Renegade Petroleum Ltd.
TSX VENTURE : RPL

Renegade Petroleum Ltd.

May 19, 2010 17:44 ET

Renegade Petroleum Ltd. Announces First Quarter 2010 Results

CALGARY, ALBERTA--(Marketwire - May 19, 2010) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES.

Renegade Petroleum Ltd. ("Renegade" or the "Company") (TSX VENTURE:RPL) is pleased to announce it has filed on SEDAR its unaudited financial statements and management's discussion and analysis ("MD&A") for the quarter ended March 31, 2010. Selected financial and operational information is outlined below and should be read in conjunction with Renegade's unaudited financial statements and the related MD&A which are available for review at www.renegadepetroleum.com or www.sedar.com.

FINANCIAL & OPERATIONAL HIGHLIGHTS

  Three Months Ended March 31  
  2010   2009   % change  
             
Financial ($000s, except per share amounts)  
             
Petroleum and natural gas sales 3,930   553   611  
Funds flow from operations (1) 1,724   276   525  
- Per share basic (2) 0.06   0.05   40  
- Per share diluted (2) 0.05   0.05   0  
Net earnings (loss) (1,081 ) (41 ) (2,537 )
- Per share basic (2) (0.04 ) (0.01 ) (300 )
- Per share diluted (2)(3) (0.04 ) (0.01 ) (300 )
Capital expenditures 59,929   365   16,189  
Working capital surplus (deficit) 5,661   541   946  
Operating (1)            
Production (boe/d)            
- Crude oil (bbls per day) 538   102   438  
- Natural gas (Mcf per day) 253   238   6  
- Natural gas liquids (bbls per day) 2   2   -  
- Barrels of oil equivalent (Boe per day) (4) 582   142   310  
             
Average realized price            
- Crude oil and natural gas liquids ($ per bbl) 78.91   51.15   54  
- Natural gas ($ per Mcf) 4.05   3.85   5  
             
Netback per Boe            
- Petroleum and natural gas sales ($ per bbl) 74.95   43.30   73  
- Royalties ($ per bbl) 7.23   7.01   3  
- Operating and transportation expenses ($ per bbl) 12.40   5.95   108  
Operating netback ($ per bbl) 55.32   30.34   82  
             
Common Shares outstanding (5) 32,421   5,065   540  
Weighted average shares (5) 30,633   5,065   547  
             
  1. "Funds flow from operations" should not be considered an alternative to, or more meaningful than, cash flow from operating activities as determined in accordance with Canadian Generally Accepted Accounting Principles ("GAAP") as an indicator of Renegade's performance. "Funds flow from operations" represents cash flow from operating activities prior to changes in non-cash working capital and incurred asset retirement expenditures. Renegade also presents funds flow from operations per share whereby per share amounts are calculated using weighted average shares outstanding consistent with the calculation of earnings per share.

  2. All references to per share basic and per share diluted amounts reflect the consolidation on January 18, 2010 of all of Renegade's common shares on a ten (10) to one (1) basis.

  3. Due to the anti-dilutive effect of Renegade's net loss for the three months ended March 31, 2009, the diluted number of shares is equal to the basic number of shares. Therefore, diluted per share amounts of the net loss are equivalent to basic per share amounts.

  4. A conversion ratio of 1 Boe: 6 Mcf has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead. Boes may be misleading, particularly if used in isolation.

  5. All references to outstanding common share and weighted average common share amounts reflect the consolidation on January 18, 2010 of all of Renegade's common shares on a ten (10) to one (1) basis.

ACCOMPLISHMENTS

  • Increased average production from 142 BOE per day in the first quarter of 2009 to 582 boe per day in the first quarter of 2010 (310% increase). Production for the first quarter of 2010 consisted of 92% oil and 8% natural gas and natural gas liquids;
  • Increased funds flow from operations from $0.3 million in the first quarter of 2009 to $1.7 million in the first quarter of 2010 (525% increase); and
  • Increased operating netback from $30.34 in the first quarter of 2009 to $55.32 in the first quarter of 2010 (82% increase).

