Triangle Cites Working Capital Improvement in Second Quarter

Triangle Petroleum Corporation has reported its financial results for the second quarter of the fiscal year ended January 31, 2009.

FINANCIAL SUMMARY

The Company incurred a net loss of $2.4 million ($0.04 net loss per diluted share) for the second quarter of fiscal 2009 compared to a net loss of $5.9 million ($0.16 net loss per diluted share), for the second quarter of fiscal 2008. The reduction in the loss was mainly the result of no oil and gas impairment charges in the second quarter of fiscal 2009 compared to a $3.9 million oil and gas property impairment charge in the same period of fiscal 2008. Also, lower production costs, depletion, depreciation and accretion expense, and stock based compensation expense, which is a component of general and administrative expenses, contributed to the reduction in the loss. Revenue for the second quarter of fiscal 2009 totaled $0.1 million, which was derived from producing wells in the Company's Barnett and Alberta Deep Basin projects, even with revenue in the second quarter of fiscal 2008.

For the first six months of fiscal 2009, the Company incurred a net loss of $4.2 million ($0.08 net loss per diluted share) compared with a net loss of $9.3 million ($0.28 net loss per diluted share) for the same six month period in fiscal 2008. The reduction in the loss was mainly the result of no oil and gas impairment charges in the first six months of fiscal 2009 compared to a $3.9 million oil and gas property impairment charge in the same six month period of fiscal 2008. Also, lower stock based compensation expense, which is a component of general and administrative expenses, contributed to the reduction in the loss. Revenue for the six months ended July 31, 2008 totaled $0.3 million compared with $0.2 million in the same six month period ending July 31, 2007.

In the first six months of fiscal 2009, the Company spent $1.7 million on investing activities mainly related to shale gas exploration in the Windsor Block of the Maritimes Basin of Eastern Canada. These activities include completion and testing of two vertical test wells which were drilled in the third quarter of fiscal 2008 and drilling costs for the first exploration well in the second phase of the Windsor Block program that began before quarter-end. In the same six-month period of fiscal 2008, the Company invested $6.5 million.

At July 31, 2008, cash and cash equivalents totaled $23.5 million. On June 4, 2008, Triangle announced that it raised $25.5 million through the private placement of 18,257,500 units priced at $1.40 per unit. Each unit consisted of one share of common stock and one-half of a warrant. One full warrant can be exercised into one share of common stock for a period of two years at a price of $2.25 per share. The net proceeds of $23.6 million were used to repay $4 million of secured convertible debentures and will be used to fund a portion of the drilling program in the Windsor Block and for general working capital purposes. Also during the quarter, the Company sold its interests in two Barnett shale wells for $0.2 million and its 25% interest in 9,692 net undeveloped acres in Montana (Rocky Mountain Project) for $0.8 million. In July, Triangle received $6.5 million in cash from its joint venture partners related to the Windsor Block: $3 million from one partner for its share of past seismic and test well expenditures and $3.5 million from both partners for their share of drilling costs for the first exploration well. At July 31, 2008, the Company had positive working capital of $10.6 million compared with a working capital deficit of $7.7 million at July 31, 2007.

Mark Gustafson, Triangle's Chairman and CEO, commented, "Our working capital position improved significantly during the second quarter. The net funds from our private placement combined with the proceeds from asset sales, and the cash calls from our two joint venture partners in the Windsor Block strengthened our balance sheet and gives us the liquidity we need to pursue the next phase of our exploration program in Nova Scotia."
 

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