Tango Energy Inc.

Tango Energy Inc.

November 24, 2009 16:14 ET

Tango Reports Third Quarter 2009 Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - Nov. 24, 2009) - Tango Energy Inc. ("Tango") (TSX VENTURE:TEI) is pleased to report on its unaudited financial and operating results for the nine months ended September 30, 2009.

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Financial Results ($000s,
except per share amounts)
Gross revenues 842 1,670 3,088 7,397
Loss before taxes (1,014) (547) (3,907) (1,192)
Net loss (731) (418) (2,839) (995)
Per share - basic (0.01) (0.01) (0.04) (0.02)
Per share - diluted (0.01) (0.01) (0.04) (0.02)
Additions to property and
equipment, net of proceeds 1,399 895 2,896 (7,902)
Total assets 34,196 38,599 34,196 38,599
Working capital (deficiency) (832) 5,763 (832) 5,763
Asset retirement obligation 695 542 695 542
Flow-through share obligations - 1,600 - 1,600
Share Data (000s)
Equity outstanding
Common shares 65,775 65,775 65,775 65,775
Stock options and warrants 4,910 4,835 4,910 4,835
Fully diluted 70,685 70,610 70,685 70,610
Sales Volumes (average)
Natural gas (mcf/d) 2,482 1,697 2,612 2,590
Crude oil, liquids and sulphur
(bbls/d) 19 38 17 33
Average boe/d 433 321 452 465
Product Prices (average)
Natural gas ($/mcf) 3.21 8.04 3.94 8.97
Crude oil and liquids ($/bbl) 51.62 101.28 52.08 100.10
Netback Analysis ($/boe)
Oil and gas revenue 20.73 54.51 24.68 57.16
Gathering income 0.28 0.44 0.28 0.33
Royalty expense (0.45) (17.48) (2.24) (16.67)
Operating costs (10.49) (12.64) (11.61) (9.54)
Netback 10.07 24.83 11.11 31.28

Sales volumes averaged 433 barrels of oil equivalent per day ("boepd") during the three months ended September 30, 2009 compared with 321 boepd for the three months ended September 30, 2008. This increase in volumes was attributable to the 03-03 well at Quaich.

Tango and the operator drilled and cased the Quaich 11-34 well and is currently in the process of completing it for potential production. Tango and the operator have more than 6,880 acres of contiguous land in the immediate area in which Tango holds between 50% and 60% working interest. In addition to this land position, the 11-34 well will validate an additional 3,840 acres of contiguous land in which Tango will earn an undivided 30% working interest.

Tango has 44,322 gross (25,757 net) acres of land located west of the fifth and sixth meridians within the foothills and deep basin portion of the Western Canadian Sedimentary Basin. Of this amount 18,943 net acres of land were undeveloped at the end of September 2009.

During the balance of 2009, Tango will continue to prudently deploy available capital towards drilling, completion and tie-in operations where immediate increases in production, cash flow, and reserves are achievable and economic. Tango recently participated in the drilling of a second well in Quaich at 11-34. Tango's share of the 11-34 well at Quaich is expected to cost approximately $1.8 million including drilling, completion, equipping and tie-in. The operator expects the completion of this well to be finalized in the fourth quarter.

Capital spending will be funded by cash flow and draws upon our existing line of credit. Tango has available bank lines in excess of $4 million. Tango bank lines are scheduled for review in December 2009.

The Company continues to evaluate and seek merger candidates in order to grow cash flow, improve efficiencies, and broaden our asset base. There are no assurances these efforts will be successful.

For a copy of Tango's September 30, 2009 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.

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.

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

Contact Information

  • Tango Energy Inc.
    John M. Gunn
    Chief Executive Officer
    (403) 266-5688
    (403) 266-8817 (FAX)
    Tango Energy Inc.
    Jeremy P. Newton
    President & Chief Operating Officer
    (403) 266-5688
    (403) 266-8817 (FAX)