News

Aug 13, 2010 - 02:00 ET Antrim Energy Inc. Second Quarter Financial and Operational Results

CALGARY, ALBERTA--(Marketwire - Aug. 13, 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 and six month periods ended June 30, 2010.

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

HIGHLIGHTS:

- Four new gas wells in Argentina drilled and cased - bringing total to six in 2010

- Average gas price in Argentina increased 20% to $1.87 per mcf over Q2 2009

- Financial flexibility with strong cash position of US$ 26.4 million, positive cash flow and no bank debt

In the first half of 2010, average production in Argentina increased to 1,787 barrels of oil equivalent per day ("boepd") compared to 1,677 boepd in the first half of 2009. Oil and gas revenue increased to $5.8 million for the six months ended June 30, 2010 compared to $5.3 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 early 2010.

Antrim generated cash flow from operations of $0.4 million for the six months ended June 30, 2010 compared to a cash flow from operations deficiency of $0.4 million in 2009. Cash flow increased due to higher revenue, higher interest and other income, and lower operating costs offset by higher general and administrative costs.

The Company's primary focus during the second quarter has been the engineering design work associated with bringing the UK Fyne Field to production. Antrim is moving forward with several potential industry partners to accelerate the development of Fyne.

Antrim's average gas price for the second quarter of 2010 was $1.87 per mcf compared to $1.56 for the same period in 2009, a 20% increase. For the second quarter, oil prices averaged $47.38 per barrel compared to $37.57 per barrel for the same period in 2009, a 36% increase. Subsequent to the quarter-end, oil prices continued to rise with the July 2010 oil shipment sold for $49.70 per barrel.

The Company expanded its drilling program in Argentina from eight to ten wells targeting liquid-rich gas bearing reservoirs in Tierra del Fuego. Of these ten wells, one well is presently being drilled, six were cased as gas wells, two wells were plugged and abandoned and one well is scheduled to be drilled prior to the end of the third quarter. Five of the six cased wells have been completed with initial flow test rates of between 1.5 and 14 million cubic feet per day and are being tied into area infrastructure. One well remains to be completed.

/T/

Financial and Operating Results (unaudited)

                                     Three Months Ended    Six Months Ended
                                                June 30             June 30
                                         2010      2009      2010      2009
----------------------------------------------------------------------------
Financial Results ($000's except
 per share amounts)
Revenue                                 2,715     2,120     5,831     5,345
Cash flow from operations
 (deficiency)(1)                          236      (716)      402      (433)
Cash flow from operations per
 share (1)                               0.00     (0.01)     0.00      0.00
Net (loss)                             (2,020)   (2,888)   (4,131)   (4,738)
Net (loss) per share - basic            (0.02)    (0.03)    (0.03)    (0.04)
Total assets                          281,032   274,360   281,032   274,360
Working capital                        27,821    32,318    27,821    32,318
Expenditures on petroleum and natural
 gas properties                         2,448     1,811     3,438     4,279
Bank debt                                   -         -         -         -

Common shares Outstanding (000's)
End of period                         135,370   135,281   135,370   135,281
Weighted average - basic              135,357   135,281   135,355   135,281
Weighted average - diluted            135,357   135,281   135,355   135,281

Production
Oil, natural gas and NGL production
 (boe per day) (2)                      1,739     1,764     1,787     1,677

(1) Cash flow from operations (deficiency) and cash flow from operations per
    share are Non-GAAP Measures. Refer to "Non-GAAP Measures" in
    Management's Discussion and Analysis.

(2) 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.

/T/

OVERVIEW OF OPERATIONS

United Kingdom

Fyne Field

With the conditional divestiture of an interest in Causeway announced in March 2010, Antrim's primary focus is 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. In this regard, Antrim is in discussions with several potential partners to sell a portion of its high working interest which could provide Antrim with funding to place the Fyne Field on production.

