Turnkey E&P Inc.
NEX BOARD : TKY.H

Turnkey E&P Inc.

May 12, 2009 19:14 ET

Turnkey E&P Inc. Announces First Quarter 2009 Results

HOUSTON, TEXAS--(Marketwire - May 12, 2009) - Turnkey E&P Inc. ("Turnkey") (NEX:TKY.H), today announced its financial and operating results for the three months ended March 31, 2009.

The figures presented herein are expressed in thousands of U.S. dollars, except per share data or unless otherwise stated.

Below are the Corporation's summarized financial statements:



Summary Consolidated Balance Sheet
(stated in thousands of U.S. dollars)

March 31, December 31,
2009 2008
$ $
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Assets

Current assets
Cash and cash equivalents 1,839 4,021
Restricted cash - 1,000
Term deposits 1,000 1,000
Accounts receivable 1,404 938
Prepaid expenses 310 430

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4,553 7,389

Property and equipment 13,795 13,376

Other assets 59 67
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18,407 20,832
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Liabilities and shareholders' equity

Current liabilities
Accounts payable and accrued liabilities 10,462 10,108
Current debt 9,272 10,310
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19,734 20,418

Asset retirement obligations 248 243
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19,982 20,661
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Commitments and Contingencies

Shareholders' equity

Share capital 97,950 97,950

Contributed surplus 3,606 3,606

Deficit (103,130) (101,385)
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(1,575) 171
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18,407 20,832
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Summary Consolidated Statement of Comprehensive Loss and Deficit
(stated in thousands of U.S. dollars, except share data)

March 31, March 31,
2009 2008
$ $
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Revenue 1,118 8,812
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Expenses
Operating 1,457 6,989
General and administration 997 1,270
Depreciation, depletion and amortization 108 1,370
Stock-based compensation - 364
Interest expense 284 -
Other expense (income) 17 (116)
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2,863 9,897
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Net loss and comprehensive loss for
the period (1,745) (1,065)
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Deficit - Beginning of period (101,385) (11,656)
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Deficit - End of period (103,130) (12,821)
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Net loss per share
Basic and diluted (0.07) (0.04)
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Weighted average number of common shares
Basic 24,187,910 24,187,910
Diluted 24,187,910 24,187,910



Summary Consolidated Statement of Cash Flows
(stated in thousands of U.S. dollars)

March 31, March 31,
2009 2008
$ $
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Cash provided by (used in)

Operating activities
Net loss for the year (1,745) (1,065)
Items not involving cash
Depreciation, depletion and amortization 108 1,370
Stock-based compensation - 364
Accretion expense 5 4
Foreign exchange losses 25 36
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(1,607) 709
Changes in non-cash working capital
Accounts receivable (466) (4,721)
Prepaid expenses 121 (395)
Accounts payable and accrued liabilities 39 3,119
Income and other taxes payable - -
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Net cash used in Operating Activities (1,913) (1,288)
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Financing activities
Repayment of long-term debt (1,038) -
Decrease in restricted cash 1,000 -
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Net cash used in Financing Activities (38) -
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Investing activities
Purchase of property and equipment (529) (8,298)
Other 8 7
Changes in accounts payable 315 36
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Net cash used in Investing Activities (206) (7,930)
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Effect of foreign exchange losses on cash (25) (36)

Decrease in cash and cash equivalents (2,182) (9,254)

Cash and cash equivalents
- Beginning of period 4,021 19,959
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Cash and cash equivalents
- End of period 1,839 10,705
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The Corporation's Financial Statements and Management Discussion and Analysis are posted on www.sedar.com.

The Corporation's consolidated financial statements for the three months ended March 31, 2009 have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities in the normal course of operations. On November 17, 2008, The Corporation's U.S. subsidiary through which the majority of the Corporation's activities are conducted filed for protection under Chapter 11 of the United States Bankruptcy Code. At December 31, 2008, the Corporation reported a working capital deficiency of $13,029 and a net loss and comprehensive loss for the year then ended of $89,729. At March 31, 2009, the Corporation reported a working capital deficit of $15,181 and a net loss for the three month period then ended of $1,745. The Corporation is engaged in a program to dispose of certain of its operating assets in order to discharge its liabilities. The Corporation's focus is to obtain an international drilling contract utilizing its specialized drilling equipment and technical knowledge to maximize the value of the assets and maintain an ongoing operation. Notwithstanding this, the assets have been written down to their estimated realizable value. Due to uncertain global and industry economic conditions, the assets may not be realized at their carrying values on these financial statements. The Corporation may not be able to continue in business operations or emerge from Chapter 11.

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.
    R. M. (Bob) Tessari
    President and Chief Executive Officer
    (281) 248-8822