WINNIPEG, Nov. 29 /CNW/ - Nordic Oil and
Gas Ltd. (TSXV: NOG) today announced the Company's financial results from
operations for its third quarter and nine months ended September 30,
2007. All amounts referenced herein are in Canadian dollars.
Year-to-Date Results
Revenue from natural gas and Coal Bed Methane ("CBM") sales for the
nine-month period (including liquids and transport revenue and interest revenue)
totaled $504,105, down slightly from the $520,717
reported for same period in 2006.
Cash, including term deposits and accounts receivable for the first nine
months of the year totaled $39,778 compared to
$269,540 for the same period in 2006. In addition, net cash flow
from operating activities (cash received from operators minus cash paid to
suppliers and for royalties) was down slightly for the first nine months of 2007
to $252,144 compared to $265,846 for the same
period in 2006.
Total assets as at September 30, 2007 were
$4,428,198, up from the $4,309,480 at the end of
2006.
General and administrative expenses for the first three quarters of the year
totaled $117,101, virtually level with the
$118,967 reported during the same period in 2006. Overall
expenses for the first three quarters of 2007 were up approximately
$170,000 at $774,062 compared to the same period
in 2006 at $606,064. This was due primarily to the significant
increase in depletion and amortization expenses from $194,138 to
$385,130.
The Company recorded a net loss before income taxes of
$516,449 for the first nine months of 2007, up from the loss of
$328,990 over the same period a year ago. However, this improves
to a loss of $367,067 when the future income tax recovery of
$149,382 is applied.
Average monthly production volume for the nine months ended September
30, 2007 was 46.16 BOEs*/day, and 42.61 BOEs*/day for the third quarter.
The Company received $6.2089/GJ as an average gas price during the first nine
months of the year.
Quarterly Results
Revenue for the three-month period ended September 30, 2007
totaled $139,538 up approximately $6,000 over the
Q3 2006 total of $133,500, but down about $40,000
over last quarter's total of $175,429. The marginal decline in
quarter over quarter revenue totals this year was due to the continued slump in
natural gas prices, coupled with the fact that the Company's 15-12-38-25 W4 well
in Joffre did not come onto production until early November.
Cash, including term deposits and accounts receivable for the three months
ended September 30, 2007 totaled $29,902 compared
to $66,578 for the same period last year. In addition, net cash
flow from operating activities (cash received from operators minus cash paid to
suppliers and for royalties) was up for the quarter under review to
$69,268 as compared to $61,577.
G & A expenses were down for the quarter under review, over the
comparable period in 2006 - $38,077 this year versus
$47,101 last year, while overall expenses for the third quarter
were up from those recorded in Q3 2006 at $232,813 compared to
$167,565. This was due primarily to the increase in depletion and
amortization costs to $164,233 for the quarter, compared to
$60,164 in Q3 2006 and an increase in professional fees from
$12,066 to $29,445.
During the quarter, the Company recorded a net loss before taxes of
$161,703 compared to a loss of $103,413 reported
in Q3 2006; however this was an improvement over the $239,056 net
loss reported last quarter. Furthermore, the quarter improves to a loss of
$12,321 when the future income tax recovery of
$149,382 is applied.
Quarterly Highlights
One of the highlights of the third quarter came near the end of September
when the Company finalized its purchase of approximately 8,000 acres of
Petroleum & Natural Gas leases in the Peace River Arch and Lloydminster
regions of Alberta. These lands will provide Nordic with new core areas for the
Corporation and represent a strategic fit for its current production and future
drilling activity at Joffre, Alberta.
In August, the Company announced that the field measurement results from the
flow test on the Corporation's 11th well in Joffre, Alberta,
Canada showed that the middle Belly River zone had gas
rates of 18.5 10(3)m(3) at between 649.5 metres and 651 metres. Furthermore, the
combined 23 10(3)M(3) for the three intervals within the well that was tested,
equated to 820 MCF/day. This well is expected to come on production in early
December.
Also during the quarter under review, the Company closed a Private Placement
offering of 1 million Units of Nordic Oil and Gas at a price of
$0.20 per Unit for gross proceeds of $200,000 to
certain funds in the EnergyFields Group. Each Unit consisted of one Class A
common share of the Corporation issued as a "flow-through share" within the
meaning of the Income Tax Act (Canada) and one-half of a
Class A common share purchase warrant. Each Warrant entitles the holder thereof
to purchase one regular Class A common share of the Corporation at a price of
$0.30 per share for a period of two years from the date of
issuance. In September, the Company announced the closing of another private
placement offering, this one totaling 752,500 units at a price of
$0.20 per Unit for gross proceeds of $150,500 to
various subscribers.
