NuLoch Resources Inc.
TSX VENTURE : NLR.A
TSX VENTURE : NLR.B

NuLoch Resources Inc.

November 17, 2005 20:41 ET

NuLoch Announces Third Quarter 2005 Results

CALGARY, ALBERTA--(CCNMatthews - Nov. 17, 2005) - NuLoch Resources Inc. (TSX VENTURE:NLR.A) (TSX VENTURE:NLR.B) was incorporated on May 13, 2005 and commenced operations on July 1, 2005.

Message to Shareholders

Significant progress is being made at our core property at Enchant Alberta. We plan to have 42 shallow gas wells (41.0 net) drilled by mid-December. Drilling operations commenced on October 7, 2005 and, to date, 23 wells have been drilled.

Large programs like our Second White Specks shallow gas allow for economies of scale. Operations are executed in batches, ensuring that mobilization costs are kept to a minimum. Two to four wells are drilled from single surface pads to reduce lease costs and minimize rig moves. We use a small drilling rig to preset surface casing and then follow up with a full size rig to drill directionally to total depth. Once an inventory of drilled and cased wells has been established, multiple fracture stimulations can be undertaken each day to complete the wells. We anticipate commencing production from this project in January 2006.

We do not expect to have a formal reserve evaluation until Q1 2006. Internal targets for natural gas reserves in our shallow gas program are 100 mmcf proved and 150 mmcf total proved plus probable for each well. If we achieve our targets we could add reserves of approximately 1 million barrels of oil equivalent in our first six months of operation and reach 500 boe/d during the first quarter of 2006.

At Shouldice Alberta, we previously reported our concern that reserves associated with the exploratory Basal Quartz well completed in August might be limited. Results from the first 30 days of production have provided confirmation of this and we have no plans for further drilling on this prospect.

NuLoch has negotiated a $4 million lending facility with a Canadian chartered bank to assist in the development of the shallow gas program. The facility will be repayable upon demand and the project must be on-time and on-budget before drawdown.

The shallow gas program represents a significant commitment for NuLoch and will establish a long life production base for the Company. The next phase of growth will come from expansion into new core areas and new opportunities in the existing core. An $11 million capital program in 2005 will be followed by a further $16.5 million of capital investment in 2006, rounding out the first 18 months of our business plan. A program of this size will permit us to fulfill the balance of our flow-through share CEE tax renouncement commitment, currently estimated at $4.5 million for 2006, without putting an unduly high percentage of our budget into riskier exploration prospects. We anticipate that such a program, if achieved, would yield an average daily production rate in 2006 of 600 boe/d and an exit rate of 800 boe/d while generating cash flow of $7.5 million.

High commodity prices have made for a very competitive oil and gas industry. Access to drilling prospects and the equipment needed to undertake operations are both in short supply. Nonetheless, NuLoch has moved quickly to establish production and reserves with its large shallow gas program and is committed to adding new prospects and core areas in the near term.

Management's Discussion and Analysis

The following Management's Discussion and Analysis ("MD&A") was prepared as of November 17, 2005.

NuLoch Resources Inc. ("NuLoch" or the "Company") was incorporated under the laws of the Province of Alberta on May 13, 2005. No operations were undertaken in the period from incorporation until the end of the second quarter on June 30, 2005 and, consequently, no discussion or analysis can be presented with respect to that period.

The financial statements as at September 30, 2005 and for the three month period then ended and extracts thereof provided within this MD&A, were prepared in Canadian dollars using Canadian generally accepted accounting principles (GAAP). Certain other information with respect to the Company is available on SEDAR at www.sedar.com.

Use of Barrels of Oil Equivalent (boe)

Disclosure provided herein in respect of boe units may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf of natural gas to 1 bbl of crude oil is based on an energy equivalency conversion method primarily applicable at the burner tip and may not represent a value equivalency at the wellhead.

Non-GAAP Measurement - Funds Flow

Funds flow from operations, which is determined before changes in non-cash working capital, is used by the Company as a key measure of performance. Funds flow from operations does not have a standardized meaning prescribed by Canadian generally accepted accounting principles and therefore may not be comparable with the calculation of similar measures for other companies. Funds flow from operations as presented is not intended to represent operating profits for the period nor should it be viewed as an alternative to cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with GAAP. Funds flow from operations per share is calculated using the same share bases which are used in the determination of earnings per share.

