News Releases
Date: August 11, 2009
Shares Outstanding: 16,096,084
TSX: “ISR”
International Sovereign Energy Corp. 2009 Q2 Results with Business Update
CALGARY, ALBERTA - August 11, 2009. International Sovereign Energy Corp. ("ISR" or the "Company") announces its operating and financial results for the three and six months ended June 30, 2009 and 2008. These filings are available for review at www.sedar.com
Q2 2009 Highlights:
|
Three months ending June 30 |
Six months ending June 30 |
|
2009 |
2008 |
2009 |
2008 |
| Revenue |
$2.11M |
$5.39M |
$4.65M |
$9.37M |
| Netbacks |
$0.96M |
$3.56M |
$2.19M |
$5.94M |
| Production (avg) |
954 Boe/d |
854 Boe/d |
975 Boe/d |
843 Boe/d |
| Cash flow/share |
$0.04 |
$0.09 |
$0.07 |
$0.23 |
| EPS |
$(0.12) |
$(0.27) |
$(0.19) |
$(0.24) |
Business Update:
In the six months ended June 30, 2009, the Company generated net cash flow from operations of approximately $1,099,965. Despite economic challenges, commodity prices for oil products recovered to the $50-$60/bbl level. Prices for natural gas, however, did not show the same level of recovery and prices hovered around $3-$4/Mcf during the six-month period.
Revenues for the six month period ending June 30, 2009 ("2009") were $4,653,271, compared to $9,367,025 for the six month period ending June 30, 2008 ("2008") a decrease of 50%. Average production increased from 843 Boe/d in 2008 to 975 Boe/d, in 2009, an increase of 16%. Average oil prices received in the six-month period fell from $86.47/Bbl in 2008 to $50.21/Bbl in 2009 a decrease of 425. Average gas prices received for the six-month period decreased from $8.66/Mcf in 2008 to $3.91/Mcf in 2009, a reduction of 55% over the corresponding period.
The Company exited the quarter at 899 Boe/d. The production at certain wells had been stopped for maintenance lowering the exit rate. If the production at these wells had not been halted the exit rate would have been 964 Boe/d. Average oil production for the second quarter of 2009 was 99 Bopd as compared to 168 Bopd in the second quarter of 2008. The decrease of 41% in oil production was primarily due to watering out of Marwayne oil field. During the same period, average gas production increased from 3,831 Mcf/d in 2008 to 4,988 Mcf/d in 2009 (from 639
Boe/d to 831 Boe/d, an increase of, 192 Boe/d) or 30%, primarily due to the increased gas production from Peace River and Medicine River areas.
Funds from operations for the three months ended June 30, 2009 totaled $593,416 or $0.04 per share, compared to $1,238,091 or $0.09 per share for the same period in 2008. This decrease is due to the significantly low commodity prices.
Net loss for the three month period ended June 30, 2009 was $1,931,259 or $0.12 per share compared to a loss of $3,779,982 or $0.27 per share, for the same period in 2008. In addition to significantly lower commodity prices the Company provided for forfeiture of its interest in the Sukkur and Sujawal Blocks in Pakistan in the current period in the amount of $954,064.
"The results for the first half are reflective of the current climate in the North American natural gas market where prices have dropped 55% from the same period last year", said International Sovereign's CEO, Eugene Hretzay. "However, our strong balance sheet and availability of approximately $8.5 million on our lines of credit provides us with the financial resources to manage your company through this current period of weak natural gas prices."
Outlook
The Company's management has been immersed in the review of the assets of the Company and appraising the opportunities to enhance the financial performance from those assets. The volatility of the oil and gas markets affects all producers and in the past the higher prices have benefited the Company. However, the current decline in energy prices impacted the Company's performance in the first half of 2009. There is much discussion on the pricing levels of oil and gas because of the economic situation and current oversupply of gas, and it is difficult for the Company to project where these will be at any point in time. However, we see opportunities to expand our presence in the Canadian market place through a selective program of acquisition of oil and gas producing properties under acceptable financial conditions. Through such a program, the Company will increase production, revenue and profit streams and be able to generate the funds to fund further acquisitions as those become available.
Pakistan
The Company had previously reported on June 18, 2009 of a notice of forfeiture received from Mari Gas Company Limited ("MGCL") to forfeit its 15% working interest ("WI") due to arrears of cash calls. On August 1, 2009 the Company obtained a temporary injunction, without notice to the defendants, for rehearing on August 8th restraining MCGL or any person claiming through or on their behalf, from seeking to forfeit or otherwise alienate the WI of the Company in the Sukkur Block in order to sell the WI to a party that had expressed serious interest. On August 8, 2009 the court set, August 25, 2009 as the date for the defendants to reply to the application, and extended the injunction to September 2, 2009.
For further information, please contact:
Eugene N. Hretzay
President & CEO
T: [403] 263 - 2472
F: [403] 264 - 7035
E: ehretzay@isove.com
Reader Advisories
Forward-Looking Statements: This news release contains certain forward-looking statements, including management's assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
BOE may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
This news release is not for dissemination in the United States or to U.S. persons.
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