Vecta Energy Corporation

May 02, 2011 19:39 ET

Vecta Energy Corporation Announces Financial Results for the Year Ended 2010

CALGARY, ALBERTA--(Marketwire - May 2, 2011) - Vecta Energy Corporation (TSX VENTURE:VER) ("Vecta" or the "Company") today announces financial and operating results for the year ended December 31, 2010. The Company also announces that it is filing its 2010 Annual Information Form, which includes the Statement of Reserves Data on Form 51-101F1 (the "Statement of Reserves"), the Report on Reserves Data by Sproule Associates Limited ("Sproule") on Form 51-101F2 and the Report of Management and Directors on Reserves Data on Form 51-101F3, and Notice of Filing 51-101F1 Information on Form 51-101F4 with the Canadian regulatory authorities on the System for Electronic Document Analysis and Retrieval ("SEDAR").

Year Ended December 2010 Financial Summary

Cash flow from continuing operations for the three months ended December 31, 2010 was a negative $297,436 as compared with a negative $56,967 in the same period 2009. For the year ended December 31, 2010 Vecta's cash flow from continuing operations was negative $555,176 as compared to a negative $288,241 in 2009. The sale of the Company's shallow gas properties on June 1, 2010 significantly reduced sales volumes and revenues in 2010. Cash flow was also negatively impacted by increased general and administrative costs associated with the proposed U.S. joint venture.

For the year ended December 31, 2010 Vecta's continuing operations recorded a net loss of $1,953,419 compared to a loss of $3,309,309 for the same period in 2009. This 2010 net loss includes a loss of $965,816 on the disposal of the Company's shallow gas assets. The loss in 2009 was as a result of a $2.3 million write-down of oil and gas properties. Production volumes for the year totalled 47 boe/d compared with 99 boe/d in 2009. The lower production is due to the sale of the shallow natural gas properties in June 2010 as well as to the natural decline of the reserves.

Fourth quarter 2010 natural gas production decreased by 70% to 149 mcf per day from 498 mcf per day in 2009 reflecting the sale of the shallow gas properties in June 2010 as well as production declines due to operational difficulties in the Brewster area that have since been resolved. Liquids production increased to 11 barrels per day from 4 barrels per day in the same period 2009. The increase was due to a gross overriding royalty on a new well that has high liquids content that was put on stream in December 2010. Year to date 2010 natural gas production decreased 56% to 254 mcf per day from 574 mcf per day in 2009. In December 2010, the Company began receiving a gross overriding royalty from a well in the Harmattan area in which the Company retained a 2.5% gross overriding royalty on the petroleum and natural gas rights sold in December 2009. This well generated significant liquids production for the Company for the month of December 2010 and continued to produce at high levels for the first two months of 2011.

In the fourth quarter of 2010 capital additions fell to $5,800 from $5,993 in 2009. For the twelve month period in 2010 capital expenditures fell 77% to $19,156 from $81,641 in the same period in 2009 reflecting the curtailment of capital expenditures in 2010 due to the low price environment and the Company's financial condition.

Vecta has filed its 2010 Financial Statements, MD&A, 2010 Annual Information Form and CEO and CFO Certifications and NI 51-101 (Form F1, F2, F3 and F4) with the securities regulatory authorities in Canada. Electronic copies of these filings may be obtained on Vecta's SEDAR profile at or on Vecta's website at

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This news release contains forward-looking statements relating to the Company's plans and other aspects of the Company's anticipated future operations, strategies, financial and operating results and business opportunities. Forward-looking statements typically use words such as "anticipate", "believe", "project", "expect", "plan", "intent" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future, or consists of statements regarding estimates of future production, operating costs or other expectations, beliefs, plans, objectives, assumptions or statements about future events or performance. Statements regarding reserves are also forward-looking statements, as they reflect estimates as to the expectation that the deposits can be economically exploited in the future.

Although the Company believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not unduly rely on forward-looking statements. The forward-looking statements contained in this news release are made as the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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.

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