Critical Accounting Estimates

The amounts presented in the Company's financial statements depend to varying degrees on estimates made by management. An estimate is considered a critical accounting estimate if it requires management to make assumptions about matters that are highly uncertain, and if different estimates that could have been used would have a material impact.

Forward-Looking Statements

Certain statements in this document or incorporated herein by reference may constitute "forward-looking statements". These forward-looking statements can generally be identified as such because of the context of the statements including words such as the Company "believes", "anticipates", "expects" or words of a similar nature. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions which will, among other things, impact demand for and market prices of the Company's products; industry capacity; the ability of the Company to implement its business strategy, including exploration and development activities; the ability of the Company to complete its capital programs; successful negotiations with bankers and other third parties; the success of exploration and development activities; production levels; government regulations and the expenditures required to comply with them (especially safety and environmental laws and regulations); site restoration costs; and other circumstances affecting revenues and expenses.

Plan of Arrangement

On July 1, 2005 a plan of arrangement involving Enerplus Resources Fund, TriLoch Resources Inc. and NuLoch ("Plan") became effective. Pursuant to the Plan, Enerplus acquired TriLoch and virtually all of its assets in exchange for units of Enerplus. TriLoch received shares in NuLoch that were distributed to Class A shareholders of TriLoch and NuLoch received certain capital assets previously held by Triloch.

Capital Expenditures

As part of the Plan the Company agreed to acquire certain administrative assets and Canadian petroleum and natural gas properties from TriLoch and associated environmental liabilities in exchange for the issuance of 2,012,694 Class A shares. The assets transferred were recorded following the continuity-of-interest method. The arrangement was completed in July 2005.

The oil and gas properties acquired through the arrangement are located at Shouldice Alberta and consist of one gas well (0.38 net) and a 50% interest in 160 acres of undeveloped lands. This gas well has declined to a point where it produces only at nominal rates. Pursuant to a farm-in agreement, a 1,700 metre test well (1.0 net) was drilled in the third quarter. Production from this well commenced subsequent to the end of the third quarter with early indications of limited reservoir size. As at September 30, 2005 these wells are not expected to recover their carrying costs and, consequently, additional depletion has been taken in the quarter to reduce the carrying value to that expected to be realized from future net cash flows.

The Company has commenced a 42 well (41.0 net) shallow gas development program in the Second White Specks Formation ("SWS") at Enchant Alberta. The SWS is characterized by marine-sand reservoirs with low-rate, long-life deliverability profiles. If fully developed, up to 67 locations (62 net) may be drilled across the Company's lands at Enchant.

Revenue

The Company's production operations commenced on July 1, 2005 and in the third quarter consist only of the single natural gas well (0.38 net) at Shouldice Alberta. This well generated $66,401 in production revenue consisting of 76 mcf/d at $8.84 per mcf and 1 b/d of NGL at $53.85. Production rates are low, averaging 14 boe/d in the quarter and are expected to contribute only nominal amounts of cash flow in the future.

The Company anticipates continuing strength in the markets for oil and natural gas through the balance of 2005 and into next year. Natural gas is expected to be the primary focus of the Company's development program in 2005. Futures contracts for delivery in December 2005 through March 2006 have recently been trading at over $10.00 per GJ at AECO. Contracts for future delivery of oil have been trading at approximately $US58.00 WTI for the same period.

Royalties

Production from Shouldice is encumbered by a 16% freehold lessor royalty and a 7.5% overriding royalty. The Second White Specks program at Enchant will be drilled primarily on Crown land with royalty rates expected to fall within the 5% to 10% range and eligible for ARTC refund that is currently at 25% of the royalties payable. In addition, the SWS is being drilled pursuant to farm-ins which provide for the payment of 15% overriding royalties to the farmors.

Operating

Operating costs are difficult to forecast and can vary significantly depending on such factors as production rates, reservoir quality, water content and available infrastructure. The Company's target is to maintain average operating cost per boe below $10.00. In the third quarter, operating costs averaged $9.84 per boe.

Interest

The Company has excess funds on hand that are invested in short term deposits that earn modest amounts of interest.


General and Administrative (G&A)

The Company has seven employees at its head office in Calgary and will use external consultants on an as-needed basis to assist with the regular operation of the business. First year annualized gross G&A is budgeted at $1.3 million of which as much as 50% is expected to be re-allocated to the capital projects to which they relate.



