Antrim Energy Inc.

Antrim Energy Inc.

March 31, 2006 18:18 ET

Antrim Energy Inc. Reports 2005 Results

CALGARY, ALBERTA AND LONDON, UK--(CCNMatthews - March 31, 2006) -

Antrim Energy Inc. (TSX:AEN) (AIM:AEY) ("Antrim") is pleased to report its financial and operational results for the year ended December 31, 2005.

Oil and gas revenue and cash flow from operations increased significantly in 2005 as a result of the acquisition of concessions in Tierra del Fuego, Argentina in February 2005 and higher oil and gas prices. These results, which do not reflect drilling success in Tierra del Fuego towards the end of 2005 and into 2006, underscore Antrim's strategy of combining production growth and high impact exploration. While Antrim participated in late 2005 in three potentially high impact but ultimately unsuccessful wells in the UK North Sea, the Company exits 2005 with record revenue, cash flow from operations and working capital.

Antrim's reserve base at December 31, 2005 has also increased significantly and does not reflect early 2006 activity. More information about Antrim's properties and year end reserve evaluation is included in Antrim's Annual Information Form ("AIF") dated March 31, 2006 which has been filed on the System for Electronic Document Analysis and Retrieval ("SEDAR") and may be found at Antrim's 2005 audited consolidated financial statements and related Management Discussion & Analysis are also available on SEDAR.


2005 2004 2003
Financial Results
($000's except per share amounts)

Oil and gas revenue $ 10,807 $ 6,900 $ 5,142
Cash flow from operations 2,530 400 (211)
Cash flow from operations per share 0.06 0.01 (0.01)
Net earnings (loss) (3,190) (5,586) (2,987)
Net earnings (loss) per share (0.07) (0.16) (0.15)
Total assets 60,227 35,124 25,988
Working capital 29,969 20,325 15,344
Capital expenditures 17,976 6,362 4,436
Debt $ - $ - $ -

Common shares outstanding (000's)
End of year 54,886 39,487 31,302
Weighted average - basic 43,824 33,966 20,505
Weighted average - fully diluted 44,669 34,644 21,521

Production (note 1)
Oil and natural gas production
(BOE per day) 931 491 405

Note 1. A BOE conversion ratio of 6 Mcf = 1 bbl has been used. BOEs may
be misleading, particularly if used in isolation. A 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 and Gas Revenue

Oil and gas revenue increased to $10,806,784 in 2005 compared to $6,899,965 in 2004. 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 oil production in the year was 522 barrels of oil per day compared to 468 barrels in 2004.

Oil prices averaged $47.97 per barrel compared to $38.66 per barrel in 2004. Oil production from both the Puesto Guardian and Tierra del Fuego concessions is sold with reference to the price of West Texas Intermediate ("WTI") crude oil less a quality discount of approximately US$3.50 and US$4.85 per barrel, respectively. With respect to Puesto Guardian oil production, a mandated discount on domestic oil sales increases as the price of WTI crude oil increases. The discount on domestic oil sales is approximately 20% when the price of WTI crude oil is equal to US$36.00 per barrel increasing to a high of approximately 33% when the price of WTI crude oil is equal to or greater than US$55.00 per barrel. This discount does not apply to oil production from Tierra del Fuego and no duties are charged on oil exported from the Tierra del Fuego concessions.

Average gas production in 2005 increased significantly to 2,210 mcf per day compared to 139 mcf per day in 2004. Gas prices in 2005 averaged $0.96 and $6.81 per mcf in Argentina and Czech Republic, respectively. Gas production from the Tierra del Fuego concession is sold to domestic residential and industrial consumers under fixed price contracts. There are no specific volume delivery commitments under the contracts. As expected, the price of gas sold to industrial consumers increased in 2005 from approximately US$0.64/Mcf in the first quarter of 2005 to over US$1.00/Mcf in the second half of 2005. The price of gas sold to industrial consumers is expected to increase further in 2006 from its present price of approximately US$1.12/Mcf to over US$1.44/Mcf in the second half of 2006. The price of gas sold to residential consumers is not anticipated to increase in 2005 above the current price of US$0.36/Mcf. In 2005 Antrim increased its sales mix towards industrial buyers and approximately 80% of gas production from the concessions is currently sold to industrial buyers.

Antrim had no NGL (propane and butane) production prior to the Tierra del Fuego acquisition. Average NGL production following the acquisition was 46 barrels per day. NGL prices averaged $39.58 per barrel in 2005. NGL production from the Tierra del Fuego concession is both exported and sold domestically. No duties are charged on NGL exported from the concessions. The average price received for export and domestic NGL sales is calculated each month based on the posted Mont Belvieu, Texas butane and propane price less a market discount of approximately US$6.55 and US$3.85 per barrel, respectively.


A change in Antrim's production mix from primarily oil to oil, natural gas and NGL and an increase in operating costs resulted in Antrim realizing a lower per unit netback of $18.41/BOE in 2005 compared to a per unit netback of $25.85/BOE in 2004. The table below provides a comparative analysis of field netbacks for 2005 and 2004.

2005 2004

Wellhead price ($/BOE) 31.79 38.50
Royalties ($/BOE) (4.09) (5.42)
Operating expenses ($/BOE) (9.29) (7.22)
Netback ($/BOE) 18.41 25.85
Oil, natural gas and NGL production (BOE) 339,930 179,213

Operating expenses increased as a result of increased costs associated with maintaining the Puesto Guardian field and a stronger economy in Argentina. Separate netbacks for each product type by country are set out in Antrim's AIF.

