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

Torquay Oil Corp.

August 26, 2011 08:30 ET

Torquay Oil Corp. Reports 2011 Second Quarter Results

CALGARY, ALBERTA--(Marketwire - Aug. 26, 2011) -

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") is pleased to announce that it has filed its unaudited financial statements and related Management's Discussion and Analysis ("MD & A") for the three and six months ended June 30, 2011. The Company's unaudited financial statements and related MD & A are available for review at www.torquayoil.com or www.sedar.com.

Q2 Highlights


--  Drilled and completed one, 100% W.I., Ratcliffe horizontal well at Lake
    Alma, SK. The well is currently being evaluated. 
--  Sold producing property at Union Jack in southeast Saskatchewan for
    gross proceeds of $1,500,000. 
--  Viewfield battery expansion was completed with the battery now capable
    of handling 5,000 bbls of fluid per day. 
--  Closed a $13,300,000 bought deal financing. 
--  Produced an average of 330 boepd (94% light oil and liquids). 
--  Achieved funds flow of $998,455. 

Subsequent to June 30, 2011 Torquay:


--  Drilled and completed one, 100% W.I., horizontal Bakken well at Lake
    Alma, SK. The Company has just begun evaluating the flow back of this
    well. 
--  Drilled and completed three, 100% W.I., horizontal Frobisher wells at
    Viewfield, SK. 
--  Drilled one (1.0 net) Bakken horizontal well at Viewfield, SK.
    Completion operations are scheduled for the first week of September. 
--  Drilled and completed one, 100% W.I., vertical well at Willmar, SK. The
    well is currently being evaluated. 
--  Current production is averaging 325 boepd (97% light oil and liquids)
    with approximately 250 boepd of production currently being equipped for
    production. 

Operations Update

Lake Alma, SE Saskatchewan

In the second quarter Torquay drilled and completed a horizontal Bakken well in the Lake Alma area. This well is currently being evaluated and the Company expects to release production data within the next 60 days.

The Company's 3D seismic programs are proceeding on schedule. Torquay is on track to complete both programs by mid September. These programs will provide Torquay with approximately 200 square kilometers of proprietary 3D seismic data over its core Lake Alma area where the Company holds over 57,000 gross acres (55,000 net).

SE Saskatchewan

Along with many other operators in SE Saskatchewan, Torquay is still experiencing the effects of record spring rainfall. The weather delayed Torquay's field operations at all areas outside of Lake Alma. However the Company has now begun lease construction and expects to start drilling at Midale and Alameda later in the third quarter.

Torquay's drilling inventory continues to expand and the Company expects to drill between 12 and 15 additional locations through to the end of 2011. Torquay has also begun permitting a proprietary 3D seismic program at Rosebank, SK.

Financial Update

6,020,143 warrants that were issued in 2010 were exercised at $1.40 for gross proceeds of $8,428,200.

Financial and Operational Highlights

Selected financial and operational information is outlined below and should be read in conjunction with Torquay's unaudited interim financial statements and related notes therein for the three and six months ended June 30, 2011 as prepared in accordance with IFRS and the December 31, 2010 audited financial statements and related notes therein as prepared in accordance with Canadian Generally Accepted Accounting Principles "(GAAP"). The Corporation's financial statements and additional information are available for review at www.sedar.com or www.torquayoil.com.


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                                                Three months    Six months 
                                                       ended         ended 
                                                    June 30,      June 30, 
($000's except per share amounts)                       2011          2011 


Petroleum & natural gas revenue                 $      2,656  $      5,105 
Funds flow from operations                               998         1,998 
Funds flow per share (basic and diluted)                0.03          0.05 
Net loss                                                (328)       (3,290)
Net loss per share (basic and diluted)                 (0.01)        (0.09)
Capital expenditures (net)                             3,177        19,913 
Weighted common shares outstanding (1)                38,491        36,992 
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            Production                                                
                Crude oil (bbls/d)                       275           281 
                    NGL's (bbls/d)                        33            41 
               Natural gas (mcf/d)                       129           168 
----------------------------------------------------------------------------
                       Total boe/d                       330           350 
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            Pricing                                                
                 Crude oil ($/bbl)              $      98.19  $      91.13 
                     NGL's ($/bbl)                     48.63         45.21 
               Natural gas ($/mcf)                      4.35          4.38 
----------------------------------------------------------------------------
                   Average ($/boe)              $      88.55  $      80.59 
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       Netbacks ($/boe)                                                    
               Petroleum & Natural gas revenue  $      88.55  $      80.59 
               Royalties                              (11.61)       (10.38)
               Operating costs                        (17.78)       (14.95)
----------------------------------------------------------------------------
               Field netback                    $      59.16  $      55.26 

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(1) Basic per share amounts are calculated by dividing net income or loss by
    the weighted average number of Class A outstanding during the period. In
    addition, for the purpose of calculating diluted per share amounts, The
    effect of warrants, options and convertible Class B Shares are anti-
    dilutive and consequently are not included in the determination of
    diluted shares outstanding. 

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 48,626,582 Class A Shares and 1,260,000 Class B Shares outstanding.

FORWARD LOOKING STATEMENTS:

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: statements with respect to, drilling, completion, seismic and facility plans, capital expenditures 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; 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.

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.

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