News

May 14, 2010 - 09:01 ET Antrim Energy Inc. Announces 2010 First Quarter Financial and Operational Results

CALGARY, ALBERTA--(Marketwire - May 14, 2010) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S.

Antrim Energy Inc. ("Antrim" or "the Company") (TSX:AEN) (AIM:AEY), an international oil and gas exploration and production company, today reported its financial and operational results for the three month period ended March 31, 2010.

All financial figures are unaudited and in US dollars unless otherwise noted

HIGHLIGHTS:

  • Two new gas wells in Argentina drilled and cased
  • Conditional sale of 30% interest in Causeway
  • Average gas price in Argentina increased 29% to $1.85 per mcf over Q1 2009
  • Financial flexibility with strong cash position of US$ 29.4 million and no debt

In the first quarter 2010, average production in Argentina increased to 1,835 barrels of oil equivalent per day ("boepd") compared to 1,590 boepd in the first quarter 2009. Oil and gas revenue decreased slightly to $3.1 million for the three months ended March 31, 2010 compared to $3.2 million for the same period in 2009. Higher gas sales volumes and higher product prices were offset by lower oil sales volumes due to the sale of the Puesto Guardian field in 2010. 

Antrim generated cash flow from operations of $0.2 million in first quarter 2010 compared to $0.3 million in 2009. Cash flow decreased due to higher general and administrative costs and lower interest and other revenue partially offset by lower operating costs. Current production in Argentina is approximately 1,800 boepd.

Antrim is in discussions with several potential industry partners to accelerate the development of the Fyne and Greater Fyne areas. Discussions with floating production storage and offloading ("FPSO") providers as well as local existing infrastructure owners to select the most efficient production export route for the Fyne Field are on-going. Engineering studies are continuing for a subsea tieback scheme to nearby third party infrastructure. 

On March 4, 2010, Antrim announced the signing of a Conditional Letter Agreement ("CLA") with Valiant Petroleum plc ("Valiant") to sell a 30% interest in Causeway. Antrim will receive up to a $21.75 million carried contribution towards the development costs of bringing the field to production start-up. Completion of the transaction is subject to several conditions including the sanction of a Field Development Plan ("FDP") by the UK Department of Energy and Climate Change ("DECC") which is anticipated in early 2011. 

In Argentina, commodity prices continue to rise as increasing mainland demand has resulted in increased market prices since late 2009. The Company commenced its eight well drilling program in late February targeting liquid-rich gas bearing reservoirs in Tierra del Fuego. Of the five wells drilled to May 12, 2010, two were cased as gas wells that flow tested at rates of 2.5 and 10 million cubic feet per day plus liquids. The most recent well has been drilled and logged with preliminary analysis indicating that it will also be cased for gas production. Two wells were plugged and abandoned after failing to encounter reservoir quality sands. 

Financial and Operating Results (unaudited)    
     
  Three Months Ended March 31  
  2010   2009  
Financial Results ($000's) except per share amounts)        
Revenue 3,116   3,225  
Cash flow from operations 167   283  
Cash flow from operations per share 0.00   0.00  
Net (loss) (2,111 ) (1,850 )
Net (loss) per share – basic (0.02 ) (0.01 )
Total assets 289,518   259,066  
Working capital 30,733   32,431  
Expenditures on petroleum and natural gas properties 990   2,467  
Debt -   -  
         
Common Shares Outstanding (000's)        
End of period 135,353   135,322  
Weighted average – basic 135,352   135,322  
Weighted average – diluted 137,342   135,322  
         
Production        
Oil, natural gas and NGL production (boe per day) (1) 1,835   1,590  
  1. The 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.

OVERVIEW OF OPERATIONS

United Kingdom

Fyne Field

The conditional divestiture of an interest in Causeway in March 2010 allows Antrim to concentrate on the development of its core UK asset, the Fyne Area located in the central North Sea in block 21/28a. In addition to the 17.5 million barrels (net) of proved plus probable reserves in the Fyne licence, Antrim holds 100% interest in three adjacent licences (total of four blocks) comprising the Greater Fyne Area. Antrim's strategy in this core area is to accelerate its development by working closely with industry partners. Antrim is in discussions with several potential industry partners to accelerate the development of the Fyne and Greater Fyne areas.

