Torquay Oil Corp.
TSX VENTURE : TOC.A
TSX VENTURE : TOC.B

Torquay Oil Corp.

April 30, 2012 09:00 ET

Torquay Oil Corp. Reports 2011 Results

CALGARY, ALBERTA--(Marketwire - April 30, 2012) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES, TO UNITED STATES NEWS WIRE SERVICES OR TO UNITED STATES PERSONS

Torquay Oil Corp. (TSX VENTURE:TOC.A)(TSX VENTURE:TOC.B) ("Torquay" or the "Company") announces that it has filed its audited financial statements and related management's discussion and analysis for the year ended December 31, 2011 on SEDAR at www.sedar.com and on the Company's website at www.torquayoil.com. The Company will also file its annual information form for the year ended December 31, 2011, which includes its statement of reserves data and other oil and gas information in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities on SEDAR.

Torquay Oil Corp. exited 2011 with production of 505 boe/day and averaged 361 boe/day throughout the year, weighted 98% to light oil and NGL's. Torquay continues to focus on light oil in SE Saskatchewan where it received an average netback of $54.96 per boe throughout the year. The Company exited the 2011 year with $8.1MM drawn on its $11.5MM credit facility.

While Torquay benefits from its oil weighting and high netbacks, 2011 proved to be a challenging year. At Lake Alma, Saskatchewan, the Company holds over 57,000 net acres, the majority of which does not expire until March, 2016. The Company acquired two 100% W.I. 3D seismic programs in 2011 covering approximately 200 square km. Torquay has discovered and produced oil in five separate horizontal wells covering a wide geographic area. Finding the right completion design to unlock the Bakken economics continues to be the Company's focus and Torquay remains committed to pursuing the Bakken potential at Lake Alma. In the past year alone, proven new completion techniques resulting in economic wells have been implemented to the south and east of Torquay's land block as competitors continue to improve the productivity of the Bakken.

At Viewfield, Saskatchewan, the Company drilled six (6.0 net) wells, five targeting the Frobisher and one targeting the Bakken. The Company also completed a battery expansion at Viewfield to handle fluid volumes from the new wells providing handling capacity of 5,000 bbls of fluid per day.

Torquay purchased a private company's interest at Queensdale, Saskatchewan in 2011. The Company drilled two (2.0 net) wells on the property in 2011and has since drilled a 3rd location in 2012. Queensdale is now the Company's largest producing property.

The Company drilled one (0.75 net) Midale well at the Torquay operated Alameda Unit. Torquay is currently looking at completing future wells by hydraulically fracturing the Midale Formation to improve both the productivity and ultimate recovery of the wells.

At Midale, Saskatchewan the Company drilled two (2.0 net) horizontal wells into the Midale Formation. The Company is also evaluating hydraulically fracturing future wells similar to Torquay's Alameda property.

The Company underwent significant management changes in 2011 and the first quarter of 2012. Effective December 2011, Terry McCallum was appointed President and CEO and Brent McKercher was appointed Executive Vice President and COO, and effective January 2012, Phil Besler was appointed Vice President, Operations.

Selected 2011 Financial Information as follows;

Three months
ended
Year
ended
($000's except per share amounts) December 31,
2011
December 31,
2011
Petroleum & natural gas revenue $ 3,657 $ 10,809
Funds flow from operations 1,596 4,126
Funds flow per share (basic and diluted) 0.03 0.10
Net loss (11,036 ) (17,921 )
Net loss per share (basic and diluted) (0.23 ) (0.42 )
Capital expenditures (net) 8,186 45,841
Weighted common shares outstanding (1) 48,776 42,880
Production
Crude oil (bbls/d) 412 300
NGL's (bbls/d) 30 35
Natural gas (mcf/d) 205 154
Total boe/d 476 361
Pricing
Crude oil ($/bbl) $ 91.48 $ 91.26
NGL's ($/bbl) 47.96 45.75
Natural gas ($/mcf) 3.18 3.97
Average ($/boe) $ 83.56 $ 82.04
Netbacks ($/boe)
Petroleum & Natural gas revenue $ 83.56 $ 82.04
Royalties (12.60 ) (10.92 )
Operating costs (14.30 ) (16.16 )
Field netback $ 56.66 $ 54.96

Torquay is a uniquely positioned, oil focused, junior exploration company formed to generate and develop its own prospects, acquire oil-weighted properties and participate with joint venture partners in oil exploration and development in the Western Canadian Sedimentary Basin. The Company's Class A Shares and Class B Shares trade on the TSX Venture Exchange under the symbols TOC.A and TOC.B. The Company currently has 48,209,448 Class A Shares and 1,260,000 Class B Shares outstanding.

READER ADVISORY:

This news release contains the term "funds flow from operations" which is defined as cash provided by (used in) operating activities before the change in non-cash working capital related to operating activities and decommissioning expenditures incurred and "netbacks" which is defined as oil and gas revenue less royalties and operating costs. Funds flow from operations and netbacks do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and therefore may not be comparable with the calculation of similar measures for other entities. Management uses funds flow from operations and netbacks to analyze the operating performance of the business. Funds flow from operations as presented is not intended to represent cash flow from operations or operating profits for the period nor should it be viewed as an alternative to cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS.

This news release contains forward-looking statements and forward-looking information (collectively "forward looking information") within the meaning of applicable securities laws. Forward-looking information typically use words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. In particular, forward looking information in this news release includes, but is not limited to: evaluation of hydraulically fracturing techniques, completion of future wells by hydraulically fracturing and the expected results from operations. The forward-looking information is based on certain key expectations and assumptions made by Torquay, including expectations and assumptions concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; future well production rates and estimates of operating costs; reserve and resource volumes; expected results of operating techniques; the state of the economy and the exploration and production business; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition; ability to market oil and natural gas successfully and the ability of the Company to access capital. Although Torquay 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 Torquay 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: results from operations will not meet with expectations and risks associated with the oil and gas industry generally. Additional information on the foregoing risks and other factors that could affect Torquay' operations and financial results are included in Torquay's annual information form and other reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements contained in this news release are made as of the date hereof and Torquay 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.

The term "boe" may be misleading, particularly if used in isolation. A boe conversion of 6 Mcf: 1 bbl 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. The financial information presented herein has been prepared on the basis of IFRS. All references to dollar amounts are in Canadian dollars.

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

Contact Information

  • Torquay Oil Corp.
    Mr. Terry McCallum
    President & Chief Executive Officer
    403 233 2444 ext. 32
    403 262 6991 (FAX)
    terry@torquayoil.com

    Torquay Oil Corp.
    Mr. Brent McKercher
    Executive Vice President & Chief Operating Officer
    403 233 2444 ext. 30
    403 262 6991 (FAX)
    brent@torquayoil.com
    www.torquayoil.com