TORONTO, May 2 /CNW/ -- TORONTO, May 2 /CNW/ - Alange Energy Corp
(TSXV: ALE) announced today the release of its audited consolidated
financial statements for the year ended December 31, 2010 (the
"2010 Financial Statements"), together with its Management's
Discussion and Analysis (the "2010 MD&A"). These documents will
be available on the Company's website at www.alangeenergy.com and
at www.SEDAR.com. Jaime Perez, the Company's Executive Chairman,
stated "the events and results of 2010 provide us now with the
opportunity to redirect Alange Energy towards steady, organic
growth through results-oriented drilling on our core assets. We
have refashioned the executive team; we have assembled a team that
is highly motivated with each member having a track record of
success in their respective field. Completing the Internal
Review allows us to look beyond what has happened, and look forward
to what we can do as a team with a single common objective." Mr.
Perez emphasized that: 1. The internal review initiated by the
Executive Committee of the board has been concluded, 2. The Company
has new leadership in place, with both management and the board
having been restructured, and 3. Alange Energy's exploration and
drilling program is proceeding, funded through the C$70 million
equity financing completed in March. "I welcome everyone to read
our press release in full for the details on all that has been
accomplished", concluded Mr. Perez. Financial Results The Company
announced its share of average daily production for the year 2010,
before deduction of royalties, of 2,413 boed, resulting in revenues
of $44.4 million, up approximately 253% from the end of 2009. In
2010, the Company successfully brought seven new wells into
production, including six at Cubiro and one at La Punta, more than
offsetting the normal annual production decline rates in the
fields. Production levels for December 2010 were below the average
for the fourth quarter as a result of severe weather difficulties.
Cubiro continues to be the anchor in the producing portfolio,
representing approximately 79% of total production in 2010.
For 2011, the Company plans to stabilize and steadily increase
production at its existing producing properties, as well as explore
and develop its high-potential exploration blocks. Alange Energy
aims to grow production to 2,800 to 3,000 boed for its share of
average daily production for 2011. For the quarter ended December
31, 2010, the Company generated an operating loss from its oil and
gas operations of $0.8 million, attributable to lower than normal
operating netbacks due to the more costly "pipeline without a pipe"
arrangement that has since been terminated. After exploration,
general and administrative expenses, the Company reported a net
loss of $31.9 million, or $0.04 per share, in the fourth quarter of
2010 compared with a net loss of $7.5 million, or $0.01 per share,
in the fourth quarter of 2009. Management, including newly
appointed Chief Executive Officer Luciano Biondi, will hold a
conference call on Monday, May 2, 2011 at 9:00 a.m. (Eastern Time)
to provide an operational update, an internal review process update
and to discuss the year-end results and strategy. Analysts and
interested investors are invited to participate as follows: Toronto
& International: (647) 427-7450 North America: (888) 231-8191
Conference ID: 63325382 A playback of this conference call will be
available by dialing 416-849-0833 with the above conference ID
number until May 16, 2011. Topoyaco Update Alange Energy also
updated the status of the Topoyaco-2 well, which, as previously
announced, was suspended in December, 2010 to undergo additional
testing. These are long-term evaluation tests encompassing
production, sampling, analyzing oil and water and testing well
pressure, and the operator is awaiting ANH approval before this
long-term evaluation plan can commence. As well, with Pacific
Rubiales Energy assuming effective operational control (subject to
ANH approval), the primary focus at Topoyaco has shifted to the
drilling of Prospect D which is planned to be drilled in the third
quarter of 2011. The previously announced additional testing
in the Villeta Formation at Topoyaco-1 has resulted in 100% fresh
water, with the result that the operator plans to abandon the well.
