Trafalgar Energy Ltd. releases first quarter results
Thu May 15, 6:11 PMCALGARY, May 15 /CNW/ - Trafalgar Energy Ltd. (TSX: TFL.TO) ("Trafalgar" or the "Company") is pleased to announce the unaudited financial results for the quarter ended March 31, 2008.
CORPORATE HIGHLIGHTS
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Three months Three months Three months
ended ended ended
(000's, except for per share March 31, December 31, March 31,
and production data) 2008 2007 2007
Petroleum and natural gas
revenues ($) 3,672 3,464 2,914
Funds from operations ($) 1,707 1,576 1,553
Basic and diluted per share ($) 0.14 0.13 0.13
Net earnings (loss) ($) (232) (279) 1,298
Basic and diluted per share ($) (0.02) (0.02) 0.11
Working capital (deficit) ($) (4,278) (349) 3,582
Long-Term Debt ($) 5,803 - -
Capital expenditures ($) 11,439 3,694 10,934
Weighted average number of shares
outstanding
Basic and diluted 11,836 11,836 11,836
Shares outstanding
Basic 11,836 11,836 11,836
Diluted 12,957 12,957 12,758
Average Production
Light Oil (bbls/d) 39 44 51
Heavy Oil (bbls/d) 52 63 45
Total Oil (bbls/d) 91 107 96
Natural Gas (mcf/d) 4,872 5,325 3,886
BOE (boe/d) 903 994 744
Average Realized Prices(1)
Light Oil ($/bbl) 82.62 82.41 67.32
Heavy Oil ($/bbl) 65.17 54.88 32.93
Natural Gas ($/mcf) 7.29 6.18 7.40
$/boe (6:1) 46.69 40.22 45.30
Netback ($/boe)
Petroleum and natural gas revenue 46.69 40.22 45.30
Royalties 9.01 6.58 9.33
Operating expenses 9.42 9.34 9.57
Transportation expenses 2.00 2.35 1.76
Operating Netback 26.26 21.95 24.64
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(1) Average realized prices are before transportation expenses.
LETTER TO SHAREHOLDERS
We are pleased to report on Trafalgar's progress through the first quarter
of 2008. First quarter highlights include:
- A 21% increase in production over the first quarter of 2007.
- Increased total revenue by 26% over the first quarter of 2007.
- Maintained operating costs under $9.50 per boe.
- Successfully executed 10 well winter drilling program.
- Tied in six new natural gas wells at Mackay at the end of the
quarter.
- Maintained a strong balance sheet.
- Hedged 2,100 gj (~1,970 mcf) per day of natural gas for summer 2008.
Summer 2008 will be an exciting time for Trafalgar as we are in final preparations to begin a three to five well drilling program on summer accessible prospects acquired over the past year. All four prospects, located in Alberta, have the potential, on existing 100% working interest Trafalgar lands, to develop into new core producing properties. At Stowe we are targeting natural gas in the Gilwood formation as defined by our proprietary 3D seismic data. The House Mountain, Beaton and Rich prospects are all oil targets which with success have multiple potential development locations.
Corporate production volumes, based on field estimates, have risen to 1,125 to 1,250 boe per day over the past two weeks as our disrupted volumes have been brought back on stream. We continue to work with the operator to increase throughput and maximize production from our Mackay wells.
On April 24th Trafalgar entered a financing agreement to issue up to 1.565 million shares on a flow through basis at $4.40 per share. Net proceeds of approximately $6.5 million will allow Trafalgar to accelerate the summer drilling program. Closing is scheduled for May 15, 2008.
Consolidation in the junior sector of the Canadian oil and gas industry continues. If the right opportunity presents itself Trafalgar with our solid production base, strong balance sheet and deep exploration inventory is in an enviable position to act.
With our drill ready exploration inventory the next three to six months will be very exciting for our company and I look forward on reporting our results.
On behalf of the Management, Staff and Board of Directors,
(signed)
May 13, 2008
Rob Wollmann
President and CEO
Trafalgar has filed with Canadian securities regulatory authorities its unaudited financial statements for the quarter ended March 31, 2008 and the accompanying Managements' Discussion and Analysis. These filings are available under Trafalgar's SEDAR profile at www.sedar.com starting May 15, 2008. Full pdf versions of our Q1 2008 unaudited financial statements and the accompanying Managements' Discussion and Analysis are available on our website at www.trafalgarenergy.ca.