Antrim has progressed 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. An FPSO pre-qualification process has been conducted and engineering studies performed, allowing for the identification of 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 Fyne development scheme and prepare a Field Development Plan ("FDP") for submission. In addition to the Fyne development, Antrim has identified five high priority drilling prospects on its surrounding licences (the 'Greater Fyne Area', Antrim 100%). Antrim expects to submit the Fyne FDP and schedule drilling of these wells upon completion of a transaction with an industry partner for the Fyne development.

26th UK Offshore Licensing Round

In April 2010, Antrim participated in the 26th UK licensing round with the aim of 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 Petroleum plc ("Valiant") to sell a 30% interest in Causeway in March 2010. In return, Antrim will receive up to $21.75 million carried contribution 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 the UK Department of Energy and Climate Change ("DECC"). As part of the transaction, Antrim will transfer related tax losses and has transferred operatorship of the field to Valiant. Following completion of the transaction, Antrim will retain a 35.5% working interest in the Causeway Field.

Valiant, as the new operator, has reaffirmed plans to finalize a revised FDP with respect to the development of the Causeway Field for submission to DECC in 2010 with first production expected in late 2011.

Argentina

Antrim's interest in Argentina is now focused on its core assets in Tierra del Fuego (Antrim 25.78%). The drilling program in Tierra del Fuego was increased in May 2010 from eight to ten wells and is designed to increase gas and NGL production from the Los Flamencos gas field. Of these ten wells, one well is presently being drilled, six were cased as gas wells, two wells were plugged and abandoned and one well is scheduled to be drilled prior to the end of the third quarter. Five of the six cased wells have been completed with initial flow test rates of between 1.5 and 14 million cubic feet per day and are being tied into area infrastructure. One well remains to be completed.

Antrim's average gas price for the second quarter of 2010 was $1.87 per mcf compared to $1.56 for the same period in 2009, a 20% increase. For the second quarter, oil prices averaged $47.38 per barrel compared to $37.57 per barrel for the same period in 2009, a 26% increase.

Antrim sells all of its oil production and approximately 70% of its natural gas production from Tierra del Fuego to the Argentine mainland. These sales generate value-added tax ("VAT") of 21% which is retained by Antrim due to favourable tax laws pertaining to Tierra del Fuego. VAT of $0.9 million (2009 - $0.7 million) is reported as interest and other income and is not included in Antrim's per unit sales prices.

Antrim's field netbacks in Argentina, based on sales, were $8.33 (2009 - $3.13) per barrel of oil equivalent ("boe") and $8.09 (2009 - $5.24) per boe for the three and a six month periods ended June 30, 2010. The increase in the 2010 field netbacks, as compared to 2009, was due to the lower operating costs and higher sales prices partially offset by higher royalty expenses. Average per boe wellhead prices were impacted due to higher proportions of gas to oil sales in 2010.

The Company 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.

In February 2010, Antrim 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 retained 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 were assumed by the operator of both concessions.

Antrim's Argentine operations are self-sustaining thereby enabling the Company to evaluate other opportunities in Argentina.

Colombia

Antrim participated in the recent Colombia 2010 Open Round. The Company bid on one block and was not successful with its bid. Antrim continues to evaluate potential opportunities in Colombia as part of its bilateral strategy described in the outlook section of the MD&A.

Outlook

Antrim's strong financial position, which includes unrestricted cash available of $26.4 million and no bank 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.

Antrim's daily production in Argentina is expected to average approximately 1,800 net boepd in 2010. Production from the successful drilling program is anticipated to mitigate reservoir decline rates for the balance of 2010 and 2011.

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

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).

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, 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.

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.