Cash Flow and Net Income

Antrim generated cash flow from operations in 2005 of $2,529,719 ($0.06 per share) compared to cash flow from operations of $399,852 ($0.01 per share) in 2004. Cash flow increased due to increased oil and gas production and higher commodity prices.

The Company recorded a net loss in 2005 of $3,189,569 ($0.07 per share) compared to a net loss of $5,586,139 ($0.16 per share) in 2004. Net loss decreased due to higher revenues on increased oil and gas production and related prices. In 2005, the Company recorded a write-down of $648,472 with respect to costs in Australia associated with permit WA-307-P relinquished during the year and residual costs related to drilling on permit WA-306-P in 2004. The Company also wrote-off in 2005 costs of $2,677,792 associated with drilling the Clachnaben prospect in the United Kingdom in November 2005.

Capital Expenditures

Petroleum and natural gas expenditures in 2005 were $17,975,947 compared to $6,361,713 in 2004. Capital expenditures in 2005 were largely focused on acquisition and development activities in Argentina and exploration activities in the United Kingdom.


At December 31 2005, Antrim had working capital of $29,969,247 (December 31, 2004 - $20,324,848) including cash of $33,209,478 (December 31, 2004 - $21,477,705) and no debt. Working capital increased following completion of an $11 million private placement and $15 million public offering in September 2005, partially offset by the acquisition of the Tierra del Fuego concessions in February 2005, the acquisition of additional working interests in the UK North Sea and participation in drilling several of the Company's UK North Sea prospects.

In 2006, Antrim intends to continue to develop its producing assets in Argentina, further evaluate its exploration acreage in Argentina and United Kingdom, and participate in new exploration and development opportunities.

In Argentina, facility expansion plans are being developed to bring to production later in the year recent drilling successes on the Tierra del Fuego concessions. In February, 2006, Antrim acquired a 70% working interest in the Medianera Block for cash consideration of approximately US$1.2 million after closing adjustments. The Medianera Block was discovered in 1961 and is located in central Argentina in the Neuquen Basin, Argentina's most prolific oil and gas basin. A comprehensive 3D seismic program over the block is planned for June, 2006 and further opportunities to participate in exploration and development in the region will be explored. In the United Kingdom, Antrim intends to continue to provide shareholders participation in high impact drilling with an exploration well in the UK North Sea, the "Causeway Prospect", in the second quarter of 2006, subject to receipt of all necessary approvals.

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

Updated information about Antrim can be accessed on its website:

Consolidated Balance Sheets
As at December 31, 2005 and 2004

2005 2004
$ $

Current assets
Cash and short-term deposits 33,209,478 21,477,705
Accounts receivable 2,208,801 3,489,087
Inventory 354,121 199,445
Other current assets 1,209,615 -

36,982,015 25,166,237

Petroleum and natural gas properties 22,950,936 9,791,904

Office equipment 103,547 165,767
Future income taxes 14,537 -
Other non-current assets 175,986 -

60,227,021 35,123,908


Current liabilities
Accounts payable and accrued liabilities 6,981,538 4,163,522
Income taxes payable 31,230 677,867
7,012,768 4,841,389

Future income taxes 30,508 33,838

Asset retirement obligation 554,603 284,882

7,597,879 5,160,109

Shareholders' Equity

Capital stock 70,046,407 45,131,393
Contributed surplus 2,117,355 1,177,457
Deficit (19,534,620) (16,345,051)

52,629,142 29,963,799

60,227,021 35,123,908

Consolidated Statements of Operations and Deficit
For the Years Ended December 31, 2005, 2004 and 2003

2005 2004 2003
$ $ $

Oil and gas 10,806,784 6,899,965 5,141,596
Royalties (1,390,941) (972,063) (685,127)

9,415,843 5,927,902 4,456,469

Interest and other income 609,222 326,083 186,673

10,025,065 6,253,985 4,643,142

Operating 3,156,966 1,294,605 1,574,885
General and administrative 3,011,410 2,671,769 2,098,486
Stock-based compensation 523,418 374,608 121,110
Depletion and depreciation 1,826,451 1,402,458 988,209
Accretion of asset retirement
obligations 61,022 33,767 40,993
Foreign exchange loss 459,456 636,295 228,739
Write-off of impaired assets 3,326,264 4,207,763 2,399,575

12,364,987 10,621,265 7,451,997

Loss before below noted
dispositions and income taxes (2,339,922) (4,367,280) (2,808,855)
Gain on disposition of petroleum
and natural gas properties - - 63,614

Loss for the year before income
taxes (2,339,922) (4,367,280) (2,745,241)

Income taxes (recovery)
Current 867,514 1,251,464 951,922
Future (17,867) (32,605) (710,515)

849,647 1,218,859 241,407

Net loss for the year (3,189,569) (5,586,139) (2,986,648)

Deficit - Beginning of year (16,345,051) (10,758,912) (7,772,264)
Deficit - End of year (19,534,620) (16,345,051) (10,758,912)

Net loss per common share:
Basic (0.07) (0.16) (0.15)
Diluted (0.07) (0.16) (0.15)

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