DESCRIPTION OF COMPANY
Trafalgar is a Calgary, Alberta based oil and natural gas exploration, production and development company, with operations in the Canadian provinces of Alberta and British Columbia. Trafalgar trades on the Toronto Stock Exchange ("TSX") under the symbol TFL.
BOE PRESENTATION AND OTHER NI 51-101 INFORMATION
In conformity with National Instrument 51-101, Standards for Disclosure of Oil and Gas Activities ("NI 51-101"), natural gas volumes have been converted to barrels of oil equivalent ("boe") using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. This ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Readers are cautioned that the term "boe" may be misleading, particularly if used in isolation. Full NI 51-101 disclosures respecting net asset value and finding and development costs are contained in the Management's Discussion and Analysis filed on SEDAR.
FORWARD-LOOKING STATEMENTS
This discussion and analysis contains forward-looking statements related to future events or future performance. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expects", "projects", "plans", "anticipates" and similar expressions. Forward looking statements are provided to help investors better understand our business. Certain statements regarding Trafalgar include management's assessment of future plans and operations and may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties, most of which are beyond Trafalgar's control. These risks may cause actual financial and operating results, performance, levels of activity and achievements to differ materially from those expressed in, or implied by, such forward-looking statements.
Such factors include, but are not limited to: the impact of general economic conditions in Canada and the United States; industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced; competition from other producers; the lack of availability of drilling rigs and other field services; the lack of availability of qualified personnel; fluctuations in commodity prices; the results of exploration and development drilling related activities; imprecision in reserve estimates; the production and growth potential of Trafalgar's various assets; fluctuations in foreign exchange or interest rates; the ability to access sufficient capital from internal and external sources; and obtaining required approvals of regulatory authorities.
Accordingly, Trafalgar gives no assurance and makes no representations or warranty that the expectations conveyed by the forward-looking statements will prove to be correct and actual results may differ materially from those anticipated in the forward-looking statements. Readers should not place undue reliance on any such forward-looking statements, which speak only as of the date they were made. Trafalgar disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.
Additional information regarding Trafalgar is available under the Company's profile on SEDAR at www.sedar.com or on the Company's website at www.trafalgarenergy.ca.
NON GAAP FINANCIAL MEASURES
Trafalgar uses the following terms for measurement that do not have standardized prescribed meaning under GAAP and these measurements may not be comparable with the calculation of similar measurements of other entities.
"Funds from operations" and "Funds from operations per share" are terms utilized by Trafalgar to evaluate operating performance and assess leverage. Trafalgar considers funds from operations to be an important measure of Trafalgar's ability to generate the funds necessary to finance capital expenditures and repay debt. Funds from operations does not represent net income and should not be viewed as an alternative to net income or other measures of financial performance calculated in accordance with GAAP. All references to funds from operations throughout the MD&A are based on cash provided by operating activities before change in non-cash working capital.
A reconciliation of cash provided by operating activities to funds from
operations is as follows:
Three months Three months Three months
ended ended ended
March 31, December 31, March 31,
2008 2007 2007
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Cash provided by operating
activities (per GAAP) 1,979 1,404 1,327
Change in non-cash operating
working capital (272) 172 226
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Funds from Operations 1,707 1,576 1,553
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Trafalgar also uses "operating netbacks" as a key performance indicator. Operating netbacks do not have a standardized meaning prescribed by GAAP and therefore may not be comparable with the calculation of similar measures by other companies. Operating netbacks are determined by deducting royalties, operating expenses, processing fees and transportation from petroleum and natural gas sales revenue.
Funds from operations and operating netbacks are not intended to represent operating profits, nor should they be viewed as an alternative to cash flows provided by operating activities, net income or other measures of financial performance calculated in accordance with GAAP.
ContactsTRAFALGAR ENERGY LTD.: Robert WollmannPresident and CEO
Telephone (403) 216-2706
Email: rwollmann@trafalgarenergy.ca Daniel Belot
Vice President Finance and CFO
Telephone: (403) 216-2707
Email: dbelot@trafalgarenergy.ca
or visit www.trafalgarenergy.ca
Toll-free: 1-877-216-2705 Investor Relations: info@trafalgarenergy.ca
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