Torque Energy Announces 2006 Year End Financial Resultsadmin
Torque Energy Inc. has filed with Canadian securities authorities its audited financial statements and related Management’s Discussion and Analysis and the reports relating to reserves data and other oil and gas information as at November 30, 2006.
During the year ended November 2006, the Company:
– entered into a new credit facility in the amount of $7,000,000. At November 30, 2006, a total of $4,275,000 had been drawn against the facility and the facility had been reduced to $6,400,000 leaving available credit of $2,125,000;
– repaid the existing $4,000,000 worth of debentures with interest to March 31, 2006 and the lenders surrendered the debentures to Torque for cancellation;
– repaid its previous credit facility in the amount of $1,890,000.
The Company’s working capital deficiency decreased to $4,648,830 at November 30, 2006 from $5,098,524 at November 30, 2005. This decrease is attributed to utilizing cash flow from operations to retire a portion of bank debt and debenture obligations during the period.
The Company incurred a loss of $55,328 ($0.00 per share) for the twelve months ended November 2006 compared to a profit of $329,761 ($0.02 per share) for the same period in 2005. Oil and gas revenues less royalties decreased to $2,940,662 in 2006 versus $3,109,993 in 2005. The decreases are a result of normal decline in production volumes.
General and administrative costs increased to $673,984 in 2006 from $517,301 over the same period in 2005. This increase is attributable to the relocation of the Company’s London office together with an increase in professional fees, management consulting services and salaries and benefits. Operating costs for the 12 months ended November 30, 2006 increased to $804,179 compared to $762,458 for the same period in 2005. The increase was a result of additional maintenance costs related to the non-operated facilities; additionally workovers were completed on several wells in the Dover Pool.
The Company averaged sales of 152 BOE (barrels of oil equivalent) per day for the period compared to 164 BOE per day for the same period in 2005. The existing daily production volumes continue to decline at approximately 8% annually.
The Company averaged $52.94 of revenue (net of royalties) per BOE sold in the year ending November 30, 2006 compared to $51.81 per BOE in the previous year.
The Company is actively participating in three project areas within southwestern Ontario. In the Dunwich project area, the Company has completed the shooting of 10.5 kilometers of two-dimensional seismic and this data has been processed and interpreted. An exploratory drilling location has been identified and drilling will commence in the second quarter of 2007 upon the removal of township road bans.
In the Sombra project area, the Company participated in the drilling of an exploratory test well under the terms of a Farmout Agreement with Liberty Oil and Gas Ltd. by paying forty percent of the cost to drill, complete and equip the well. Torque earned a twenty-five percent interest in the test well. The location was defined by a three-dimensional seismic program. Drilling was completed in January 2007 but the well was dry and has been abandoned.
In the Maidstone area, the Company acquired an 800 acre block of petroleum and natural gas rights and acquired 11 kilometers of trade seismic as it continues to develop this prospect.
All activities will be funded with existing cash flow and the Company continues to develop exploratory plays and prospects in Ontario.
Copies of the filed documents may be accessed electronically through www.sedar.com.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this new release.
Contacts: Torque Energy Inc. John K. Thomson General Manager
Torque Energy Inc. Brian E. Bayley (604) 689-1428
Source: Torque Energy Inc.