At December 31, 2012, Tuscany had positive working capital of $380,000 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 remained undrawn.
For the year ended December 31, 2012, the Company's average production increased to 354 BOEd from 247 BOEd in the prior year. The Company's average Q4 2012 production increased to 372 BOEd compared with 332 BOEd in Q4 2011.
Tuscany anticipates 2013 average prices for its heavy oil production in excess of $60 per barrel. At these prices the Company believes that its heavy oil projects will have positive economics which would warrant continued development. However, heavy oil prices realized in December 2012 of approximately $45 per barrel and weak January 2013 prices has resulted in the delay of winter drilling activities. Tuscany has paused development drilling until after spring breakup. By then Management expects heavy oil prices to have strengthened.
In the near term, Tuscany is focused on capital maintenance, reducing operating costs and sustaining production levels. In addition, the Company believes it can currently achieve growth, once heavy oil prices recover, by continuing to develop its Dina oil properties at Macklin and Evesham from working capital and operating cash flows, while minimizing the reliance on bank debt to finance future capital expenditures.
Management believes longer term growth will result from the development of new production and reserves from Tuscany's additional heavy oil prospects, which have been developed over the past three years.
ADVISORY: Certain information regarding the Company in this News Release including management's assessment of future plans and operations may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, wells not performing as expected, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhausted. Additional information on these and other factors that could effect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at the Company's website (www.tuscanyenergy.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Where amounts are expressed on a barrel of oil equivalent (boe) basis, natural gas volumes have been converted to barrels of oil at six thousand cubic feet (mcf) per barrel (bbl). Boe figures may be misleading, particularly if used in isolation. A boe conversion of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References to oil in this discussion include crude oil and natural gas liquids (NGLs).
NEITHER THE 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 RELEASE.
Tuscany Energy Ltd.
Robert W. Lamond
President & CEO
(403) 269-9890 (FAX)
Tuscany Energy Ltd.
Donald K. Clark
Vice President Operations
(403) 269-9890 (FAX)
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