Vecta Energy Corporation

September 03, 2009 17:51 ET

Vecta Energy Corporation Financial Results and Corporate Update

CALGARY, ALBERTA--(Marketwire - Sept. 3, 2009) - Vecta Energy Corporation ("Vecta") (TSX VENTURE:VER) announces its results for the second quarter of 2009. Natural gas prices have dropped by 65% from the second quarter of 2008 to an average of $3.57 per mcf in the second quarter of 2009. This precipitous drop was the primary reason for a $360,237 net loss for the quarter, bringing the net loss for the first six months of 2009 to $692,813. Cash flow in the first six months of the year was negative at ($193,544) compared to a positive cash flow of $297,045 in the first half of 2008.

Production volumes for the first half of 2009 were 29% higher at 112 barrels of oil equivalent per day (boe/d) compared with 87 boe/d for the same period in 2008.

Working capital at June 30, 2009 was negative at ($574,661) and in addition the Company had drawn down $350,000 on its revolving line of credit. The line of credit stands at $500,000 and the existing working capital deficit renders the Company non compliant under its loan agreement. The Company has taken steps to alleviate this situation by cutting officer compensation by more than 50%, restricting the use of consultants to a minimum, and cutting administrative costs where possible. In addition the Company is investigating the possibility of raising equity capital, farmout or sale of assets, as well as exploring merger and joint venture possibilities. The Company's objective is to eliminate the working capital deficit before year end.

Due to low natural gas prices, the joint venture partners that operate Vecta's natural gas exploration and development programs have severely curtailed their activities so no wells have been drilled and six suspended natural gas wells in which Vecta holds interests will not be completed and connected until prices improve.

Effective August 31, 2009, Stewart D. Gossen has resigned from his position of Vice President, Finance and Chief Financial Officer of the Company. Mr. Gossen intends to pursue a new business opportunity but will continue to serve as an independent member of the Board of Directors where the Company will continue to receive his good advice and counsel.

To receive company news releases via e-mail, please advise and specify "Vecta Press Releases" in the subject line.

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