August 31, 2007 09:00 ET

Tuscany Energy Announces Financial and Operating Results for the First Six Months of 2007

CALGARY, ALBERTA--(Marketwire - Aug. 31, 2007) - Tuscany Energy Ltd. (TSX VENTURE:TUS):

Tuscany's financial and operating results for the six months ended June 30, 2007 were lower than the first half of 2006 due primarily to reduced production volumes. The Company, however, continued to realize on the benefits of strong prices for its crude oil and narrower price differential between light sweet crude at Edmonton and Hardisty's Bow River Blend. As a result, the Company received an average of $44.83 per Bbl for its crude in the first half of 2007 compared to $42.69 per Bbl received in the first six months of 2006. Tuscany's natural gas selling prices increased as the Company received $6.92 in the first half of 2007 compared to $6.62 per Mcf received over the same period in 2006, a period-over-period increase of 5%. The Company's gas sales during the first six months of 2007 experienced a greater than anticipated decline as a well at Macklin, Saskatchewan watered out during the first quarter resulting in a decrease of natural gas sales from 379 Mcf per day during the first half of 2006 to average 232 Mcf per day for the comparative period in 2007.

Tuscany's second quarter 2007 capital expenditure program focused on production facilities and equipment to place wells on production at the Evesham and Wildwood areas. Both wells are anticipated to be on production by the end of Q3.


Revenue for the three and six month periods ended June 30, 2007, totaled $538,000 and $1.07 million respectively compared to $597,000 and $1.23 million respectively for the same periods on 2006.

Cash flow from operations for the Q2 2007 increased to $84,000 compared with $59,000 in Q2 2006. Cash flow from operations for the six month period ended June 30, 2007 resulted in a cash flow deficiency of $62,000, compared with $255,000 in the previous year.

Capital expenditures for the first half of 2007 totaled $459,000 relative to the $1.2 million during the same period in 2006. The Company's 2007 capital program was funded entirely from bank borrowings compared to 80% in the first half of 2006.


Natural gas production for Q2 2007 decreased to 231 Mcf/d from 312 Mcf/d. Heavy oil production, however, increased to average 96 Bbl/d for the quarter compared with 87 Bbl/d over the same period in 2006. For the six month period ended June 30, 2007, natural gas production decreased to average 232 Mcf/d from 379 Mcf/d for 2006 and heavy oil production decreased slightly to average 97 Bbl/d compared with 100 Bbl/day for the same period in 2006.

Business Outlook

Tuscany announced on July 23, 2007 that as part of a continuing review of business and strategic opportunities available to the Company, the Company's board of directors authorized management to examine strategic and corporate restructuring alternatives that may be beneficial to Tuscany shareholders. The alternatives to be considered will include, but will not necessarily be limited to: maintaining the status quo; continuing as an independent oil and gas company with changes to management; merging with another company and or the sale of the Company for cash or shares. Any strategic or corporate restructuring alternatives identified will be subject to review and approval of the Tuscany board of directors, shareholders and all the requisite regulatory authorities.

Tuscany also announces that David Dakers, chief financial officer and corporate secretary of the Company has resigned for personal reasons. "On behalf of Tuscany, I would like to thank Mr. Dakers for his contributions to the Company and wish him well on is future endeavors," says Greg Busby, president and CEO of Tuscany. Greg Busby has been appointed as CFO on an interim basis until the completion of the Company's strategic review of operations.

Financial and Operating Highlights

Three Months Ended Six Months Ended
June 30 June 30
($ thousands except where noted) 2007 2006 2007 2006
Total revenue 538 597 1,078 1,230
Natural gas revenue 146 161 292 454
Heavy oil revenue 392 436 786 776
Cash flow (deficiency) from
operations 84 59 (62) 255
Per share - basic & diluted ($) 0.00 0.00 (0.00) 0.01
Net loss (92) (122) (377) (195)
Per share - basic & diluted ($) (0.00) (0.00) (0.01) 0.01
Shares o/s - weighted avg.
diluted (000's) 26,551 25,257 26,551 25,414
Shares o/s - period end (000's) 26,551 25,149 26,551 25,149
Capital expenditures - net 275 144 459 1,261
Total Sales (Boe/d) (1) 135 139 135 163
Natural gas sales (Mcf/d) 231 312 232 379
Heavy Oil sales (Bbls/d) 96 87 97 100
Natural gas price ($/Mcf) 6.84 5.70 6.92 6.62
Heavy Oil price ($/Bbl) 44.40 54.85 44.82 42.69

(1) Boe Presentation - The term barrels of oil equivalent (Boe) may be
misleading, particularly if used in isolation. A Boe conversion ratio
of 6 million cubic feet (Mcf): 1 barrel (Bbl) is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead. All Boe
conversions in this report are derived by converting gas to oil in the
ratio of six Mcf of gas to one Bbl of oil.

Additional information concerning Tuscany's financial statements and associated Management's Discussion and Analysis for the period ended, June 30, 2007 can be found on the SEDAR website at www.sedar.com.

Forward-looking statements - statements included in this press release that are not historical facts may be considered "forward-looking statements." Actual results could differ materially from the conclusions, forecasts or projections in the forward-looking information. Certain material factors and assumptions were applied in drawing the conclusions or making the forecasts or projection in the forward-looking information and the material factors or assumptions that were applied in drawing the conclusion or making the forecast or projection as reflected in the forward-looking information is contained in the press release.

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

Contact Information

  • Tuscany Energy Ltd.
    Greg T. Busby
    President & CEO
    (403) 264-2398
    (403) 264-2399 (FAX)
    Tuscany Energy Ltd.
    Robert W. Lamond
    (403) 269-9889
    (403) 269-9890 (FAX)