DENVER, CO--(Marketwire - August 15, 2008) - Rancher Energy Corp. (
Rancher Energy reported oil sales of $1.9 million in the first quarter as compared with oil sales of $1.3 million in the same quarter a year ago. The increase was attributable to a higher average sales price of $118.07 per barrel versus $59.31 per barrel in the first quarter of 2007. The Company sold 16,083 barrels of oil in the first quarter, which represents its net interest in its properties, down from 22,434 barrels in the same quarter last year due to mechanical production problems that curtailed production from certain wells during the quarter while flowline repairs were made. Total oil sales were offset by losses on risk management activities related to a short-term debt financing the Company entered into in October of 2007.
Total operating expenses in the first quarter decreased to $2.2 million from $3.7 million in the same quarter last year. General and administrative expense decreased by $1.5 million, or 40%, to $1.0 million from $2.5 million last year, reflecting lower headcount and related costs, lower professional fees and generally reduced overhead costs. Lower general and administrative costs, in combination with lower depreciation, depletion and amortization costs, more than offset increases in production taxes and lease operating expenses. The Company reported a net loss of $3.9 million, or $0.03 per basic and diluted share, versus a net loss of $3.8 million, or $0.04 per basic and diluted share, in the same quarter last year. The net loss of $3.9 million included $1.3 million in amortization of deferred financing costs, $1.9 million in derivative losses and nearly $500,000 in non-cash depreciation, depletion, amortization and stock-based compensation. Rancher Energy closed the first quarter with cash and cash equivalents of $5.2 million, down from $6.8 million at fiscal year end March 31, 2008.
"During the first quarter we made good progress bringing total operating expenses more in line with oil sales as we continued to evaluate options to fund the CO2 recovery phase of our enhanced oil recovery (EOR) program," said John Works, President & CEO of Rancher Energy. "More recently we engaged an investment bank to serve as the Company's financial advisor to consider strategic alternatives to maximize the value of our considerable asset base, which includes three promising oil fields in the Powder River Basin and a CO2 contract with ExxonMobil."
About Rancher Energy Corp.
Rancher Energy is an innovative oil & gas exploration & development company with a targeted strategy to reinvigorate older, historically productive oil fields in the hydrocarbon-rich Rocky Mountain region of the United States. Using waterflood injection and CO2 flooding, coupled with other leading edge hydrocarbon recovery techniques such as 3-D seismic data and directional drilling, Rancher Energy expects to extract proven in-place oil that remains behind in mature fields. Rising energy demand and strong oil & gas prices combined with advances in oil recovery have made this strategy profitable. Rancher Energy is taking advantage of this convergence by acquiring low risk, high quality, historically productive plays with under-exploited reserves and developing customized enhanced recovery strategies to maximize production.
Forward-Looking Statements
This press release includes forward-looking statements as determined by the U.S. Securities and Exchange Commission (the "SEC"). All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that the Company believes or anticipates will or may occur in the future are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include the Company's ability to obtain financing to implement its waterflood plan, to construct pipeline and other infrastructure, and for other operational and working capital purposes, the uncertainty of recovery factors for the enhanced oil recovery projects, the volatility of oil prices, general economic and business conditions, and other factors over which the Company has little or no control. The Company does not intend (and is not obligated) to update publicly any forward-looking statements. The contents of this press release should be considered in conjunction with the warnings and cautionary statements contained in the Company's recent filings with the SEC.
Rancher Energy Corp. Consolidated Statements of Operations (Unaudited) Three months ended June 30, 2008 2007 ------------ ------------ Revenues: Oil and gas sales $ 1,898,967 $ 1,330,479 Losses on derivative activities (1,895,293) - ------------ ------------ Total revenues 3,674 1,330,479 Operating expenses: Production taxes 230,283 161,469 Lease operating expenses 623,421 588,233 Depreciation, depletion and amortization 275,841 331,532 Accretion expense 46,276 45,990 Exploration expense 9,604 41,158 General and administrative expense 1,048,376 2,539,992 ------------ ------------ Total operating expenses 2,233,801 3,708,374 Loss from operations (2,230,127) (2,377,895) ------------ ------------ Other income (expense): Liquidated damages pursuant to registration rights arrangement - (1,377,110) Amortization of deferred financing costs and discount on note payable (1,309,175) - Interest expense (371,295) (71,239) Interest and other income 10,581 48,323 ------------ ------------ Total other income (expense) (1,669,889) (1,400,026) ------------ ------------ Net loss $ (3,900,016) $ (3,777,921) ============ ============ Basic and diluted net loss per share $ (0.03) $ (0.04) ============ ============ Basic and diluted weighted average shares outstanding 114,966,138 103,734,995 Rancher Energy Corp. Consolidated Balance Sheets (Unaudited) June 30, March 31, ASSETS 2008 2008 ----------- ----------- Current Assets: Cash and cash equivalents $ 5,199,914 $ 6,842,365 Accounts receivable and prepaid expenses 1,101,987 1,170,641 ----------- ----------- Total current assets 6,301,901 8,013,006 Oil & gas properties at cost (successful efforts method): Unproved 54,051,180 54,058,073 Proved 20,876,225 20,734,143 Less: Accumulated depletion, depreciation and amortization (1,757,403) (1,531,619) ----------- ----------- Net oil & gas properties 73,170,002 73,260,597 Other assets: Furniture and equipment, net of accumulated depreciation of $251,401 and 204,420, respectively 937,914 997,196 Other assets 1,151,276 1,300,382 ----------- ----------- Total other assets 2,089,190 2,297,578 ----------- ----------- Total assets $81,561,093 $83,571,181 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 1,037,165 $ 2,114,204 Accrued oil & gas property costs 250,000 250,000 Asset retirement obligation 366,319 337,685 Note payable, net of unamortized discount of $1,452,742 and $2,527,550, respectively 10,787,258 9,712,450 Derivative liability 1,939,318 590,480 ----------- ----------- Total current liabilities 14,380,060 13,004,819 Long-term liabilities: Derivative liability 520,802 246,553 Asset retirement obligation 944,612 922,166 ----------- ----------- Total long-term liabilities 1,465,414 1,168,719 Stockholders' equity: Common stock 1,154 1,150 Additional paid-in capital 92,008,169 91,790,181 Accumulated deficit (26,293,704) (22,393,688) ----------- ----------- Total stockholders' equity 65,715,619 69,397,643 ----------- ----------- Total liabilities and stockholders' equity $81,561,093 $83,571,181 =========== ===========
Contact Information: Contacts: John Works Chief Executive Officer Rancher Energy Corp. 303-629-1125 Jay Pfeiffer Pfeiffer High Investor Relations, Inc. 303-393-7044