Background to Internal Review As previously disclosed, the decision
to undertake a review of the Company's internal controls and
procedures, management systems and corporate governance practices
(the "Internal Review") was made in early December 2010 following
difficulties encountered by the Company's senior finance personnel
and audit committee in receiving information in a timely manner
from the Company's Colombia branch operation. This
information was necessary to complete the Company's third quarter
2010 financial reporting. At the time of filing its third quarter
2010 management's discussion and analysis (the "Q3 MD&A") on
November 29, 2010, the Company was not aware that the production
disclosure contained in the Q3 MD&A was based on capacity
rather than production. Although the necessary information to
complete the Company's third quarter 2010 financial reporting was
received prior to the filing of the Q3 MD&A, the audit
committee and board of directors of the Company (the "Board") were
not satisfied with the Company's systems and processes for the
provision of such information on a timely basis. Accordingly, at
the request of the Company's audit committee, the Board met on
December 1, 2010 to develop an approach for reviewing the Company's
internal reporting systems. A further meeting of the Board was held
on December 9, 2010 at which the Board established a committee of
all the independent directors of the Board (the "Executive
Committee") to oversee and direct the Company's Internal Review.
Mandate of Executive Committee: The mandate of the Executive
Committee encompassed the following tasks: a) Conduct a complete
review of all of the books of the Company, including accounting
practices and systems, establish a comprehensive list of all of the
liabilities of the Company, and establish the cash position of the
Company. b) Restructure the investor relations and communications
function. c) Conduct a contract review, including crude sales
contracts, drilling contracts, substantial purchase contracts and
security contracts. d) Review the management structure of the
Company including all operational structures in the Company, and
complete a comprehensive review of all roles and responsibilities
of each position. e) Review ANH and Ecopetrol contracts to include
environmental, commitments and obligations, permitting and status
of operations of all past and current operations within those
contracts. f) Complete a corporate finance and strategy review.
Summary of Work Performed As previously disclosed, on December 13,
2010 the Executive Committee engaged the Company's auditors,
PricewaterhouseCoopers LLP ("PwC"), to perform certain procedures
relating to the Executive Committee's Internal Review. The Company
also engaged Mr. Gregg Vernon, an external consultant to the
Company since September, 2009 and a petroleum engineer with over 30
years' experience in various executive positions, to assist the
Executive Committee with its due diligence investigations.
Mr. Mike Davies, the Company's Chief Financial Officer, was also
requested to assist the Executive Committee with executing its
mandate. On December 14, 2010 the Executive Committee met with
representatives of GMP Securities L.P. ("GMP") to gain an
understanding of the general market perception of the Company. On
January 7, 2011 the Executive Committee formally engaged GMP to
provide the Executive Committee with a summary of market views of
the Company and recommendations with respect to the Company's
corporate governance, capital structure and financial reporting, as
well as strategic opportunities available to the Company. After
completing a review of production reports respecting the Company's
Cubiro area, Mr. Davies sent an e-mail on the afternoon of December
22, 2010 to Mr. Vernon and certain members of the Company's
Executive Committee and copying the Company's auditors and in-house
legal team, advising them that irregularities had been identified
in the reporting of production results in the Cubiro area.
