Tuscany Energy Ltd.
TSX VENTURE : TUS

Tuscany Energy Ltd.

April 29, 2016 09:00 ET

Tuscany Reports Financial and Operating Results for the Year Ended December 31, 2015

CALGARY, ALBERTA--(Marketwired - April 29, 2016) - Tuscany Energy Ltd. (TSX VENTURE:TUS). Tuscany is pleased to report on its financial and operating results for the year ended December 31, 2015.

Financial

Tuscany reported oil and natural gas sales of $10.1 million for the year ended December 31, 2015 compared with $17.6 million in 2014. The Company reported cash flow from operations of $1.2 million, compared to $8.1 million for 2014. Lower commodity prices resulted in Tuscany reporting a $2.5 million impairment of its Alberta oil and gas assets for the year, which contributed to a loss of $6.6 million for the year ended December 31, 2015.

Operations

Due to the low heavy oil prices, the Company deferred drilling activities and focused on well optimization and the expansion of infrastructure. This included the addition of higher volume pumps on a number of wells, as well as increasing the capacity of water disposal facilities at both the Macklin and Evesham properties.

In December 2015, the Company drilled a successful exploratory horizontal heavy oil well on a Dina prospect at Winter, Sask. The well was drilled to satisfy Tuscany's flow- through share commitments on shares issued in 2014. The Winter well is a new pool heavy oil discovery that may lead to six offset development wells. The new well produced an average of 67 Bopd in December 2015 and 85.4 Bopd in January 2016 before being shut-in in February until oil prices recover.

Tuscany was also active in abandoning wells in Alberta to improve the Company's Licensed Liability Rating ("LLR"). As a result Tuscany has restored its LLR to above one and recovered its $1.1 million of security from the Alberta Government.

Production

The Company reported average production of 789 BOEd for 2015, slightly higher than the 751 BOEd in the prior year, though lower than the 844 BOEd reported for the first half of 2015. Tuscany was able to maintain its production levels with limited drilling activity.

Strategic Review Process

On December 2, 2015 Tuscany announced that it had initiated a process to identify and examine strategic alternatives for the purpose of enhancing shareholder value. Such review process is ongoing and may include a number of alternatives including a corporate transaction, consisting of a sale or amalgamation of the Company, an asset sale, an issue of new equity or debt instruments or a combination of any of these.

Tuscany has engaged a financial advisor in connection with the comprehensive review and analysis of strategic alternatives.

At December 31, 2015, the Company had a production loan facility with a Canadian financial institution, with a lending limit of $8.5 million, repayable on demand. At December 31, 2015, Tuscany's working capital deficit was $9.1 million including $7.9 million drawn on the facility. The Company is not in compliance with the working capital covenant in its credit facility agreement. Tuscany has obtained a temporary waiver from its lending institution of the breach of its covenants in order to allow it to remedy the breach. The Company has committed to supply the lending institution with a plan to remedy the breach in a timely manner.

Corporate Summary
Three months ended Year ended
December 31, December 31,
2015 2014 2015 2014
($ Thousands, unless otherwise indicated)
Financial
Oil & gas revenue 1,750 4,689 10,113 17,609
Cash flow from (used in) operations (1) (679 ) 1,925 1,197 8,077
$ per share, basic and diluted (1) (0.01 ) 0.04 0.02 0.15
Net loss for the period (2,297 ) (5,874 ) (6,574 ) (5,087 )
$ per share, basic and diluted (0.05 ) (0.12 ) (0.13 ) (0.12 )
Capital expenditures, net of dispositions 905 3,584 2,646 11,525
Net debt (1) (9,128 ) (6,763 ) (9,128 ) (6,763 )
Total assets 27,281 38,324 27,281 33,503
Total shares outstanding at period end 50,637 51,041 50,637 51,041
Operations
Production
Oil and NGLs (Bopd) 519 777 632 609
Gas (Mcfd) 1,138 834 943 852
BOEd (6 Mcf = 1 Bbl) 709 916 789 751
Product Prices
Oil ($/Bbl) 31.10 61.89 39.91 73.19
Gas ($/Mcf) 2.53 3.43 2.63 4.30

(1) See Non-GAAP Measures in MD&A for the Year ended December 31, 2015

Tuscany has filed Audited Financial Statements and MD&A for the year ended December 31, 2015 on SEDAR at www.sedar.com.

Where amounts are expressed on a barrel of oil equivalent (BOE) basis, natural gas volumes have been converted to barrels of oil on the basis of six thousand cubic feet (mcf) per barrel (bbl). BOE figures may be misleading, particularly if used in isolation. A BOE conversion of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 mcf : 1 bbl, using a conversion on a 6 mcf : 1 bbl basis may be m isleading as an indication of value. References to oil in this discussion include crude oil and natural gas liquids (NGLs).

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Robert W. Lamond, President & CEO
    TUSCANY ENERGY LTD.
    (403) 269-9889
    (403) 269-9890 (FAX)

    Donald K. Clark, Vice President Operations
    TUSCANY ENERGY LTD.
    (403) 269-9889
    (403) 269-9890 (FAX)
    www.tuscanyenergy.com