Tango Energy Inc.
TSX VENTURE : TEI

Tango Energy Inc.

April 02, 2007 23:59 ET

Tango Reports 2006 Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - April 2, 2007) - Tango Energy Inc. ("Tango") (TSX VENTURE:TEI) is pleased to report on its audited financial and operating results for the year ended December 31, 2006. Tango is also pleased to announce that current production levels are in excess of 800 boepd as a result of recent production additions at Hanlan and Ricinus which have been tied in and placed on production during the first quarter of 2007.



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Three Months Ended Years Ended

December 31, December 31,

2006 2005 2006 2005 2004

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Financial Results ($000s, except per share amounts)

Gross revenues 1,549 1,317 5,478 4,027 1,258

Income (loss) before taxes (124) 514 (442) 582 (197)

Net income (loss) (438) 361 97 366 (9)

Per share - basic (.01) .01 .00 .01 .00

Per share - diluted (.01) .01 .00 .01 .00

Funds flow from

operations 608 1,062 2,934 2,555 335

Per share - basic .01 .03 .07 .08 .02

Per share - diluted .01 .03 .07 .08 .02

Additions to property and

equipment, net of proceeds 6,854 5,556 19,402 11,487 8,555

Total assets 44,231 37,495 44,231 37,495 15,544

Working capital (5,669) 7,234 (5,669) 7,234 (36)

Asset retirement obligation 596 486 596 486 211

Flow-through share

obligations 3,000 6,800 3,000 6,800 -

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Share Data (000s)

Equity outstanding

Common shares 49,430 42,157 49,430 42,157 23,896

Stock options and warrants 4,150 2,485 4,150 2,485 1,905

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Fully diluted 53,580 44,642 53,580 44,642 25,801

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Sales Volumes (average)

Natural gas (mcf/d) 2,004 999 1,820 1,020 524

Crude oil and liquids (bbls/d) 35 26 29 19 8

Average boe/d 369 192 332 189 96

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Product Prices (average)

Natural gas ($/mcf) 7.37 11.67 6.99 9.10 7.11

Crude oil and liquids ($/bbl) 52.68 66.43 64.66 68.75 47.21

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Netback Analysis ($/boe)

Oil and gas revenue 45.40 69.54 43.89 56.03 42.93

Royalty expense 6.62 0.06 5.52 6.95 6.82

Operating costs 7.03 6.96 6.93 7.12 15.34

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Netback 31.75 62.52 31.54 41.96 20.77

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Production averaged 332 barrels of oil equivalent per day ("boepd") during the year ended December 31, 2006, a 76% increase over the 189 boepd over the previous years production. Current production levels are in excess of 800 boepd.

During 2006, Tango participated in the drilling of six wells (2.3 net), five of which were cased for production with one dry hole. Of the five cased wells, two (0.8 net) have been placed on production, two (0.5 net) are suspended pending further evaluation, and one (0.6 net) is in the process of being tied in. As well, three wells which were drilled during 2005 were completed during 2006 resulting in two (0.8 net) producers and one (0.3 net) suspended well.

Also, three (1.7 net) wells which were completed during 2005 were tied in and placed on production in 2006. One (0.5 net) existing well was successfully recompleted, and an additional well (0.5 net) in Ricinus was successfully reentered, tied in, and placed on production during March 2007.

At Hanlan, the 14-35 well was placed on production during February, 2007 and is currently producing in excess of 10 million cubic feet per day of raw gas. Tango has a 28% working interest (WI) in this well, subject to a 12.5% non-convertible overriding royalty.

At Ricinus, the 6-9 well has been placed on production with initial rates in the 100 boepd range. Tango has a 67.5% WI in this well and will monitor the wells' production performance over the coming months in order to evaluate additional opportunities on Company owned acreage adjacent to this discovery. Tango acquired 6 sections at the March 7 land sale at an average 67.5% WI.

At Kakwa, the 13-1 Swan Hills well has been drilled and completed. Testing operations were not completed due to wildlife constraints which required all of the equipment to be removed from the lease prior to March 15. As a result, the well has been suspended pending further evaluation of the pressure data. Further operations on the well will not be conducted prior to December, 2007. Tango has a 30% WI in this well.

At Quaich, the 3-3 well was successfully drilled, tested and evaluated, and it is expected that the well will be tied into existing facilities once a pipeline can be constructed.

At Cecilia, two (0.8 net) wells were successfully drilled and placed on production, and one (0.5 net) well was recompleted during 2006.

Two wells (1.2 net) were tied in and placed on production at Ansell, and one (0.5 net) at Blackstone.

Tango has 30,240 gross (18,405 net) acres of undeveloped land located west of the fifth and sixth meridian within the foothills and deep basin portion of the Western Canadian Sedimentary Basin. Tango continues to post and acquire crown land on new plays, as well as crown land offsetting existing opportunities.

For a copy of Tango's December 31, 2006 Financial Statements and Management Discussion and Analysis please visit www.sedar.com.

Tango Energy Inc. is listed on the TSX-Venture Exchange under the Symbol TEI.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This release contains forward-looking information. By their nature, forward-looking statements involve assumptions and known and unknown risks and uncertainties that may cause actual future results to differ materially from those contemplated. These risks include such things as volatility of oil and gas prices, commodity supply and demand, fluctuations in currency and interest rates, ultimate recoverability of reserves, timing and costs of drilling activities and pipeline construction, new regulations and legislation and availability of capital. Tango does not undertake to update any such forward-looking statements except as required by law. Please refer to Tango's Annual Report for more detail as to the nature of these risks and uncertainties. Although Tango believes that the expectations represented by these forward looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

Natural gas volumes have been converted to a barrel of oil equivalent ("boe") using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with Canadian Securities Regulators National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Boe's may be misleading, particularly if used in isolation.

Funds flow from operations and funds flow from operations per share and netback are not recognized measures under Canadian generally accepted accounting principles. Management believes that these items are a useful measure of financial performance. Funds flow from operations is defined as net income plus non-cash charges including, depletion, depreciation and accretion, future taxes and stock-based compensation, after asset retirement costs. Funds flow from operations per share is calculated by dividing the weighted average number of shares outstanding during the year into funds flow from operations. Netback is the average per unit of volume for oil and gas revenues less royalties and production costs incurred. Netback is expressed in terms of dollars per boe.

Contact Information

  • Tango Energy Inc.
    John M. Gunn
    Chief Executive Officer
    Phone: (403) 266-5688

    or

    Tango Energy Inc.
    John E. Bell
    President
    Phone: (403) 266-5688
    Fax: (403) 266-8817