Antrim is also in discussion with floating production storage and offloading ("FPSO") providers as well as local existing infrastructure owners to select the most efficient production export route for the Fyne Field. An FPSO pre-qualification process has been conducted and engineering studies are continuing for an alternative subsea tieback scheme to nearby third party infrastructure. The production system is being engineered to handle up to 20,000 barrels of oil per day ("bopd") directly from the Fyne Field, with potential capacity add-ons to handle additional volume from the satellite fields. 

Antrim intends to select the optimum development scheme and prepare a FDP for submission in late 2010.

In addition to the Fyne development, Antrim is evaluating drilling prospects on its surrounding licences (the 'Greater Fyne Area', Antrim 100%) with a view to drilling in 2011. These licences hold a best estimate of 54.9 million barrels recoverable prospective resources with a range of 29.7 million barrels (low estimate) to 105.5 million barrels (high estimate). These prospective resources have been risked for chance of discovery but not for chance of development. If a discovery is made, there is no certainty that it will be developed, or if it is developed, there is no certainty as to the timing of such development. The prospective resources referenced herein were estimated by Mr. Terry Lederhouse, P. Eng., Vice President, Commercial of the Company. Within the meaning of NI 51-101, Mr. Lederhouse is a qualified reserve evaluator but is not independent in respect to the Company. The estimates were prepared in accordance with the procedures contained in the Canadian Oil and Gas Evaluation Handbook.

26th UK Offshore Licensing Round

In April 2010, Antrim participated in the 26th UK licensing round building on the success already established in the Greater Fyne Area. The results of our bids are expected in the second half of 2010. 

Causeway Field

Antrim signed a Conditional Letter Agreement with Valiant to sell a 30% interest in Causeway in March 2010. In return, Antrim will receive up to $21.75 million contributed to the development costs of bringing the field to production startup. Completion of the transaction is subject to several conditions, including sanction of the FDP by DECC. As part of the transaction, Antrim will transfer related tax losses and has transferred operatorship of the field to Valiant. Valiant will endeavor to finalize a revised FDP with respect to the development of the Causeway Field for submission to DECC during 2010. Following completion of the transaction, Antrim will retain a 35.5% working interest in the Causeway Field. 

Argentina

Antrim's interest in Argentina has shifted with a greater focus on its core assets in Tierra del Fuego (Antrim 25.78%). An eight well drilling program in Tierra del Fuego, designed to increase gas and NGL production from the Los Flamencos gas field, commenced in late February 2010. Of the five wells drilled to May 12, 2010, two were cased as gas wells that flow tested at rates of 2.5 and 10 million cubic feet per day plus liquids. The most recent well has been drilled and logged with preliminary analysis indicating that it will also be cased for gas production. Two wells were plugged and abandoned after failing to encounter reservoir quality sands. 

The Company has applied for "Gas Plus" pricing incentives for new gas that will be produced from the wells being drilled in 2010. If approved by the federal authorities, this will permit Antrim to sell its gas in the higher-priced industrial market on the mainland. 

Additional export capacity from the Tierra del Fuego area is anticipated later this year with the completion of a 600 million cubic feet per day capacity gas pipeline across the Straits of Magellan that will tie into the national gas network accessing the high demand Buenos Aires Province. Antrim, as part of a larger Tierra del Fuego consortium of companies, has contributed to the construction of the new pipeline through the purchase of interest bearing bonds.

Antrim has sold its non-operated 40% working interest in Puesto Guardian effective January 1, 2010, for consideration in the form of a $1.4 million non-interest bearing promissory note. The Puesto Guardian Field was reaching the end of its economic life and the purchaser will retain responsibility of all abandonment and environmental remediation work on the concession.

