News Releases
Date: March 30, 2010
CommonShares: 16,096,084
TSX: “ISR”
International Sovereign Energy Corp. 2009 Q4 and YE Results with Business Update
CALGARY, ALBERTA - March 30, 2010. International Sovereign Energy Corp. ("ISR" or the "Company") announces its operating and financial results for the three and twelve months ended December 31, 2009. These filings are available for review at www.sedar.com
Q4 2009 and YE 2009:
|
Q4 2009 |
Q4 2008 |
YE 2009 |
YE 2008 |
| Revenue |
$2.3 MM |
$3.5 MM |
$8.9 MM |
$18.5 MM |
| Netbacks |
$1.3 MM |
$1.9 MM |
$4.5 MM |
$11.2 MM |
| Production (avg) |
761 boed |
1052 boed |
882 boed |
909 boed |
| General and Administration |
$0.77 MM |
$0.92 MM |
$2.2 MM |
$4.2 MM |
| Funds from operations/share |
$.03 |
$.06 |
$.02 |
$.48 |
| EPS |
($.10) |
($.10) |
($.42) |
($.26) |
Production for 2009 averaged 882 boe/d consisting of 4,576 mcf/d of natural gas and 119 boe/d of oil and natural gas liquids ("NGL") representing a 3% decrease from 2008 average production. This was primarily due a decline in oil and NGL production from the watering out of the Marwayne oil field offset by a 7% increase in natural gas production from the addition of the 2008 drill program all on-stream.
Production for Q4 2009 averaged 761 boe/d a 28% decrease from Q4 2008. The decline is represented by a 32% decrease of natural gas production quarter over quarter. Two of the Company's larger gas producers encountered water issues in Q4 2009, resulting in a loss of 127 boe/d.
Petroleum and natural gas sales totalled $8.9 million for 2009 compared to $18.5 million in 2008 despite a very small decline in the sales production volume of 3%. The 52% decrease in overall sales is the result of the significant decline in commodity prices from 2008 of $55.50/boe to 2009 of $27.56/boe or 50%. Q4 2009 sales decreased from Q4 2008 as production decreased with the Marwayne and Boundary Lake properties encountering water, as well as the decision in 2009 to shut-in some gas production due to the lower commodity prices.
The Company continues to review its general and administrative costs which over the year, has significantly reduced. In 2009 these costs averaged approximately $180,000 per month. Currently the average monthly costs are in the region of $150,000.
Outlook
The Company's performance to date in 2009 has been adversely affected by the substantial decline in energy prices from the 2008 levels. As natural gas prices continue to fluctuate, the Company continues to adjust its strategy in order to be better equipped to handle the future volatility in the natural gas markets. The Company plans to accomplish this through both merger/acquisition possibilities combined with rebalancing the production portfolio towards a higher oil to gas ratio.
The Company has recently evaluated its portfolio and has identified potential areas within its portfolio where further development of oil assets can be undertaken at minimal cost, and has identified non-strategic assets which may be monetised.
Natural gas prices continued to decline in Q4 2009 to $4.41/mcf compared to that recognized in Q4 2008 of $5.92/mcf. While partially influenced by the strength of crude oil price changes, natural gas price changes are predominantly based on supply and demand fundamentals in the North American market.
Crude oil prices experienced a significant drop from the peak in mid-July 2008 for West Texas Intermediate ("WTI") of more than US$145.00/bbl to a range of between US$60.00 to $70.00/bbl in late October 2008. For the three months ended December 31, 2009, WTI averaged $75.96/bbl.
The Company will continue to review its capital expenditure program in light of the current economic climate. Since the present portfolio is approximately 80% gas, the Company will focus on opportunities that increase the oil component as we feel that the present outlook for near term gas prices versus oil prices is less favourable.
For further information, please contact:
Sharad Mistry
Chief Financial Officer & Interim CEO
T: [403] 263 - 2472
F: [403] 264 - 7035
E: smistry@isove.com
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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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