UNX Energy Corp.
TSX VENTURE : UNX

UNX Energy Corp.

November 29, 2010 16:34 ET

UNX Energy Announces Third Quarter 2010 Operational and Financial Results

CALGARY, ALBERTA--(Marketwire - Nov. 29, 2010) -

NOT FOR DISTRIBUTION IN THE U.S.

UNX Energy Corp. (TSX VENTURE:UNX) ("UNX" or the "Company") today announced third quarter operational and financial results for the period ending September 30, 2010. During the quarter, the Company advanced its geological and geophysical work, raised funds to fulfill its commitments and hired additional technical staff. An equity financing in November has enabled the Company to move forward on a large 3D seismic acquisition during the first half of 2011. The Company also restated and refiled its consolidated financial statements and related management's discussion and analysis for fiscal 2009, as well as the interim financial statements and management's discussion and analysis for the three and six month periods ended March 31, 2010 and June 30, 2010 respectively. Management believes the changes in the restated and refiled financial statements are not material. Further detail on the restatement is provided below.

2010 Q3 Financial and Operational Results

"The third quarter saw continued steady progress on our work towards the discovery of oil and gas resources in offshore Namibia," said Mr. Gabriel Ollivier, President and CEO of UNX Energy. "Our efforts during the quarter were focused on the continued delineation of the resources through both in-house interpretation and analysis, and the various studies conducted and delivered to us by Brazilian-based IPEX (Integrated Petroleum Expertise Co.), whom we commissioned to provide in-depth analysis of the Orange Basin. The final and complete suite of studies from IPEX is targeted for delivery either later this year or in early 2011 and will include oil slick satellite surveys, seismic reprocessing and interpretation and a 3D compositional petroleum system model of the Orange Basin. These studies will be an important addition to the science we have assembled to-date on the Orange Basin and will contribute towards meaningful consultations with interested farm-in partners.

"Looking ahead, sizeable 3D seismic survey acquisitions are planned for the first half of 2011, which have been made possible by our most recent equity offerings. Once interpreted and analyzed, the new seismic data will give us a clearer picture of the resources, allowing us to identify and rank numerous possible drilling locations. UNX is well-positioned to continue the advancement of our corporate goals which will hopefully lead to the discovery of oil and gas in Namibia's offshore region."

Highlights from the third quarter include:

  • Completed an equity offering for the distribution of 11,430,000 Common Shares at a price of $1.75 per Common share, for gross proceeds of approximately $20 million;
  • Received an extension from Namibia's Ministry of Mines and Energy for the first phase of the Company's work program on Exploration License 0022 (Blocks 2815, 2816 and 2915), for a one-year period expiring on September 22, 2011;
  • Completed strategic additions to staff, including the appointment of Mr. Brad Holub as Chief Operating Officer;
  • Changed name and corporate identity to UNX Energy Corp., which represents a more accurate reflection of the Company's strategic focus; and
  • Experienced a third quarter net loss of $2,982,008 with a loss per share of $0.03

These highlights along with other operational and financial details are discussed further in the Company's third quarter 2010 financial statements and management discussion and analysis which can be accessed at www.sedar.com, or alternatively on the Company's updated website, located at www.unxenergy.com.

Restatement and Refiling of Financial Statements

During the preparation of the interim consolidated financial statements for the period ended September 30, 2010, the Company re-evaluated the acquisitions of NIDG and Kunene and determined that these acquisitions should be treated as asset acquisitions rather than business combinations. As a result, the Company reversed a $1.6 million gain, net of acquisition expenditures, on revaluation of the original investment in NIDG in the June 30, 2010 interim consolidated financial statements, and the $1.2 million loss, net of acquisition expenditures, on the revaluation of the investment in Kunene in the December 31, 2008 consolidated financial statements. The Company also amended the future income tax liability for the six month period ended June 30, 2010 and the year ended December 31, 2008 to reflect the appropriate liability associated with the NIDG and Kunene oil and gas properties and adjusted the associated non-controlling interests. In addition, the Company adjusted its stock-based compensation expected life estimates for the period ending June 30, 2010, increasing the expense by $0.3 million.

These restatements will have no impact on the Company's cash flow or its ability to fulfill its commitments and move forward with its strategy in Namibia.

The restated and refiled interim and annual consolidated financial statements have been amended as follows:

Consolidated Balance Sheet and  
Interim Consolidated Statements of Operations and Comprehensive Loss  
As at and for the three months ended June 30, 2010     Previously reported       Adjustment     Restated  
Oil and gas properties   $ 17,940,700     $ 7,041,396   $ 24,982,096  
Future income tax liability     -       7,471,105     7,471,105  
Non-controlling interest     1,454,146       9,908     1,464,054  
Contributed surplus     6,461,553       322,505     6,784,058  
Deficit     (11,790,088 )     762,122     (12,552,210 )
Net loss     (816,077 )     1,958,218     (2,774,295 )
Net loss per share   $ (0.01 )   $ 0.02   $ (0.03 )
                       
Consolidated Balance Sheet                      
                       
As at December 31, 2009     Previously reported     Adjustment       Restated  
Oil and gas properties   $ 6,964,913   $ 4,414,529     $ 11,379,442  
Future income tax liability     -     3,087,044       3,087,044  
Non-controlling interest     273,748     131,389       405,137  
Deficit     (8,181,599 )   (1,196,096 )     (6,985,503 )
   
Consolidated Balance Sheet and  
Consolidated Statements of Operations and Comprehensive Loss  
                         
As at December 31, 2008     Previously reported       Adjustment       Restated  
Oil and gas properties   $ 4,419,193     $ 4,414,529     $ 8,833,722  
Future income tax liability     -       3,087,044       3,087,044  
Non-controlling interest     273,748       131,389       405,137  
Deficit     (6,764,808 )     (1,196,096 )     (5,568,712 )
Net loss     (3,942,232 )     (1,196,096 )     (2,746,136 )
Net loss per share   $ (0.07 )   $ (0.02 )   $ (0.05 )

About UNX Energy Corp.

