Stratic Energy Corporation - Second Quarter 2010 Results

CALGARY and LONDON, Aug. 25 /CNW/ - Stratic Energy Corporation (TSX Venture: 'SE', AIM 'SE.') ("Stratic" or the "Company") has today filed its Interim Financial Statements and accompanying Management's Discussion and Analysis for the quarter and six months ended June 30, 2010. This filing can be accessed at www.sedar.com and on the Company's website www.straticenergy.com. All amounts below are US dollars, unless otherwise stated.

Highlights:

Recommended offer for the Company by EnQuest PLC

• Agreement for proposed conditional sale of the Company to EnQuest PLC announced on August 3, 2010, in an all share transaction pursuant to a statutory plan of arrangement under which each Stratic common share will be exchanged for 0.089626 EnQuest ordinary shares
  
  
• Agreement subject to a number of conditions, including approval of the Stratic shareholders, acceptance of repayment by the holders of the Company's outstanding 9% convertible notes upon change of control, court approval pursuant to the arrangement provisions of the Business Corporations Act (Yukon) and receipt of all necessary regulatory consents and approvals

Operations and West Don Development

• Production in the quarter from continuing operations of 1,085 bopd (2009: 1,075 bopd). Production from discontinued operations in Turkey of 157 boepd (2009: 297 boepd)
  
  
• More consistent production performance from the Northern Producer floating production facility on West Don, following successful connection by pipeline in March 2010 to Brent oil export system
  
  
• Mechanical problems with West Don WPB well reduced production - operator looking at possibility of rig intervention
  
  
• Third production well in the southern part of the West Don field spudded with John Shaw semi-submersible drilling unit on August 7, 2010 and currently drilling in accordance with plan

Pre-Development Assets

• Following the postponement of operator Fairfield's IPO, plans for development of the Crawford field delayed for an estimated 12 months

Financial

• Oil sales revenues for the quarter from continuing operations in the UK of $6.2 million (2009: $5.6 million). Gas revenues from discontinued operations in Turkey of $0.7 million (2009: $1.4 million)
  
  
• Net income for the quarter of $0.2 million (2009: net loss $8.4 million). Net loss from continuing operations of $3.0 million (2009: $7.8 million). Net income from discontinued operations of $3.2 million (2009: net loss $0.6 million)
  
  
• Capital expenditure for the quarter of $3.0 million (2009: $14.4 million), mainly in the UK
  
  
• Cash and cash equivalents (including restricted cash) of $10.9 million at June 30, 2010 (December 31, 2009: $7.4 million); bank debt (excluding letters of credit) of $18.9 million and convertible notes of $66.7 million totaling $85.6 million at June 30, 2010 (December 31, 2009: $112.5 million), making net debt at the mid-year of $74.7 million (December 31, 2009: $105.1 million)

Disposal Program

• Sale of the Company's Turkish business agreed and completed in May 2010.

Forward-looking statements

This news release contains certain forward looking statements, which involve assumptions with respect to future plans, production levels and results, and capital expenditures. The reader is cautioned that all such forward looking statements involve substantial risks and uncertainties and the assumptions used in their preparation may not prove to be correct. Stratic's actual results could differ materially from those expressed in, or implied by, these forward looking statements and accordingly, the forward looking statements are qualified by reference to these cautionary statements. The forward looking statements contained herein are made as at the date of this news release. Stratic undertakes no obligation to update or publicly revise forward looking statements or information unless so required by applicable securities laws.

TSX-V and AIM notifications

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this release.

Stratic's Chief Operating Officer, Dr Mark Bilsland BSc (geology), PhD (petroleum petrophysics), and member of the SPE, is the qualified person who has reviewed and approved the technical information in this announcement for the purposes of the AIM Rules for Companies (incorporating the Guidance Note for Mining, Oil and Gas Companies).

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