HOUSTON, TX--(Marketwire - November 16, 2007) - Petro Resources Corporation (
AMEX:
PRC)
announces today the financial results of operations for the third quarter
and first nine months of 2007.
For the three months ended September 30, 2007 and 2006:
-- Revenues for the three months ended September 30, 2007 were
$1,972,866, up from $37,528 recorded for the same period in 2006. This
increase is due primarily to the acquisition of Williston Basin properties
in the first quarter of 2007.
-- Oil and gas production for the quarter was 33,975 barrels of oil
equivalent (BOE's) or an average of 369 BOE's per day. The Company received
an average of $58.07 per BOE, net of hedging, for the quarter.
-- Lease operating expenses increased to $890,141 for the third quarter
of 2007 from $9,517 incurred in the same period of 2006 as a result of the
acquired interest in the Williston Basin.
-- The Company incurred exploration costs in the period ended September
30, 2007 of $344,721 compared to $1,276,770 incurred in the quarter ended
September 30, 2006.
-- Depreciation, depletion and accretion for the three months ended
September 30, 2007 were $178,484, up from $22,439 for the third quarter of
2006.
-- General & administrative costs for the quarter ending September 30,
2007 were $612,323, compared to $522,027 for the quarter ending September
30, 2006.
For the nine months ended September 30, 2007 and 2006
-- Revenues from oil and gas sales for the nine months ending September
30, 2007 were $4,447,303, up from $1,482,862 for the nine months ending
September 30, 2006.
-- For the nine months ended September 30, 2007, the Company has produced
a total of 83,848 BOE's. The Company received an average of $51.85 per BOE,
net of hedging during the period.
-- Lease operating costs for the nine months ended September 30, 2007
were $2,352,412 compared to $25,129 for the same period the prior year. The
increase in lease operating costs was due primarily to the Williston Basin
property acquisition.
-- Exploration costs declined to $518,310 for the nine months ending
September 30, 2007 from $1,855,628 for the same period in 2006.
-- The Company had impairment of oil and gas property expense of $15,712
for the period ending September 30, 2007 down from $140,488 during the
prior year.
-- General & administrative costs for the period ended September 30, 2007
were $2,031,637 compared to $2,130,128 for the period ended September 30,
2006.
Complete financials and operational details are available in the Company's
10-QSB filing for the third quarter of 2007 which was filed with the
Securities and Exchange Commission on November 14, 2007. A copy can be
found on the Company website at
www.petroresourcescorp.com.
Plan of Operations
Our plan of operations for the next twelve months is to pursue further
exploration and development of the oil and natural gas prospects we
currently own, to obtain working capital required to fund such exploration
and development, and to acquire additional domestic oil and gas interest.
We intend to continue the pursuit of prospects in partnership with
established and experienced exploration, development and production
companies. We will also continue to establish alliances with unaffiliated
third parties in the areas of geological and geophysical services, prospect
generation and evaluation and leasing.
Management Comments
Don Kirkendall, President of Petro Resources, said: "We are extremely
pleased with results for the first nine months of 2007. The Company is
obviously improving performance across all sectors. The impact of the
Williston Basin property acquisition is showing its significance to the
company as we continue to add production from existing fields and, as
expected, these properties have become the cornerstone of the Company's
asset base. We expect revenue from oil and gas production to continue to
increase through 2008 from not only the Williston Basin but also from the
Permian Basin. The Gulf of Mexico exploration program, while not reflected
directly in these latest numbers, continues to show excellent results from
drilling operations."
About Petro Resources
We are an independent oil and natural gas company engaged in the
acquisition, drilling and production of oil and natural gas properties in
the United States and the Gulf of Mexico. We have an operating strategy
that is based on our participation in oil and natural gas properties and
prospects as a non-operator, which means we do not directly manage
exploration, drilling or development operations. Instead, we seek to
acquire interests in oil and natural gas properties in joint ownership with
oil and natural gas companies that have exploration, development and
production expertise. Based on that strategy, our plan of operations is to
acquire domestic oil and natural gas interests and to obtain the additional
working capital necessary to pay our share of the costs to develop or
enhance the production from such properties. We have developed or acquired
producing oil and natural gas properties in Texas, North Dakota, and
Louisiana, as well as in the Gulf of Mexico through our limited partnership
interest in Hall-Houston Exploration II, L. P., an oil and natural gas
exploration and development partnership. Additionally, we have leasehold
acreage in Kentucky, New Mexico and Utah.
Forward-looking Statements
The statements contained in this press release that are not historical are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including statements, without limitation, regarding the Company's
expectations, beliefs, intentions or strategies regarding the future. Such
forward-looking statements relate to, among other things: (1) the Company's
proposed exploration and drilling operations on its various properties, (2)
the expected production and revenue from its various properties, and (3)
estimates regarding the reserve potential of its various properties. These
statements are qualified by important factors that could cause the
Company's actual results to differ materially from those reflected by the
forward-looking statements. Such factors include but are not limited to:
(1) the Company's ability to finance the continued exploration and drilling
operations on its various properties, (2) positive confirmation of the
reserves, production and operating expenses associated with its various
properties; and (3) the general risks associated with oil and gas
exploration and development, including those risks and factors described
from time to time in the Company's reports and registration statements
filed with the Securities and Exchange Commission, including but not
limited to the Company's definitive prospectus dated October 30, 2007 filed
with the Securities and Exchange Commission on October 31, 2007, and the
Quarterly Report on Form 10-QSB for the three months ended September 30,
2007. The Company cautions readers not to place undue reliance on any
forward-looking statements. The Company does not undertake, and
specifically disclaims any obligation, to update or revise such statements
to reflect new circumstances or unanticipated events as they occur.