Mr. Davies expressed his concern and advised that he was in the
process of attempting to determine the reasons for, and to quantify
the effects of, these irregularities on the previously publicly
disclosed production results of Alange, such investigations to
include obtaining further explanation of the reporting differences
from management in Bogota. Later that day, Mr. Vernon sent an
e-mail to the Executive Committee, advising that he believed there
was insufficient information to conclude that there had been errors
in reporting and recommending that investigations be completed
before making any conclusions. At this point, the Company's audit
committee and Executive Committee had not yet concluded that the Q3
MD&A production disclosure was inaccurate, as they required
more complete information. Similarly, the scope of engagement of
the Executive Committee and its professional advisors had not
originally been specifically directed at reviewing production
disclosure in the Q3 MD&A as the Company was not then aware
that such disclosure was inaccurate; however, the scope of the
Internal Review included gaining an understanding of the then
current production reporting process and how the Company reconciled
financial reporting results to actual production reported to the
Colombian authorities for royalty purposes. The Company's auditors
were also requested to provide internal control observations
identified through the course of their inquiries. At a meeting of
the Executive Committee held on January 12, 2011, PwC reported its
findings and recommendations with respect to the matter of the
Company's production reporting and its preliminary findings on
other aspects of its scope of work. At that meeting, the Executive
Committee reviewed and considered the information it had received
from PwC, Mr. Vernon, Mr. Davies and Mr. Luis Giusti Sr. (then the
Company's Chief Executive Officer) with respect to the results of
the due diligence investigations to that date, including the
finding that the Q3 MD&A production disclosure was based on
capacity rather than production. At the meeting, the Executive
Committee appointed Mr. Vernon as Interim Chief Operating Officer,
and tasked him with the responsibility to conduct a review of the
Company's internal controls and systems as well as the
implementation of systemic and management adjustments required
based on the results of the Company's internal review process.
Prior to opening of markets on January 13, 2011, the Company issued
a news release announcing the amended production numbers for its Q3
MD&A, the formation of the Executive Committee and the
appointment of Mr. Vernon as Interim Chief Operating Officer.
(Please refer to the Company's press release of January 13, 2011
for a full description of the amendment and announcement of the
Internal Review.) On January 13, 2011 the Company also filed an
amended management's discussion and analysis for the third quarter
2010 (the "Amended Q3 MD&A") and Chief Executive Officer and
Chief Financial Officer certifications with respect thereto. There
was no requirement to re-file the Company's unaudited consolidated
financial statements for the three and nine month periods ended
September 30, 2010 previously filed on SEDAR since information set
forth therein was based on actual production numbers and sales
volumes rather than production capacity. As previously disclosed,
the Company had, through the Internal Review on behalf of the
Executive Committee, identified at that time material weaknesses in
its internal controls and tasked Mr. Vernon with the responsibility
to conduct a review of the Company's internal controls and systems
as well as the implementation of systemic and management
adjustments. Specifically, the Internal Review found that: 1.
the Company did not maintain effective operational control to
determine its production; 2. the Company did not maintain adequate
controls over lines of communication between operational staff and
management to assist in managing cash flow and to obtain a full
understanding of the Company's current working capital position; 3.
the Company did not maintain adequate controls for the reliable
sharing of information between the operational staff and finance
staff; 4. the Company did not maintain effective controls to ensure
that material sales of assets of the Company are subject to a
formal approval process; 5. the Company did not maintain effective
procedures with respect to competitive awarding of contracts to
ensure the proper approval and documentation of significant
contracts; and 6. the Company did not maintain adequate controls
over the timely communication between departments of information
relating to issues that may impact the Company's financial
reporting. On January 19, 2011 GMP reported to the Executive
Committee on the results of its review; after which they
recommended a financing to the Board to ensure that exploration
costs could be covered and to reduce the Company's debt, allowing
it to strengthen its immediate and long-term financial
position. GMP then proposed to the Board a C$50 million
(later increased to C$60 million and ultimately, through the
exercise of an over-allotment option, C$70 million) bought deal
financing (the "Offering"). Following receipt of the report of GMP
and deliberation of, among other things, the recommendations of GMP
(and those of its professional advisors previously received) and
the results (to date) of the Internal Review, on January 19, 2011
the Company issued a news release updating the market on actions
taken or to be undertaken by the Executive Committee on behalf of
the Company. These included a full analysis of the strategic
opportunities available to the Company including development of the
Company's portfolio of core assets, joint ventures and the sale of
non-core assets. (Please refer to the Company's press release
of January 19, 2011 for a full description of the organizational,
operational and strategic initiatives encompassed in the Internal
Review.) The Company also announced, in addition to the Offering,
that, at the request of the Board, Mr. Giusti Sr. had stepped down
as Chief Executive Officer and chair of the Board, but remained as
a board member. Mr. Vernon, the Company's Interim Chief
Operating Officer, would henceforth act in the capacity of Chief
Executive Officer, a position that was permanently filled in April,
2011. The Company stated that the board would also ensure it has
the resources available to oversee the execution of the strategic
plan that was being implemented under new leadership and a new
management team. The Company also announced that each of Mr. Jose
Luis Acevedo and Mr. Luis Urdaneta, both Executive Vice Presidents
of the Company, had been relieved of their responsibilities.