Three months ended
September 30, 2005

Gross overhead costs $ 317,632
Amounts capitalized (113,441)
Stock-based compensation 13,000
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Net G&A $ 217,191
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Income Taxes

Pursuant to its plan of arrangement with Enerplus and TriLoch, the Company acquired petroleum and natural gas properties with a tax basis less than their carrying value and a resulting future tax liability of $85,000. The Company incurred share issuance expenses during the third quarter that resulted in a future tax asset of $218,500 of which $85,000 has been recognized at September 30, 2005 and a valuation allowance has been applied to the balance.

The Company does not expect to incur any income or capital taxes in its first year of operations. There is an obligation to shareholders to renounce $7,250,000 in eligible Canadian Exploration Expense with respect to 2005. Some of the expenditures will be incurred in 2005. To the extent that the balance of the expenditures are made in 2006, there will be a tax obligation equivalent to interest on the amount unspent at the end of each month after January 2006.

Funds Flow and Net Earnings

The Company is in the early stages of developing its oil and natural gas production business. As such, funds flow and net earnings were both negative in the quarter primarily due to general and administrative expenses. These results are expected to continue throughout the fourth quarter. Production from the Second White Specks shallow natural gas project is expected to commence in the first quarter of 2006 and result in positive funds flow.

Liquidity and Capital Resources

On July 6, 2005 the management of NuLoch subscribed for 2,800,000 Class A common shares of the Company at $0.25 per share pursuant to a private placement.

On July 7, 2005 the Company issued 7,250 units at $1,000 per unit on a flow-through basis. Each unit consisted of 400 Class A flow-through shares at $0.25 each and 90 Class B flow-through shares at $10.00 each. The Company is committed to incur and renounce qualifying Canadian Exploration Expense in the amount of $7,250,000 prior to December 31, 2006.

On November 8, 2005 the Company entered into a lending agreement with a Canadian chartered bank in the amount of $4 million for the purpose of developing the Company's shallow natural gas prospect at Enchant Alberta. The facility is demand in nature and will be subject to a first charge on all of the Company's assets. Advancement of funds is subject to a number of requirements including completion of the bank's standard security documentation and provided that the project continues on-time and on-budget.

The capital program has been established at $11 million for the last half of 2005. A shortfall in available funds may be satisfied with bank borrowings or further equity issues if appropriate. If these or other sources of funding are insufficient, then prudent reductions in the capital program may be warranted.

Outstanding Share Data

The Class A and Class B common shares of the Company trade on the TSX Venture Exchange under the symbol NLR.A and NLR.B, respectively. Of the 7,712,695 Class A shares outstanding, 5,700,000 were issued in early July 2005 and subject to a four month hold that ended in early November 2005 pursuant to prospectus-exemption securities regulations. The Class B common shares of the Company have been listed for trading after expiry of the same four month hold period. A total of 652,500 Class B common shares are outstanding.

The Company established a stock option plan to allow grants of options to acquire Class A common shares to officers, directors, employees and consultants. On July 7, 2005 a total of 822,500 options were granted with an exercise price of $0.35 each.



NULOCH RESOURCES INC.
Balance Sheets
(unaudited)
As at September 30, June 30,
2005 2005
------------- -------------
Assets

Current assets:
Cash and cash equivalents $ 6,052,669 $ 1
Accounts receivable 120,960 -
Prepaid expenses and other assets 61,488 -
------------- -------------
6,235,117 1

Property and equipment (note 3) 476,649 -
------------- -------------
$ 6,711,766 $ 1
------------- -------------
------------- -------------

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable and
accrued liabilities $ 260,451 $ -

Future asset retirement
obligations (note 4) 42,000 -

Shareholders' equity:
Share capital (note 6) 7,714,772 1
Contributed surplus (note 6(d)) 13,000 -
Deficit (1,318,457) -
------------- -------------
6,409,315 -

Commitment (note 8)
Subsequent event (note 10)
------------- -------------
$ 6,711,766 $ -
------------- -------------
------------- -------------

See accompanying notes to financial statements


NULOCH RESOURCES INC.
Statement of Operations and Deficit
For the period from commencement of operations on
July 1, 2005 to September 30, 2005
(unaudited)


Revenue:
Petroleum and natural gas $ 66,401
Royalties, net of
Alberta Royalty Tax Credit (9,646)
Interest and other 26,293
-------------
83,048

Expenses:
Operating 12,314
General and administrative 217,191
Depletion and depreciation 1,171,000
Asset retirement accretion 1,000
-------------
1,401,505

