Admiral Bay Resources has reported record production and revenue for the fiscal year ended July 31st, 2008. Revenues (after royalties) were $5.7 million, an increase of 64% from the prior period driven by increases in production of 30% and higher commodity prices. Production (before royalty) averaged 2,376 mcfpd compared to 1,739 mcfpd in the prior period. Production costs were $3.58/mcf, a decrease of 3% from the prior period and G&A expense was $2.05/mcf, a decrease of 41% from the prior period. Earnings for the fiscal year were a loss of ($8.2 million) versus ($5.4 million) in the prior period due primarily to the non-cash change in the mark-to-market of the Company's natural gas hedges as well as higher amortization and interest costs.
The annual reserve report, as filed on Form 51-101 F1, based on forecast process and costs reported gross Proved reserves of 57.6 BCF (42.8 BCF net after royalty) with pre-tax net present value discounted at 10% ("PV-10") of $117.2 million which is an overall increase of 31% and 27% respectively from 2007. The Company reported Probable and Possible reserves of 17.5 and 178.4 BCF respectively (13.2 and 116.3 BCF respectively net after royalty). For the 2008 fiscal year Admiral Bay had capital expenditures of $7.6 million which included $1.2 million for the purchase of the Ft. Scott properties in May of 2008. The Ft. Scott properties and the associated interest in the Bourbon County Pipeline were purchased via the issuance of 3 million shares of the Company's stock.
Based on fiscal 2008 capital expenditures the Company achieved a proved finding and development cost for the year of $0.75/MCF. Admiral Bay's four year average all-in Finding Cost of $1.20/MCF is based on overall capital expenditures for the four year period of $52.4 million (including $15.6 million for acquisitions). The four year average full cycle Finding & Development cost (including future development costs of $22.9 million) was $1.72/Mcf.
President and CEO Steven Tedesco commented, "The record annual results highlight the progress we are making in increasing production and Proved reserves while decreasing production costs and G&A expense. In addition to our excellent finding and development costs, which show the viability of our Kansas CBM projects in nearly any commodity price environment, we are anticipating moving our Revloc project in Pennsylvania to commercial development in fiscal 2009. Admiral Bay is looking forward to another record year in 2009 as the Company achieves additional scale, cost reductions and significant production growth."
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