Highlights for the first three months include:
- 28% increase in revenues over the comparable period in 2005
- 457% increase in cash flow over the comparable period in 2005
- Successful multi-well drilling program in Tierra del Fuego, Argentina
- Acquisition of Medianera Block, Neuquen Basin, Argentina
- Obtained approval as UK Offshore Operator
- Secured drilling rig for UK North Sea Causeway prospect
- Completed $28 million financing
Antrim reports significant increases in revenue and cash flow over the comparable period in 2005. The Company continues its successful drilling program in Argentina with eight wells cased for testing or production and one well dry and abandoned. Operational activity in Argentina is expected to increase through 2006 with additional drilling in Tierra del Fuego and seismic acquisition and drilling on the recently acquired Medianera Block in Argentina's Neuquen Basin.
In the UK North Sea, Antrim is pleased to announce the contracting of a rig to drill the Company's Causeway Prospect, expected to start in early June, 2006.
Funds to finance the Company's increased level of activity are in place following a $28 million financing completed in May, 2006.
At March 31, 2006, Antrim had working capital of $27,828,257 (December 31, 2005 - $29,969,247) including cash of $27,981,608 (December 31, 2005 - $33,209,478) and no debt. Working capital decreased following the acquisition of the Medianera Block in February 2006 and capital expenditures associated with the Company's multi-well drilling program in Tierra del Fuego, Argentina. Antrim generated cash flow from operations in the three month period ended March 31, 2006 of $1,243,453 ($0.02 per share) compared to cash flow from operations of $223,091 ($0.01 per share) in the comparable period in 2005. Net income in the first three months of 2006 was $545,991 ($0.01 per share) compared to a net loss of $349,887 ($0.01 per share) in 2005. Net income increased due to higher revenues on increased oil, gas and NGL prices and increased production over the comparable period.
OVERVIEW OF OPERATIONS
Argentina- NorthWest Basin
Net oil production from the Puesto Guardian field in Argentina's NorthWest Basin in the first three months of 2006 was 357 barrels of oil per day compared to 450 barrels of oil per day in the first three months of 2005. Despite the washout in January 2006 of a key river crossing, the majority of production in the quarter was delivered to a regional refinery.
In conjunction with its partners in the Puesto Guardian field and neighbouring Capricorn license, Antrim plans to acquire additional 3-D seismic in June 2006 which would lead to the drilling of new wells to add further production and reserves from the region. Antrim has extended the Capricorn license into a second term with the relinquishment of 50% of the acreage and the commitment to drill an exploration well on the license in 2006-2007.
Argentina - Tierra del Fuego
On February 14, 2005, Antrim completed the acquisition of a 25.78% working interest in three producing exploitation concessions and related processing facilities in the Tierra del Fuego region in southern Argentina. The concessions produce light crude oil, natural gas and natural gas liquids ("NGLs"). Net oil production from the Tierra del Fuego concessions in the first three months of 2006 was 138 barrels of oil per day compared to 132 barrels of oil per day from February 14, 2005 to March 31, 2005. Gas and NGL production in the first three months of 2006 was 2,283 mcf per day and 56 barrels per day, respectively. Gas and NGL production from February 14, 2005 to March 31, 2005 was 2,410 mcf per day and 46 barrels per day, respectively.
In October 2005, Antrim commenced a successful multi-well drilling program on the concessions. The drilling program has tested very high rates of gas, NGL's and condensate none of which was on production in the quarter. Antrim and its partners have to date tested a cumulative 50.4 mmcf/d (Antrim net - 13.0 mmcf/d) wet gas from the drilling program. Due to the high rates encountered, additional compression, pipeline and processing facilities are being sourced to bring these wells onto production later in the year. In the interim drilling continues with an expected seven additional wells to be drilled in 2006.
Argentina - Medianera
On February 24, 2006, Antrim completed the acquisition of a 70% working interest in the producing Medianera Block in Rio Negro Province, Neuquen Basin, Argentina. The cost of the acquisition was approximately US$1.2 million after closing adjustments. The Medianera field was discovered in 1961 and the license covers an area of 53 km2 (130,000 acres). It is located in central Argentina in the Neuquen Basin, Argentina's most prolific oil and gas basin. Oil production net to Antrim from February 24, 2006 to March 31, 2006 was 30 barrels of oil per day and was placed in storage in the period.
Antrim believes the Medianera block has significant exploitation and exploration potential, both uphole and from deeper horizons. No deep wells have been drilled on the block to date. Antrim intends to acquire 3D seismic over the entire block in the second and third quarter of 2006. The operator of Antrim's concessions in Tierra del Fuego, Argentina, has acquired the remaining 30% working interest in the block and will operate the block.
United Kingdom - Block 211/22a South East and Block 211/23d
Drilling operations on the Company's Causeway prospect are expected to begin in early June 2006. The Causeway prospect is on the prospective Osprey Ridge Trend which consists of a series of fault-bounded, staircase like structures extending northeast from Block 211/22 SE onto Block 211/23d. A lateral well is planned to intercept a number of fault blocks on the trend. A discovery well (211/22a-3) drilled in 1984 on Block 211/22a SE tested oil at 5,512 barrels of oil per day from a Jurassic reservoir. A discovery well (211/23b -11) drilled in 1992 on Block 211/23d tested oil at a rate of 8,100 bopd from the Jurassic Brent Interval. Antrim has a 79% working interest in the two blocks and is the operator.
United Kingdom - South Larne
In 2005, Antrim and its partners acquired additional seismic data on the license to be used towards preparation and filing of an application to drill an exploration well on the license. Examination of the gas storage potential of the license also continues to be performed.
Antrim has also filed a Revised Annual Information Form, dated May 15, 2006, for the year ended December 31, 2005, which includes the following reports required under National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities": Form 51-101F1, Statement of Reserves Data and Other Oil and Gas Information; Form 51-101F2, Reports of Reserve Data by Independent Qualified Reserves Evaluators; and Form 51-101F3, Report of Management and Directors on Oil and Gas Disclosure. The Revised Annual Information Form can be found for viewing by electronic means on the System for Electronic Document Analysis and Retrieval at www.sedar.com. Form 51-101F3 identifies, in accordance with AIM 16 Guidance Note of the London Stock Exchange, the qualified persons within the Company responsible for Antrim's oil and gas disclosures included in the Revised Annual Information Form.
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