-------------
Net loss and deficit 1,318,457
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-------------

Net loss per share (note 6(e)):

Three months ended September 30, 2005
Basic and diluted $ (0.12)

From inception on May 13, 2005 to
September 30, 2005
Basic and diluted $ (0.19)

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-------------

See accompanying notes to financial statements


Statement of Cash Flows
For the period from commencement of operations on
July 1, 2005 to September 30, 2005
(unaudited)

Cash provided by (used in):

Operating:
Net loss $ (1,318,457)
Items not involving cash:
Depletion and depreciation 1,171,000
Asset retirement accretion 1,000
Stock-based compensation 13,000
-------------
(133,457)
Change in non-cash
operating working capital (71,982)
-------------
(205,439)

Financing:
Issue of share capital, net of issue costs 7,281,534

Investing:
Property and equipment (1,173,412)
Change in non-cash
investing working capital 149,985
-------------
(1,023,427)
-------------
Increase in cash and cash equivalents 6,052,668


Cash and cash equivalents, beginning of period 1

-------------
Cash and cash equivalents, end of period $ 6,052,669
-------------
-------------

Supplemental cash flow information (note 9)

See accompanying notes to financial statements


NULOCH RESOURCES INC.
Notes to the Financial Statements
As at and for the period ended September 30, 2005


1. Nature of business

NuLoch Resources Inc. (the "Company") is incorporated under the laws of the Province of Alberta. The Company's activities are related to exploration for and development of petroleum and natural gas. The Company was incorporated on May 13, 2005 and commercial operations commenced on July 1, 2005.

2. Significant accounting policies

(a) Joint operations

To the extent that the Company's exploration, development and production activities are conducted jointly with others, the Company only reflects its proportionate interest in such activities.

(b) Cash and cash equivalents

Cash and cash equivalents are comprised of cash and investments with a maturity date of three months or less.

(c) Petroleum and natural gas properties

The Company follows the full cost method of accounting for petroleum and natural gas operations. All costs of exploring for and developing petroleum and natural gas properties and related reserves are capitalized. Such costs include lease acquisition, geological and geophysical activities, lease rentals on non-producing properties, drilling of productive and non-productive wells, tangible production equipment, and that portion of general and administrative costs directly attributable to exploration and development activities. Gains or losses on disposition of petroleum and natural gas properties are not recognized unless crediting the proceeds against the accumulated costs results in a change in the rate of depletion by 20 percent or more.

Costs of acquiring unproved properties are initially excluded from the full cost pool and are assessed periodically to ascertain whether impairment has occurred. When proved reserves are assigned to a property or a property is considered to be impaired, the cost of the property or the amount of impairment is added to the full cost pool. Depletion of petroleum and natural gas properties and depreciation of production equipment are calculated using the unit-of-production method based upon estimated proved reserves, before royalties, as determined by an independent engineer. For purposes of the calculation, natural gas reserves and production are converted to equivalent volumes of petroleum based upon relative energy content.

The Company applies a cost recovery impairment test to capitalized costs. Future net revenues are estimated using expected future product prices. When the carrying value of capitalized costs is determined to be not recoverable, an impairment loss is recognized to the extent that the value of discounted future net revenues from production of proved and probable reserves plus the cost of unproved properties net of any impairment allowance exceeds the carrying value. Any such impairment loss is charged to depletion and depreciation in the period.

Administrative assets are recorded at cost and depreciated on a declining balance basis at 30 percent per annum.

(d) Future asset retirement obligations

The Company has obligations to retire petroleum and natural gas assets such as wells, facilities and pipelines and restore land to its original state at the end of the assets' useful lives. Expected future asset retirement costs, discounted at the Company's credit-adjusted risk-free rate, are recorded as liabilities and increase the carrying value of petroleum and natural gas assets. Costs are estimated by management based on current regulations, technology and industry standards. The assets are subject to depletion and depreciation and the liabilities are increased as accretion expense is recognized over time.

(e) Future income taxes

The Company uses the asset and liability method of tax allocation accounting. Temporary differences arising from the differences between the tax basis of an asset or liability and the carrying amount on the balance sheet are used to calculate future income tax assets or liabilities. Future income tax assets or liabilities are calculated using tax rates anticipated to apply in the periods that the temporary differences are expected to reverse.

