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TUSCANY ANNOUNCES SIGNIFICANTLY IMPROVED RESULTS FOR THE YEAR ENDED DECEMBER 31, 2010

 

Calgary, Alberta, Canada, April 19, 2011. Tuscany Energy Ltd. (TSXV: "TUS") announces that it has filed its 2010 MD&A;, Financial Statements, and Annual Information Form ("AIF") on SEDAR.  These are also available on the Company's website at www.tuscanyenergy.com.

 

Tuscany is pleased to report significant increases in revenue, cash flow and reserves for the year ended December 31, 2010.

 

Tuscany's revenue increased by 60% to $2.9 million, cash flow improved to $450,000 from a working capital deficiency of $144,000, and proved and probable reserves increased by 64% to $1.2 million barrels of oil equivalent, compared with the prior year.

 

The Company anticipates improved results for 2011 as a result of two additional heavy oil wells, at Evesham, being placed on production, at year end.  In addition, heavy oil prices have increased significantly in the past two months and should result in higher average prices through the balance of the year.

 

Operationally the Company has laid the foundation for long term growth by purchasing new heavy oil prospects at Macklin, Lloydminster, Winter and acreage on 10 additional oil prospects in Alberta and Saskatchewan.

 

The primary reasons for Tuscany's focus on heavy oil development are:

During 2010 Tuscany accomplished the following: 

Tuscany completed 2010 in sound financial condition and with proved and probable reserves of 1.2 MMBOE, 91% of which, on a BOE basis, were oil and NGL reserves.  The net present value of its reserves at December 31, 2010 was $22.9 million at a 10% discount rate, 64% of which were proved reserves.   

 

During 2011, Tuscany will continue to focus on developing its Dina oil property at Evesham.  Tuscany plans to increase the pace of investment and development at Evesham with six new wells planned for 2011. Initial drilling is planned to commence after spring break-up, as conditions permit. If the proposed business combination with Sharon is completed, the pace of drilling will increase significantly as the company plans to maximize its growth through the development of this pool.

 

In order to maximize the amount of investment available for reinvestment in exploration and development, Tuscany has agreed to share overhead expenditures with two related companies, in effect, to manage the company within a joint venture group with common goals. Tuscany is operating jointly with Diaz Resources Ltd. and Sharon Energy Ltd. to identify and develop oil properties along similar trends in Alberta and Saskatchewan. 

 

Since the beginning of 2010 Tuscany participated in the acquisition of an additional 15,110 gross acres (4,530 net acres) and the drilling and completion of a vertical oil well in the Chambery, Saskatchewan area, through this joint venture. 

 

Tuscany's total revenue, net of royalties, increased by 60% in 2010 to $2.9 million from $1.7 million in 2009.  The Company reported a loss of $875,000 compared with a loss of $263,000 a year earlier.  Tuscany reported cash flow of $450,000, a significant increase from the previous year, when it reported a cash flow deficiency of $144,000.

 

Tuscany incurred $3.0 million of capital expenditures during the year.  At December 31, 2010 Tuscany had total net debt of $4.2 million.  Subsequent to the year end, the company negotiated an increase in its credit facility to $4.6 million.

 

 

Tuscany is focused on growth through oil exploration and development. With a sound reserve base developed over the past two years, Tuscany believes it can achieve significant growth over the next year by continuing to develop its Evesham, Dina oil pool. 

 

In order to accelerate the development of this pool and Tuscany's growth, the Company has entered into the business combination agreement with Sharon Energy Ltd. which will provide the combined companies with sufficient working capital to develop the pool at a significantly accelerated pace.  

 

Management would like to thank its shareholders for their continued support and we look forward to a year of steady growth.

 

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

 

Robert W. Lamond, Chairman & CEO 

TUSCANY ENERGY LTD.

Telephone:  (403) 269-9889

Fax:  (403) 261-4072

TSX Venture:  TUS

 

John G.F. McLeod, Vice President & COO

TUSCANY ENERGY LTD.

Telephone:  (403) 264-2398 

Fax:  (403) 261-4072

 

 

ADVISORY: Certain information regarding the Company in this News Release including management's assessment of future plans and operations 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, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, wells not performing as expected, incorrect assessment of the value of acquisitions, failure to 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.  As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.  Readers are cautioned that the foregoing list of factors is not exhausted.  Additional information on these and other factors that could effect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at the Company's website (www.tuscanyenergy.com).  Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

 

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).

 

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