Twoco Petroleums Ltd.
TSX VENTURE : TWO

Twoco Petroleums Ltd.

August 28, 2012 18:26 ET

Twoco Petroleums Ltd. Second Quarter Highlights and 2012 Update

CALGARY, ALBERTA--(Marketwire - Aug. 28, 2012) - Twoco Petroleums Ltd. ("Twoco" or the "Company") (TSX VENTURE:TWO) announces financial and operating results for the quarter ended June 30, 2012 and an update of its 2012 activities.

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

  1. Unaudited condensed interim financial statements as at and for the quarter ended June 30, 2012, 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, 2012.

Copies of these documents may be obtained via SEDAR at www.sedar.com.

Highlights of the Second Quarter 2012 include:

  • Petroleum and natural gas sales revenue of $934,591 - a 30% decrease from the Second Quarter 2011 - predominantly due to the decrease in natural gas production and natural gas prices;

  • Cash flow used by operations of ($187,746) - a 258% decrease from the First Quarter 2011 primarily due to the decrease in natural gas production and natural gas prices. During the six months ended June 30, 2012, the Company had cash flow from operations of $338,556;

  • Average production of 426 boe per day (includes 102 barrels per day of oil and natural gas liquids) - a 25% decrease from the First Quarter 2011 - a result of shut-in natural gas volumes due to low natural gas prices, a lack of natural gas drilling activity and production declines of the Company's natural gas properties. Second Quarter 2012 oil production was hampered by wet access conditions during spring break-up. Current oil production is approximately 150 barrels per day;

  • Average production of 102 barrels per day of oil and natural gas liquids from the Company's Warspite heavy oil property represents a 100% increase in the average production of oil and natural gas liquids from the First Quarter 2011;

  • Operating netback of $363,023 ($9.36 per boe);

  • Operating netback of $38.76 per barrel in respect of the Company's production of Sparky heavy oil;

  • Net loss of $712,829;

  • Capital expenditures of $38,348;

  • Current land position of 104,151 gross (75,546 net) acres;

  • Operating costs of $13.60 per boe;

  • General and administrative expenses of $5.41 per boe; and

  • In the Second Quarter 2012, the Company issued a total of 466,393 common shares in payment of interest accrued to June 30, 2012 on its $3.4 million principal amount of redeemable, convertible, unsecured 8% debentures.

Highlights of Twoco's operations for the 2012 year to date include:

  • Current production of 375 boe per day (includes approximately 150 barrels per day of oil and natural gas liquids);

  • Twoco estimates current shut-in and behind pipe production capability of 400 boe per day; and

  • On April 30, 2012, the Company and Alberta Treasury Branches entered into an indicative term sheet extending the next review date of the Company's credit facilities to July 31, 2012. The Company and Alberta Treasury Branches have not yet reached an agreement on the next review date of the Company's credit facilities. Discussions in that regard remain on-going.

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 72,957,533 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 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 www.sedar.com. 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)