FIRSTLAND Energy Limited
TSX VENTURE : FLD

FIRSTLAND Energy Limited

April 19, 2007 17:51 ET

FIRSTLAND Energy Limited Announces Results for the Year Ended December 31, 2006 and an Operational Summary of Activities

CALGARY, ALBERTA--(CCNMatthews - April 19, 2007) - FIRSTLAND Energy Limited (TSX VENTURE:FLD):

2006 RESULTS

- Petroleum & Natural Gas Rights in Alberta totaled 208,000 net (223,000 gross) acres and 40,000 royalty acres.

- Ten wells were drilled on company lands including eight exploratory tests.

- All of the wells were drilled by industry partners subject to farmout agreements.

- At December 31, 2006, the Company had proved plus probable producing reserves of 493 MMcf equivalent.

- Daily production remained relatively unchanged at 38 BOE per day.

- Net Income totalled $158,000 in 2006, cash flow totaled $279,000 in 2006

- The company was debt free at December 31,2006, with working capital of $1,971,000.

- 12,700,000 shares were outstanding as of December 31, 2006.



CORPORATE HIGHLIGHTS

($ Thousands, except per share amounts) 2006 2005
----------------------------------------------------------------------------
Petroleum and Natural Gas Revenue 606 731
Net Income (Loss) 158 179
Per Share 0.01 0.01
Cash Flow from Operations 279 354
Per Share 0.02 0.03
Net Capital Expenditures (Recovery) 930 (625)
Shareholders' Equity 4,295 4,004
Debt - -
Working Capital 1,971 2,501
Natural Gas Production (mcf/d) 195 204
Oil Production (bbl/d) 6 5
Natural Gas Equivalent (1:6) 231 234
Barrel Oil Equivalent (6:1) 38 39
Natural Gas Selling Price ($/mcf) 6.72 8.26
Oil Price ($/bbl) 62.73 63.78
Operating Expenses ($/boe) (6:1) 8.86 13.05
Proven and Probable Producing Reserves
(mmcf Natural Gas) 391 355
(mbbl Oil) 17 13
(mmcf Natural Gas Equivalent) 493 433
Cash Flow Netback $/boe (6:1) 20.10 25.20
Petroleum & Natural Gas Land Holdings
Gross Acres (Thousands) 223 226
Net Acres (Thousands) 208 215
Royalty Acres (Thousands) 40 26
Common Shares (Millions)
December 31 12.70 12.40
Fully Diluted 13.15 13.05
----------------------------------------------------------------------------


OPERATIONS REVIEW

Ten wells were drilled on company lands at no cost to FIRSTLAND as a result of farm out agreements negotiated with industry partners. This drilling resulted in eight cased potential natural gas wells, one oil well and three dry holes.

Petroleum and natural gas revenue decreased to $606,000 from $731,000 a year earlier as a result of lower commodity prices. Total production decreased to 38 BOED in 2006 from 39 BOED for the previous year. Fourth quarter production increased to 42 BOED in 2006, a 24% increase from the 34 BOED produced in 2005.

Prices received for natural gas in 2006 averaged $6.72 per Mcf, 19% lower than the $8.26 received in 2005. Oil prices received decreased to average $62.73 per barrel in 2006 from $63.78 a year earlier. Operating costs were $8.86 per BOE in 2006, 32% lower than the $13.05 per BOE in the previous year mainly due to higher net royalty production versus working interest production.

Cash flow from operations decreased to $279,000 in 2006 from $354,000 a year earlier mainly as a result of lower commodity prices. On a BOE basis, cash flow from operations fell to $20.10 per BOE from $25.20 per BOE in 2005, again largely due to lower commodity prices.

Net income decreased to $158,000 for 2006 compared to $179,000 in 2005. Depletion, depreciation and amortization remained relatively unchanged at $10.84 per BOE on 2006 compared to $10.46 per BOE a year earlier. Net capital expenditures for 2006 were $929,000 compared to a gain of $625,000 in 2005. The gain in 2005 is a direct result of the sale of undeveloped lands for $1,244,000.

At December 31, 2006, the company had $1,971,000 in working capital, no long term debt and 12,700,000 common shares outstanding.

RESERVE SUMMARY

In 2006, the company total proven plus probable reserves increased by 14% to 493 MMcf equivalent from 433 MMcf equivalent in 2005.



NET PRODUCING RESERVES AFTER ROYALTIES
APPRAISED INTEREST (ESCALATED PRICES)

Crude Oil Natural
& NGLs Gas NPV ($000s) Discounted at
(mbbls) (mmcf) 0% 5% 10% 15%
----------------------------------------------------------------------------
Proved Producing 15 304 2,251 1,965 1,739 1,567
Probable Producing 2 87 667 516 410 332
ARTC 37 32 29 26
----------------------------------------------------------------------------
Grand Total 17 391 2,955 2,513 2,178 1,925



TOTAL RESERVE RECONCILIATION
PROVED PLUS PROBABLE

Natural Gas Natural Gas
Crude Oil & NGLS Equivalent
(mbbls) (mmcf) (mmcf)
----------------------------------------------------------------------------
January 1, 2005 13 355 433
Production (2) (71) (83)
Acquisitions - - -
Dispositions - - -
Additions 7 74 116
Revisions (1) (33) (39)
----------------------------------------------------------------------------
Grand Total 17 391 493


FOURTH QUARTER 2006

During the fourth quarter, a 3,270 meter Precambrian test was drilled on Company land in the Puskwa area of northwest Alberta. The well was drilled by an industry partner subject to a farmout agreement that involved 12 sections (7,680 acres). By drilling, completing, testing and equipping or abandoning the well the partner would earn a 65% interest in four sections (2,560 acres) and have a continuing option to drill additional wells to earn in the balance of the lands under the same earning terms. The well is currently standing cased.

