Nordic Oil and Gas Announces Second Quarter and Six-Months Financial Results
for 2010
WINNIPEG, Aug. 30 /CNW/ - Donald Benson, Chairman and Chief Executive Officer of Nordic Oil and Gas Ltd. ("Nordic" or "the Company") today announced the Company's financial results from operations for the three- and six-month period ended June 30, 2010. All amounts referenced herein are in Canadian dollars.
Analysis of Revenue, Cash Flows and Assets
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Revenue from oil and natural gas sales (including liquids and transport revenue) during the second quarter of 2010 totaled $207,975, down approximately $150,000 from the $358,127 reported for the same period in 2009, but up over $75,000 from the $129,911 reported in Q1 2010. When adding interest earned, the Q2 2010 revenue becomes $210,135 compared to $366,001 during the quarter ended June 30, 2009, and $130,890 during the first quarter of this year. The decrease from last year can be attributed to the fact that the Company has been accounting on the basis that the effective date of the sale of certain assets in Lloydminster to Western Plains commenced April 12, thereby reducing Nordic's production and subsequent revenue accordingly.
On a year to date basis, overall revenue for the first six months of 2010 totaled $341,025 versus $627,222 for the same period a year ago.
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REVENUE
3 Months Ended 6 Months Ended
June 30 June 30
2010 2009 2010 2009
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$ $
Oil and gas revenue 207,975 353,860 337,885 608,258
Liquids revenue 1,307 2,793
Transport revenue 2,960 5,744
Production revenue 207,975 358,127 337,885 616,795
Interest revenue 2,161 7,874 3,140 10,427
Total Revenue 210,135 366,001 341,025 627,222
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Total assets, including cash, short-term investments, deposits and accounts receivable at the end of the second quarter were $13,817,829, down $3.5 million from the $17,357,549 total as at December 31, 2009 and down also from the $16,834,451 at the end of the first quarter in 2010. The main reason for the drop is the Company began accounting for the sale of the assets at Lloydminster as noted above on April 12, 2010, thereby reducing the value of its property and equipment by nearly $4 million. Both accounts receivable and cash are up for the second quarter as compared to the end of the year.
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ASSETS
Current Assets 6 Months 3 Months Year
Ended Ended Ended
June 30, March 31, December 31,
2010 2010 2009
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$ $ $
Cash & deposits 628,601 205,533 262,309
Short term investments 71,311 71,311 242,332
Accounts receivable 877,162 235,679 684,121
Deferred costs 43,992 43,992 --
Fixed Assets
Property & equipment 12,196,538 16,277,936 16,168,787
Other assets -- 100,093
Total Assets 13,817,829 16,834,451 17,357,549
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Analysis of Expenses
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Overall expenses, including production costs for the quarter under review, not including production costs, increased slightly to $421,320 from the $395,998 reported in the second quarter ended June 30, 2009 and were down by some $76,000 from the $497,571 in the first quarter this year. When factoring in production costs, total expenses incurred for the second quarter of 2010 totaled $588,120, a drop of some $147,345 versus the $735,465 reported during the same period a year ago.
On a year-to-date basis, overall expenses for the first six months of 2010 totaled $1,085,691, down from the $1,280,109 reported for the six months in 2009 The main reason for this decrease is the drop in production costs - $379,944 to date this year versus $609,251 last year. The reason for this decrease is that the wells at Lloydminster were not on production for several weeks during the first quarter of the year.
Royalties & Production Expenses
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Royalties paid in Q2 2010 totaled $12,842 versus $22,779 for the same period in 2009 and $8,240 in Q1 of this year. Total well expenses (operating costs) were also lower during the period under review at $153,957, compared to $316,688 for the second quarter of 2009 and $204,905 in the first quarter this year.
On a year-to-date basis, as noted above, operating costs for the first six months of 2010 are down more than $197,000 at $358,862 versus $556,037 for the same period last year. In addition, royalty costs for the first six months of 2010 are also down when compared to the same period a year - $21,082 this year versus $53,214 last year
The sharp drop in operating costs is due to the decrease in the number of wells on production in Q1 and the fact that for accounting purposes, the Company has been using April 12, 2010 as the date of the sales transaction of certain assets in Lloydminster, thereby reducing its overall costs for the year to date.
Balance Sheet Analysis
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Long-term liabilities at the end of June 2010 totaled $4,468,900, down significantly from the December 31, 2009 total of $7,903,111 and also from the March 2010 total of $7,141,868. The reason for the decline is the substantial decrease in accounts payable to $2,069,664 as at June 30, 2010 as opposed to $4,834,870 as at December 31, 2010. This is due to the sale of the Lloydminster assets, much of which was used to pay creditors.
The net loss for the period before taxes was ($427,776) versus ($369,464) for the same period in 2009. The reason for the increase was the stock option expense of $69,739 in the first quarter of 2010, as opposed to no stock option expense in the same period last year.
Given that there was no income tax recovery reported in the second quarter of 2010, the net loss for the three months under review remains unchanged at ($427,776), compared to a net loss of ($369,464) for the three months ended June 30, 2009 and the net loss of ($232,132) during Q1 of 2010).
For the six-month six month period under review, after applying the future income tax recovery of $94,157 the next loss is ($700,301) compared to ($499,327) in the first half of 2009. A portion of this increased loss was due to the loss on the sale of assets - Lloydminster - of ($49,792) this year.
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 Corporation is listed on the TSX Venture Exchange and trades under the symbol NOG. Nordic was one of the "2008 TSX Venture 50" companies, a ranking of the top 10 public venture capital companies in five industry sectors listed on the TSX Venture Exchange.
Neither the 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 the contents of this News Release.
This press release contains forward-looking statements with respect to Nordic Oil and Gas Ltd. properties, and matters concerning the business, operations, strategy, and financial performance of Nordic. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the estimates and projections regarding the properties are realized. Forward-looking statements are based on a number of assumptions which may prove to be incorrect. Unless otherwise stated, all forward looking statements speak only as of the date of this press release and Nordic does not undertake any obligation to update such statements except as required by law.
For further information: Don Bain, Corporate Secretary, Nordic Oil and Gas Ltd., Tel. 204-229-7751, Fax: 204-943-1829, E-mail: [email protected] www.nordicoilandgas.com
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