(f) Flow-through shares

In accordance with tax legislation, the Company renounces deductions related to resource expenditures to the extent they have been financed through the issuance of flow-through shares. Future tax liabilities and share capital are adjusted by the estimated cost of the renounced tax deductions when qualifying expenditures are renounced to investors.

(g) Stock-based compensation plans

The Company maintains a stock option plan for its directors and employees. The fair value of options granted, as estimated using the Black-Scholes valuation model, is measured at the date of grant and charged to earnings over the vesting period with a corresponding increase in contributed surplus. Consideration paid to the Company on the exercise of stock options together with amounts previously recognized in contributed surplus are credited to share capital.

(h) Per share amounts

Basic per share amounts are calculated using the weighted average number of Class A and Class B common shares outstanding in the period. Class B shares are assumed converted into Class A shares at a rate of $10.00 divided by the greater of $1.00 and the average price for Class A common shares in the 30 trading days immediately prior to the end of the period.

Diluted per share amounts are calculated based on the treasury stock method. The dilutive effect of options is determined as if proceeds received on exercise along with the value of unamortized stock-based compensation associated with in-the-money options are used to purchase Class A shares at the average price during the period.

(i) Measurement uncertainty

The amounts recorded for depletion and depreciation of petroleum and natural gas properties and associated equipment and the provision for future asset retirement obligations are based on estimates of reserves, production rates, future commodity prices and costs and other relevant assumptions. Computation of stock-based compensation expense includes estimates of stock price volatility. The provision for future income taxes incorporates estimates of when temporary differences are expected to reverse. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant.

(j) Revenue recognition

Revenue from the sale of petroleum and natural gas is recognized when the product is delivered, normally at the pipeline delivery point for natural gas and at the wellhead for crude oil.



3. Property and equipment

Accumulated
depletion and Net book
Cost depreciation value
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Petroleum and natural
gas properties $ 1,527,697 1,162,000 $ 365,697
Administrative assets 119,952 9,000 110,952
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$ 1,647,649 1,171,000 $ 476,649
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------------ ------------- -------------


Effective July 1, 2005 a plan of arrangement involving Enerplus Resources Fund, TriLoch Resources Inc. and the Company became effective. Pursuant to the plan, Enerplus acquired TriLoch and virtually all of its assets in exchange for units of Enerplus. TriLoch received shares in the Company that were distributed to Class A shareholders of TriLoch and the Company received certain capital assets previously held by Triloch. The acquisition of the assets was recorded by the Company using the continuity-of-interests method as follows:



Petroleum and natural gas properties $ 335,993
Administrative assets 108,244
Asset retirement obligation (11,000)
Future income taxes (85,000)
-------------
Class A common shares issued $ 348,237
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-------------


During the three months ended September 30, 2005, general and administrative costs of $113,441 directly related to the acquisition, exploration and development of petroleum and natural gas reserves were capitalized.

At September 30, 2005, costs associated with major development projects of petroleum and natural gas properties totaling $400,000 have been excluded from the depletion calculation.

The carrying value of the Company's petroleum and natural gas properties was tested for impairment at September 30, 2005 resulting in an additional depletion and depreciation charge of $943,000 in the three months then ended. The price applied to the proved and probable natural gas reserves over the remaining life of the properties is $10.00 per mcf.



4. Future asset retirement obligations

Balance, beginning of period $ -
Liabilities incurred 41,000
Accretion expense 1,000
-------------
Balance, end of period $ 42,000
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-------------


Asset retirement activities with an estimated future cost total of $58,000 and a present value of $42,000 are not expected to be undertaken until after 2010.

Expected future costs assume an inflation rate of 2 percent per annum and the present value of the estimated future asset retirement obligation has been calculated using a credit-adjusted risk free rate of 5 percent per annum.

5. Income taxes

The provision for income taxes differs from the amount obtained by applying the combined federal and provincial income tax rate to earnings before income taxes. The difference relates to the following items:



Statutory tax rate 37.62%
-------------

Expected tax provision (recovery) $ (496,000)
Federal resource allowance 27,100
Stock-based compensation 4,900
Expected tax rate reductions 21,900
Valuation allowance 442,100
-------------
Tax provision $ -
-------------
-------------

Components of the future income tax asset at September 30, 2005 are as
follows:


Property and equipment $ 267,500
Share issue costs 218,500
Non-capital losses 101,100
Valuation allowance (587,100)
-------------
$ -
-------------
-------------


6. Share capital

(a) Authorized

An unlimited number of Class A, Class B and Class C shares have been authorized.