Events Subsequent to the End of the Quarter
Several major announcements have taken place subsequent to the end of the
third quarter. The most notable came in early November when the Company
announced it had discovered a series of oil seeps in its most northerly permit
in Township 40, Ranges 4 and 5 W2 Preeceville, Saskatchewan. Various samples
were sent to a laboratory in Calgary, and the analysis
revealed the presence of oil. All together, evidence of 29 seeps was found on
the property, of which three were very extensive. The oil seeps were discovered
as a result of hydrocarbon soil gas surveys undertaken by Petro-Find Geochem
Ltd.
In addition, the Company announced the closing of three Private Placement
financings, two in October and the other one during November. On October
1, 2007, Nordic closed a private placement offering of Units of the
Corporation at a price of $0.17 per Unit. The Corporation issued
600,000 Units to a member of the FrontierAlt Group for aggregate gross proceeds
of $102,000. Each Unit consists of one Class A common share of
the Corporation plus one-half of one Class A common share purchase warrant. Each
whole Warrant entitles the holder thereof to purchase one Class A common share
of the Corporation at a price of $0.30 per share for a period of
two years from the date of issuance. The securities issued pursuant to the
Offering are subject to a four-month holding period, ending February 2,
2008.
On October 24, the Company issued 1,375,000 units at a price
of $0.20 per Unit for gross proceeds of $275,000
to various subscribers. Each Unit consisted of one Class A common share of the
Corporation issued as a "flow-through share" within the meaning of the Income
Tax Act (Canada) and one half of one Class A common share
purchase warrant. Each whole Warrant entitles the holder thereof to purchase one
regular Class A common share of the Corporation at a price of
$0.30 for a period of two years from the date of issuance.
Finally, on November 20, the Company announced the second
closing of its previously announced private placement offering of units of the
Corporation at a price of $0.20 per Unit by issuing 3,600,000
Units for aggregate gross proceeds of $720,000 to various
subscribers. Each Unit consisted of one Class A common share of the Corporation
and one half of one Class A common share purchase warrant. MAK Allen & Day
Capital Partners was paid a finder's fee of $30,000 and was
issued 200,000 Warrants as partial compensation for their services.
Mr. Benson stated that the Company is very upbeat with
respect to both the remainder of 2007 and into 2008. "The fact that we intend to
place our new well in Joffre on production before the end of the year will set
the tone for what we feel will be a pivotal year in 2008 for Nordic Oil and
Gas.
"However, we are most excited about our recent findings in Preeceville. It is
our intention to move forward with applications for multiple well licenses and
start drilling as soon as possible. We have a large land base in Preeceville,
and when combined with the proprietary seismic that we have already undertaken,
along with the Geo-Chem samples and the current oil seeps analysis, we are
confident that the possibility exists for one or more pools to be identified on
our property."
About Nordic Oil and Gas Ltd.
-----------------------------
Nordic Oil and Gas Ltd. is a junior oil and gas company engaged in the
exploration and development of oil, natural gas and Coal Bed Methane in Alberta
and Saskatchewan. The Company is listed on the TSX Venture Exchange and trades
under the symbol NOG.
This news release contains certain statements that may be deemed
"forward-looking statements". All statements in this release, other than
statements of historical fact, that address events or developments that the
Corporation expects to occur, are forward looking statements. Forward looking
statements are statements that are not historical facts and are generally, but
not always, identified by the words "expects", "plans", "anticipates",
"believes", "intends", "estimates", "projects", "potential" and similar
expressions, or that events or conditions "will", "would", "may", "could" or
"should" occur. Although the Corporation believes the expectations expressed in
such forward-looking statements are based on reasonable assumptions, such
statements are not guarantees of future performance and actual results may
differ materially from those in forward looking statements. Factors that could
cause the actual results to differ materially from those in forward-looking
statements include market prices, exploration and drilling success, continued
availability of capital and financing and general economic, market or business
conditions. Investors are cautioned that any such statements are not guarantees
of future performance and actual results or developments may differ materially
from those projected in the forward-looking statements. Forward looking
statements are based on the beliefs, estimates and opinions of the Corporation's
management on the date the statements are made. The Corporation undertakes no
obligation to update these forward-looking statements in the event that
management's beliefs, estimates or opinions, or other factors, should
change.
* The term BOEs may be misleading, particularly if used in isolation. A
BOE conversion ratio of 6 Mcf: 1 barrel 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 TSX Venture Exchange has not reviewed nor accepts responsibility for
the adequacy or accuracy of the contents of this News Release.
%SEDAR: 00015188E