Ironhorse Announces Q3 2017 Financial and Operating Results

CALGARY, Nov. 28, 2017 /CNW/ - Ironhorse Oil & Gas Inc. ("Ironhorse" or the "Company") (TSX-V: IOG) announces its financial and operating results for the three and nine months ended September 30, 2017.

Financial and Operation Summary

The Company's reported production declined 37% to 104 boe/d in the third quarter of 2017 compared to 165 boe/d produced in the second quarter of 2017.  The current quarter production was impacted by unanticipated downtime and repair and maintenance work on the Pembina 9-5 well for a significant portion of September and the Pembina 14-5 well continued to produce intermittently while awaiting installation of an electric submersible pump which occurred in late October 2017.

Operating netbacks for Q3 2017 decreased 78% to $57,000 from $256,000 reported for Q2 2017 and corresponding with 37% lower production, a 10.7% decrease in the Company's realized oil price received and higher operating costs recorded compared to the prior quarter. 

The Company realized a net loss of $3.3 million for the third quarter. This loss pertained to a $1.6 million impairment charge at Pembina which reflects fair market value discussions with external parties related to the proposed transaction with Pond Technologies Inc. ("Pond") and a $1.4 million non-cash deferred tax expense resulting from the reduction of the deferred tax asset recorded as the future net taxable income horizon was reduced.

Quarterly funds from operations were negative and decreased 208% to ($107,000) in Q3 2017 compared to $99,000 for Q2 2017 due to 37% less production and significantly lower netbacks realized.  

Updated Production Guidance:

Net Pembina Q4 2017 production guidance is anticipated to be in the range of 100 to 120 boe/d due to restricted flow as a result of a piping failure at the Sinopec operated 13-2 battery. The repair is scheduled to be completed by the end of November. 

Q1 2018 net Pembina production is expected to be 150 to170 boe/d with both wells producing at full capability.

Proposed transaction with Pond:

On November 17, 2017, Ironhorse together with Pond completed the filing and mailing of a joint management circular in connection with an annual and general meeting of Ironhorse Shareholders to be held on December 18, 2017 whereby the shareholders will be asked to approve the proposed transaction as described in the document. The TSX Venture Exchange ("TSXV") has conditionally accepted the proposed transaction which will constitute a reverse takeover and change of business of Ironhorse pursuant to the TSXV's policies, subject to Ironhorse fulfilling all of the requirements of the TSXV.  Trading of Ironhorse shares on the TSXV resumed on November 23, 2017.  A copy of the Circular is available under Ironhorse's issuer profile at www.sedar.com

Additional Information

Ironhorse's complete results for the three and nine months ended September 30, 2017, including unaudited condensed financial statements and the management's discussion and analysis are available on SEDAR and the Company's web site at www.ihorse.ca. 

About Ironhorse:

Ironhorse Oil & Gas Inc. is a Calgary-based junior oil and natural gas production company trading on the TSX Venture Exchange under the symbol "IOG."

Forward-looking statements:

Statements throughout this release that are not historical facts may be considered to be "forward looking statements." These forward looking statements sometimes include words to the effect that management believes or expects a stated condition or result. All estimates and statements that describe the Company's objectives, goals, or future plans, including management's assessment of future plans and operations, drilling plans and timing thereof, expected production rates and additions and the expected levels of activities may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, incorrect assessment of the value of acquisitions, failure to complete and/or realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources and changes in the regulatory and taxation environment. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: the ability of the Company to obtain equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manor; pipeline restrictions; and field production rates and decline rates. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included elsewhere herein and in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this release are made as at the date of this release and Ironhorse assumes no obligation to update or revise any forward-looking statements to reflect new events or circumstances, except as required by applicable laws.

Boe Conversion – Certain natural gas volumes have been converted to barrels of oil equivalent ("boe") whereby six thousand cubic feet (mcf) of natural gas is equal to one barrel (bbl) of oil. This conversion ratio is based on an energy equivalency conversion applicable at the burner tip and does not represent a value equivalency at the wellhead.

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

SOURCE Ironhorse Oil & Gas Inc.

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