Class B shares are exchangeable for Class A shares. The number of Class A shares obtained upon conversion of each Class B share will be equal to $10.00 divided by the greater of $1.00 and the 30-day average closing price for Class A common shares immediately prior to the effective date of conversion. Conversion may be effected by the Company in 2009 or 2010 or, if not converted before 2011, then at the option of the Class B shareholder in January 2011 or otherwise automatically on February 1, 2011.



(b) Issued and outstanding
Common
Shares Amount
------------- -------------
Class A common shares
Issued upon incorporation 1 $ 1
------------- -------------
Balance, June 30, 2005 1 1

Issued pursuant to plan of arrangement 2,012,694 348,237
Issued pursuant to private placement 2,800,000 700,000
Issued pursuant to flow-through
private placement 2,900,000 725,000
Share issue costs (66,846)
Tax effect of share issue costs 8,500
------------- -------------
Balance, September 30, 2005 7,712,695 1,714,892
------------- -------------
Class B common shares
Issued pursuant to flow-through
private placement 652,500 6,525,000
Share issue costs (601,620)
Tax effect of share issue costs 76,500
------------- -------------
Balance, September 30, 2005 652,500 5,999,880
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Total share capital, September 30, 2005 $ 7,714,772
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-------------


(c) Stock option plan

The Company maintains a stock option plan that authorizes the board of directors to issue stock options to directors, officers, employees or other service providers of the Company. The options vest a third annually over three years and expire after five years. Options are issued at strike prices equal to or greater than the market value of the Company's Class A shares on the date of grant.



Weighted
Average
Exercise
Options Price
---------------------
Balance, June 30, 2005 - -
Granted 822,500 $0.35
---------- --------
Balance, September 30, 2005 822,500 $0.35
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---------- --------


At September 30, 2005 the outstanding options have a remaining life of 4.7 years and are unvested.

(d) Stock-based compensation expense

The Company estimated the weighted average fair value of options granted in the three months ended September 30, 2005 at $0.19 per option using the Black-Scholes pricing model with a risk-free interest rate of 4 percent, an option life of 5 years and expected volatility of 60 percent.

(e) Per share amounts

Per share amounts have been calculated on the weighted average number of shares outstanding after giving effect to the potential conversion of Class B shares into Class A shares at 1:5.6 based on the average closing price of Class A shares of $1.77 in the 30 trading days prior to September 30, 2005. Options, when the exercise price is less than the average market price of the underlying security, are dilutive to net earnings per share and notionally increase the weighted average number of Class A common shares outstanding. Stock options are anti-dilutive to net loss per share.

The weighted average numbers of shares for the three months ended September 30, 2005 and for the period from inception on May 13, 2005 to September 30, 2005 are as follows:



Three From
months inception

Class A common shares 7,371,391 4,600,451
Class B common shares 617,038 402,606
Additional Class B if converted 2,838,375 1,851,990
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Basic shares outstanding 10,826,804 6,855,047
Stock option dilution 497,740 266,888
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Diluted shares outstanding 11,324,544 7,121,935
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7. Financial instruments

At September 30, 2005 the carrying value of cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities included on the balance sheet approximate their fair value due to their short term to maturity.

8. Commitment

In July 2005 the Company issued flow through shares totaling $7,250,000. The Company plans to renounce this amount of tax deductions to shareholders effective December 31, 2005 and will be committed to incur these qualifying resource expenditures prior to December 31, 2006. A total of $872,000 of qualifying expenditures was incurred to September 30, 2005.

9. Supplemental cash flow information

No cash payments for interest expense or taxes have been made by the Company.

10. Subsequent event

On November 8, 2005 the Company entered into a lending agreement with a Canadian chartered bank in the amount of $4 million for the purpose of developing the Company's shallow natural gas prospect at Enchant Alberta. The facility is demand in nature and will be subject to a first charge on all of the Company's assets. Advancement of funds is subject to a number of requirements including completion of the bank's standard security documentation and provided that the project continues on-time and on-budget.

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

Contact Information

  • NuLoch Resources Inc.
    James N. McIndoe
    President and CEO
    (403) 920-0455
    (430) 920-0457 (FAX)
    Email: nuloch@nuloch.ca
    or
    NuLoch Resources Inc.
    2200, 444 - 5th Avenue SW
    Calgary, Alberta T2P 2T8