Rally Sets Q2 Earnings Record
Rally Energy Corp. on Friday reported record earnings of $10.4 million ($0.10/share) for the six months ended June 30, 2007, an increase of 104% from $5.1 million ($0.06/share) for the comparable 2006 period. Cash flow increased by 67% to $19.7 million ($0.18/share) for the first six months of 2007 as compared to $11.8 million ($0.13/share) for the first six months of 2006.
Working capital at the end of the first quarter was $8.5 million with no bank debt. An additional $12.1 million was held in drilling and facilities inventory to be used for future capital expenditures in Egypt and Pakistan.
Average production during the second quarter was 5,900 boe/d. Eleven wells were drilled during the same period and were completed as oil wells.
Average production in July 2007 was 5,894 boe/d with approximately 1,000 boe/d from 12 thermal wells. Drilling of four new thermal wells and construction of a third 2,500 boe/d central production facility in the Issaran Field are currently underway.
Natural gas production from the Salsabil Field commenced on June 29, 2007 at a gross rate of 9.5 mmcf/d from one well and current production is 20 mmcf/d (6 mmcf/d, 1,000 boe/d net) from two wells.
The Al-Baraka-1 exploration well commenced drilling on July 20, 2007 and has run first intermediate casing at 358 meters. The well is expected to reach its projected total depth of 2,200 meters by early September.
Current corporate production is approximately 6,900 boepd.
On July 24, 2007, the Corporation closed a transaction with an independent public company to dispose of its remaining Canadian oil and gas properties at Gold Creek for $1.5 million. The agreement has an effective date of April 1, 2007.
On August 1, 2007, the Corporation announced that it has entered into an Arrangement Agreement whereby Logria Corporation ("Purchaser"), a subsidiary of National Petroleum Company S.A.E. and an affiliate of Citadel Capital Company, will acquire the Corporation in a transaction valued at approximately $898 million. Under the terms of the Arrangement Agreement, the Purchaser will acquire all of the issued and outstanding common shares of the Corporation at a price of $7.30 per share in cash and all outstanding in-the-money options for their in-the-money value pursuant to a plan of arrangement. The Transaction will have to be approved by 66 2/3% of the votes cast by Rally's security-holders at a special meeting to be held in mid-September. Closing is subject to certain other conditions, including court approval.
Based in Calgary, Alberta, Canada, Rally Energy is an oil and gas exploration, development and production company. The Corporation's primary area of operations is in Egypt, where it has a 100% operating interest in the Issaran Oilfield, a significant heavy oil development opportunity with strong growth potential. In Pakistan, the Corporation holds a 30% interest in the Safed Koh Block, where it is participating in the development of a large natural gas/condensate discovery.