Ironhorse Announces Q1 2016 Financial and Operating Results

CALGARY, May 26, 2016 /CNW/ - Ironhorse Oil & Gas Inc. ("Ironhorse" or the "Company") (TSX-V: IOG) announces its financial and operating results for the three months ended March 31, 2016.

Financial and Operation Summary

The Company's reported production has decreased 71% to 67 boe/d in the first quarter of 2016 from 231 boe/d produced in the fourth quarter of 2015.  The decrease in production is attributed to the Nisku L2L Pool shut in of production on January 19, 2016. As a result, Pembina only produced for 18-days during the quarter.

The Company realized a net loss of $144,000 for the first quarter, reflective of higher general and administrative costs incurred resulting from the expired unsolicited take-over bid by 1927297 Alberta Ltd. and lower revenues triggered by reduced production and persistent declining commodity prices.

Despite significantly lower operating netbacks and production for Q1 2016, negative funds from operations improved 9% to $131,000 compared to negative funds of $144,000 for Q4 2015 which included $270,000 in take-over bid costs recorded.  The Company has incurred $325,000 in take-over bid associated general and administrative costs since November 2015. 

Currently the Company does not have significant capital commitments authorized for 2016 and continues to be well positioned financially to withstand the temporary shut-in of the Pembina wells. The Company continues to look for an opportunity of consistent higher prices in order to possibly hedge and sustain a restart of production at Pembina.

On February 23, 2016, the Company and GRL jointly filed a Statement of Claim in the Court of Queen's Bench of Alberta against Sinopec Daylight Energy Ltd. ("Sinopec"), the operator of pipelines and facilities associated with the Pool production.  The Company and GRL are seeking damages against Sinopec for misrepresentation and breach of contract.  On April 15, 2016 Sinopec Daylight Energy Ltd. filed a Statement of Defense in response to the Statement of Claim, as well as a Counterclaim.  On May 24, 2016, the Company and GRL filed a Statement of Defense to the Sinopec Counterclaim.

SELECTED INFORMATION			For three months ended
			March 31,	December 31,		March 31,
($ thousands except per share & unit amounts)			2016	2015		2015
Financial
Petroleum and natural gas revenues ^(1)			162	892		248
Funds from operations ^(2)			(131)	(144)		(68)
	Per share – basic and diluted		-	(0.01)		-
Net loss			(144)	(2,076)		(159)
	Per share – basic and diluted		(0.01)	(0.07)		(0.01)
Capital expenditures ^(3)			(1)	-		20
Operation
Production
	Light Oil & NGL (bbl/d)		44	202		52
	Gas (mcf/d)		137	197		171
	Total (boe/d)		67	231		81
Petroleum and natural gas revenues ($/boe)			26.50	42.08		34.27
Royalties ($/boe)			11.27	18.00		13.96
Operating expenses ($/boe)			12.75	12.55		16.89
Operating netback ($/boe)			2.48	11.53		3.42

(1)	Petroleum and natural gas revenues are before royalty expense.
(2)	Funds from operations and net debt are non-GAAP measures as defined in the Advisory section of the MD&A.
(3)	Capital expenditures are before acquisitions and dispositions.

Additional Information

Ironhorse's complete results for the three months ended March 31, 2016, including unaudited condensed financial statements and the management's discussion and analysis are available on SEDAR and the Company's web site at www.ihorse.ca. 

About Ironhorse:

Ironhorse Oil & Gas Inc. is a Calgary-based junior oil and natural gas production company trading on the TSX Venture Exchange under the symbol "IOG."

Forward-looking statements:

Statements throughout this release that are not historical facts may be considered to be "forward looking statements." These forward looking statements sometimes include words to the effect that management believes or expects a stated condition or result. All estimates and statements that describe the Company's objectives, goals, or future plans, including management's assessment of future plans and operations, drilling plans and timing thereof, expected production rates and additions and the expected levels of activities may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, incorrect assessment of the value of acquisitions, failure to complete and/or realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources and changes in the regulatory and taxation environment. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: the ability of the Company to obtain equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manor; pipeline restrictions; and field production rates and decline rates. 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 elsewhere herein and in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this release are made as at the date of this release and Ironhorse assumes no obligation to update or revise any forward-looking statements to reflect new events or circumstances, except as required by applicable laws.

Boe Conversion – Certain natural gas volumes have been converted to barrels of oil equivalent ("boe") whereby six thousand cubic feet (mcf) of natural gas is equal to one barrel (bbl) of oil. This conversion ratio is based on an energy equivalency conversion applicable at the burner tip and does not represent a value equivalency at the wellhead.

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

SOURCE Ironhorse Oil & Gas Inc.

Larry J. Parks, President & Chief Executive Officer, [phone]; Karen Hutson, VP Finance & Chief Financial Officer, [phone], www.ihorse.ca