Subsequent to January 19, 2011, the Executive Committee formally
met thrice (on January 21, 2011, March 2, 2011 and April 26, 2011)
to receive updates from Mr. Vernon and Mr. Davies on their
investigations and actions taken to date. Members of the
Executive Committee often discussed issues amongst themselves
outside of the context of formal committee meetings. On March 7,
2011 the Company provided another update to the market on the
continued Internal Review led by the Executive Committee, which
detailed steps taken to terminate uneconomic contracts, reduce
general and administrative ("G&A") expenses and pay down
debt. It also provided an update on production and announced
the appointment of Ian Mann to the Board. (Please refer to
the Company's press release of March 7, 2011 for a full description
of the update provided by the Company.) On April 7, 2011 the
Company provided another update to the market, which, among other
things, announced the appointment of Mr. Luciano Biondi Golinucci
(who had been acting as an advisor to Mr. Vernon to that point in
the execution of his duties as acting Chief Executive Officer and
under the Internal Review) as its Chief Executive Officer and the
appointment of Mr. Jaime Perez Branger, a director of the Company,
as Executive Chairman of the Board. As well, the appointment
of Camilo Valencia as an advisor to the Board was announced, as was
the appointment of Messrs. Serafino Iacono and Miguel de la Campa
as directors, replacing Mr. Horacio Santos and Mr. Giusti Sr., each
of whom had tendered their resignation from the Company's Board.
(Please refer to the Company's press release of April 7, 2011 for a
full description of the update provided by the Company.) On April
26, 2011, the Executive Committee met to receive oral reports from
Messrs. Vernon and Davies on the progress to date of the Internal
Review. At the end of the meeting, the Executive Committee
resolved that it was satisfied that the Internal Review had, to the
best of their knowledge, identified all material issues regarding
the Company's internal controls and procedures, management systems
and corporate governance practices and that the Executive Committee
had taken appropriate steps to address or commence addressing such
issues. The committee resolved to report to the Board at its
next meeting (held on April 29, 2011) its conclusions, as well as
its recommendation that the Internal Review be concluded and the
Executive Committee disbanded. On April 29, 2011, the Board
accepted the Executive Committee's recommendations and resolved to
implement the recommendations and to disband the Executive
Committee. Conclusions of Executive Committee and Recommendations
Made or Actions Taken Set out below are: (a) the significant issues
identified during the course of the Internal Review, (b) the
actions taken to resolve such identified issues, (c) the Executive
Committee's view and recommendations with respect to the resolution
of the issues, and (d) the procedure going forward. The list
below is not an exhaustive list of all of the activities, work and
recommendations of the Executive Committee. Readers are also
referred to the 2010 Financial Statements and 2010 MD&A, which
contain further details on some of these matters.
A. STREAMLINE AND RENEW FOCUS OF CORPORATION'S BUSINESS
The following changes were implemented at the recommendation of the
Executive Committee: -- Recapitalized balance sheet with the
proceeds of the Offering to repay approximately US$31 million of
bank debt and to, among other things, provide funding for
exploration and development of the Company's core assets in 2011.
-- Directed an immediate decrease in ongoing G&A expenses
through, ultimately, a staff reduction of 10 senior managers, 20
support staff and 19 technical consultants in Colombia.
