DENVER, CO--(Marketwire - July 1, 2008) - Rancher Energy Corp. (
The Company reported revenue of $6.3 million in fiscal 2008, up from $1.2 million in fiscal 2007. Rancher Energy sold 86,626 barrels of oil, which represents its net interest in its properties, at an average price of $73.24 per barrel in fiscal 2008 as compared with the sale of 23,838 barrels of oil at an average price of $48.74 per barrel in the prior year.
Total operating expenses in fiscal 2008 increased to $12.9 million from $6.8 million in the prior year during which the Company had fewer than four months of full operating expenses due to the late December 2006 and January 2007 acquisitions of producing properties in the Powder River Basin. The year-over-year increase in total operating expenses was primarily due to the following: Lease operating expenses grew to $2.9 million from $670,000; non-cash depreciation, depletion and amortization increased to $1.4 million from $380,000; an increase in production taxes to $770,000 from $140,000; and an increase in general and administrative expenses to $7.5 million, including $1.0 million in non-cash stock-based and restricted stock compensation expense, from $4.5 million. The Company recently implemented headcount and other overhead expense reductions that have reduced its general and administrative expense run rate significantly, positioning Rancher Energy to operate at or near break-even. Total other expense in fiscal 2008 increased to $5.6 million from $3.1 million in fiscal 2007 due primarily to higher interest expense relating to the GasRock note payable and a $1.9 million increase in amortization of deferred financing costs and discount on note payable. Net loss in fiscal 2008 was $13.2 million, or $0.12 per basic and diluted share, versus a net loss of $8.7 million, or $0.16 per basic and diluted share, in fiscal 2007. Rancher Energy closed the fiscal year with cash and cash equivalents of $6.8 million, up from $5.1 million at 2007 fiscal year end.
"We continue to work to secure financing to fund the CO2 recovery phase of our enhanced oil recovery (EOR) program," said John Works, President & CEO of Rancher Energy. "We remain confident that we will be successful in these efforts based on the quality of our properties, the high price of oil and the value of our CO2 supply agreement with ExxonMobil."
About Rancher Energy Corp.
Rancher Energy is an innovative oil & gas exploration & development company with a targeted strategy to reinvigorate older, historically productive oil fields in the hydrocarbon-rich Rocky Mountain region of the United States. Using waterflood injection and CO2 flooding, coupled with other leading edge hydrocarbon recovery techniques such as 3-D seismic data and directional drilling, Rancher Energy expects to extract proven in-place oil that remains behind in mature fields. Rising energy demand and strong oil & gas prices combined with advances in oil recovery have made this strategy profitable. Rancher Energy is taking advantage of this convergence by acquiring low risk, high quality, historically productive plays with under-exploited reserves and developing customized enhanced recovery strategies to maximize production.
Forward-Looking Statements
This press release includes forward-looking statements as determined by the U.S. Securities and Exchange Commission (the "SEC"). All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that the Company believes or anticipates will or may occur in the future are forward-looking statements. 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 to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include the Company's ability to obtain financing to implement its waterflood plan, to construct pipeline and other infrastructure, and for other operational and working capital purposes, the uncertainty of recovery factors for the enhanced oil recovery projects, the volatility of oil prices, general economic and business conditions, and other factors over which the Company has little or no control. The Company does not intend (and is not obligated) to update publicly any forward-looking statements. The contents of this press release should be considered in conjunction with the warnings and cautionary statements contained in the Company's recent filings with the SEC.
Rancher Energy Corp.
Statements of Operations
Twelve months ended
March 31,
2008 2007
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Revenues:
Oil and gas sales $ 6,344,414 $ 1,161,819
Losses on derivative activities (956,142) -
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Total revenues 5,388,272 1,161,819
Operating expenses:
Production taxes 772,010 136,305
Lease operating expenses 2,906,210 668,457
Depreciation, depletion and amortization 1,360,737 375,701
Impairment of unproved properties - 734,383
Accretion expense 121,740 29,730
Exploration expense 223,564 333,919
General and administrative expense 7,538,242 4,512,427
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Total operating expenses 12,922,503 6,790,922
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Loss from operations (7,534,231) (5,629,103)
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Other income (expense):
Liquidated damages pursuant to
registration rights arrangement (2,645,393) (2,705,531)
Amortization of deferred financing
costs and discount on note payable (2,423,389) (537,822)
Interest expense (794,693) (37,647)
Interest and other income 232,880 207,848
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Total other income (expense) (5,630,595) (3,073,152)
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Net loss $ (13,164,826) $ (8,702,255)
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Basic and diluted net loss per share $ (0.12) $ (0.16)
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Basic and diluted weighted
average shares outstanding 109,942,627 53,782,291
Rancher Energy Corp.
Balance Sheets
March 31, March 31,
ASSETS 2008 2007
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Current Assets:
Cash and cash equivalents $ 6,842,365 $ 5,129,883
Accounts receivable and prepaid
expenses 1,170,641 453,709
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Total current assets 8,013,006 5,583,592
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Oil & gas properties
(successful efforts method):
Unproved 54,058,073 56,533,934
Proved 20,734,143 18,552,188
Less: Accumulated depletion,
depreciation and amortization (1,531,619) (347,821)
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Net oil & gas properties 73,260,597 74,738,301
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Furniture and equipment, net of
accumulated depreciation of $204,420
and $27,880, respectively 997,196 513,556
Other assets 1,300,382 642,582
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Total other assets 2,297,578 1,156,138
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Total assets $ 83,571,181 $ 81,478,031
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 2,114,204 $ 1,542,840
Accrued oil & gas property costs 250,000 250,000
Asset retirement obligation 337,685 196,000
Liquidated damages pursuant to
registration rights arrangement - 2,705,531
Derivative liability 590,480 -
Note payable, net of unamortized
discount of $2,527,550 9,712,450 -
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Total current liabilities 13,004,819 4,694,371
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Long-term liabilities:
Derivative liability 246,553 -
Asset retirement obligation 922,166 1,025,567
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Total long-term liabilities 1,168,719 1,025,567
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Stockholders' equity:
Common stock 1,150 1,021
Additional paid-in capital 91,790,181 84,985,934
Accumulated deficit (22,393,688) (9,228,862)
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Total stockholders' equity 69,397,643 75,758,093
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Total liabilities and stockholders'
equity $ 83,571,181 $ 81,478,031
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Contact Information: Contacts: John Works Chief Executive Officer Rancher Energy Corp. 303-629-1125 Jay Pfeiffer Pfeiffer High Investor Relations, Inc. 303-393-7044