CALGARY, May 15 GEOCAN-Q1-results
CALGARY, May 15 /PRNewswire-FirstCall/ - GEOCAN Energy Inc. ("GEOCAN" or
the "Company") (TSX: GCA) announces its financial results for the quarter
ended March 31, 2008.
2008 First Quarter Results
Cash flow from operating activities for the first quarter was $5.21
million or $0.09/basic share as compared to $2.82 million or $0.05/basic share
in first quarter 2007. Geocan, in the first quarter of 2008 closed its
previously announced major asset sales and applied the proceeds to reducing
debt and related high interest costs. Further, the sales were primarily of
heavy oil assets which contained inherently lower operating netbacks. As a
result, average netbacks improved significantly. These factors combined with
higher commodity prices more than offset lower revenues due to lower
production during the quarter. Benefits from higher average netbacks and lower
interest costs should continue to be realized going forward commencing with
the second quarter of 2008.
Earnings (loss) after income tax for first quarter 2008 was $(0.23)
million or $(nil)/basic share compared to a loss of $(2.98) million or
$(0.05)/basic share for first quarter 2007. The 2008 first quarter earnings
were predominantly made up of positive pre-tax operating earnings of $0.78
million or $0.01/basic share and a recapture of future tax related to the sale
of assets and the reversal of a valuation allowance on successored tax pools
of $6.00 million or $0.11/basic share offset by a loss on disposal of assets
of $(6.67) million or $(0.12) basic share.
For the first quarter 2008, production sales averaged 2,023 boepd,
weighted 70% to oil and 30% to natural gas. With the aforementioned sale of
the heavy oil assets effective February 1, 2008 and the unit and non-unit
interests in the Carrot Creek region, effective December 1, 2007, exit
production sales volumes for the first quarter of 2008 decreased to
approximately 975 boepd based on raw production volumes of 1050 boepd.
Production volumes are now distributed approximately 62% to natural gas and
38% to light/medium oil.
Natural gas prices averaged $7.91/mcf in first quarter 2008, up 21% from
$6.55/mcf in first quarter 2007. Light and medium oil prices (before financial
instruments) averaged $76.09/bbl in first quarter 2008 up 38% from $55.19/bbl
in first quarter 2007. Heavy oil averaged $59.46/bbl, up 42% from $41.92/bbl
in first quarter 2007.
Further information regarding the Company's first quarter 2008 results is
contained in the Company's March 31, 2008 consolidated financial statements,
the attached notes and the management's discussion and analysis relating
thereto, all of which are available for viewing on SEDAR (www.sedar.com) and
on the Company's website (www.geocan.com).
Review of Strategic Alternatives Process
On March 6, 2008 the Company announced that its board of directors had
unanimously approved a process to review strategic alternatives to maximize
shareholder value and had retained Tristone Capital Inc. to act as its
exclusive financial advisor to assist in exploring strategic alternatives.
These alternatives may include the sale of the Company, an amalgamation or
reorganization or such other transaction that is considered to be in the best
interests of GEOCAN. At the time of writing, this process is well underway.
Advisory -- Forward-looking Information
This press release may include certain forward-looking statements. These
statements involve known and unknown risks, uncertainties, and other factors
that may cause actual results or events to differ materially from those
anticipated in the forward-looking statements. However, while management
believes these forward-looking statements to be reasonable, the reader cannot
be assured that these expectations will prove to be correct. The reader should
not unduly rely on these forward-looking statements as these statements speak
only as of the date of May 15, 2008. Additional information about the company
can be found on www.sedar.com.
Barrel of oil equivalent (BOE) may be misleading, particularly if used in
isolation. A BOE conversion ratio for natural gas of 1 bbl : 6 mcf. This is
based on an energy equivalency conversion method particularly applicable at
the burner tip and does not represent a value equivalency at the wellhead.
SOURCE GEOCAN Energy Inc.