Consolidated Balance Sheet
Sept. 30, 2007 Sept. 30, 2006
Current Assets
Cash and cash equivalents $ 3,153,991 $ 4,285,204
Marketable securities - -
Accounts receivable and accrued revenue 719,710 91,344
Prepaids 63,797 11,602
Total current assets 3,937,498 4,388,150
Property and equipment, net of depreciation,
depletion and amortization
Oil and natural gas properties,
successful efforts accounting
Unproved properties 32,815,247 3,728,112
Proved properties 5,118,863 527,958
Furniture and fixtures 95,512 --
Total property and equipment 38,029,622 4,256,070
Other Assets
Deferred financing costs, net of
amortization of $558,704 2,930,877 --
Investment in partnership 3,892,944 2,293,104
Deposit 10,257 10,257
Total other 6,834,078 2,303,361
Total assets 48,801,198 10,947,581
Liabilities and Shareholders Equity
Current Liabilities
Accounts payable $ 1,374,096 $ 216,870
Accrued liabilities 21,000 1,300
Stock payable 10,969 --
Current portion of notes payable 9,762,554 --
Total current liabilities 11,168,619 218,170
Notes payable, net of current maturities and
discount of $2,992,365 12,984,072 --
Market value of derivatives 900,215 --
Accumulated production floor payments 207,337 --
Asset retirement obligation 1,696,650 30,653
Total liabilities 26,956,893 248,823
Redeemable preferred stock, Series A
Convertible Preferred 7,055,931 --
Shareholders’ equity
Common stock, $0.01 par value 212,732 196,773
Additional paid in capital 21,664,213 14,816,718
Accumulated deficit (7,088,571) (4,314,733)
Total shareholders’ equity 14,788,374 10,698,758
Consolidated Statement of Operations (unaudited)
For the three months ended For the six months ended
September 30, September 30,
2007 2006 2007 2006
Revenue
Oil and gas sales $ 1,972,866 $ 37,528 $ 4,347,303 $ 88,164
Other - - 100,000 -
Gain (loss) on sale
of property - - - 1,394,698
1,972,866 37,528 4,447,303 1,482,862
Expenses
Lease operating
costs 890,140 9,517 2,352,411 25,129
Exploration costs 344,722 1,276,770 518,311 1,855,628
Impairment of oil &
gas properties - - 15,712 140,488
Depreciation, depletion
& accretion 178,483 22,439 488,866 51,322
General &
administrative 612,321 522,027 2,031,635 2,130,128
Total expenses 2,025,666 1,830,753 5,406,935 4,202,695
Net gain (loss)
from operations (52,800) (1,793,225) (959,632) (2,719,833)
Other income (expenses)
Interest income 17,504 80,221 91,843 201,465
Interest expense (182,679) (739) (479,087) (3,834)
Loss on derivative
contract (365,731) - (1,092,432) -
Net gain (loss) before
income tax (583,706) (1,713,743) (2,439,308) (2,522,202)
Provision for income
tax - - - -
Net gain (loss) (583,706) (1,713,743) (2,439,308) (2,522,202)
Dividend on Series
A Preferred (172,095) - (334,530) -
Net loss to
shareholders (755,801) (1,713,743) (2,773,838) (2,522,202)
Earnings per share
Basic and diluted (0.04) (0.09) (0.13) (0.13)
Weighted average
common shares
Outstanding
Basic and diluted 21,273,172 19,677,317 21,253,992 19,041,808
Consolidated Statement of Cash Flows
Nine Months Ended
September 30
2007 2006
Cash flows from operating activities
Net gain (loss) $ (2,439,308) $ (2,522,302)
Adjustments to reconcile net income to
net cash (used in) provided by
operating activities:
Depletion, depreciation and accretion 488,866 51,322
Amortization included in interest expense 320,432 -
Impairment 15,712 140,488
Dry hole costs 479,949 1,850,742
Issuance of common stock and stock options
for services 876,286 1,370,116
Gain on sale of property - (1,394,698)
Loss on derivative contracts 900,215 -
Accretion of asset retirement obligation - -
Accounts receivable and accrued revenue (628,366) (30,407)
Prepaid expense (52,195) (36,522)
Accounts payable 354,091 51,280
Accrued expenses 30,669 (97,739)
------------ -------------
Net cash provided by (used in)
operating activities 346,351 (617,620)
------------ -------------
Cash flows from investing activities
Capital expenditures (9,140,133) (7,154,003)
Acquisition of Williston Basin (14,397,855) -
Investment in partnership (1,599,840) (959,904)
Investment in marketable securities (2,000,000) -
Proceeds from sale of properties - 3,953,785
------------ -------------
Net cash used in investing activities (25,137,828) (4,160,122)
Cash flows from financing activities
Issuance of common stock - 8,215,000
Issuance of preferred stock 2,000,000 -
Costs to issue preferred stock (14,705) -
Financing costs (2,982,154) -
Proceeds from notes payable - 20,100
Proceeds from loan 26,018,108 -
Principal payment on loan (1,360,985) -
------------ -------------
Net cash provided by financing activity 23,660,264 8,235,100
Net increase (decrease) in cash (1,131,213) 3,457,358
Cash, beginning of periods $ 4,285,204 $ 3,417,510
------------ -------------
Cash, end of period $ 3,153,991 $ 6,874,868