Twoco Petroleums Ltd.

Twoco Petroleums Ltd.

August 24, 2011 18:58 ET

Twoco Petroleums Ltd. Second Quarter Highlights and 2011 Update

CALGARY, ALBERTA--(Marketwire - Aug. 24, 2011) - Twoco Petroleums Ltd. ("Twoco" or the "Company") (TSX VENTURE:TWO) announces financial and operating results for the quarter ended June 30, 2011 and an update of its 2011 activities.

Twoco has filed the following documents on the System for Electronic Document Analysis and Retrieval (SEDAR):

  1. Unaudited condensed financial statements as at and for the quarter ended June 30, 2011, together with the notes therein as prepared in accordance with International Financial Reporting Standards; and
  2. Management's discussion and analysis of financial condition and results of operations as at and for the quarter ended June 30, 2011.
Copies of these documents may be obtained via SEDAR at
Highlights of the Second Quarter 2011 include:
  • Average production of 567 boe per day (includes 51 barrels per day of oil and natural gas liquids) – a 23% decrease from the Second Quarter 2010 – a result of shut-in volumes due to low natural gas prices and limited access due to extremely wet conditions, a lack of drilling activity and natural production declines;
  • Petroleum and natural gas sales revenue of $1,338,413 – a 2% decrease from the Second Quarter 2010 – due to lower natural gas production and lower natural gas prices;
  • Cash flow from operations of $118,979 – an 121% increase from the Second Quarter 2010;
  • Operating netback of $666,003 ($12.90 per boe);
  • Net loss of $1,254,660 ($0.02 per share);
  • Capital expenditures of $1,757,677;
  • Current land position of 114,344 gross (84,304 net) acres;
  • Operating costs of $10.21 per boe;
  • General and administrative expenses of $3.77 per boe;
  • On April 29, 2011, the Company closed a $3.05 million private placement equity financing of 10,157,824 common shares of the Company at a price of $0.27 per common share and 994,500 flow-through common shares of the Company at a price of $0.31 per flow-through common share; and
  • On July 4, 2011, the Company announced the issuance of 278,495 common shares in payment of interest accrued to June 30, 2011 on its $3.4 million principal amount of redeemable, convertible, unsecured 8% debentures.
Highlights of operations for the year to date include:
  • In April 2011, Twoco acquired the mineral rights to an additional 640 gross acres (618 net) on the Company's Sparky heavy oil property in the Warspite area of Alberta;
  • On May 5, 2011, Twoco received approval from the Energy Resources Conservation Board ("ERCB") which amended the drilling spacing on the Company's Sparky heavy oil property to allow for the drilling of up to 8 horizontal lateral legs per pool per quarter section. As a result of the ERCB's approval, Twoco has identified drilling locations for an additional 120 horizontal laterals on the Company's lands;
  • In July 2011, Twoco completed the drilling and completion of two (1.93 net) tri-leg horizontal oil wells on the Company's Sparky heavy oil property. The wells are currently being tied into Twoco's existing gas infrastructure for purposes of natural gas conservation as required by the ERCB. Production from these two wells is expected to commence within the next 10 days;
  • Current production of 575 boe per day (includes approximately 60 barrels per day of oil and natural gas liquids); and
  • Twoco estimates current shut-in and behind pipe production capability of 150 boe per day. This estimate does not include the potential production from the two (1.93 net) tri-leg horizontal oil wells currently being tied-in for production.

Twoco is an oil and gas company engaged in the exploration for, and the acquisition, development and production of, oil and natural gas reserves primarily in the Province of Alberta. Twoco has 71,352,224 common shares issued and outstanding as at today's date.

In this news release the calculation of barrels of oil equivalent (boe) is calculated at a conversion rate of six thousand cubic feet (Mcf) of natural gas for one barrel (Bbl) of oil based on an energy equivalency conversion method. Boes may be misleading particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1Bbl is based on an energy equivalency conversion method primarily applicable to the burner tip and does not represent a value equivalency at the wellhead.

Forward-Looking Statements:

Certain information set forth in this news release contains forward-looking statements or information ("forward- looking statements"), including statements regarding the timing of production from its two tri-leg horizontal wells and behind pipe production capability. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Twoco's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, operational risks in exploration and development, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although Twoco believes that the expectations in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. As such, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Twoco does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy securities in any jurisdiction.

Neither 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

  • Twoco Petroleums Ltd.
    Wayne A. Malinowski
    President and Chief Executive Officer
    (403) 231-8653
    (403) 237-6048 (FAX)