Alange Energy Revises Production Numbers Reported in Third Quarter of 2010, Announces Fourth Quarter Production and Appoints Int
13 Januar 2011 - 3:01PM
PR Newswire (Canada)
TORONTO, Jan. 13 /CNW/ -- TORONTO, Jan. 13 /CNW/ - Alange Energy
Corp (TSXV: ALE) revised today production numbers it earlier
provided in its Management's Discussion and Analysis for the
quarter ended September 30, 2010 (the "Third Quarter 2010") and
announced on November 29, 2010. Average production for the
Third Quarter 2010 was 2,561 barrels of oil equivalent per day
(boe/d) rather than the reported 3,179 boe/d. Exit rate
production for the Third Quarter 2010 (defined as the average daily
production for September 2010) was 2,622 boe/d rather than the
reported 3,330 boe/d and the daily production rate as at November
29, 2010 was 2,609 boe/d rather than the reported 4,300 boe/d. The
production numbers that were reported on November 29, 2010 related
to production capacity rather than production as of the referenced
dates. Production capacity is based on management's estimate
of the capability that the Company has to produce oil and/or gas,
which at any moment may be partially limited by diverse factors.
The difference between capacity and production, called deferred
production, is generally readily available when the extraordinary
factors that cause it are removed. These factors can include a
normal structural time delay when production is expanding by
drilling new wells, or transportation restrictions and seasonal
weather difficulties. The latter has been especially severe during
the past three months, as Colombia experienced unusually high
rainfall resulting in landslides and floods. During the Third
Quarter 2010, the Company instituted a new internal production
reporting system for better operational control, which allowed it
to better pinpoint each field's production capacity and improve
optimization. These capacity numbers were reported on
November 29, 2010 rather than the production numbers, which had
been used appropriately for all previous quarters. This revision
has no impact on the unaudited consolidated financial statements
for the three and nine month periods ended September 30, 2010
previously filed on SEDAR since they were based on production
rather than capacity. The revised Third Quarter 2010
production numbers do not include any results from Topoyaco. The
Company also reported that its exit rate production for the fourth
quarter of 2010 was 2,374 boe/d. The Company's share of daily
production averaged 2,515 boe/d for the fourth quarter, bringing
the daily average for 2010 to 2,413 boe/d. The Company's
production statistics for the third and fourth quarters of 2010 are
summarized below: Daily average production Actual Previously
Disclosed (boe/d) Q3 2010 Exit Rate ((1)) 2,622 3,330 Three months
ended September 2,561 3,179 30, 2010 Nine months ended September
2,378 2,579 30, 2010 November 29, 2010 2,609 4,300 Q4 2010 Exit
Rate ((1)) 2,374 N/A Three months ended December 2,515 N/A 31, 2010
Twelve months ended December 2,413 N/A 31, 2010
(1) Measured as the average of the daily production
rates for the last month of the fiscal quarter. As at December 31,
2010, Alange Energy had a cash balance of approximately US$6
million and total debt (current and long-term) of approximately
US$47 million. At current production levels, the Company estimates
that its operating cash flow is sufficient to cover its day to day
operations and monthly debt service requirements. However,
all previous guidance provided by the Company, including capital
expenditure budgets, is currently under review by the board of
directors. The board of directors of the Company has formed a
committee of its independent directors which, in conjunction with
its Audit Committee, has reviewed and approved the revised
production numbers. The committee of independent directors
has also instituted a review of the Company's internal controls and
procedures, management systems and corporate governance practices
to ensure that production is consistently reported and has engaged
professional and financial advisors, including GMP Securities Inc.,
to assist it in this review. The committee will report the
results of this review to the market on a timely basis and has
taken all steps necessary to ensure that the market is fully
informed. Moreover, the committee has also mandated various
steps towards improving the Company's disclosure checks and
controls. In conjunction with the procedures the Company has put in
place, it has appointed Gregg Vernon as Interim Chief Operating
Officer, reporting directly to the board of directors and the Chief
Executive Officer. Mr. Vernon will be responsible for the
review of controls and systems mentioned above, as well as
implementing management and systemic adjustments that the review
requires. Mr. Vernon has been acting as a consultant to
Alange Energy since September 2009 and was the Chairman of Prospero
Hydrocarbons from August 2007 until it was acquired by the Company
in September 2009. Mr. Vernon is an engineer by training with
over 30 years' experience in the oil and gas business in various
executive positions. Luis Giusti, Chief Executive Officer of Alange
Energy stated "Our production was affected by a number of factors
in the third and fourth quarters of 2010, but as a result of our
successful drilling efforts, our potential production capacity has
increased and continues to do so, and we expect actual production
to start catching up to capacity in due course. The board has
made some important recommendations based on the disclosure issues
that are now apparent, and we will do everything necessary to meet
their internal review process requirements. I particularly welcome
Gregg Vernon's increased role in the Company to ensure the
implementation is handled in a proper and timely manner."
