Blackdog Resources Ltd.
TSX VENTURE : DOG

Blackdog Resources Ltd.

May 04, 2011 08:00 ET

Blackdog Resources Ltd. Announces Year Over Year Revenue Increase of 204%

CALGARY, ALBERTA--(Marketwire - May 4, 2011) - Blackdog Resources Ltd. ("Blackdog" or "The Company") (TSX VENTURE:DOG) is pleased to provide a summary of its operations further to the recently announced 2010 financial results.

2010 was a very busy year for Blackdog as the Company began to see significant returns from its decision in 2008 to focus only on light oil opportunities and totally discontinue spending any capital, resources or time on natural gas opportunities.

Selected highlights for the year are as follows:

  • Production Revenue increased to $2,754,659 (2009-$906,551). This represents a year over year increase of 204%.
  • Daily average production increased to 106 barrels of oil equivalent per day ("boepd") (99% light oil) (2009- 43 boepd). This represents a year over year increase of 146%.
  • Exited the year producing in excess of 170 boepd (99% light oil).
  • Funds Flow From Operations increased to $279,021 (2009-$115,875). This represents a year over year increase of 141%.
  • Net Present Value of Proved Reserves at December 31, 2010, discounted at 10% (based on NI 51-101 Trimble Engineering Report ("Trimble Report")) increased by 18%
  • Signed an agreement to acquire Drilling Royalty Credits with no capital risk to the Company- Expected to generate a royalty refund to Company in excess of $150,000 for period from April 1, 2010-December 31, 2010. These amounts are not reflected in 2010 annual financial statements.
  • Increased producing wells at Woking from 2 (net 1.48) to 4 (net 3.38) plus commenced testing disposal of water into Enhanced Oil Recovery/Salt Water Disposal well during Q1, 2010. After successful testing, during Q2, 2010 installed a pump capable of disposing 3,000-4,000 barrels of water per day into EOR/SWD. Also tested 2(net 1.73) other wells for potential production post breakup in 2011.
  • Purchased 3 light oil wells at Girouxville, Alberta with average monthly production between 75-93 barrels of light oil per day ("bopd") for $710,000 cash and 100,000 common shares at a deemed value of $0.30 per share in July, 2010 retroactive to June 1, 2010. For month of June, 2010, wells produced 2,403 barrels for gross revenue of $170,000 and generated free cash flow of $34,900, which is not reflected in 2010 annual financial statements. Purchase price was readjusted to $675,100 plus 100,000 common shares or approximately $8,500 per flowing barrel.
  • Increased credit facility from $800,000 to $2,000,000 and lowered lending rate to prime plus 2% from prime plus 2.5%
  • Technically reviewed all Pembina Cardium lands and Evi Slave Point and Granite Wash land for prospective 2011 drilling (first Cardium well drilled in Q1, 2011). No value was assigned to these prospective drilling locations in the Trimble Report.
  • In December, 2010 closed an oversubscribed flow-through share financing of 3,305,631 common shares for gross proceeds of $1,190,027. Two major funds were among the participants in the financing. The Company placed a significant amount of this financing without paying any commission or finder's fees.
  • Exited the 2010 year with 875 barrels of light oil in onsite tank inventory at Girouxville not reflected in 2010 Financial Statements.

Overall Blackdog is very pleased with the progress it made in 2010 as the Company is now perfectly positioned to fully capitalize on the recent sharp increases in the price of oil. In February, 2011, the Company participated in its first non-operated Cardium horizontal light oil well in Pembina, Alberta. The results to date have been very encouraging with the well producing from flow and swab testing over 1,000 boepd in 70 hours. The well was then placed on production on March 10, 2011. During the first week of production the well produced an average of 250 boepd and for the first 30 days of production, the well averaged approximately 200 boepd. The well has now been running for over 50 days trouble free and the operator has indicated an interest in both drilling additional wells on our shared section of land and also intends to apply for down spacing to increase the density from 4 wells per section to 8 wells per section. Blackdog has a 15% working interest ("W.I.") in the well and the section of land. The Company has also been advised that the former operator of two other sections of Blackdog's Cardium lands has recently sold its interest to a new public company which has recently announced intentions to drill multiple Cardium wells on this land in 2011. The Company has yet to be advised when such drilling might occur but is looking forward to participating especially given that Blackdog owns a 15% W.I. in a lengthy pipeline and gas gathering system on that part of the Company's Cardium lands. Blackdog will have a 15% W.I. on any prospective wells drilled on these sections and will impose a toll on any third party gas which runs through its pipeline. In total, the Company has an approximate 15% W.I. in over 5 sections of prospective Cardium horizontal drilling land in Pembina.

Blackdog Resources Ltd. is a junior oil and gas Company focused on the development of light oil with producing assets in South East Saskatchewan and Alberta. The Company has 24,574,318 common shares Outstanding.

Certain information regarding Blackdog in this news release, including management's assessment of future plans and operations, may constitute forward looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, production, marketing and transportation, loss of markets, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, unexpected decline rates in wells, wells not performing as expected, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Blackdog's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements or information contained in this news release are made as of the date hereof and Blackdog does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this release.

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