SUBSEQUENT EVENTS

On April 13, 2010, the Company announced an asset acquisition (the "Asset Acquisition") respecting certain petroleum and natural gas assets in southeast Saskatchewan, the acquisition of a private company (the "Private Company Acquisition") with interests in southeast Saskatchewan, a farm-in agreement (the "Farm-In") respecting properties in North Dakota and a bought deal subscription receipt financing (the "Financing").

On April 29, 2010, the Company completed the Asset Acquisition at a purchase price of approximately $33 million in cash, net of adjustments. The Asset Acquisition is effective April 1, 2010.

On April 29, 2010, Renegade closed the Financing of 11,430,000 subscription receipts for gross proceeds of approximately $40 million at a price of $3.50 per subscription receipt. The majority of the funds were used to finance the Asset Acquisition.

On May 12, 2010, the Company closed the Private Company Acquisition, involving the amalgamation of Prairie Hunter Energy Corporation ("Prairie Hunter") with 101161220 Saskatchewan Ltd., a wholly-owned subsidiary of Renegade. Consideration consisted of 5,331,121 Common Shares of the Company. The effective date of the amalgamation is May 12, 2010.

On May 12, 2010, the 11,430,000 subscription receipts issued on April 29, 2010 were exchanged for Common Shares in accordance with the terms of the certificates representing the subscription receipts and the subscription receipt agreement governing the same.

On April 26, 2010, Renegade entered into a joint venture ("Joint Venture") with Petro Uno Resources Ltd. ("Petro Uno"). Under the Joint Venture, the Company will participate on a 50/50 basis with Petro Uno in the development of the Viking Pool in the Dodsland area of Saskatchewan with the object of drilling short horizontal multi stage fractured wells into the Viking zone. Petro Uno has entered into 8 farm-in agreements covering 6.75 sections in the area. The Company will also have the option to participate in any further farm-in agreements that Petro Uno may negotiate in the region on a 50/50 basis. The independent directors of Renegade have independently considered and unanimously approved the entry into the joint venture.

The Joint Venture has an effective date of January 1, 2010. However, as the Joint Venture was signed subsequent to the period ended March 31, 2010, the net capital and operating results related to the Joint Venture activities have not been incorporated into the consolidated financial statements for the period. The following table summarizes the pro forma consolidated netbacks and production had the Joint Venture been finalized on January 1, 2010:

  Three Months Ended March 31
($ per boe) 2010 2009 % change
Total production (boe/d) 604 142 325
Petroleum, natural gas and natural gas liquids revenues 75.39 43.30 74
Royalties 7.41 7.01 6
Operating and transportation expenses 12.23 5.95 108
Operating netback 55.75 30.34 82

CORPORATE INFORMATION

Renegade's common shares trade on the TSX Venture Exchange under the symbol RPL. Renegade currently has approximately 49.2 million shares outstanding and 55.9 million fully-diluted shares. The Company's presentation can be viewed on its website at www.renegadepetroleum.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements. More particularly, this press release contains statements concerning Renegade's capital expenditure program, Renegade's drilling plans, the expected ability of Renegade to execute on its exploration and development program, Renegade's anticipated production (both in terms of quantity and raw attributes) and Renegade's anticipated cash flow from operations using estimated benchmark prices.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Renegade, including: (i) with respect to capital expenditures, generally, and at particular locations, the availability of adequate and secure sources of funding for Renegade's proposed capital expenditure program and the availability of appropriate opportunities to deploy capital; (ii) with respect to drilling plans, the availability of drilling rigs, expectations and assumptions concerning the success of future drilling and development activities and prevailing commodity prices; (iii) with respect to Renegade's ability to execute on its exploration and development program, the performance of Renegade's personnel, the availability of capital and prevailing commodity prices; and (iv) with respect to anticipated production and resulting cash flow, the ability to drill and operate wells on an economic basis, the performance of new and existing wells and accounting for risks typically associated with oil and gas exploration and production.

Although Renegade believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Renegade can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.

The forward-looking statements contained in this document are made as of the date hereof and Renegade undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

Contact Information

  • Renegade Petroleum Ltd.
    Michael Erickson
    President & CEO
    (403) 355-8922
    or
    Renegade Petroleum Ltd.
    Alex Wylie
    Vice-President, Finance & CFO
    (403) 410-3376