Tango Reports Second Quarter 2009 Financial and Operating Results
August 25 2009 - 4:01PM
Marketwired Canada
Tango Energy Inc. ("Tango") (TSX VENTURE:TEI) is pleased to report on its
unaudited financial and operating results for the six months ended June 30,
2009.
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Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
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Financial Results ($000s, except
per share amounts)
Gross revenues 942 2,942 2,246 5,727
Loss before taxes (1,337) (162) (2,892) (644)
Net loss (983) (206) (2,108) (577)
Per share - basic (0.01) 0.00 (0.03) (0.01)
Per share - diluted (0.01) 0.00 (0.03) (0.01)
Additions to property and
equipment, net of proceeds 353 (8,987) 1,497 (8,797)
Total assets 33,641 38,759 33,641 38,759
Working capital (deficiency) 407 6,217 407 6,217
Asset retirement obligations 727 504 727 504
Flow-through share obligations - 1,750 - 1,750
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Share Data (000s)
Equity outstanding
Common shares 65,775 65,775 65,775 65,775
Stock options and warrants 5,350 4,710 5,350 4,710
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Fully diluted 71,125 70,485 71,125 70,485
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Sales Volumes (average)
Natural gas (mcf/d) 2,681 2,751 2,677 3,042
Crude oil, liquids and sulphur
(bbls/d) 17 34 15 31
Average boe/d 464 493 462 538
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Product Prices (average)
Natural gas ($/mcf) 3.43 10.24 4.28 9.24
Crude oil and liquids ($/bbl) 59.99 149.11 52.37 124.40
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Netback Analysis ($/boe)
Oil and gas revenue 22.03 64.84 26.56 57.96
Gathering income 0.26 0.27 0.32 0.31
Royalty expense 2.84 (18.21) (3.10) (16.43)
Operating costs (13.39) (10.05) (12.15) (8.61)
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Netback 11.74 36.85 11.59 33.23
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Sales volumes averaged 464 barrels of oil equivalent per day ("boepd") during
the three months ended June 30, 2009 and 462 boepd for the six months ended June
30, 2009. Sales volumes were 305 boepd over the three months ended December 31,
2008. This increase in volumes was attributable to Quaich.
The Quaich 03-03 well was tested in June 2009 by Tango and its partner to
further evaluate the size of the pool and to evaluate the drilling of the 12-34
well. The nine day buildup test on the Cadomin B zone indicated approximately 2%
depletion in the average reservoir pressure after producing 0.35 billion cubic
feet of natural gas since December 2008. The Cadomin C zone was flow tested at
1.5 million cubic feet of natural gas per day with stabilized water to gas ratio
of 200 barrels per million cubic feet. After the tests the Quaich 03-03 well was
placed back on production from the Cadomin B zone at approximately 2.6 million
cubic feet per day. Tango's interest in the production from the 03-03 well is
60% or 260 boepd.
Tango and the operator have more than 6,880 acres of contiguous land in the
immediate area in which Tango holds between 50% and 60% working interest. In
addition to this land position, the 12-34 well will validate an additional 3840
acres of contiguous land in which Tango will earn an undivided 30%.
Tango has 41,282 gross (25,597 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 19,167 net acres of land were
undeveloped at the end of June 2009.
During 2009, Tango will prudently deploy available capital towards drilling,
completion and tie-in operations where immediate increases in production, cash
flow, and reserves are achievable and economic. Tango currently is participating
in the drilling of a second well in Quaich at 12-34 which commenced drilling on
August 21st. Tango's share of the second well at Quaich is expected to cost
approximately $1.8 million including drilling, completion, equipping and tie-in.
The operator expects the drilling time to be approximately 35 days.
Equity markets and gas prices are expected to remain weak throughout the
remainder of 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 scheduled for review in
December 2009.
The Company continues to evaluate and seek merger candidates in order to grow
cash flow, improve efficiencies, and broaden our asset base. There are no
assurances these efforts will be successful.
For a copy of Tango's June 30, 2009 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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