Additionally, G&A in 2010 included US$1.8 million of fees to
consultants and advisors to assist the Company in local debt
financings that the Company does not anticipate incurring in 2011
or thereafter. -- Identified the Company's core oil assets on which
to focus its endeavours - Cubiro, La Punta, Topoyaco, Santa Cruz,
Mecaya, while identifying non-core assets to be disposed of or
farmed out, in particular the gas assets and the Las Quinchas heavy
oil interest. B. MANAGEMENT RESTRUCTURING The following
management changes, many of which were summarized above, were
implemented at the recommendation of the Executive Committee: --
January 13, 2011: Mr. Vernon was appointed the Company's Interim
Chief Operating Officer. -- January 17, 2011: Mr. Jose Luis Acevedo
and Mr. Luis Urdaneta, both Executive Vice Presidents of the
Company, were relieved of responsibilities. Mr. Acevedo's was
effective January 20, 2011. -- January 19, 2011: Mr. Giusti Sr.
stepped down as Chief Executive Officer and Mr. Vernon commenced
acting in the capacity of Chief Executive Officer. In addition, the
Executive Committee hired two experienced oil and gas industry
consultants to support the implementation of the strategic plan
initiatives: Mr. Biondi to focus on improvements to increase
production from the Company's core assets and provide assistance
and advice to Mr. Vernon in the execution of his duties, and Mr.
Francisco Bustillos to work closely with the Company's Chief
Financial Officer to lead the implementation of improved internal
controls, processes and management systems in the Company's
Colombian operations. -- April 7, 2011: Mr. Biondi appointed Chief
Executive Officer, with Mr. Vernon remaining as Interim Chief
Operating Officer. Mr. Camilo Valencia appointed to act as an
advisor to the Board and management. Additionally, the Executive
Committee directed that senior management from the Company's
Canadian offices, including the General Counsel and Chief Financial
Officer, spend significant additional time on location in the
Company's Bogota offices, as well as continue to foster increased
and improved interaction between the Toronto and Bogota offices. At
the middle management and staff levels, management was also
directed to identify opportunities, wherever possible, to upgrade
staffing, to continue to review the organizational structure for
streamlining and to implement a focused training program where
needed. These processes are all well underway and are already
resulting in improvements in functionality and morale.
C. ADDRESS PREVIOUSLY DISCLOSED CONTROL WEAKNESSES 1.
The Company did not maintain effective operational control to
determine its production. As previously disclosed, work performed
in the Internal Review determined that the production figures
included in the MD&A for the third quarter 2010 needed to be
revised. This was as a direct result of the Internal Review
and the work undertaken at the direction of the Executive
Committee, including but not limited to, Mr. Vernon being directed
to investigate and validate production data for 2010 including
comparison to Colombian Ministry of Mines and Energy ("MME")
filings, the Company's auditors checking the accuracy of the
findings of Mr. Vernon by comparing the numbers he determined
against MME filings, and requesting Mr. Giusti Sr. to explain his
understanding of the basis of the previous disclosure of
Company. As a result of this work, among other steps, the
internal production reporting system of the Company was revised to
ensure production reporting is now, on a monthly basis,
communicated to all senior management, the Board of Directors and
reconciled to the certified filings with the MME. These
filings are generated by the Company for delivery to the MME, which
then independently verifies them, as they form the basis for
royalty calculations. As such, they are regarded as the most
reliable source of production information in Colombia. The Company
did not maintain adequate controls over lines of 2. communication
between operational staff and management to assist in managing cash
flow and to obtain a full understanding of the Company's current
working capital position. The following significant changes were
made at the recommendation of the Executive Committee: -- detailed
review of working capital performed by Messrs. Davies and
Bustillos; -- continuing weekly treasury reporting; -- a treasury
analyst was appointed, responsible for short-term cash planning
forecast process; -- prepared 2011 cash flow monthly forecast,
which will be continually modified as new information becomes
available regarding key assumptions and new developments; and --
implemented regular telephone/e-mail communications between Mr.
