CALGARY, ALBERTA--(Marketwire -08/27/12)- NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN UNITED STATES
Iona Energy Inc. ("Iona" or the "Company") (INA.V) announces its financial results for the three months and six months ended June 30, 2012.
-- Received credit approval from lenders on a corporate senior secured
reserve based lending facility of USD$130 million. The facility is
subject to final documentation and conditions precedent which are
currently being negotiated.
-- Closing of a CAD$92 million equity financing of common shares.
-- No short or long term debt as at June 30, 2012.
-- Exploration and evaluation assets of CAD$65.9 million (December 31,
2011- CAD$28.2 million).
-- Total assets of CAD$167.2 million (December 31, 2011 - CAD$72.1
-- Q2 Net loss of CAD$2.9 million (or CAD$0.01 per share) resulting in a
loss for the six months ended June 30, 2012 of CAD$3.9 million.
-- Issue of a cash-backed letter of credit for GBP 4.26 million pounds
(CAD$6.8 million) for the Company's share of future decommissioning
costs for the Trent & Tyne properties.
-- GBP 20 million (CAD$32.0 million) paid into a trust account as an
upfront payment for the side-track of the Tyne T5-z well, which
commenced in August 2012.
-- Trent & Tyne net production to Iona during each of the three and six
months ended June 30, 2012 was 2.3 MMscf/d and the average realized gas
price was $8.67/mcf and $8.86/mcf respectively.
-- Completion of the Orlando well and side-track with better than expected
-- Contracts awarded for the Kells & Orlando field developments covering
project management, engineering, Xmas trees and procurement of other
-- Gaffney Cline & Associates Ltd. ("GCA") completed an independent
reserves report, effective March 31, 2012 using GCA's forecast prices
and costs, evaluating the Kells project. Based on management's revised
development plan, GCA determined the Pre-Tax Net Present Value,
discounted at 10%, of Kells Proved plus Probable ("2P") reserves have
increased to USD$358.4 million, up from USD$164.9 million as of December
31, 2011, an increase of more than 117%.
-- Performed an engineering and portfolio review and decided to put Orlando
development ahead of the Kells Development.
-- The Orlando Environmental Statement and consultation with DECC is now
complete. A re-engineered Orlando Field Development Plan ("FDP") is
being finalized for submission to DECC. Optimized engineering for
Orlando is expected to provide peak production at a rate of over 14,000
-- The Company has bid on 5 blocks in DECC's 27th UK licence round.
-- Completion of the acquisition of the 100% operated interest in the Kells
field and fast track development progressing with exploration
operatorship application approved by the Department of Energy and
Climate Change ("DECC") and submission of an FDP and Environmental
Statement to DECC.
-- Signed a definitive sale and purchase agreement to acquire a 58.73%
working interest, including operatorship, in the West Wick oil discovery
on UK Block 13/21a.
-- Signed a sale and purchase agreement for the purchase of its partners'
interests, MPX (30%) and Sorgenia (35%), in the Orlando Oil field.
-- Mr. Alan Curran joined the Company as Chief Operating Officer.
-- In March 2012, the UK Government doubled the Small Field Allowance
("SFA") tax shelter from GBP 75 million to GBP 150 million, which is
expected to benefit Iona but has not yet been applied to any of Iona's
qualifying properties. Iona's Orlando and Kells fields will each qualify
for SFA, representing a total of GBP 300 million of supplementary charge
-- 17,280,000 stock options granted during the second quarter of 2012.
Post Quarter End
-- Completed the purchase of its partners' interests, MPX North Sea Limited
("MPX") (30%) and Sorgenia E&P (UK) Ltd ("Sorgenia") (35%), in the
Orlando Oil field in exchange for the payment of historical costs and
future payments out of production.
-- The Company received a completion date extension to its previously
announced West Wick sale and purchase agreement and expects to complete
the acquisition at the end of August 2012.
-- During August, the Ensco 80 jack-up rig commenced operations to side-
track the T5-z production gas well.
Further details on the above are provided in the Condensed Consolidated Financial Statements and Management's Discussion and Analysis for the three and six months ended June 30, 2012, which have been filed with securities regulatory authorities in Canada. These documents are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on the Company's website at www.ionaenergy.com.
Iona is an oil and natural gas acquisition, appraisal, and development corporation active through its 100% wholly owned United Kingdom subsidiary, Iona Energy Company (UK) Ltd. in the United Kingdom's Continental Shelf ("UKCS").
Some of the statements in this announcement are forward-looking, including statements regarding Iona's plans for the development of its properties, anticipated effects of the UK small field allowance, and estimates of the net present value of future net revenue of proved and probable reserves from Iona's Kells property. Forward-looking statements include statements regarding the intent, belief and current expectations of Iona Energy Inc. or its officers with respect to various matters. When used in this announcement, the words "expects," "believes," "anticipate," "plans," "may," "will," "should", "scheduled", "targeted", "estimated" and similar expressions, and the negatives thereof, whether used in connection with estimated production levels and future activity or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcome to differ materially from those suggested by any such statements, including without limitation, the risk that Iona's development plans change as a result of new information or events, and the risk that drilling results differ materially from management's current estimates. These forward-looking statements speak only as of the date of this announcement. Iona Energy Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based except as required by applicable securities laws.
Note: "Boe" means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio 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.
It should not be assumed that the present worth of estimated future net revenue represents the fair market value of the reserves disclosed in this press release. The reserve and related revenue estimates set forth in this press release are estimates only and the actual reserves and realized revenue may be greater or less than those calculated. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.
Additionally, this press release uses certain abbreviations as follows
Oil and Natural Gas Liquids Natural Gas
bbls barrels mcf thousand cubic feet
Mbbls thousand barrels mcf/d thousand cubic feet per day
MMbbls million barrels scf standard cubic foot
bbls/d barrels per day MMscf millions of standard cubic feet
bopd barrels of oil per day MMscf/d millions of standard cubic feet
NGLs natural gas liquids Bscf billion standard cubic feet
Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.