109,967 122,629 101,696

Oil , natural gas and NGL
production (boe per day)(1) 1,358 1,536 1,418 1,542
(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.


United Kingdom - Block 211/22a South East and Block 211/23d ("Causeway")

In July 2008, Antrim completed drilling of the Causeway well 211/23d-18 (Antrim 65.5% and operator) in the UK Northern North Sea. The 211/23d-18 well drilled a significant oil column, including a new oil accumulation in the Etive Formation. The well was drilled directionally, 93 feet structurally below well 211/23d-17z, and penetrated an oil column of 50 feet with 25 feet True Vertical Depth (TVD) net oil pay in the Ness Formation and an oil column of 15 feet with 8 feet TVD net oil pay in the underlying Etive Formation.

Modular Dynamics Testing over the oil bearing sandstones in both formations flowed light oil with no water. The equivalent Ness section in the discovery well tested light oil (32 degrees API) at rates up to 7,000 bopd with no water. The Etive section in 23d-18 represents a new oil accumulation not previously reported from this area of the Causeway structure.

The 211/23d-18 well has been cased and will be retained as a development well to provide pressure support to the 211/23d-17z discovery well, which tested at a combined rate of up to 14,500 bopd.

As previously announced, Antrim signed a Heads of Terms agreement for the provision of platform hosting services on the Dunlin Alpha platform. As well, a contract for a front-end engineering and design (FEED) study was signed. The FEED study will establish detailed scope of work, costs and scheduling for the platform and riser modifications.

There are no additional wells planned before oil is produced under the proposed first phase of the development. Preparation of a Field Development Plan (FDP) continues with its submittal to the Department of Energy and Climate Change (DECC), formerly the Department of Business Enterprise and Regulatory Reform, anticipated for late 2008. Facility construction commitments are planned once approval of the FDP is obtained. A new reprocessing of 3D seismic over Causeway is currently being evaluated which gives much better clarity over the area. Antrim plans to incorporate the results of this evaluation into the FDP.

United Kingdom - Block 21/28a ("Fyne")

In April 2008, Antrim completed drilling operations on the Antrim-operated (net 75%) well 21/28a-9 on the Fyne Field in the UK Central North Sea. The multilateral 21/28a-9 well was drilled as planned with three legs, one pilot hole and two sidetracks into the Eocene Tay Sandstone. All three holes encountered significant oil columns. As originally designed, the final sidetrack 21/28a-9y has been cased to be used as a future production well.

Full analysis of the log and test data from 21/28a-9y indicated 65 feet net oil pay and 30 feet net gas pay. The well was drilled at a 60 degree angle resulting in wellbore measured thicknesses of 120 feet net oil pay and 47 feet net gas pay. The oil and gas pay intervals in Fyne are separate with the gas pay confined to the Upper Tay Formation and the oil pay contained within several sandstones in the Middle and Lower Tay Formations.

In mid July 2008, appraisal drilling was initiated on the western lobe of the Fyne Field. The results from this 21/28a-10 well were similar to the Fyne discovery well 21/28a-2, which tested up to 3,600 bopd from 30 feet of reservoir section.

In August 2008, a near vertical sidetrack to well 21/28a-10 designated 21/28a-10z was drilled to the southeast of this location and encountered 60 feet of net pay in the Eocene Tay Sandstone. The 21/28a-10z well was successfully completed and tested on natural flow, at rates up to 4,000 bopd, with no water. An additional 45 feet of gas pay was drilled in the Upper Tay Sandstone and remains untested. No oil/water contacts or gas/oil contacts were observed in either well. These test results are indicative of the very high reservoir quality Tay Sandstones drilled in this area. Studies have been initiated to allow the preparation and submission of a FDP to DECC by mid 2009.

The Fyne Field is on trend with several other Tay fields in the area, including the Guillemot, Pict and Saxon developments. Oil from the Fyne Field, similar to adjacent fields, is likely to be produced through a Floating Production Storage and Offloading (FPSO) system and Antrim is sourcing a suitable vessel. Fyne is situated approximately 20 kilometres from existing infrastructure which provides production services for several fields in the area.

United Kingdom - Block 211/22a North West ("Kerloch")

In late 2007, Antrim participated in drilling the non-operated Kerloch prospect in Block 211/22a North West. The well, approximately 10 km northwest of Causeway, discovered a net 116 foot thick oil section in the Ness Formation. The Kerloch well was not tested and was retained to allow for potential re-entry and future use. Further technical evaluation of the prospect is underway. Antrim holds a 21% working interest in Block 211/22a North West.

Argentina - Tierra del Fuego, Austral Basin

In September 2007, Antrim announced the start of its planned two-year drilling program in Tierra del Fuego where Antrim has a non-operated 25.78% working interest. Under the current drilling program, Antrim has drilled 20 wells on the concessions, of which nine are producing oil wells. In addition, Antrim cased seven gas wells, of which five have been completed and tested. Two wells are waiting on frac equipment availability, one well was plugged and abandoned, one well had mechanical problems and two wells await completion. Well completions are slightly behind schedule due to necessary general maintenance and inspection on the joint venture owned completion and workover rig. This maintenance work was completed during the second quarter and the rig is now working in the field.

One additional well was drilled on the 2006 discovery Los Patos oil field in the third quarter. Of the eight wells drilled into this pool since September 2007, six oil wells and one gas well have been completed and placed on production. As previously mentioned one well had mechanical problems and may be re-drilled.

