Trimox Energy Inc.

Trimox Energy Inc.

April 11, 2006 21:27 ET

Trimox Energy Inc. Announces 2005 Results, 2006 Budget and Q1-2006 Update

CALGARY, ALBERTA--(CCNMatthews - April 11, 2006) - Trimox Energy Inc. ("Trimox" or the "Company") (TSX VENTURE:TRM.A)(TSX VENTURE and TRM.B) is pleased to announce its financial and operating results for the year ended December 31, 2005, the Company's 2006 budget and provide an update of operations conducted during the first quarter of 2006.


Three Months Ended Year ended Period ended
December 31, December 31, December 31,
2005 2005 2004(1)

Financial ($)
Natural gas and
NGL revenues 1,101,128 1,220,498 -
Net income (loss) 39,738 (203,453) (15,739)
Per share - basic
and diluted 0.00 (0.02) (0.00)
Funds from (used for)
operations 719,437 645,347 (3,239)
Per share - basic
and diluted 0.05 0.05 (0.00)
Capital expenditures 9,013,849 15,787,876 923,437
Working capital 4,176,469 4,176,469 8,374,648

Equity outstanding
Class A shares 14,900,000 14,900,000 10,000,000
Class B shares 450,000 450,000 450,000
Stock options on Class
A shares 1,335,000 1,335,000 665,000

Average Daily Production
Natural gas - mcf 1,055 299 -
Crude oil & NGL - bbls 8 2 -
Total - boe 184 52 -

Average Sales Prices
Natural gas - $/mcf 10.85 10.72 -
Crude oil & NGL - $/bbl 64.00 56.19 -
Total - $/boe 65.05 63.94 -

Operating Netbacks
BOE - $/boe 42.64 42.15 -

Wells Drilled
Gross 7.0 17.0 2.0
Net 5.0 10.7 1.9

Undeveloped Land
Gross - Acres 37,440 37,440 -
Net - Acres 17,593 17,593 -

(1) Period from incorporation on September 13, 2004 to
December 31, 2004.

Significant progress was made during the Company's first full year of operations. Exploration success was realized in three core areas - Retlaw in southern Alberta, Niton and Windfall in west-central Alberta and Worsley on the Peace River Arch. A total of 17 (10.7 net) wells were drilled, resulting in five (3.7 net) oil wells, seven (4.2 net) gas wells and five (2.8 net) dry holes. Significant increases realized in production and funds from operations during the fourth quarter have continued into 2006. Production, which averaged 184 boe/d during the fourth quarter, averaged approximately 500 boe/d for the first quarter of 2006, based on preliminary field numbers. Funds from operations, which were $719,000 for the fourth quarter of 2005, are expected to exceed $1,000,000 for the first quarter of 2006.

A total of 719,800 boe, based on proved plus probable reserves, were discovered during 2005, resulting in finding and development costs of $26.35 per boe, including future development costs of $3,234,000. Approximately 30% of the 2005 capital expenditures related to capital spent on unproved properties, the benefits of which will be felt in future years. Operating netbacks for 2005 were $42.15 per boe.

The Board of Directors have approved a 2006 capital budget of $13,500,000, which will be funded by a combination of existing working capital, 2006 funds from operations, the establishment of a bank credit facility and potential equity financing. To date, two (0.6 net) wells have been drilled and cased at Worsley resulting in a potential oil well and a potential gas well. Completion, and potentially tie-in and equipping operations, will resume after spring break-up when surface conditions improve. The Company will also commence drilling the remaining nine wells budgeted for 2006 subsequent to spring break-up. Two drilling rigs have been contracted to execute this program which will include wells in each of the three core areas established by Trimox.

The audited financial statements and related MD&A for the year ended December 31, 2005 will be filed on the SEDAR website at within 48 hours.

This news release refers to "funds from (used for) operations", "funds from (used for) operations per share" and "operating netback", which are not recognized measures under GAAP. Management believes that in addition to net income (loss), funds from (used for) operations and operating netback are useful supplemental measures as they demonstrate the Company's ability to generate the cash necessary to fund future growth through capital investment. The reconciliation between net income (loss) and funds from (used for) operations can be found on the statements of cash flow in the interim financial statements and the audited financial statements. Trimox defines operating netback as revenue less royalties, operating and transportation expenses. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss) determined in accordance with GAAP as an indication of the Company's performance. Trimox's method of calculating these measures may differ from the method used by other companies and accordingly, may not be comparable to measures used by other companies.

This news release contains forward-looking statements which are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied. Such forward-looking statements necessarily involve risks associated with oil and gas exploration, property development, production, marketing, and transportation, such as dry holes and non-commercial wells, facility and pipeline damage, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers and the ability to access sufficient capital from internal and external sources. Readers are cautioned not to place undue reliance on forward-looking statements, as no assurances can be given as to future results, levels of activity or achievements.

Natural gas volumes have been converted to barrels of oil equivalent ("boe") using six thousand cubic feet ("mcf") equal to one barrel ("bbl"). This conversion ratio is based on an energy equivalent conversion applicable at the burner tip and does not represent a value equivalency at the wellhead.

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

Contact Information

  • Trimox Energy Inc.
    Steve Dabner
    President & C.E.O.
    (403) 216-1721
    Trimox Energy Inc.
    Thomas Love
    Chairman & C.F.O.
    (403) 216-1722