UNX Energy Corp. is a junior, independent oil and gas company, focused on exploration for crude oil in offshore Namibia, Africa. Headquartered in Calgary, Alberta, Canada, UNX's asset base consists of approximately 51,000 square kilometres (approximately 32,000 net) of offshore acreage, strategically located along the prolific South Atlantic Margin. Development of these highly prospective blocks is being advanced by an experienced management team, qualified technical staff and strong in-country relationships. UNX employs strategic technical expertise to optimize the probability of exploration success in the region. UNX is committed to conducting its business in a socially and environmentally responsible manner, ultimately working towards the goal of sustainable development in Namibia's oil and gas sector for the benefit of all stakeholders.

On Behalf of the Board of Directors of UNX Energy Corp.

Duane Parnham, Chairman

For further information visit our website at www.unxenergy.com.

Sedar Profile No. 00016276

Forward Looking Information

Certain statements contained in this press release may constitute forward looking statements. These statements relate to future events or UNX's future performance. All statements other than statements of historical fact may be forward looking statements. Statements relating to "reserves" or "resources" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves and resources described can be profitably produced in the future. Forward looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. UNX believes that the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements included in this press release should not be unduly relied upon by investors.

These statements speak only as of the date of this press release and are expressly qualified, in their entirety, by this cautionary statement.

Any statements regarding the following are forward looking statements: (i) planned exploration activity including both expected drilling and geological and geophysical related activities; (ii) capital expenditure programs; (iii) projections of market prices and costs; (iv) possible commerciality; (v) available and potential farm out partners; (vi) future drilling of new wells; (vii) impact of increasing competition; (viii) supply and demand for oil and natural gas; (ix) ultimate recoverability of current and long term assets; (x) expectations regarding UNX's ability to raise capital and to continually add to reserves through acquisitions and development; (xi) future foreign currency exchange rates; (xii) future market interest rates; (xiii) UNX's ability to obtain additional financing on satisfactory terms; (xiv) future production levels; (xv) future capital expenditures and their allocation between blocks; (xvi) future earnings; (xvii) future asset acquisitions and dispositions; (xviii) future debt levels; (xix) future sources of liquidity, cash flows and their uses; (xx) estimates on per share basis; (xxi) the Canadian legislative and regulatory environment; (xxii) government or other regulatory consent for exploration, development or acquisition activities; (xxiii) treatment under governmental regulatory and taxation regimes; (xxiv) future expenditures and future allowances relating to environmental matters; (xxv) the use of proceeds from the Offering; (xxvi) completion of the Offering and timing thereof; and (xxvii) changes in any of the foregoing.

With respect to forward looking statements contained in this press release, UNX has made assumptions regarding, among other things: (i) planned exploration activity including both expected drilling and geological and geophysical related activities; (ii) capital expenditure programs; (iii) possible commerciality; (iv) available and potential farm out partners; (v) future drilling of new wells; (vi) impact of increasing competition; (vii) supply and demand for oil and natural gas; (viii) ultimate recoverability of current and long term assets; (ix) expectations regarding UNX's ability to raise capital and to continually add to reserves through acquisitions and development; (x) future foreign currency exchange rates; (xi) future market interest rates; (xii) UNX's ability to obtain additional financing on satisfactory terms; (xiii) future capital expenditures and their allocation between blocks; (xiv) future asset acquisitions and dispositions; (xv) future sources of liquidity, cash flows and their uses; (xvi) estimates on per share basis; (xvii) the Canadian legislative and regulatory environment; (xviii) government or other regulatory consent for exploration, development or acquisition activities; (xix) treatment under governmental regulatory and taxation regimes; (xx) future expenditures and future allowances relating to environmental matters; (xxi) the use of proceeds from the Offering; (xxii) completion of the Offering and timing thereof; and (xxii) changes in any of the foregoing.

UNX's actual results could differ materially from those anticipated in these forward looking statements as a result of risk factors set forth below and elsewhere in this press release: (i) volatility in the market prices for oil and natural gas; (ii) uncertainties associated with estimating reserves; (iii) ability to explore, develop, produce and transport crude oil and natural gas to markets; (iv) geological, technical, drilling and processing problems; (v) the results of exploration and development drilling and related activities; (vi) liabilities and risks, including environmental liabilities and risks, inherent in oil and natural gas operations; (vii) volatility in energy trading markets; (viii) foreign currency exchange rates; (ix) economic conditions in the countries and regions in which UNX carries on business; (x) competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; (xi) governmental actions including changes to taxes or royalties, changes in environmental and other laws and regulations; (xii) renegotiations of contracts; (xiii) results of litigation, arbitration or regulatory proceedings; (xiii) political uncertainty, including actions by terrorists, insurgent or other groups, or other armed conflict; (xiv) corruption or other illegal activities in the country in which UNX carries on business; (xv) conflict between states; and (xvi) other factors referred to under "Risk Factors" in UNX's Annual Information Form.

Readers are cautioned that the foregoing list of risk factors is not exhaustive. The forward looking statements contained in this press release are expressly qualified by this cautionary statement. UNX is not under any duty to update any of the forward looking statements after the date of this press release or to conform such statements to actual results or to changes in UNX's expectations and UNX disclaims any intent or obligation to update publicly any forward looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

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