During the fourth quarter of 2006, FIRSTLAND purchased 13,920 net acres of Petroleum and Natural Gas Rights in Alberta for $188,000.

OUTLOOK

During the first quarter of 2007, fourteen wells commenced drilling on Company land. Twelve of the wells were drilled at Mearon several of which are expected to be tied in during the second quarter of 2007. The wells were drilled on a fifteen section (9,600 acre) block of royalty land following up on a successful two well drilling program in the first quarter of 2006.

In the first three months of 2007, FIRSTLAND purchased 11,377 net acres of Petroleum and Natural Gas Rights in Alberta for $222,000.



BALANCE SHEET

December 31, 2006 2005
----------------------------------------------------------------------------
ASSETS
CURRENT
Cash and short-term investments $ 1,830,384 $ 2,392,624
Accounts receivable 209,886 196,058
------------- -------------
2,040,270 2,588,682

PROPERTY AND EQUIPMENT 2,925,862 2,174,477
------------- -------------
$ 4,966,132 $ 4,763,159
------------- -------------
------------- -------------
LIABILITIES
CURRENT
Accounts payable and
accrued liabilities $ 69,383 $ 87,009

ASSET RETIREMENT OBLIGATION 63,896 91,760
FUTURE TAX LIABILITY 538,000 586,000
------------- -------------
671,279 764,769
------------- -------------
SHAREHOLDERS' EQUITY
SHARE CAPITAL 3,136,920 3,016,920
CONTRIBUTED SURPLUS 18,000 -
RETAINED EARNINGS 1,139,933 981,470
------------- -------------
4,294,853 3,998,390
------------- -------------
$ 4,966,132 $ 4,763,159
------------- -------------
------------- -------------


On behalf of the board:

A. David van der Lee Adam O. Wells
Director Director



STATEMENT OF INCOME AND RETAINED EARNINGS

Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
(unaudited) (unaudited) (audited) (audited)
----------------------------------------------------------------------------
INCOME
Royalty income $ 124,112 $ 90,407 $ 283,990 $ 251,357
Production 67,217 170,838 321,861 479,831
Interest 19,252 18,200 86,458 47,305
------------ ------------ ----------- -----------
210,581 279,445 692,309 778,493
------------ ------------ ----------- -----------

EXPENSES
Accretion (1,325) 1,697 4,180 6,797
Depletion, depreciation
and amortization 10,660 39,417 146,134 142,131
General and
administrative 36,700 27,790 131,952 105,568
Stock based
compensation 3,760 - 18,000 -
Management fees 12,000 24,000 148,000 96,000
Operating 12,757 68,684 115,771 185,858
Transportation 920 1,509 4,280 6,635
Crown Royalties
(net of ARTC) 3,218 14,808 13,529 30,684
------------ ------------ ----------- -----------
78,690 177,905 581,846 573,673
------------ ------------ ----------- -----------

INCOME BEFORE
INCOME TAXES 131,891 101,540 110,463 204,820

FUTURE INCOME TAXES 19,000 56,000 (48,000) 26,000
------------ ------------ ----------- -----------

NET INCOME 112,891 45,540 158,463 178,820

RETAINED EARNINGS,
beginning of period 1,027,042 935,930 981,470 802,650
------------ ------------ ----------- -----------

RETAINED EARNINGS,
end of period $ 1,139,933 $ 981,470 $ 1,139,933 $ 981,470
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------

BASIC AND FULLY
DILUTED INCOME
PER SHARE $ 0.01 $ 0.00 $ 0.01 $ 0.01
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------

Weighted Average
Common Shares
Outstanding
- Basic 12,700,000 12,400,000 12,616,164 12,400,000
- Diluted 12,879,933 12,586,000 12,840,643 12,500,000



STATEMENT OF CASH FLOW

Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
(unaudited) (unaudited) (audited) (audited)
----------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss)
for the period $ 112,891 $ 45,540 $ 158,463 $ 178,820
Items not
involving cash
Depletion,
amortization
and accretion 9,335 41,114 150,314 148,928
Future taxes 19,000 56,000 (48,000) 26,000
Stock option
benefit expense 3,760 - 18,000 -
------------ ------------ ----------- -----------

FUNDS FROM OPERATIONS 144,986 142,654 278,777 353,748

Net change in
non-cash working
capital (122,738) 447,244 (31,453) (122,406)
------------ ------------ ----------- -----------
Cash provided by
operating activities 22,248 589,898 247,324 231,342
------------ ------------ ----------- -----------

INVESTING ACTIVITIES
Acquisition and
development of
petroleum and
natural gas
properties (236,739) (119,016) (1,019,652) (618,227)
Proceeds on
disposition of
petroleum and
natural gas
properties 50,000 250,000 99,490 1,243,950
Settlement of asset
retirement obligation (9,402) - (9,402) -
------------ ------------ ----------- -----------
(196,141) 130,984 (929,564) 625,723
------------ ------------ ----------- -----------

FINANCING ACTIVITIES
Issuance of common
shares - - 120,000 -
------------ ------------ ----------- -----------

INCREASE (DECREASE)
IN CASH (173,893) 720,882 (562,240) 857,065

CASH POSITION,
beginning of
period 2,004,277 1,671,742 2,392,624 1,535,559
------------ ------------ ----------- -----------

CASH POSITION, end
of period $ 1,830,384 $ 2,392,624 $ 1,830,384 $ 2,392,624
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------


Cash consists of cash and short-term investments.

Contact Information

  • FIRSTLAND Energy Limited
    David van der Lee
    President and Chief Executive Officer
    (403) 264-9223
    (403) 264-9085 (FAX)
    Email: corp@firstlandenergy.com