Davies and Mr. Bustillos, as well as weekly meetings augmented by
regular travel to Colombia by the Chief Financial Officer.
Additionally, a monthly financial reporting process will be
implemented in 2011 to increase the availability of timely
financial information to management and the Board so that they have
increased flexibility to deal with any issues that may arise. The
Company's auditors have observed the process and have provided
advice regarding alternatives as management implemented
improvements recently to the financial close and "procure to pay"
processes. The Company did not maintain adequate controls for the
reliable 3. sharing of information between operational staff and
finance staff. As mentioned above, the Executive Committee
recommended and management has implemented increased visits between
Colombia and Toronto, and the newly appointed members of management
in Colombia are in frequent contact with the Toronto office, with
communication emphasized. This has also led to an initiative
for management to map core processes in the Company and implement
improved processes, including communication and training for all
staff involved in the process. The Company did not maintain
effective controls to ensure that 4. material sales of assets of
the Company are subject to a formal approval process. In addition
to putting new members of management into place who are cognizant
of, and committed to, approval guidelines, which has included
implementing an expanded delegation of authorities matrix, the
Executive Committee took the steps described in greater detail
below under "Contract Awarding". The Company did not maintain
effective procedures with respect to 5. competitive awarding of
contracts to ensure the proper approval and documentation of
significant contracts. New purchasing and contract management
policies and procedures have been developed and have been and will
continue to be communicated to all staff involved in the process,
and a contracts review committee has been implemented to review all
new contracts on a quarterly basis to ensure compliance with
policies. Additionally, please see the actions described in
greater detail below under "Contract Awarding". The Company did not
maintain adequate controls over the timely 6. communication between
departments of information relating to issues that may impact the
Company's financial reporting. On the recommendation of the
Executive Committee, the Company's auditor was engaged to conduct a
review of the financial close process and provide observations and
advice on short-term solutions. As well, the Colombian
finance staff was reorganized and Mr. Bustillos appointed as the
Vice President of Finance in Bogota to lead longer-term financial
close process improvements, which includes the Canadian and
Colombian finance teams collaborating on planning and implementing
these improvements. D. CONTRACT AWARDING In the Internal
Review led by the Executive Committee, it was determined that: --
The Company had established procedures for the awarding of
contracts outlined in the "Contracting General Procedures" dated
January 2010. -- The Internal Review identified that the
established processes and controls were not consistently applied.
-- A further review of contracts identified evidence of
irregularities or improprieties with certain contracts. As a result
of these findings, the following further actions, which were only
recently completed, were taken at the recommendation of the
Executive Committee: -- Contract summaries were prepared for all
significant contracts presented by management. -- The Executive
Committee directed Messrs. Vernon and Davies and members of the
General Counsel's office to review all contracts provided, confirm
the summaries and to assess whether the contract had commercial
terms, satisfied a valid need and provided the Company with
commercial benefit, and whether there were any indications that
those responsible for the contract would have benefited personally
from it. -- Certain Colombian contracts, including but not limited
to Beta, CODIS, TSP, Gesca, and Parabola, were identified for
further investigation, which included: o Interviewing the personnel
involved in negotiating and approving the contracts in question. o
Where considered necessary delegates of the Executive Committee met
with the third parties to discuss the terms and negotiation
process. o Communications, including e-mails of several former
staff members were reviewed in respect of contracts for which they
were responsible. The investigation resulted in the Beta (drilling
services), CODIS ("pipeline without a pipe" arrangement), TSP (also
a "pipeline without a pipe" arrangement), Gesca (geoscientific
services), and Parabola (Colombian public relations) contracts
being determined to have no ongoing commercial benefit to the
Company. As well, the employment of three Colombian-based
senior employees, along with that of a member of middle management,
was terminated for cause due in part to their involvement in
respect of these contracts. The Company's Colombian lawyers have
recently filed requests with the Colombian Ministry of Justice to
investigate the CODIS contract and matters related to the Beta