Production capacity rather than production was reported in a press
release dated November 29, 2010 and the Third Quarter 2010
Management's Discussion and Analysis filed on SEDAR on the same
day. The Company has re-filed its Management's Discussion and
Analysis on SEDAR; it is also available on the Company's website
(www.alangeenergy.com). The Third Quarter 2010 financial
statements were not affected by this correction to the production
numbers and have not been re-filed. About Alange Energy Corp.
Alange Energy is a Canadian-based oil and gas exploration and
production company, with working interests in 12 properties in four
basins in Colombia. Further information can be obtained by visiting
our website at www.alangeenergy.com. All monetary amounts in U.S.
dollars unless otherwise stated. This news release contains certain
"forward-looking statements" and "forward-looking information"
under applicable Canadian securities laws concerning the business,
operations and financial performance and condition of Alange Energy
Corp. ("Alange Energy"). Forward-looking statements and
forward-looking information include, but are not limited to,
statements with respect to estimated production and reserve life of
the various oil and gas projects of Alange Energy; the estimation
of oil and gas reserves; the realization of oil and gas reserve
estimates; the timing and amount of estimated future production;
costs of production; success of exploration activities; currency
exchange rate fluctuations; expectations regarding sufficiency of
operating cash flows and the timing for reporting results of the
review of the Company's internal controls and procedures,
management systems and corporate governance practices. Except for
statements of historical fact relating to the company, certain
information contained herein constitutes forward-looking
statements. Forward-looking statements are frequently characterized
by words such as "plan," "expect," "project," "intend," "believe,"
"anticipate", "estimate" and other similar words, or statements
that certain events or conditions "may" or "will" occur.
Forward-looking statements are based on the opinions and estimates
of management at the date the statements are made, and are based on
a number of assumptions and subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. Many of these assumptions are based on
factors and events that are not within the control of Alange Energy
and there is no assurance they will prove to be correct. Factors
that could cause actual results to vary materially from results
anticipated by such forward-looking statements include changes in
market conditions, risks relating to international operations,
fluctuating oil and gas prices and currency exchange rates, changes
in project parameters, the possibility of project cost overruns or
unanticipated costs and expenses, labour disputes, other risks of
the oil and gas industry, failure of plant, equipment or processes
to operate as anticipated and completion of the review of internal
controls and procedures, management systems and corporate
governance practices. Although Alange Energy has attempted to
identify important factors that could cause actual actions, events
or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be anticipated, estimated or
intended. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Alange Energy undertakes no obligation to update forward-looking
statements if circumstances or management's estimates or opinions
should change except as required by applicable securities laws. The
reader is cautioned not to place undue reliance on forward-looking
statements. Statements concerning oil and gas reserve estimates may
also be deemed to constitute forward-looking statements to the
extent they involve estimates of the oil and gas that will be
encountered if the property is developed. Boe 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. Estimated values of future net
revenue disclosed do not represent fair market value. 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 news release.
To view this news release in HTML formatting, please use the
following URL:
http://www.newswire.ca/en/releases/archive/January2011/13/c2258.html
pPeter Volkbr/ General Counsel & Secretarybr/ 416-360-4653br/ a
href="mailto:pvolk@alangecorp.com"pvolk@alangecorp.com/a/p
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