The Las Violetas oil pool has had four wells drilled of which two are on production, one well awaits completion, and one well was plugged and abandoned after failing to encounter reservoir quality rock. Six wells have been drilled in the Los Flamencos field resulting in three gas wells, two wells waiting on frac equipment and one well to be completed. One well drilled in the San Luis gas field during the first quarter was completed and placed on production in August. The Angostura Sur x-1001 exploration well, drilled into a structural closure approximately 15 kilometres to the North West of the Las Violetas pool, has now been completed in both the Tobifera and overlying Springhill zones and placed on comingled oil production.

The drilling rig is now drilling the 21st location in the current multi-well program. An additional two firm wells plus one contingent well are scheduled before year-end at which time the rig will be released from contract. Drilling is expected to recommence in the latter part of 2009. In the interim period, Antrim's focus will be to add new locations to the drilling inventory in addition to production tie-ins to the gas sales line. In August 2008, Antrim completed a 3-D seismic program totaling over 137 square kilometres (km2) in the Angostura and Las Violetas concessions.

Commissioning of the pipeline linking the Company's gas producing fields with the San Martin gas sales line across the Straits of Magellan was completed in mid September. This has enabled Antrim to redirect and deliver gas to the continent where higher prices are available. The system is currently delivering 12.25 (net 3.2) million cubic feet per day (mmcf/d). By mid 2009, this delivery rate is expected to increase to 40 mmcf/d (net 10.3) under the terms of new sales contracts which will allow for Antrim's previous gas discoveries to be placed on production.

Net production to Antrim from the Tierra del Fuego licences in the first nine months of 2008 was 1,102 boepd compared to 1,218 boepd for the comparable period in 2007. Net production averaged 1,064 boepd in the third quarter compared to 1,234 boepd during the third quarter of 2007. Gas and natural gas liquids (NGL) production in the first nine months of 2008 declined to 4.44 mmcf/d and 62 barrels per day, respectively compared to 4.96 mmcf/d and 67 barrels per day in the same period in 2007.

For the third quarter, gas production averaged 4.40 mmcf/d and NGL production averaged 44 barrels per day, representing declines of 14% and 41% compared with the third quarter 2007 production of 5.12 mmcf/d and 75 barrels per day, respectively. Declines in gas and NGL production during the nine and three month periods of 2008 over the comparable periods in 2007 were due to a lack of access to mainland markets.

Previously, Antrim had swap contract arrangements with other island producers to sell gas to mainland markets as it had no physical connection with the sales line connecting Tierra del Fuego with the mainland gas transmission grid. These swap arrangements were negated in November 2007 by force majeure following changes in Argentine legislation introduced to overcome gas shortages on the mainland. With the commissioning of the new pipeline system in September 2008, the Company now sells gas directly to the mainland, thus avoiding any reliance on swap arrangements with other gas producers.

Net oil production in the first nine months of 2008 was 300 bopd compared to 324 bopd for the comparable period in 2007, a decline of 7.5%. Third quarter average oil production declined 3% to 287 bopd from 296 bopd for the comparable quarter in 2007. Oil production decreases were due to natural declines experienced by Antrim's wells.

Argentina - Medianera and Tres Nidos Sur, Neuquen Basin

Net production to Antrim from the Medianera licence in the first nine months of 2008 was 56 bopd compared to 31 bopd for the comparable period in 2007. Third quarter production averaged 49 bopd compared with 38 bopd in the third quarter of 2007. Increased production resulted from two shallow oil discoveries drilled on the Medianera licence in the first half of 2007 and placed on production in the fourth quarter of 2007. Antrim has a 70.0% working interest in the Medianera and Tres Nidos Sur licences. Under the terms of the Tres Nidos Sur licence, Antrim must acquire a minimum of 50 km2 of 3D seismic and drill an exploration well by end 2009. Required permitting and environmental studies for the 3D seismic acquisition are underway.

Argentina - North West Basin

On the Capricorn licence, two exploration wells were drilled pursuant to a farm-out agreement. Under this agreement, Antrim retained a 37.5% working interest in the licence by paying 25% of the cost of the two wells. No commercial quantities of oil or gas were found in either well. After further technical review, the joint venture elected to relinquish the remaining portion of the licence.

Net production to Antrim from the Puesto Guardian licence in the first nine months of 2008 averaged 261 bopd compared to 293 bopd for the comparable period in 2007, a decline of 11%. Average production in the third quarter 2008 decreased by 7% to 246 bopd, compared with 264 bopd in 2007. Reduction in production volumes were the result of natural reservoir decline. Antrim has a 40% working interest in the Puesto Guardian licence.


On November 12, 2008, Antrim announced the appointment of Mr. James C. Smith to the Board of Directors. We are pleased to welcome Jim to the Board and look forward to his guidance based on his extensive financial and business experience.

Antrim's 2008 third quarter financial statements and related MD&A are available on Antrim's website at as well as on the SEDAR website at

About Antrim

Antrim Energy Inc. is a Canadian, Calgary based high-growth junior oil and gas exploration and production company with assets in the UK North Sea and Argentina. Antrim is listed on the Toronto Stock Exchange (AEN) and on the London Stock Exchange's Alternative Investment Market (AEY). Visit for more information.

Forward-Looking Statements

This news release contains certain forward-looking statements, which include assumptions with respect to future plans, results and capital expenditures. Cumulative volumes are not necessarily representative of future production volumes. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Antrim's control. Please refer to Antrim's Annual Information Form for the year ended December 31, 2007 and dated March 31, 2008 and available for viewing at, for a list of risk factors. Antrim's actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances 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 that Antrim will derive therefrom. All subsequent forward-looking statements, whether written or oral, attributable to Antrim or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release.

Qualified Person Review

In accordance with AIM guidelines, Mr. Kerry Fulton, P. Eng and Vice President, Operations of Antrim, is the qualified person that has reviewed the technical information contained in this news release.

Click here to view Antrim's Third Quarter Financial Statements:

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