Tuscany Energy Ltd. (TSX VENTURE:TUS) announces that it has filed on SEDAR its Interim Financial Statements and MD&A for the six months ended June 30, 2012.
For the six months ended June 30, 2012, oil production increased to 368 BOEd from 167 BOEd for the same period in 2011. Revenues increased to $4.1 million from $1.9 million and cash flow from operations increased to $1.7 million from $665,000 in 2011. The Company also reported no debt at the end of the period.
Operations
In Q1 2012 Tuscany completed a three well drilling program at Macklin, Saskatchewan and placed the wells on production at the end of the quarter. The wells produced at an average rate of 75 bopd (41 bopd net to Tuscany) during Q2 2012 and have subsequently declined to 35 bopd (20 bopd net to Tuscany). This increased the number of horizontal heavy oil wells that the Company has drilled in Saskatchewan to 18 wells in total, with 12 wells at Evesham and 6 wells at Macklin.
During Q2 2012 Tuscany commenced a program to increase the water handling facilities and disposal capacity at both Evesham and Macklin. This included deepening and re-completing existing wells for increased disposal capacity and installing pipelines to handle increased volumes of water.
The Company plans to significantly increase the total fluid production from producing wells which we believe will increase total oil production.
Additional drilling in the area will be delayed until the increased water handling capacity has been completed.
Financial
For the quarter, Tuscany's revenues net of royalties increased 119% to $1.9 million compared with $861,000 in the prior year. For the six month period, revenues increased to $4.1 million from $1.9 compared with the same period in the prior year. Cash flow from operations for Q2 2012 increased 151% to $549,000 compared with $236,000 in Q2 2011. For the six month period, cash flow from operations increased to $1.7 million from $665,000.
Tuscany incurred $729,000 of capital expenditures during the quarter compared with $1.2 million for Q2 2011. For the sixth month period, capital spending was $3.1 million compared with $1.6 million for the same period in the prior year. Capital expenditures for the three and six month periods ended June 30, 2012, were financed from cash flow from operations and the proceeds from sales of Magnum Hunter shares.
At June 30, 2012, Tuscany had working capital of $461,000 compared with net debt of $447,000 at the beginning of the year. The Company also had access to a credit facility of $8.5 million, which was undrawn.
Tuscany's sale of its remaining 426,195 shares of Magnum Hunter during March and April 2012 resulted in a taxable gain on the disposition. The Company estimates a tax payable on the gains of $454,000.
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