Tango Reports 2008 Financial and Operating Results
April 22 2009 - 5:22PM
Marketwired Canada
Tango Energy Inc. ("Tango") (TSX VENTURE:TEI) is pleased to report on its
audited financial and operating results for the year ended December 31, 2008.
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Three Months Ended Years Ended
December 31, December 31,
2008 2007 2008 2007 2006
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Financial Results ($000s,
except per share amounts)
Gross revenues 1,131 2,400 8,528 10,973 5,478
Loss before taxes (1,069) (931) (2,260) (2,928) (442)
Net income (loss) (608) 7 (1,603) (1,427) 97
Per share - basic (0.01) 0.00 (0.02) (0.03) 0.00
Per share - diluted (0.01) 0.00 (0.02 (0.03) 0.00
Additions to property and
equipment, net of proceeds 4,532 5,736 (3,370) 11,332 19,402
Total assets 38,557 43,854 38,557 43,854 44,231
Working capital 1,362 (5,035) 1,362 (5,035) (5,669)
Asset retirement obligations 519 656 519 656 596
Future income taxes 5,948 4,963 5,948 4,963 5,349
Flow-through share obligations - 2,000 - 2,000 3,000
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Share Data (000s)
Equity
outstanding
Common shares 65,775 65,725 65,775 65,725 49,430
Stock options and warrants 3,515 3,405 3,515 3,405 4,150
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Fully diluted 69,290 69,130 69,290 69,130 53,580
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Sales Volumes (average)
Natural gas (mcf/d) 1,717 3,681 2,371 4,121 1,820
Crude oil and liquids (bbls/d) 19 25 30 28 29
Average boe/d 305 638 425 716 332
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Product Prices (average)
Natural gas ($/mcf) 6.60 6.41 8.54 6.75 6.99
Crude oil and liquids ($/bbl) 34.87 81.73 89.55 69.09 64.66
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Netback Analysis ($/boe)
Oil and gas revenue 39.34 40.14 53.95 41.56 43.89
Gathering income 0.39 0.56 0.35 0.36 0.11
Royalty expense 12.14 11.08 15.86 8.43 5.52
Operating costs 11.04 9.38 9.81 8.54 6.93
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Netback 16.55 20.24 28.63 24.95 31.55
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Sales volumes averaged 425 barrels of oil equivalent per day ("boepd") during
the year ended December 31, 2008, a 41% decrease over the 716 boepd over 2007.
This decline in production was attributable to a combination of the sale of the
Cecilia property, natural declines from existing production at Hanlan, as well
as delays getting new production at Quaich on stream. Tango's production is
currently approximately 600 boepd.
During the three months ended December 31, 2008, Tango focused on optimizing
operated production. The construction of the pipeline at Quaich to tie in the
3-3 discovery well in which Tango has a 60% working interest was delayed until
late October and the well was placed on production in late December. Tango
participated in three exploratory wells in the Worsley, Beaton and Ferrier areas
prior to year end. All three plays were evaluated using 3D and/or 2D seismic
data and the primary targets being the Leduc, Bluesky/Gething and Ellerslie
formations respectively. All three wells were cased before year end. Subsequent
to year end, the Worsley well was evaluated, tied into a third party facility
and placed on production by the operator. The Beaton well was tied in and is
producing from one of the two targeted zones, and the Ferrier well was tested
and suspended until natural gas prices increase.
Tango has 46,402 gross (26,750 net) acres of land located west of the fifth and
sixth meridian within the foothills and deep basin portion of the Western
Canadian Sedimentary Basin. Of this amount 15,833 net acres of land were
undeveloped at year end, and subsequent to year end Tango acquired an additional
3,840 gross and net acres of land.
During 2009, Tango will prudently deploy available capital towards recompletion
and tie-in operations where immediate increases in production, cash flow, and
reserves are achievable and economic. In addition, Tango currently plans to
participate in the drilling of a second well in Quaich during the second half of
the year. Tango's share of the second well at Quaich is expected to cost
approximately $1.5 million including drilling, completion, equipping and tie-in.
Drilling of this well is dependant on economic conditions at that time.
Equity markets and gas prices are expected to remain weak throughout the year.
Capital spending will be funded by cash flow and draws upon our existing line of
credit. Tango currently has no debt and available bank lines in excess of $4
million. Tango bank lines are reviewed quarterly.
The Company is currently seeking merger candidates in order to grow cash flow,
improve efficiencies, and broaden our asset base. There are no assurances these
efforts will be successful.
Tango also announces it has filed its detailed reserves information required by
National Instrument 51-101 of the Canadian Securities Administrators, including
the Statements and Reports required by Forms 51-101F1, 51-101F2 and 51-101F3. A
copy of the N51-101 reports can be viewed on SEDAR at www.sedar.com.
For a copy of Tango's December 31, 2008 Financial Statements and Management
Discussion and Analysis please visit www.sedar.com.
Tango Energy Inc. is listed on the TSX-Venture Exchange under the Symbol TEI.
This release contains forward-looking information. By their nature,
forward-looking statements involve assumptions and known and unknown risks and
uncertainties that may cause actual future results to differ materially from
those contemplated. These risks include such things as volatility of oil and gas
prices, commodity supply and demand, fluctuations in currency and interest
rates, ultimate recoverability of reserves, timing and costs of drilling
activities and pipeline construction, new regulations and legislation and
availability of capital. Tango does not undertake to update any such
forward-looking statements except as required by law. Please refer to Tango's
Annual Report for more detail as to the nature of these risks and uncertainties.
Although Tango believes that the expectations represented by these forward
looking statements are reasonable, there can be no assurance that such
expectations will prove to be correct.
Natural gas volumes have been converted to a barrel of oil equivalent ("boe")
using six thousand cubic feet equal to one barrel unless otherwise stated. A boe
conversion ratio of 6:1 is based upon an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. This conversion conforms with Canadian Securities
Regulators National Instrument 51-101 Standards of Disclosure for Oil and Gas
Activities ("NI 51-101"). Boe's may be misleading, particularly if used in
isolation.
Funds flow from operations and funds flow from operations per share and netback
are not recognized measures under Canadian generally accepted accounting
principles. Management believes that these items are a useful measure of
financial performance. Funds flow from operations is defined as net income plus
non-cash charges including, depletion, depreciation and accretion, future taxes
and stock-based compensation, after asset retirement costs. Funds flow from
operations per share is calculated by dividing the weighted average number of
shares outstanding during the year into funds flow from operations. Netback is
the average per unit of volume for oil and gas revenues less royalties and
production costs incurred. Netback is expressed in terms of dollars per boe.
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