Effective February 25, 2010, Antrim relinquished its non-operated 70% working interest in Medianera and its non-operated 70% working interest in Tres Nidos Sur. Medianera production, as previously reported, was shut-in in February 2009. Well abandonment and seismic and drilling obligations on the properties have been assumed by the operator of both concessions.

Outlook

Antrim's strong financial position which includes unrestricted cash available of $29.4 million and no debt provides Antrim with financial and operational flexibility.

With the expectation that Causeway will be funded to production and with the intention to acquire a development partner for Fyne, Antrim's other North Sea activity will be weighted towards adding value by exploring for new hydrocarbons and appraising existing discoveries.

The Company will also concentrate on the high value production assets in Tierra del Fuego with a view to increasing production in a rising price commodity market. The Antrim team intends to grow the Argentine operation primarily through new in-country opportunities using the cash flow from existing Argentine operations.

Antrim is also considering other global exploration opportunities.

Antrim views the bilateral strategy as central to its corporate development, balancing longer term and capital-intensive investments in the UK North Sea with shorter investment cycle on-shore exploration and production opportunities.

Antrim's daily production in Argentina is expected to average approximately 1,800 net boepd in 2010.

About Antrim

Antrim Energy Inc. is a Canadian, Calgary based high-growth junior oil and gas exploration and production company with assets in the UK North Sea and Argentina. Antrim is listed on the Toronto Stock Exchange (AEN) and on the London Stock Exchange's Alternative Investment Market (AEY). Visit www.antrimenergy.com for more information. 

Forward-Looking Statements

This MD&A and any documents incorporated by reference herein contain certain forward-looking statements and forward-looking information which are based on Antrim's internal reasonable expectations, estimates, projections, assumptions and beliefs as at the date of such statements or information. Forward-looking statements often, but not always, are identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", "targeting", "forecast", "achieve" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements and information. Antrim believes that the expectations reflected in those forward-looking statements and information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements and information included in this MD&A and any documents incorporated by reference herein should not be unduly relied upon. Such forward-looking statements and information speak only as of the date of this MD&A or the particular document incorporated by reference herein and Antrim does not undertake any obligation to publicly update or revise any forward-looking statements or information, except as required by applicable laws.

In particular, this MD&A and any documents incorporated by reference herein, contain specific forward-looking statements and information pertaining to the quality of and future net revenues from Antrim's reserves of oil, natural gas liquids ("NGL") and natural gas production levels. This MD&A may also contain specific forward-looking statements and information pertaining to commodity prices, foreign currency exchange rates and interest rates, capital expenditure programs and other expenditures, supply and demand for oil, NGL's and natural gas, expectations regarding Antrim's ability to raise capital, to continually add to reserves through acquisitions and development, the schedules and timing of certain projects, Antrim's strategy for growth, Antrim's future operating and financial results, treatment under governmental and other regulatory regimes and tax, environmental and other laws and the start up of production from the Causeway or Fyne fields in the UK North Sea.

With respect to forward-looking statements contained in this MD&A and any documents incorporated by reference herein, Antrim has made assumptions regarding Antrim's ability to finalize the sale of a portion of Causeway to Valiant, obtain access to sub-sea or floating facilities including transportation and production storage offloading providers in the UK North Sea for production from Fyne and Causeway, obtain additional drilling rigs and other equipment in a timely manner, obtain regulatory approvals, timing of completion of the pipeline across the Straits of Magellan, future oil and natural gas production levels from Antrim's properties and the price obtained from the sales of such production, the level of future capital expenditure required to exploit and develop reserves, the ability of Antrim's partners to meet their commitments as they relate to the Company and more specifically the ability of Valiant to honour its commitments are identified in the Conditional Letter Agreement. Antrim's ability to obtain financing on acceptable terms, the general stability of the economic and political environment in which Antrim operates and the future of oil and natural gas pricing. In respect to these assumptions, the reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect.