/T/

Antrim Energy Inc.
Consolidated Balance Sheets
As at June 30, 2010 and December 31, 2009 (unaudited)
(U.S. Dollars)
----------------------------------------------------------------------------

                                                        2010           2009
                                                           $              $
                                               -----------------------------
Assets

Current assets
Cash and cash equivalents                         26,406,107     31,168,669
Restricted cash                                      100,000              -
Accounts receivable                                3,128,249      3,278,166
Inventory and prepaid expenses                     1,039,459        937,513
                                               -----------------------------
                                                  30,673,815     35,384,348

Petroleum and natural gas properties             248,003,083    248,012,987
Office equipment                                     509,196        447,160
Investments and other non-current assets           1,846,353      1,274,384
                                               -----------------------------
                                                 281,032,447    285,118,879
                                               -----------------------------
                                               -----------------------------

Liabilities

Current liabilities
Accounts payable and accrued liabilities           2,575,531      3,424,596
Loan from Valiant                                    277,081              -
                                               -----------------------------
                                                   2,852,612      3,424,596

Asset retirement obligation                        5,361,781      5,696,945
                                               -----------------------------
                                                   8,214,393      9,121,541
                                               -----------------------------

Commitments and contingencies

Shareholders' equity
Share capital                                    311,956,700    311,946,244
Contributed surplus                               16,787,054     15,605,999
Deficit                                          (53,717,598)   (49,586,859)
Accumulated other comprehensive loss              (2,208,102)    (1,968,046)
                                               -----------------------------
                                                 272,818,054    275,997,338
                                               -----------------------------
                                                 281,032,447    285,118,879
                                               -----------------------------
                                               -----------------------------


Antrim Energy Inc.
Consolidated Statements of Income (Loss) and Deficit
For the Periods Ended June 30, 2010 and 2009 (unaudited)
(U.S. Dollars)
----------------------------------------------------------------------------

                           Three Months Ended              Six Months Ended
                                      June 30                       June 30
                          2010           2009           2010           2009
                             $              $              $              $
                  ----------------------------------------------------------

Revenue
Oil and gas          2,715,104      2,120,116      5,830,918      5,345,199
Royalties             (421,049)      (287,891)      (879,012)      (641,096)
Export tax             (10,300)       (11,773)       (67,365)       (22,170)
                  ----------------------------------------------------------
                     2,283,755      1,820,452      4,884,541      4,681,933
Interest and
 other income          523,500        248,601      1,001,567        829,410
                  ----------------------------------------------------------
                     2,807,255      2,069,053      5,886,108      5,511,343
                  ----------------------------------------------------------

Expenses
Operating              997,529      1,396,790      2,345,183      3,133,065
General and
 administrative      1,571,768      1,381,586      3,106,143      2,762,107
Stock-based
 compensation          584,608        935,420        923,844      1,791,952
Depletion and
 deprecation         1,666,053      1,430,938      3,321,143      2,672,874
Accretion of asset
 retirement
 obligations            76,110        147,631        155,287        278,428
Foreign exchange
 (gain) loss          (121,862)      (308,510)       109,388       (284,503)
                  ----------------------------------------------------------
                     4,774,206      4,983,855      9,960,988     10,353,923
                  ----------------------------------------------------------

Loss for the
 period before
 income taxes       (1,966,951)    (2,914,802)    (4,074,880)    (4,842,580)

Income tax
 expense
 (recovery)
Current                 52,901         74,092         55,859         77,029
Future                       -       (101,318)             -       (182,108)
                  ----------------------------------------------------------
                        52,901        (27,226)        55,859       (105,079)
                  ----------------------------------------------------------
Net Loss for
 the period         (2,019,852)    (2,887,576)    (4,130,739)    (4,737,501)
Deficit -
 Beginning of
 period            (51,697,746)   (38,877,193)   (49,586,859)   (37,027,268)
                  ----------------------------------------------------------
Deficit - End of
 period            (53,717,598)   (41,764,769)   (53,717,598)   (41,764,769)
                  ----------------------------------------------------------
                  ----------------------------------------------------------
Net loss per
 common share
 Basic                   (0.02)         (0.03)         (0.03)         (0.04)
 Diluted                 (0.02)         (0.03)         (0.03)         (0.04)


Antrim Energy Inc.
Consolidated Statements of Comprehensive Income (Loss) and Accumulated Other
Comprehensive Income (Loss)
For the Periods ended June 30, 2010 and 2009 (unaudited)
(U.S. Dollars)
----------------------------------------------------------------------------

