Admiral Bay Resources Reports Record Production and Proved Reserves for Fiscal 2009
02 Dezembro 2009 - 10:00AM
Marketwired
Admiral Bay Resources Inc. (TSX VENTURE: ADB) ("Admiral Bay" or the
"Company") today announced record production and proved reserves
for the fiscal year ended July 31st, 2009. The Company also
announced it had sold a 50% interest in its Bourbon County, Kansas
gas gathering system and agreed to amendments to its current credit
facility.
Record Production and Reserves
Production before royalty averaged 3,556 Mcfpd compared to 2,376
Mcfpd in the prior fiscal year. Production costs were $ 2.70/mcf, a
decrease of 25% from the prior year and G&A expense was $
1.30/mcf, a decrease of 37%. Revenues (after royalties) plus hedge
impact were $5.5 million, an increase of 5% over fiscal year 2008
as the Company's hedge position and higher production volumes
offset sharply lower commodity prices. During fiscal 2009, natural
gas prices averaged $3.66 per Mcf compared to $7.76 per Mcf in
fiscal 2008.
Admiral Bay posted a net loss of $ 6.4 million in fiscal year
2009. That compares to a net loss of $ 8.2 million in fiscal year
2008. The improvement was due primarily to the non-cash change in
the mark-to-market of the Company's natural gas hedges and lower
financing fees offset by higher amortization and interest
costs.
The annual reserve report prepared by Norwest Corporation
reported gross Proved reserves of 66.1 Bcf (49.3 BCF net after
royalty) with pre-tax net present value discounted at 10% ("PV-10")
of $118.8 million. Reserves increased 15% and PV-10 value increased
1% from Fiscal Year 2008. The Company reported Probable and
Possible reserves of 14.3 and 100.2 Bcf respectively net after
royalty. Norwest's evaluation is based on multi-year forecast
prices for natural gas (NYMEX) ranging from $4.69 in 2009 to $7.11
in 2013.
Admiral Bay's fiscal year 2009 capital expenditures were $5.6
million, including $1.8 million paid for the Thayer acquisition in
May, 2009. Fiscal Year 2009 year-end reserves attributable to the
Thayer acquisition were 10.9 Bcf net after royalty.
Admiral Bay had proved finding costs of $0.93/Mcf in Fiscal Year
2009. That compares to Admiral Bay's four year average all-in
finding cost of $1.41/MCF, based on overall capital expenditures
for the four year period of $36.9 million, including $7.1 million
for acquisitions. The four year average full cycle finding &
development cost (including future development costs of $18.4
million) was $2.12/Mcf.
"With record production, solid reserve growth and continued
improvement in our cost structure, Admiral Bay continues to grow as
a leading player in the Cherokee Basin," said Steve Tedesco,
Admiral Bay's President and Chief Executive Officer. "While
seriously depressed natural gas pricing impacted the value of our
reserves, we were still able to post modest growth to overall
reserve value. Although we have faced price challenges as we enter
the new fiscal year, we remain focused on smart production and
reserve growth and continued reduction in our basin-leading finding
and development cost metrics."
Cherokee Basin Gathering System Sale Provides Cash While
Retaining Flexible Access
Admiral Bay also announced that the Company sold a 50% interest
in its Bourbon County Pipeline to a third party for $500,000.
Admiral Bay will retain the remaining 50% interest and will
continue to operate the pipeline.
"The sale of an interest in the Bourbon County Pipeline provided
Admiral Bay with capital which is being used to boost production
through workover work on our core assets in the Cherokee Basin,"
added Tedesco. "At the same time, the terms of the transaction
provided continued access to capacity on the Bourbon County system
as well as operatorship of the pipeline. We will continue to look
for ways to maximize the value of all of our assets as we focus on
our core exploration and production business."
Amendments to Credit Facility
In addition, Admiral Bay announced it executed an amendment to
its current credit agreement that provides the Company with
flexible interest payment terms. In addition to other ministerial
changes, the Amendment allows for a portion of the interest due to
be paid "in-kind" ("PIK") through December 2009. Under the terms of
the Amendment, the Company will pay a minimum of 5% of the interest
due in cash with the option to PIK the balance of interest due at a
rate of 10% for a total of 15%.
"We appreciate the continued support of our lenders in this
period of unprecedented declines in natural gas prices," said
Robert Carington, Admiral Bay Chief Financial Officer. "The ability
to PIK a portion of our interest payments provides the Company with
capital to maintain and strategically grow our production and
reserve levels. Our lender's willingness to provide us with
financial flexibility is an indication of their perception of the
long-term value in our reserve base."
About Admiral Bay Resources
Admiral Bay Resources Inc. (www.admiralbay.com) is an emerging
unconventional gas production company focused on the development of
projects in the Cherokee Basin in southeast Kansas and the
Appalachian Basin in Pennsylvania. Admiral Bay is listed on the TSX
Venture Exchange under the symbol ADB.
Statements in this release that are not historical facts are
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Readers are cautioned
that any such statements are not guarantees of future performance
and that actual developments or results may vary materially from
those in these "forward-looking statements".
The TSX Venture Exchange does not accept responsibility for the
adequacy of this release
Contacts: Admiral Bay Resources Inc. Steven Tedesco President
& C.E.O. (303) 350-1255 (303) 617-8956 (FAX)
stedesco@admiralbay.com Admiral Bay Resources Inc. Robert Carington
CFO (303) 350-1255 (303) 708-1861 (FAX)
rcarington@admiralbay.com
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