Iona Energy Inc.
TSX VENTURE : INA

Iona Energy Inc.

May 30, 2013 21:25 ET

Iona Energy Inc. Announces 2013 First Quarter Results

CALGARY, ALBERTA--(Marketwired - May 30, 2013) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN UNITED STATES

Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA) announces its financial results for the three months ended March 31, 2013.

HIGHLIGHTS FOR THE PERIOD ENDED MARCH 31, 2013

Financial

  • Closed a CAD$23 million equity financing of common shares in February 2013.
  • Closed Senior Secured Borrowing Base Facility for up to USD$250 million of which USD$150 million is currently available with the Bank of America Merrill Lynch, Lloyds TSB Bank plc and BNP Paribas.
  • Total assets as at March 31, 2013 of CAD$513.0 million (March 31, 2012 - CAD$76.0 million).
  • Net loss, excluding one off expenditure/gains in relation to acquisition costs, gains on acquisition, losses on financial instruments and taxation credit, of CAD$4.2 million for the quarter ended March 31, 2013 (March 31, 2012 - CAD$1.0 million).
  • Cashflow generated from financing activities of CAD$163.0 million for the quarter ended March 31, 2013 (March 31, 2012 - CAD$Nil).
  • Cash increased CAD$14.4 million during the quarter ended March 31, 2013 (March 31, 2012 - reduced CAD$28.1 million).

Operational

  • On February 21, 2013 Iona sold a 25% working interest in its UK North Sea Orlando and Kells fields to an industry participant for total gross proceeds of CAD$37.7 million on close and pro-rata share of future staged payment obligations.
  • The net production from the Trent & Tyne ("T&T") fields to Iona during the three months ended March 31, 2013 was 2.3 MMscf/d. Production was lower than anticipated due to a scheduled six-week shutdown on the Bacton processing facility during February and March. The average realized gas price for the quarter was strong at $10.39/mcf. As of May 13, 2013, both T&T were producing at a combined production rate of 43.3 MMcf/d, net 8.7 MMcf/d to Iona. Production at the 44/18-T6 ("T6") well on the Tyne Gas field is currently producing at a stabilized rate of 28 MMcf/d.

Acquisitions & Disposals

  • Completed the previously announced acquisition of 100% of the issued and outstanding shares of Carrizo UK Huntington Limited.
  • Completed the sale of 25% interest of the Orlando and Kells discoveries on February 21, 2013 for total gross proceeds of USD$37.7 million on close and a pro-rata share of future staged payment obligations.

Corporate

  • The Company completed a USD$60 million structured energy derivative transaction with Britannic Trading Ltd., a subsidiary of BP International Limited in February 2013 for notional quantities of 1,360,072 and 6,746,231 barrels of Brent blend crude oil over the period April 1, 2013 to March 31, 2014 and April 1, 2014 to March 31, 2018 at strike prices of USD$100 and USD$95 respectively.
  • The Company also entered into a Marketing and Off-take Agreement with BP Oil International Limited in February 2013.
  • On January 10, 2013 and March 5, 2013, 175,000 and 7,420,000 of stock options were granted at a price of $0.58 and $0.63 per share respectively.
  • On April 5, 2013, Iona announced the appointment of Don Copeland as non-executive Chairman, the resignation of Brad Gunn as Chief Financial Officer and as a Director, and the appointment of Graham Heath as Interim Chief Financial Officer.

Post Quarter Events

  • The Huntington Field commenced production on April 12, 2013. The field has been developed through four production and two water-injection wells and is tied back to Teekay's Floating Production Storage and Offloading ("FPSO") vessel, the Voyager Spirit, with production capacity of 30,000 barrels of oil per day and 27 million standard cubit feet of gas per day. On May 14th, 2013 the Company produced a new record production level of approximately 2,960 boepd, which is expected to increase in the coming weeks to approximately 4,600 boepd and reach a new production threshold of 7,500 boepd by the end of June, based on the anticipated increase of the Company's working interest in Trent & Tyne from 20% to 37.5% and the anticipated increase in Huntington production to maximum capacity (4,500 bbls/d of oil and 4.0 MMcf/d of natural gas, both net to Iona).
  • On April 16, 2013 the Company announced that the Department of Energy and Climate Change ("DECC") had advised the Orlando joint venture partners that it has approved the Orlando Field Development Plan submitted by the partners.

Notes:

Further details on the above are provided in the Consolidated Financial Statements and Management's Discussion and Analysis for the quarter ended March 31, 2013, which have been filed with securities regulatory authorities in Canada. These documents are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on the Company's website: www.ionaenergy.com.

Iona is an oil and natural gas acquisition, appraisal, and development corporation active through its 100% wholly owned United Kingdom subsidiary, Iona Energy Company (UK) Ltd. in the United Kingdom's Continental Shelf ("UKCS").

Forward-looking statements

Some of the statements in this announcement are forward-looking, including statements regarding Iona's plans for the development of its properties, estimated production levels, anticipated effects of the UK small field allowance, and estimates of the net present value of future net revenue of proved and probable reserves from Iona's properties. Forward-looking statements include statements regarding the intent, belief and current expectations of Iona Energy Inc. or its officers with respect to various matters. When used in this announcement, the words "expects," "believes," "anticipate," "plans," "may," "will," "should", "scheduled", "targeted", "estimated" and similar expressions, and the negatives thereof, whether used in connection with estimated production levels and future activity or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcome to differ materially from those suggested by any such statements, including without limitation, the risk that Iona's development plans change as a result of new information or events, the risk that production rates at Huntington does not increase as anticipated, or the risk that Iona does not increase its interest in Trent & Tyne. These forward-looking statements speak only as of the date of this announcement. Iona Energy Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based except as required by applicable securities laws.

Note: "Boe" means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. 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.

It should not be assumed that the present worth of estimated future net revenue represents the fair market value of the reserves disclosed in this press release. The reserve and related revenue estimates set forth in this press release are estimates only and the actual reserves and realized revenue may be greater or less than those calculated. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. As used in this press release, "possible reserves" are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

Additionally, this press release uses certain abbreviations as follows:

Oil and Natural Gas Liquids Natural Gas
bbls barrels mcf thousand cubic feet
Mbbls thousand barrels mcf/d thousand cubic feet per day
MMbbls million barrels scf standard cubic foot
bbls/d barrels per day MMscf millions of standard cubic feet
bopd barrels of oil per day MMscf/d millions of standard cubic feet per day
NGLs natural gas liquids Bscf billion standard cubic feet

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

Contact Information

  • Iona Energy Inc.
    Neill A. Carson
    Chief Executive Officer
    +011 (44) 7919 057989

    Iona Energy Inc.
    Graham Heath
    Interim Chief Financial Officer
    (403) 605-6726
    info@ionaenergy.com
    www.ionaenergy.com