News Releases
Date: May 14, 2010
CommonShares: 16,096,084
TSX: “ISR”
International Sovereign Energy Corp. 2010 Q1 Results with Business Update
CALGARY, ALBERTA - May 14, 2010. International Sovereign Energy Corp. ("ISR" or the "Company") announces its operating and financial results for the three months ended March 31, 2010. These filings are available for review at www.sedar.com
Q1 2010 Highlights:
|
Q1 2010 |
Q1 2009 |
| Revenue |
$2.487 MM |
$2.544MM |
| Netbacks |
$1.3 MM |
$1.2 MM |
| Production (avg) |
764 boed |
956 boed |
| General and Administration |
$405M |
$747M |
| Cash flow/share |
$0.06 |
$0.02 |
| EPS |
($.05) |
($.07) |
Production for the three months ended March 31, 2010 (the "quarter") averaged 764 boe per day consisting of 3,783 mcf per day of natural gas and 133 bbls per day of crude oil and natural gas liquids. Production during the quarter was 20% lower than the same period in 2009 of 956 boe per day mainly due to Company's larger gas producers encountering water issues in the fourth quarter of 2009. The Company's production portfolio for the quarter was weighted 82% to natural gas and 18% to crude oil and natural gas liquids.
For the quarter, petroleum and natural gas revenue decreased two percent to $2,487,264 from $2,544,921 for the same period in 2009 as the decline in overall production was offset by an increase in the averaged realized prices reported.
The Company continues to review its general and administrative costs and for the quarter they have been significantly reduced. The costs averaged approximately $135,000 per month.
Outlook
The Company's performance to date in 2010 has been adversely affected by the substantial decline in energy prices from the 2008 levels. Although prices seem to be recovering, the Company will adjust its strategy in order to be better equipped to handle the future volatility of specifically the natural gas markets. The Company plans to accomplish this through both merger/acquisition possibilities combined with rebalancing the production portfolio more towards a 50:50 oil to gas ratio. 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.
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 is in the process of disposing of minor non strategic assets.
Natural gas prices remained virtually unchanged in Q1 2010 at $4.70/GJ compared to that recognized in Q1 2009 of $4.69/GJ. 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. Since that time, the global demand has pushed the price of oil back up, with the WTI price averaging $78.68/bbl for Q1 2010, compared to the $42.86/bbl of Q1 2009.
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 because 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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