Brownstone Ventures Inc.

Brownstone Ventures Inc.

February 26, 2009 15:43 ET

Brownstone Ventures Inc. Releases Unaudited Results for the Three and Six Months Ended December 31, 2008

TORONTO, ONTARIO--(Marketwire - Feb. 26, 2009) - Brownstone Ventures Inc. (TSX VENTURE:BWN) today announced its unaudited results for the three and six months ended December 31, 2008.

As at December 31, 2008, the Company had cash and cash equivalents of $4.8 million as compared to $10.8 million as at June 30, 2008. Investments at fair value totaled $12.9 million at December 31, 2008 as compared to $57.4 million at June 30, 2008. Also at December 31, 2008, oil & gas properties and related expenditures totaled $37.2 million as compared to $30.6 million as at June 30, 2008.

Financial Highlights for the three and six months ending December 31, 2008 with comparatives:

Operating Results Three months ended Six months ended
(unaudited) December 31, December 31,
2008 2007 2008 2007
Realized gains on
disposal of investments,
net $ 12,334 $ 1,263,941 $ 1,457,071 $ 1,263,941
Unrealized losses on
investments, net (12,370,393) (1,250,572) (45,485,332) (279,172)
Net investment gains
(losses) (12,358,059) 13,369 (44,028,261) 984,769

Total expenses 1,666,754 1,036,310 2,399,002 2,091,644

Gain from bargain
purchase 3,948,274 - 3,948,274 -

Net income (loss) for
the period (8,102,590) (626,016) (35,148,756) 402,875
Basic earnings (loss) per
common share (0.16) (0.01) (0.69) 0.01
Diluted earnings (loss)
per common share (0.16) (0.01) (0.69) 0.01


Balance Sheet Highlights --------------------------------
(Unaudited) December 31, 2008 June 30, 2008
Cash and cash equivalents $ 4,778,421 $ 10,809,467
Investments, at fair value 12,912,617 57,387,545
Oil & gas properties and related
expenditures 37,235,116 30,612,602
Total assets 64,905,610 104,414,508
Total liabilities 243,078 5,951,833
Share capital, warrants and
contributed surplus 61,937,292 60,588,679
Retained earnings 2,725,240 37,873,996
Working Capital 22,350,060 69,977,654

The Company has spent cash of approximately $3.9 million on oil & gas properties and related expenditures during the six months ended December 31, 2008. The Company also acquired interests in oil & gas properties of approximately $4.6 million through the issuance of shares and the bargain purchase of a 100% owned subsidiary. As at December 31, 2008, oil & gas properties and related expenditures totaled $37,235,116 as compared to $30,612,602 at June 30, 2008.

Project Update

Brownstone is currently participating in several oil and gas exploration projects based in the United States (Colorado/Utah and Oregon), Argentina, Brazil and India. Key activities include:


The Company has been informed by the operator, Geopetrol International Inc., that the 100km2 3d seismic acquisition has been completed and drilling plans are well underway on the AA-ONN-2003/2 exploration block in the Assam/Arakan basin of northeast India. The Company anticipates that the operator will spud the first of its multi-well program in the first half of 2009. Brownstone has a 15% participating interest in this block.


The Company is currently awaiting drilling plans for its various joint ventures with Fidelity Exploration & Production Company, Laramie Energy II LLC, Retamco Operating Inc. and Dejour Enterprises Ltd, and anticipates multiple drilling programs to commence on its acreage in the latter half of 2009. In addition, together with Dejour Enterprises Ltd., the Company continues to evaluate new opportunities and prospects for exploiting its Piceance, Uinta and Paradox Basin holdings. Brownstone's interests vary from a minimum of 10% to a maximum of 28.57% in approximately 300,000 gross acres.


The first year of the Company's farm-in agreement with its partner and operator, Petrolifera Petroleum Limited, was recently completed. During the year, the operator drilled four wells on the Vaca Mahuida block, and despite oil showings in several of the wells, well activities have either been abandoned or suspended pending full interpretation of the 1,150km2 3d seismic which was shot in 2008. The Company awaits further development and capital expenditure recommendations from the operator with further drilling likely in late 2009 or early 2010. Brownstone is earning a 25% interest in the 253,000 acre Vaca Mahuida block.


The Company was advised by the operator, W. Washington Empreendimentos E. Participacoes Ltda. ("W.Washington") that the multi-drill program on Blocks 24, 31, 39, 52, 102 and 113, all in the Reconcovo Basin, Brazil, had concluded with no material success. In total, the Company and its partners have abandoned blocks, 204, 219, 234, Test Well 235, 94, 105, 115 and 116. The Company continues to await the outcome of the Brazilian national petroleum agency's (the Agencia Nacional de Petroleo) Round 8 injunction affecting the Company's interests in blocks 131, 132, 161, 172 and 177 in the Tucano Basin. In addition, the Company and its partners have returned the Sergipe blocks in which the Company had a 20% interest (blocks 413 and 428) with no cost to Brownstone. Brownstone's interests range from 10% to 25% in multiple onshore Brazilian oil and gas blocks primarily in the Reconcovo Basin.

Quebec Lowlands

The Company is currently reviewing government data on the Company's project in the Quebec Lowlands. Together with its 50% joint venture partner, X-Terra Resources Corp., the Company intends to finalize a work program for 2009 following recent positive developments by other companies active in the St. Laurent Shale gas area.

About Brownstone

Brownstone Ventures Inc. is a well-financed Canadian-based, energy focused investment company with equity interests and direct interests in oil and gas exploration projects, including working interests in almost 300,000 acres in the Piceance/Uinta Basins of Colorado and Utah, 295km2 in the Assam/Arakan Basin, Northeast India, 253,000 acres in Rio Negro, Argentina and interests in several projects in Brazil. For additional information, please see Brownstone's website:

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

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