SHY Sharon Enery Ltd

Sharon Energy Ltd. (TSX VENTURE:SHY) announces that it has filed its Q3 2011
MD&A and Financial Statements for the nine months ended December 31, 2011, on
SEDAR.


During the quarter, Sharon realized approximately $7.0 million from the sale of
its Magnum Hunter investment. The fair value of the remaining investment of
546,195 shares was approximately $3.9 million at December 31, 2010 and
approximately $3.7 million at the date of this report. To date, Sharon has sold
1,748,279 Magnum Hunter shares to realize approximately $9.2 million.


Late in the prior quarter, Sharon acquired a 25% interest in a property at
Macklin, Saskatchewan. The property contained four shut-in oil wells, a water
disposal well, 3-D seismic over the lease area, and 3,770 acres under lease.
Sharon believes the property's four wells can be reactivated. The wells were
producing a combined 58 bopd when they were shut-in. The operator reactivated
one of the wells late in December 2010. To date, the reactivated well has been
producing an average of 20 bopd (5 bopd net). The operator now plans to
reactivate the remaining three wells after spring breakup. 


Sharon continues to be in an enviable position, for a growth oriented junior
exploration company, with a: 




--  Significant cash position. 
--  Substantial and highly liquid holding in Magnum Hunter Resources. 
--  Growing inventory of oil focused prospects. 
--  Joint venture program with two related junior exploration companies
    which will allow Sharon to minimize overhead costs and maximize the
    amount of expenditure used to grow its production and reserves base. 



Financial

Revenue from continuing operations for the quarter ended December 31, 2010,
totaled $67,000 compared with $49,000 for the prior year period. For the nine
month period, revenue from continuing operations was $173,000 compared with
$290,000 for the prior year period. Revenue for discontinued operations was nil
for the three and nine month periods compared with nil and $248,000 respectively
for the prior year periods. Revenue was reduced by lower natural gas production.



Cash flow from continuing operations for the quarter was negative $89,000
compared with negative $26,000 for the prior year period. For the nine month
period, cashflow was negative $385,000 compared with negative $62,000 for the
prior year period. Cash flow from discontinued operations for the three and six
month periods was nil compared with nil and positive $29,000 for the prior year
periods. 


Net earnings from continuing operations for the quarter was $5.4 million
compared with a loss of $54,000 for the prior year period. For the nine month
period, net earnings from continuing operations was $6.6 million compared with a
net loss of $407,000 in the prior year period. Earnings for the three and nine
month periods were primarily driven by the $5.5 million and $7.3 million gains
respectively on the sale of Magnum Hunter shares. Net earnings from discontinued
operations for the three and nine month periods was nil compared with net losses
of nil and $9.4 million respectively for the prior year periods. 


Capital expenditures for continuing operations for the three and nine month
periods totaled $227,000 and $671,000 compared with $93,000 and $216,000 for the
prior year periods. Capital expenditures for discontinued operations for the
three and nine month periods was nil compared with nil and $410,000 for the
prior year periods. Capital expenditures were financed from property
dispositions, working capital and cash flow.


Sharon exited the quarter with working capital of $8.3 million versus working
capital from continuing operations of $133,000 at the beginning of the fiscal
year. 


The MD&A and financial statements of Sharon Resources Ltd. for the three month
period ended December 31, 2010 is available on SEDAR at www.sedar.ca. The
following table summarizes the financial and operating results of Sharon from
continuing operations for the year.




----------------------------------------------------------------------------
(Thousands, except per BOE, BOEd and per share        Nine Months Ended
 amounts, unaudited)                                     December 31
                                                ----------------------------
                                                     2010              2009
----------------------------------------------------------------------------
                                                                 (Restated,
Financial                                                       Notes 2 & 3)
 Total revenue (net of royalty expense)         $     173     $         290
 Cash flow from operations (1)                  $    (385)    $         (62)
  per share, basic and diluted                  $   (0.01)    $           -
 Earnings (loss) for the period                 $   6,635     $        (407)
  per share, basic and diluted                  $    0.09     $       (0.01)

 Capital additions                              $     671     $         216
 Dispositions                                   $      64     $         600

 Working capital                                $   8,349     $         339

 Total assets                                   $  14,472     $       6,495
 Total shares outstanding, at period end           73,907            74,086

Operations (for continuing operations)
 Production
  Gas (Mcfd)                                          132               198
  Oil (Bopd)                                            3                 7
  BOEd (6 Mcf = 1 Bbl)                                 25                40
 Product Prices
  Gas ($/Mcf)                                   $    3.57     $        3.58
  Oil ($/Bbl)                                   $   57.11     $       62.14
----------------------------------------------------------------------------
(1) Non-GAAP measure. Please see the reconciliation of "cash flow from
    operations" to "cash flow from operating activities" after the
    shareholders message.



Business Outlook

After the completion of the sale of the U.S. properties and the Parkman oil
pool, Sharon has significantly increased its financial flexibility. Over the
last few months oil prices have stabilized at relatively high levels while
natural gas prices continue to weaken. 


Sharon plans to use its strong financial base to focus its efforts on the
development of oil prospects in Alberta and Saskatchewan. 


Sharon is an oil and gas exploration and production company based in Calgary,
Alberta.


ADVISORY: This press release contains forward looking statements. Although
Sharon believes that the expectations reflected in these forward looking
statements are reasonable, undue reliance should not be placed on them because
Sharon can give no assurance that they will prove to be correct. Since forward
looking statements address future events and conditions, by their very nature
they involve inherent risks and uncertainties. 


Where amounts are expressed on a barrel of oil equivalent (boe) basis, natural
gas volumes have been converted to barrels of oil at six thousand cubic feet
(mcf) per barrel (bbl). Boe figures may be misleading, particularly if used in
isolation. A boe conversion of six thousand cubic feet per barrel is based on an
energy equivalency conversion method primarily applicable at the burner tip and
does not represent a value equivalency at the wellhead. References to oil in
this discussion include crude oil and natural gas liquids (NGLs). 


The forward looking statements contained in this press release are made as of
the date hereof and Sharon undertakes no obligations to update publicly or
revise any forward looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.

Sharon Enery Ltd (TSXV:SHY)
Historical Stock Chart
From May 2024 to Jun 2024

Sharon Enery Ltd (TSXV:SHY)
Historical Stock Chart
From Jun 2023 to Jun 2024