TRAVERSE CITY, Mich., May 19, 2006 (PRIMEZONE) -- Cadence Resources Corporation (OTCBB:CDNR) today announced financial and operating results for the first quarter of 2006. "This quarter's performance is encouraging," remarked William Deneau, President and CEO of Cadence. "We are seeing the positive impact in our financial statements, production and operational activity. As our business strategy continues to unfold, we will see that trend repeat itself many years into the future."
Financial Detail
For the first quarter of 2006, Cadence reported a net loss of $939,183 on revenues of $5.6 million. This amounts to a loss of $0.01 per common share (basic and diluted). Also, EBITDA (earnings before interest, taxes, depreciation and amortization) was a net gain of nearly $2.1 million and net cash from operations was $270,118. Comparing to the same quarter in 2005, we see a net loss of $413,145 on revenues of $690,203, which amounts to a loss of $0.01 per common share. EBITDA for the first quarter of 2005 was a loss of $83,129 and net cash from operations was -$1.1 million. Mr. Deneau commented, "A dramatic improvement from the first quarter of 2005 is evident. Though still operating at a loss, these numbers indicate that we are moving in the right direction. This is going to be an important year."
Production Detail
Average daily natural gas production rose to 6.6 million cubic feet per day (MMcf/d), a 1,000 percent increase over the prior-year period of 0.6 MMcf/d. Average daily crude oil production increased over the same period in 2005 to 73 barrels daily -- a 356 percent increase.
During the first quarter of 2006, Cadence participated in 25 wells (gross) of which 2 were added into production, and 20 wells (gross) are preparing for completion, expected in the second quarter of 2006.
Total natural gas production for the period climbed to 594 million cubic feet (MMcf), a 1,013 percent increase over the prior-year period of 53 MMcf. Crude oil production climbed as well, reaching 6,602 barrels for the quarter versus 1,452 in the first quarter of 2005. The natural gas was sold for an average of $8.49 per Mcf and the crude oil was sold for an average of $56.27. Each of these prices are higher than the prior-year period, while production expenses per Mcfe dropped from $4.42 in the first quarter of 2005 to $2.90 in the first quarter of 2006.
Reflecting on the production growth, Mr. Deneau said, "The growth in our production highlights the fact that we are aggressively working to increase our reserves and production capabilities. A key ingredient is keeping our cost structure low and under control. Our proven reserves exceed 88 Bcf with implied potential reserves nearing 3 Tcf. As we continue to develop those reserves, the company's revenue stream and cash flow will improve exponentially. Our net production will continue to improve throughout the year as we bring more projects online either directly as operator or through joint ventures operated by other companies."
Operations Detail
By the end of the first quarter, 2006, Cadence's Antrim Shale leasehold totaled 85,288 net acres, nearly doubling the prior-year period's total of 45,965. The company's major leasehold increase occurred in the New Albany Shale, growing 351 percent to 374,810 net acres from 83,076 net acres. Mr. Deneau commented, "We are excited to have established a substantial acreage position in such a terrific new area of development potential."
About Cadence Resources
Cadence Resources is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production with its main operations in the Michigan Antrim Shale and Indiana New Albany Shale.
Statements regarding the plans for the future growth are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although we believe that the drilling and acquisition plans described are based on reasonable assumptions, we can give no assurance that they will prove accurate. Important factors that could cause our actual results to differ materially from those included in the forward-looking statements include the timing and extent of changes in commodity prices for oil and gas, drilling and operating risks, the availability of drilling rigs, changes in laws or government regulations, unforeseen engineering and mechanical or technological difficulties in drilling the wells, operating hazards, weather-related delays, the loss of existing credit facilities, availability of capital, and other risks more fully described in our filings with the Securities and Exchange Commission. All forward-looking statements contained in this release, including any forecasts and estimates, are based on management's outlook only as of the date of this release and we undertake no obligation to update or revise these forward-looking statements, whether as a result of subsequent developments or otherwise.