Turnkey E&P Inc.

Turnkey E&P Inc.

March 23, 2006 08:00 ET

Turnkey E&P Inc. Announces December 31, 2005 Results

CALGARY, ALBERTA--(CCNMatthews - March 23, 2006) - Turnkey E&P Inc. ("Turnkey") (TSX:TKY), today announced its financial and operating results for the period ending December 31, 2005.

The figures presented below are expressed in thousands of U.S dollars, except where otherwise stated.

Selected Consolidated Financial Information
Year ended December 31, 2005

Financial Results $U.S.

Revenue 1,026
Operating expenses 1,047
Financial items (386)
Net loss 504
Loss per share - basic and diluted 0.34

Financial Position

Cash and cash equivalents 58,591
Working capital 59,464
Long term debt Nil
Shareholders' equity 98,204

Operating and Financial Highlights

1. Turnkey was incorporated on December 10, 2004.

2. Turnkey completed the first stage of its founders share private placement issue on August 24, 2005, by the issue of 1,052,000 common shares as CAD $3.00 per share. A further 92,574 shares were issued on October 4, 2005. Expenses related to this issuance were $185. Part of the proceeds were used to pay start-up costs of $148, which mainly comprised consulting fees.

3. On August 23, 2005, the Corporation entered into an Acquisition Agreement with Tesco Corporation and certain of its subsidiaries ("Tesco") and agreed to enter into a Preferred Supplier Agreement and a Rig Personnel Supply Agreement.

4. On December 13, 2005, the Corporation completed a long form prospectus initial public offering for CAD $100 million and on December 29, 2005, closed an agents over-allotment option for a further CAD $15 million. A total of 23 million common shares were issued at CAD $5.00. Expenses of the issuer were $6,357, including agents fees of 5.5%.

5. On December 13, 2005, the Acquisition, Preferred Supplier and Rig Personnel Supply Agreements were activated. Pursuant to these agreements, the Corporation purchased Tesco's Contract Casing Drilling Business, including four drilling rigs and other assets, assumed drilling contracts in progress and hired the majority of employees of the business. Pursuant to the Preferred Supplier Agreement, the Corporation is obligated to purchase $3,000 of casing drilling services and supplies during the period to June 13, 2007. Pursuant to the Rig Personnel Agreement, the Corporation supplies personnel to Tesco. Consideration paid by the Corporation to Tesco was $35,000 plus 1,000,000 warrants to purchase common shares of the Corporation at CAD $6.00 expiring December 13, 2007, valued at $1,000.

The Management Discussion and Analysis and the December 31, 2005 Audited Financial Statements for Turnkey are posted on www.sedar.com. The Annual Meeting for Turnkey is scheduled to take place on Wednesday, May 10th, 2006 at 3:00 p.m. in the Cardium Room of the Calgary Petroleum Club.

Turnkey is an independent oil and gas company that is focusing its oil and natural gas acquisition, exploitation, development and production activities in the continental United States using Casing Drilling® technologies. Additional information about Turnkey can be found at its website: www.turnkeyep.com.

This release and Turnkey's website referenced in this release contain forward-looking statements including expectations of future production and components of cash flow and earnings. Investors are cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Turnkey. These risks include, but are not limited to; the risks associated with the oil and gas industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to; operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, health and safety risks including, without limitation, blowouts and spills, and the uncertainty of estimates and projections of production, costs and expenses. The risks outlined above should not be construed as exhaustive. Investors are cautioned not to place undue reliance on any forward-looking information. Turnkey undertakes no obligation to update or revise any forward-looking statements.

Contact Information

  • Turnkey E&P Inc.
    Dale W. Bossert
    President and Chief Executive Officer
    (403) 828-5720
    Turnkey E&P Inc.
    Martin Hall
    Vice-President, Finance and Chief Financial Officer
    (403) 616-3910