Antrim's actual results could differ materially from those anticipated in these forward-looking statements and information as a result of assumptions proving inaccurate and of both known and unknown risks, including risks associated with the exploration for and development of oil and natural gas reserves, operational risks and liabilities that are not covered by insurance, volatility in market prices for oil, NGLs and natural gas, changes or fluctuations in oil, NGLs and natural gas production levels, changes in foreign currency exchange rates and interest rates, the ability of Antrim to fund its substantial capital requirements and operations, risks associated with ensuring title to the Company's properties, liabilities and unexpected events inherent in oil and gas operations, including geological, technical, drilling and processing problems, the accuracy of oil and gas reserve estimates and estimated production levels as they are affected by the Antrim's exploration and development drilling and estimated decline rates, in particular the future production rates at the Causeway and Fyne fields in the UK North Sea and at the Tierra del Fuego properties in Argentina. Additional risks include the ability to effectively compete for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel, incorrect assessments of the value of acquisitions, Antrim's success at acquisition, exploitation and development of reserves, changes in general economic, market and business conditions in Canada, North America, Argentina, South America, the United Kingdom, Europe and worldwide, actions by governmental or regulatory authorities including changes in income tax laws or changes in tax laws, royalty rates and incentive programs relating to the oil and gas industry and more specifically, changes to the capped market price in Argentina, changes in environmental or other legislation applicable to Antrim's operations, and Antrim's ability to comply with current and future environmental and other laws, adverse regulatory rulings, order and decisions and risks associated with the nature of the Common Shares.

Statements relating to "resources" are deemed to be forward-looking statements. The estimates of remaining recoverable prospective resources have been risked for chance of discovery, but have not been risked for chance of development. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development.

Many of these risk factors, other specific risks, uncertainties and material assumptions are discussed in further detail throughout the MD&A and in Antrim's management discussion and analysis for the year ended December 31, 2009. Readers are specifically referred to the risk factors described in this MD&A under "Risk Factors" and in other documents Antrim files from time to time with securities regulatory authorities. Copies of these documents are available without charge from Antrim or electronically on the internet on Antrim's SEDAR profile at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The calculation of barrels of oil equivalent ("boe") is based on a conversion rate of six thousand cubic feet of natural gas ("mcf") to one barrel of crude oil ("bbl"). Boe's 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.

Qualified Person Review

In accordance with AIM guidelines, Mr. Kerry Fulton, P. Eng and Vice President, Operations for Antrim, is the qualified person that has reviewed the technical information contained in this MD&A.

Antrim Energy Inc.
Consolidated Balance Sheets
As at March 31, 2010 and December 31, 2009 (unaudited)
 
         
         
  2010
$
  2009
$
 
Assets        
         
Current assets        
Cash and cash equivalents 29,375,148   31,168,669  
Accounts receivable 3,050,390   3,278,166  
Inventory and prepaid expenses 847,422   937,513  
  33,272,960   35,384,348  
         
Petroleum and natural gas properties 253,869,990   248,012,987  
Office equipment 535,391   447,160  
Investments and other non-current assets 1,839,629   1,274,384  
  289,517,970   285,118,879  
         
Liabilities        
         
Current liabilities        
Accounts payable and accrued liabilities 2,540,046   3,424,596  
  2,540,046   3,424,596  
         
Asset retirement obligation 5,382,974   5,696,945  
  7,923,020   9,121,541  
         
Commitments and contingencies        
         
Shareholders' equity        
Share capital 311,947,912   311,946,244  
Contributed surplus 16,107,319   15,605,999  
Deficit (51,697,746 ) (49,586,859 )
Accumulated other comprehensive loss 5,237,465   (1,968,046 )
  281,594,950   275,997,338  
  289,517,970   285,118,879  
Antrim Energy Inc.
Consolidated Statements of Income (Loss) and Deficit
For the Three Months ended March 31, 2010 and 2009 (unaudited)
 
   
   
