Canoro Resources Ltd.
TSX VENTURE : CNS

Canoro Resources Ltd.

June 27, 2008 03:11 ET

Canoro Has Strong Reserves, Revenue and Production Growth

CALGARY, ALBERTA--(Marketwire - June 27, 2008) - Canoro Resources Ltd. (TSX VENTURE:CNS) has released its fourth quarter and year-end financial and operating results, recording a 507% increase in proved reserves and a 387% increase in proved plus probable net present value (NPV), discounted at 10% (before taxes), to US$170.1 million.

Reserves

With the successful additions of Amguri 10B and 11, we were able to substantially increase the overall reserves picture of the Company, both in terms volumes and value. Full reserves information for the year ended March 31, 2008 is available in our Annual Information Form, which can be found on our website at www.canoro.com or www.sedar.com.

- Total proved reserves increased by 507% to 2.77 million barrels of oil equivalent (boe);

- Total proved plus probable reserves increased by 129% to 9.85 million boe;

- Total proved plus probable plus possible reserves increased by 112% to 16.42 million boe;

- Total proved plus probable NPV (discounted at 10%, before taxes) increased 387% to US$170.1 million;

- Proved-plus-probable reserve additions replaced 815% of 2007 production;

- Total proved plus probable finding and development (F&D) costs, including expenditures incurred on exploration blocks and changes in future development costs, were US$6.11 per boe in 2008.



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Under Forecast Prices and Costs (1)
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Light Oil and Natural Gas Liquids (mbbl)
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Proved Probable Proved plus Possible (2)
Probable

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As at April 1, 2007 126 95 220 363
Extensions 549 787 1,336 1,105
Technical Revisions - - - 88
Discoveries 285 150 434 348
Economic factors - - - -

Production (46) - (46) -
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As at March 31, 2008 913 1,031 1,944 1,904
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Under Forecast Prices and Costs (1)
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Gas (mmcf)
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Proved Probable Proved plus Possible (2)
Probable

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As at April 1, 2007 1,988 22,495 24,483 18,449
Extensions 6,408 12,584 18,993 8,299
Technical Revisions - - - -
Discoveries 3,180 1,645 4,825 2,188
Economic factors - (429) (429) (1,214)

Production (412) - (412) -
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As at March 31, 2008 11,156 36,294 47,451 27,722
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Notes:
(1) The forecast price assumptions table is based on the price forecast of
independent reservoir engineering consultants and escalating over the
life of the reserves.
(2) "Possible Reserves" are defined as those additional reserves that are
less certain to be recovered than probable reserves. It is unlikely that
the actual remaining quantities recovered will exceed the sum of the
estimated proved plus probable plus possible reserves.



Net Present Value (3) Of Estimated Future Net Revenue
Under Forecast Price Assumptions (1) As at March 31, 2008
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Before Income Taxes
Discounted at (percent per year)
Reserves Category ---------------------------------------------
(Thousands of US dollars) 0% 5% 10% 15% 20%
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Proved Developed Producing 40,761 37,040 33,960 31,377 29,186
Proved Developed Non-Producing 2534 2362 2213 2082 1967
Proved Undeveloped 42,846 37,729 33459 29856 26785
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Total Proved 86,142 77,131 69,631 63,315 57,939
Probable 180,245 131,834 100,502 79,022 63,640
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Total Proved plus Probable 266,387 208,965 170,133 142,337 121,579
Possible (2) 203,183 150,915 116,218 92,256 75,121
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Total Proved plus Probable
plus Possible 469,570 359,880 286,351 234,593 196,700
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Notes:
(1) The forecast price assumptions table is based on the price forecast of
independent reservoir engineering consultants and escalating over the
life of the reserves.
(2) "Possible Reserves" are defined as those additional reserves that are
less certain to be recovered than probable reserves. It is unlikely that
the actual remaining quantities recovered will exceed the sum of the
estimated proved plus probable plus possible reserves.
(3) Present worth values are expressed after giving effect to estimated
operating expenses and capital expenditures but before overhead and
general administrative expenses, and for escalating price assumptions
case, the operating expenses and capital expenditures have been
escalated.
(4) The above net present values do not include any payment for revenue
entitlement. Please see note 6 of our Annual Financial Statements for
further details.


Net Asset Value:

The net asset value of the Company at March 31, 2008 has been calculated as
follows:

March 31,
(thousands of US dollars, except per share amounts) 2008
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Value of proved plus probable reserves discounted at 10% 170,133
Working capital 35,545
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Net asset value 205,678
Net asset value per basic share $ 1.82

Value of proved plus probable plus possible reserves discounted
at 10% 286,351
Working capital 35,545
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Net asset value 321,896
Net asset value per basic share $ 2.85
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Notes:
(1) The above net present values do not include any payment for revenue
entitlement. Please see note 6 of our Annual Financial Statements for
further details.


