Vecta Energy Corp (C-VER) - News Release
Vecta Energy loses $1.57-million in nine months
2010-11-29 19:36 ET - News Release
Shares issued 73,620,009
VER Close 2010-11-29 C$ 0.14
Mr. Tom Coffman reports
VECTA ENERGY CORPORATION ANNOUNCES THIRD QUARTER 2010 RESULTS
Vecta Energy Corp. is releasing its financial and operating results for the third quarter ended Sept. 30, 2010. The unaudited financial statements, notes, and management's discussion and analysis, are available on Vecta's website or on SEDAR.
Cash flow for the nine months ended September 30, 2010 was a negative amount of $257,739 compared to a negative amount of $230,862 for the same period in 2009. For the nine months ended September 30 the Company suffered a net loss of $1,573,298 after recording a loss on the disposal of its shallow gas properties amounting to $897,654.
Production for the nine month period ended September 30, 2010 averaged 51 barrels of oil equivalent per day (Boe/d) compared to 103 Boe/d in the same period a year ago. The production decrease is attributable to the sale of the Company's Warwick shallow gas production effective June 1, 2010 as well as disruption of production from the Brewster well that since has been corrected. The average price received for natural gas for the nine months ended September 30th was $4.56 per thousand cubic feet (Mcf) compared to $4.04 in the same period in 2009. Operating costs were $2.00 per thousand cubic feet equivalent, up from $1.81 a year earlier. Administrative costs dropped by 23% due to cost cutting measures introduced by the Company in May of 2009.
Effective June 1, 2010 the Company sold its interests in the Warwick shallow gas area of central Alberta. The Company had approximately 360 Mcf per day of natural gas production in that area and received proceeds of $650,000 from the sale. The ongoing weakness in natural gas prices and significant volume decline experienced from the Warwick wells resulted in a substantial revenue reduction over the past year. Accordingly, the Company chose to sell these assets in order to fund existing operations and new projects. The asset sale closed on August 4, 2010. The Company retains all of its various working interests in approximately 16,000 acres of land in the foothills of Alberta and Northeast BC, and in the approximately 20 Boe/d of production from the Brewster area.
As announced on November 4, 2010 Vecta has signed a letter of intent with a non-arms' length private company to enter into a 50-50 Joint Venture to participate in the Exshaw/Bakken light oil resource play in northern Montana. The Joint Venture Partner continues to assemble additional land holdings for the Joint Venture which are deemed prospective for the Exshaw/Bakken formation. Joint Venture and Joint Operating agreements are being completed and the Company is preparing an aggressive work program expected to commence in early 2011.
Vecta will manage the Joint Venture from its Calgary office and the technical team from the Joint Venture Partner will be responsible for the operations, including all engineering, land, geological and geophysical functions in the evaluation and development of the project.
In October, 2010 the Company reached an agreement to farm out a portion of its 50% interest in Section 36-31-3 W5M in the Harmattan area. The farmee will drill and complete a well to earn 70% and Vecta will retain 15% carried working interest (one half of the 30% owned jointly with Perpetual Energy). The well was spudded on November 29, 2010 and is planned to test the Cardium formation with a horizontal well and multi stage frac treatment.
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