NiMin Energy Corp. Announces 2009 Fourth Quarter and Year-End Results and Reserves Disclosure
CARPINTERIA, CALIFORNIA - NiMin Energy Corp. (TSX:NNN - News)(OTCQX: NEYYF) ("NiMin" or "the Company") today announced the financial results for the quarter and year ended December 31, 2009 and the filing of its annual information form for the year ended December 31, 2009, which includes the disclosure and reports relating to reserves data and other oil and gas information required pursuant to National Instrument 51-101 - Standards of Disclosure of Oil and Gas Activities of the Canadian Securities Administrators. Copies of these documents may be obtained via SEDAR at www.sedar.com.
Net income (loss) for the year ended December 31, 2009 was $(11,895,819) compared to $(1,646,383) for the year ended December 31, 2008. Earnings (loss) per share for the year ended December 31, 2009 was $(0.29) compared to $(0.05) for the year ended December 31, 2008.
For the year ended December 31, 2009, the Company reported gross revenues of $8.71 million, down from $14.55 million reported at year-end 2008. This 40% decrease in gross revenues was due to a dramatic 42% drop in the price received by the Company for crude oil, which was partially offset by an increase in production. Operating netback decreased to $1.34 million for the year ended December 31, 2009 from $7.49 million reported for the year ended December 31, 2008. General & Administrative ("G&A") expenses increased from $5.73 million at year end 2008 to $7.05 million at year end 2009. Deducting stock-based compensation costs, a non-cash accounting entry, the G&A for 2009 was $3.88 million, very comparable to the $3.57 million reported for 2008. Depreciation, depletion and amortization for 2009, another non-cash accounting entry, increased to $5.11 million, an increase from the $3.31 million reported at year end 2008. This increase is primarily attributable to the acquisition of four fields in Wyoming in December 2009.
Highlights for 2009 include:
-- NiMin began injection of foamed oxygen using our proprietary Combined
Miscible Drive ("CMD") technology at Pleito Creek Field in California.
In February 2010, the Company reported an initial positive response from
the H-2 horizontal well which is now producing 107 barrels of oil per
day, approximately 44 barrels of oil per day above the natural decline
rate of the well. In addition, the gravity of the oil has been upgraded
from 17 to 19.9 degrees API.
-- The Company successfully completed a reverse merger in September of 2009
to become a public entity and began trading on the Toronto Stock
-- In December of 2009, we completed the acquisition of four producing
fields located in the Bighorn Basin of north central Wyoming. The
Company drilled and completed their first new well in these fields in
March of 2010, less than three months after closing the acquisition.
-- The Gulf Coast assets in Louisiana have continued to generate cash flow
at a consistent rate with no meaningful capital spending requirements.
NiMin CEO and Chairman, Mr. Clancy Cottman said, "We accomplished a great deal in 2009. The acquisition at the end of the year of four fields in Wyoming was the closing achievement to a busy year. These fields provide us the opportunity to significantly grow crude oil production over the next two to three years. We have 87 drilling locations identified, all low risk in-fill wells that will take about two weeks each to drill and complete. This provides NiMin with a very unique combination of assets. The acreage in Louisiana generates consistent cash flow with no significant capital spending required and the Wyoming fields will allow us to make very meaningful production gains over the next two years at very predictable costs. We recently announced the drilling of our first well in the Ferguson field, the State #11 and our current plan, subject to raising the necessary capital, is to drill 11 more wells in 2010."
Mr. Cottman continued, "There is significant long-term upside potential for NiMin in the CMD process and we are in the early stages of demonstrating the effectiveness of the process in the Pleito Creek Field in California. We believe the CMD process, which is proprietary to NiMin, will greatly increase the total amount of oil that can economically be recovered from the Pleito Creek Field. Once this process is demonstrated to be effective, the upside extends well beyond the oil we can recover from Pleito Creek, as there are literally dozens of analogous fields in California alone, all of them candidates for enhanced recovery using the CMD process."
Highlights of Oil and Gas Reserves Effective January 1, 2010
-- Total proved reserves of 11.9 MMboe (million barrels of oil equivalent),
an increase of 185% from January 1, 2009.
-- Total probable reserves of 16.0 MMboe, an increase of 209% year over
-- Total proved plus probable reserves of 27.9 MMboe, an increase of 199%
from January 1, 2009.
The pretax PV10 (net present value of future net revenue using a discount rate of 10%) for these reserves is:
-- A 179% increase on proved reserves to $215 million from $77 million
reported on January 1, 2009.
-- An increase of 110% on probable reserves to $261 million from $124
million on January 1, 2009.
-- The PV10 for proved plus probable reserves increased 137% to $476
million from $201 million reported a year ago.
The Company will host a conference call at 9:00 AM EDT (6:00 AM PDT) on Tuesday, April 6, 2010. During this call the management team will discuss the Company's year-end 2009 results. The conference leader will be Mr. Clancy Cottman, CEO and Chairman of NiMin, also on the call will be Dr. Sven Hagen, President and Mr. Jonathan Wimbish, CFO. Interested parties in the United States can access the conference call by dialing (877)407-8031, parties outside the U.S. should dial (201)689-8031 five to ten minutes prior to the start time. The call will also be web cast live on the Company's web site at www.niminenergy.com. A replay of the call will be available by calling (877)660-6853 or (201)612-7415 for international callers; account #286, conference ID #347657. The replay will be available until April 19, 2010.
About NiMin Energy
NiMin is a California based independent oil and gas exploitation and production company with principal operations in the Bighorn Basin of Wyoming, the San Joaquin Basin in California and South Louisiana onshore areas of the U.S. The Company has over 27 million barrels of proved and probable reserves, 97% of which are oil. The Company has current gross production of approximately 820 barrels of oil equivalent per day.
A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency for the individual products at the wellhead. Such disclosure of boe's may be misleading, particularly if used in isolation.
This news release contains forward-looking statements and information ("forward-looking statements") within the meaning of applicable securities laws, including the drilling program to be commenced by NiMin on the acquired fields, production gains, the long-term upside potential of the CMD process and the increase in oil recovery resulting therefrom. Although NiMin believes that the expectations reflected in its forward-looking statements are reasonable, such statements have been based upon currently available information to NiMin. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in forward-looking statements. Risks include, but are not limited to: the risks associated with the oil and gas industry (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in more detail in our Annual Information Form and other documents available at www.sedar.com. Readers are cautioned to not place undue reliance on forward-looking statements. The statements in this press release are made as of the date of this release, and, except as required by applicable law, NiMin does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement. NiMin undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the NiMin, Legacy or their respective financial or operating results or, as applicable, their securities. The net present value of future net revenue attributable to NiMin's reserves do not represent fair market value.