  2010
$
  2009
$
 
         
Revenue        
Oil and gas 3,115,814   3,225,083  
Royalties (457,963 ) (353,205 )
Export tax (57,065 ) (10,397 )
  2,600,786   2,861,481  
Interest and other income 478,067   580,809  
  3,078,853   3,442,290  
         
Expenses        
Operating 1,347,654   1,736,275  
General and administrative 1,534,375   1,380,521  
Stock-based compensation 339,236   856,532  
Depletion and depreciation 1,655,090   1,241,936  
Accretion of asset retirement obligations 79,177   130,797  
Foreign exchange (gain) loss 231,250   24,007  
  5,186,782   5,370,068  
Loss for the period before income taxes (2,107,929 ) (1,927,778 )
         
Income tax expense (recovery)        
Current 2,958   2,937  
Future -   (80,790 )
  2,958   (77,853 )
Net Loss for the period (2,110,887 ) (1,849,925 )
         
Deficit – Beginning of period (49,586,859 ) (37,027,268 )
Deficit – End of period (51,697,746 ) (38,877,193 )
         
Net loss per common share        
  Basic (0.02 ) (0.01 )
  Diluted (0.02 ) (0.01 )
     
         
Antrim Energy Inc.
Consolidated Statements of Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)
For the Three Months ended March 31, 2010 and 2009 (unaudited)
 
   
   
  2010
$
  2009
$
 
         
Net loss for the period (2,110,887 ) (1,849,925 )
Comprehensive income (loss)        
Unrealized (loss) gain on translation of consolidated financial statements into reporting currency 7,205,511   (6,999,541 )
Comprehensive income (loss) 5,094,624   (8,849,466 )
         
Accumulated other comprehensive income (loss) – Beginning of period (1,968,046 ) (31,318,787 )
Change in accounting policy -   (2,938,629 )
Other comprehensive (loss) income 7,205,511   (6,999,541 )
Accumulated other comprehensive loss – End of period 5,237,465   (41,256,957 )
Antrim Energy Inc.
Consolidated Statements of Cash Flows
For the Three Months ended March 31, 2010 and 2009 (unaudited)
 
   
   
  2010
$
  2009
$
 
Cash Provided by (used in)        
         
Operating Activities        
Net loss for the period (2,110,887 ) (1,849,925 )
Items not involving cash:        
  Depletion and depreciation 1,655,090   1,241,936  
  Accretion of asset retirement obligations 79,177   130,797  
  Stock-based compensation expense 339,236   856,532  
  Foreign exchange (gain) loss 204,071   (15,106 )
  Future income taxes -   (80,790 )
  166,687   283,444  
Change in non-cash working capital items 182,597   (559,312 )
  349,284   (275,868 )
Financing Activities        
Issue of common shares 992   -  
Share issue expenses -   -  
  992   -  
Investing Activities        
Office equipment (156,923 ) (5,859 )
Petroleum and natural gas properties (990,304 ) (2,467,303 )
Other non-current assets (565,681 ) 1,644  
Change in non-cash working capital items (975,148 ) (721,339 )
  (2,688,056 ) (3,192,857 )
         
Effects of foreign exchange on cash 544,259   (628,728 )
         
Net (decrease) increase in cash and cash equivalents (1,793,521 ) (4,097,453 )
Cash and cash equivalents – Beginning of period 31,168,669   35,337,007  
Cash and cash equivalents – End of period 29,375,148   31,239,554  

FOR FURTHER INFORMATION PLEASE CONTACT:

Antrim Energy Inc.
Stephen Greer
President & CEO
(403) 264-5111
(403) 264-5113 (FAX)
greer@antrimenergy.com
or
Antrim Energy Inc.
Douglas Olson
Chief Financial Officer
(403) 264-5111
(403) 264-5113 (FAX)
olson@antrimenergy.com
or
Antrim Energy Inc.
Scott Berry
Manager, Investor Relations
(403) 264-5111
(403) 264-5113 (FAX)
berry@antrimenergy.com
www.antrimenergy.com