                           Three Months Ended              Six Months Ended
                                      June 30                       June 30
                          2010           2009           2010           2009
                             $              $              $              $
                  ----------------------------------------------------------
Net loss for the
 period             (2,019,852)    (2,887,576)    (4,130,739)    (4,737,501)
Comprehensive income
 (loss)
Unrealized (loss)
 gain on translation
 of consolidated
 financial
 statements         (7,445,567)    16,649,626       (240,056)     9,650,085
                  ----------------------------------------------------------
Comprehensive
 income (loss)      (9,465,419)    13,762,050     (4,370,795)     4,912,584
                  ----------------------------------------------------------

Accumulated other
 comprehensive
 income (loss)
 - Beginning of
 period              5,237,465    (41,256,957)    (1,968,046)   (31,318,787)

Change in
 accounting
 policy                      -              -              -     (2,938,629)
Other
 comprehensive
 (loss)
 income             (7,445,567)    16,649,626       (240,056)     9,650,085
                  ----------------------------------------------------------
Accumulated other
 comprehensive
 income (loss)
 - End of period    (2,208,102)   (24,607,331)    (2,208,102)   (24,607,331)
                  ----------------------------------------------------------
                  ----------------------------------------------------------


Antrim Energy Inc.
Consolidated Statements of Cash Flows
For the Periods ended June 30, 2010 and 2009 (unaudited)
(U.S. Dollars)

                            Three Month Ended              Six Months Ended
                                      June 30                       June 30
                          2010           2009           2010           2009
                             $              $              $              $
                  ----------------------------------------------------------
Cash Provided by
 (used in)

Operating
 Activities
Net loss for the
 period             (2,019,852)    (2,887,576)    (4,130,739)    (4,737,501)
Items not
 involving
 cash:
 Depletion and
  depreciation       1,666,053      1,430,938      3,321,143      2,672,874
 Accretion of asset
  retirement
  obligations           76,110        147,631        155,287        278,428
 Stock-based
  compensation expense 584,608        935,420        923,844      1,791,952
 Foreign exchange
  (gain) loss          (71,108)      (241,218)       132,963       (256,324)
 Future income taxes         -       (101,318)             -       (182,108)
                  ----------------------------------------------------------
                       235,811       (716,123)       402,498       (432,679)
Change in non-cash
 working capital
 items                (402,491)      (168,105)      (219,894)      (727,417)
                  ----------------------------------------------------------
                      (166,680)      (884,228)       182,604     (1,160,096)
                  ----------------------------------------------------------

Financing
 Activities
Issue of common
 shares                  5,231         (6,859)         6,223         (6,859)
                  ----------------------------------------------------------
                         5,231         (6,859)         6,223         (6,859)
                  ----------------------------------------------------------

Investing
 Activities
Office equipment       (36,646)       (68,591)      (193,569)       (74,450)
Petroleum and
 natural gas
 properties         (2,447,511)    (1,811,461)    (3,437,815)    (4,278,764)
Restricted cash       (100,000)             -       (100,000)             -
Other non-current
 assets                (33,446)        15,162       (599,127)        16,806
                  ----------------------------------------------------------
                    (2,617,603)    (1,864,890)    (4,330,511)    (4,336,408)
Change in non-cash
 working capital
 items                 502,026       (344,268)      (473,122)    (1,065,607)
                  ----------------------------------------------------------
                    (2,115,577)    (2,209,158)    (4,803,633)    (5,402,015)
                  ----------------------------------------------------------
Effect of foreign
 exchange
 translations on
 cash flow            (692,015)     2,498,290       (147,756)     1,869,562
                  ----------------------------------------------------------
Net (decrease)
 increase in cash
 and cash
 equivalents        (2,969,041)      (601,955)    (4,762,562)    (4,699,408)
Cash and cash
 equivalents
 - Beginning
 of period          29,375,148     31,239,554     31,168,669     35,337,007
                  ----------------------------------------------------------
Cash and cash
 equivalents
 - End of period    26,406,107     30,637,599     26,406,107     30,637,599
                  ----------------------------------------------------------
                  ----------------------------------------------------------

/T/



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