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

Turnkey E&P Inc.

August 14, 2009 16:01 ET

Turnkey E&P Inc. Announces Second Quarter 2009 Results

HOUSTON, TEXAS--(Marketwire - Aug. 14, 2009) - Turnkey E&P Inc. ("Turnkey") (NEX:TKY.H), today announced its financial and operating results for the three and six months ended June 30, 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)

June 30, December 31,
2009 2008
$ $
-----------------------------

Assets

Current assets
Cash and cash equivalents 944 4,021
Restricted cash (note 4) - 1,000
Term deposits (note 8(b)) 1,000 1,000
Accounts receivable 449 938
Prepaid expenses 360 430
-----------------------------

2,753 7,389

Property and equipment (note 3) 13,537 13,376

Other assets - 67
-----------------------------

16,290 20,832
-----------------------------
-----------------------------

Liabilities and shareholders' equity

Current liabilities
Accounts payable and accrued liabilities 9,511 10,108
Current debt (note 4) 9,272 10,310
-----------------------------

18,783 20,418

Asset retirement obligations 253 243
-----------------------------

19,036 20,661
-----------------------------

Commitments and Contingencies (note 8)

Shareholders' equity

Share capital (note 5) 97,950 97,950

Contributed surplus (note 5) 3,606 3,606

Deficit (104,302) (101,385)
-----------------------------

(2,746) 171
-----------------------------

16,290 20,832
-----------------------------
-----------------------------


Summary Consolidated Statement of Comprehensive Loss and Deficit
(stated in thousands of U.S. dollars, except share data)

Three months ended Six months ended
June 30, June 30,
-----------------------------------------------
2009 2008 2009 2008
$ $ $ $
-----------------------------------------------

Revenue 466 4,958 1,584 13,770
-----------------------------------------------

Expenses
Operating 646 6,673 2,103 13,662
General and administration 849 1,083 1,846 2,353
Depreciation, depletion and
amortization 175 1,250 283 2,620
Stock-based compensation - 341 - 705
Interest expense 256 21 540 21
Other expense (income) (note 6) (288) (35) (272) (151)
-----------------------------------------------

1,638 9,333 4,500 19,210
-----------------------------------------------

Net loss and comprehensive
loss for the period (1,172) (4,362) (2,916) (5,440)

Deficit - Beginning of
period (103,130) (12,721) (101,386) (11,656)
-----------------------------------------------

Deficit - End of period (104,302) (17,083) (104,302) (17,083)
-----------------------------------------------

Net loss per share
Basic and diluted (0.05) (0.18) (0.12) (0.22)

Weighted average number of
common shares
Basic 24,187,910 24,187,910 24,187,910 24,187,910
Diluted 24,187,910 24,187,910 24,187,910 24,187,910


The Corporation's Financial Statements and Management Discussion and Analysis are posted on www.sedar.com.

The Corporation's consolidated financial statements for the period ended June 30, 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 deficit of $13,029 and a net loss and comprehensive loss for the year then ended of $89,729. At June 30, 2009, the Corporation reported a working capital deficit of $16,030 and a net loss for the six month period then ended of $2,916. 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. Due to uncertain global and industry economic conditions, the assets may not be realized at their carrying values on these financial statements. Accordingly, the assets were written down to their estimated realizable value on a forced liquidation basis as at December 31, 2008. There is no certainty that the Corporation will be able to continue in business operations or emerge from Chapter 11.

On August 13, 2009 the Board of Directors granted 1,670,000 stock options to the Directors, Officers, Employees and Consultants of the Corporation. The stock options are exercisable at $0.10 Canadian, vest over three years and expire seven years from date of grant.

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