contracts, including the possible involvement of some
Colombian-based employees. Additionally, notices of
arbitration have recently been filed in respect of the Beta master
drilling contract and rig sale agreement. The Company's debt
agreements were also reviewed, including the Multibank agreement (a
Colombian debt agreement that included financial covenants not
presented to or approved by the Board), and as a result management
has communicated the requirement to local finance management in
Bogota for Chief Financial Officer and Board approval of all new
debt or changes to existing debt agreements, including the
covenants they contain. The Multibank loan was one of the
debt arrangements that were paid down from the proceeds of the
Offering; as a result, the Company is no longer bound by these
covenants. The additional investigation of contracts determined
that the remaining contracts that were reviewed are all of
commercial benefit to the Company and there is no indication of
improprieties on behalf of those that were involved in the
negotiation or awarding of the contracts. Nonetheless, and as
discussed above, contracting procedures, which have been reviewed
and approved by the Chief Financial Officer, have been revised and
communicated to all personnel involved in the procurement function,
including the requirement that all contracts above certain
thresholds must go through the process regardless of whether the
request is regarded to be a "rush". Finally, given the contracting
issues noted above, the Executive Committee directed management to
conduct a review for any indication of payments to public officials
or other Corruption of Foreign Public Officials Act ("CFPOA")
violations. Included in this review were social programs and
donations; the review did not identify any indicators of CFPOA
violations. Steps were also taken to ensure that the current
senior management team is aware of the CFPOA legislation and
management was also mandated to ensure compliance with the
legislation. E. CORPORATE GOVERNANCE AND INVESTOR
RELATIONS Many of the steps and changes outlined above are intended
to improve the Corporation's corporate governance. GMP advised, as
part of its review, that there was a market perception that many of
the Company's now former managers had a poor grasp of Canadian
corporate governance and public disclosure guidelines.
Although, as a result of the steps outlined above, many new members
of management are in place, the Executive Committee has recommended
that all members of senior management and the Board be enrolled in
the Institute of Corporate Directors, in order to take advantage of
the education programs it offers and has mandated that all such
persons should take at least one course with the institute in
2011. The committee has also recommended that the General
Counsel's office undertake seminars in Colombia for middle and
upper management on public disclosure and corporate governance best
practices. These seminars will be conducted in the second
half of 2011. While the steps outlined immediately above are
focused on improving corporate governance practices, it is the
Executive Committee's belief that these improved practices will
also improve the clarity, accuracy and consistency of
communications by the Company to the market. In this regard,
the Company has renewed the mandate of its investor relations
consultant, The Capital Lab Inc., and fully engaged it in providing
the Company with a comprehensive plan to achieve and maintain the
communications and investor relations objectives identified here.
Conclusion Although the Internal Review and the Amended Q3 MD&A
that resulted from it have been difficult for the Company and its
shareholders, it has, in the view of the Executive Committee and
the Board, proven to be a process that has also sharpened the
Company's focus on its core assets and on delivering value to
shareholders, a process that can truly get underway with the formal
close of the Internal Review. While the Internal Review, by
its nature, has identified clear areas for improvement, and
restoring investor confidence in Alange Energy remains the foremost
commitment of the board of directors, it has also provided an
opportunity for the Company to strengthen its balance sheet,
controls, structure and perhaps most important of all, change its
culture to one based on teamwork. About Alange Energy Corp. Alange
Energy is a Canadian-based oil and gas exploration and production
company, with working interests in 19 properties in five 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. 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; and currency exchange rate fluctuations.
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 and other risks
of the oil and gas industry, failure of plant, equipment or
processes to operate as anticipated. 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/May2011/02/c8367.html p
Michael Davies, Chief Financial Officerbr/ Peter Volk, General
Counsel & Secretarybr/ 416-360-7915 /p p Miranda Smithbr/
Investor Relations Representative, The Capital Lab Inc.br/
647-428-7422 /p
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