Financial results

The table below, "Financial and Operating Results," provides a summary of the Company's financial and operating results for the three- and 12-month periods ended March 31, 2008, and March 31, 2007. For the period ended March 31, 2008, Canoro has begun reporting all financial in US dollars and has translated and restated the March 31, 2007 numbers, which were previously reported in Canadian dollars, to reflect the change in reporting currency. Consolidated financial statements with management's discussion and analysis (MD&A) are now available on the company's website (www.canoro.com) and will also be available on the SEDAR website (www.sedar.com).



FINANCIAL AND OPERATING RESULTS
(In thousands of US dollars, except per share and other amounts)

Three months ended Twelve months ended
March 31 March 31

(US$ thousands except per
unit amounts) 2008 2007 (1) 2008 2007 (1)
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Natural gas (mcf/d) 1,462 766 1,153 775
Crude oil (bbl/d) 146 70 106 82
Total (boe/d) 390 197 298 211
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Realized gas price ($/mcf) 2.45 2.08 2.45 1.84
Realized oil price ($/bbl) 104.47 57.13 97.32 50.41
Nigerian Bonny Light
($/bbl) 99.20 60.21 84.59 66.22

Realized price per boe 48.36 28.28 44.13 26.35
Royalties per boe 5.16 (1.02) 3.33 1.29
Operating costs per boe 6.70 14.95 6.93 10.00
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Netback per boe 36.50 14.35 33.88 15.06

Capital expenditures 5,445 7,394 13,708 14,092
Total Assets 90,364 59,005 90,364 59,005
Working Capital 35,545 17,757 35,545 17,757
Basic shares outstanding 112,992,273 93,472,439 112,992,273 93,472,439
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(1) Amounts in the periods ending on or before March 31, 2008, have been
translated and restated in United States dollars from the previously
reported Canadian dollar amounts.


Outlook for Fiscal 2009

Looking forward to the next fiscal year, we are expecting production to average approximately 1,200 to 1,300 boe/d net to Canoro with an exit rate of 1,550 boe/d. We have an aggressive drilling program planned for all three of our blocks, with appraisal and development drilling at Amguri, appraisal and exploration drilling at AA-ON/7 and exploration drilling at AA-ONN-2003/2.

For fiscal 2009, we have a budgeted capital program of approximately US$55 - 60 million. This capital program is split between nine more wells and facility upgrades at Amguri, at least three exploration wells on AA-ON/7 and starting drilling of the seven exploration wells on AA-ONN-2003/2. The facilities work for Amguri will proceed in two stages, the first stage to focus on compression for re-cycling most of the natural gas back into the gas / condensate reservoir and the second phase focusing on the gas plant to remove additional liquids from the gas stream prior to re-cycling back to the reservoir.

Appointment of Officers

Following our year-end board meeting, the officers of the company are:

- Les Kondratoff, President and Chief Executive Officer

- S. Brian Gieni, Vice President - Finance and Chief Financial Officer

- Doug Uffen, Vice President - Geoscience

- John Kroshus, Vice President - Engineering and Operations

Canoro is a Canadian-based international oil and gas company operating in the Assam/Arakan basin of northeast India. Canoro is the operator of Amguri field with a 60% working interest. Canoro is the operator with a 65% working interest in the AA-ON/7 exploration block. Canoro also has a 15% non-operated working interest in the AA-ONN 2003/2 exploration block.

Annual General and Special Meeting

Shareholders of Canoro are invited to attend the Annual General and Special Meeting of the shareholders of the Corporation to be held in the Bennett Room of the Ranchmen's Club, 710, 13th Ave SW, Calgary, Alberta, Canada, on Wednesday, September 3, 2008, at 2:30 pm, Calgary time.

Common shares of Canoro trade on the TSX Venture Exchange under the symbol 'CNS'.

This news release contains certain forward-looking statements, including management's assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond Canoro's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Canoro's actual results, performance or achievements 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, including the amount of proceeds, that Canoro will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Canoro 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 and Canoro does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Boe 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.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this News Release.

Contact Information

  • Canoro Resources Ltd.
    S. Brian Gieni
    Vice President, Finance & CFO
    (403) 543-5742
    (403) 543-5740 (FAX)
    or
    Canoro Resources Ltd.
    Les Kondratoff
    President & CEO
    (403) 543-5741
    (403) 543-5740 (FAX)
    or
    Canoro Resources Ltd.
    700, 717 - 7th Ave SW
    Calgary, Alberta T2P 0Z3
    Website: www.canoro.com