CALGARY, Nov. 27 /PRNewswire-FirstCall/ -- Tuscany is pleased to report significant improvements in financial and operating results for the three and nine months ended September 30, 2008.
New oil and gas production from the Wildwood area, increased production from the Company's Saskatchewan properties, lower general and administrative expenses, and higher prices for both oil and natural gas combined to result in higher cash flows and earnings and lower debt levels.
This greatly improved financial position of Tuscany gives a sound base from which to expand its exploration development program for the next year. The Company is planning to drill a horizontal well in the fourth quarter of 2008 and the expenditures incurred drilling this well will ensure that the Company's 2007 flow through share commitment is expended.
Financial
Revenue for the nine months ended September 30, 2008 totaled $4,013,000 compared with $1,591,000 in 2007. The Company reported cash flow from operations of $1,542,000 compared with a cash flow deficiency of $143,000 in the comparative period in 2007. Tuscany's net earnings also increased to $356,000 versus a net loss of $1,404,000 for the same period in 2007.
The Company had a net debt position of $1.9 million as at September 30, 2008 compared with $3.0 million as at September 30, 2007. Debt repayment ratio (net debt divided by the monthly average cash flow), a simple estimate of the time required to repay debt, improved to 9 months at September 30, 2008, well below the corporate target of 24 months.
The following is a summary of Financial and Operating Results: Nine months Ended September 30, 2008 2007 ------------------------------------------------------------------------- Financial Total revenue $ 3,486,821 $ 1,427,593 Cash flow from operations 1,541,778 (142,523) per share, diluted 0.04 (0.00) Earnings (loss) for the period 355,679 (1,403,738) per share, diluted 0.01 (0.05) Capital additions 326,716 470,527 Net debt 1,910,180 2,969,828 Total assets $ 8,424,431 $ 8,116,779 Total shares outstanding 36,550,836 26,550,836 Operations Production Natural gas (Mcfd) 421 216 Oil (Bopd) 35 - Heavy oil (Bopd) 78 95 BOEd (6 Mcf = 1 Bbl) 183 131 Product Prices Natural gas ($/Mcf) 8.83 6.37 Oil ($/Bbl) 109.80 - Heavy oil ($/Bbl) 93.99 46.77 ------------------------------------------------------------------------- Exploration and Development
Tuscany's well at Wildwood, 30% interest, commenced production in January 2008 and is currently producing at an average rate of 140 Bopd and 750 Mcfd. Tuscany has acquired additional land in the area to expand the play, purchased 2-D trade seismic data and acquired proprietary 2-D data. Additional exploration and development prospects in the area are being evaluated to be drilled in 2009.
In the Evesham and Macklin areas of Saskatchewan, Tuscany 100%, remedial work on Tuscany's heavy oil wells has resulted in current average production of 90 Bopd and 215 Mcfd. Of significance to Tuscany is a planned horizontal well, Tuscany 60%, expected to commence in early December, targeting a deeper oil prospect, in a zone which produces in near by fields and has been mapped over Tuscany's acreage.
Business Outlook
Energy commodity prices have declined significantly in the past weeks, and remain volatile. Management remains optimistic that the solid production base, coupled with careful cash management, will allow the Company opportunities to increase its production base while maintaining its excellent financial position.
Additional information concerning Tuscany's financial statements and associated Management's Discussion and Analysis for the period ended September 30, 2008 can be found on the SEDAR website at http://www.sedar.com/.
Forward-looking statements - statements included in this press release that are not historical facts may be considered "forward-looking statements." Actual results could differ materially from the conclusions, forecasts or projections in the forward-looking information. Certain material factors and assumptions were applied in drawing the conclusions or making the forecasts or projection in the forward-looking information and the material factors or assumptions that were applied in drawing the conclusion or making the forecast or projection as reflected in the forward-looking information is contained in the press release.
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