Voyager Oil & Gas, Inc. Reports Positive Net Income and Adjusted EBITDA Driven by Record Production and Revenue for Its Third Quarter Ended September 30, 2011

BILLINGS, Mont., Nov. 8, 2011 (GLOBE NEWSWIRE) -- Voyager Oil & Gas, Inc. (AMEX:VOG), announces record oil and gas production, revenue and adjusted EBITDA for the third quarter ended September 30, 2011. During the quarter ended September 30, 2011, Voyager reported revenues of $2,872,674, which represents an increase of 72% from $1,666,535 in the second quarter ending June 30, 2011 and an increase of 983% from $265,229 in the quarter ended September 30, 2010. This increase in revenue is due primarily to production from 46 gross (1.66 net) producing Bakken and Three Forks wells as of September 30, 2011, compared to 24 gross (1.13 net) and 3 gross (0.16 net) producing wells in the same plays as of June 30, 2011 and September 30, 2010, respectively.

Third Quarter 2011 Highlights

• Net income of $55,874 for the three months ended September 30, 2011;
   
• Record quarterly revenues of $2,872,674, up 72% over the quarter ended June 30, 2011 and up 983% over the quarter ended September 30, 2010;
   
• Record quarterly oil production of 33,319 barrels of oil equivalent (BOE), up 86% from 17,866 BOE in the quarter ended June 30, 2011 and up 898% from 4,264 BOE produced in the quarter ended September 30, 2010;
   
• Adjusted EBITDA of $2,035,395 up 166% from $763,866 in the quarter ended June 30, 2011 and up from a loss of ($93,097) in the quarter ended September 30, 2010 primarily due to increased production operations, which is the third consecutive quarter for Voyager to yield positive adjusted EBITDA;
   
• Acquired 2,996 core net acres during the quarter ended September 30, 2011 targeting the Bakken and Three Forks formations in North Dakota and Montana at an average price of $1,441 per net acre;
   
• 118 gross, 4.51 net wells targeting the Bakken-Three Forks that are in the process of being drilled or completed or which are producing as of November 8, 2011 in the Williston Basin; and
   
• As of September 30, 2011, Voyager had a cash balance of $22,226,461.

J.R. Reger, Voyager's Chief Executive Officer, commented, "We are pleased to announce to our shareholders another record quarter for Voyager. The continual execution of our business model has proved itself again as we were profitable from operations in the quarter ended September 30, 2011. Most of our lease acquisitions this quarter focused on acreage attached to AFEs and drilling plans in an effort to accelerate operating cash inflows, and we intend to continue with this strategy as long as we believe it delivers accretive value to our shareholders. At the end of the quarter ended September 30, 2011, 6% of Voyager's acreage was producing while another 14% was either being drilled or awaiting completion. We look forward to increasing our production in the fourth quarter of 2011."

2011 Williston Drilling Update

As of November 8, 2011, Voyager had interests in a total of 118 gross (4.51net) Bakken-Three Forks wells of which 54 (2.01 net) wells were producing and the remainder were in the process of being drilled or completed.  Permits continue to be issued for drilling units in which Voyager has acreage interests within North Dakota and Montana. The Company expects to participate in approximately 140 gross, 6 net Bakken-Three Forks wells by the end of 2011.

Recent Well Completions

The following table illustrates certain recent well completions in which Voyager has participated with a working interest:

* The working interest noted above are based on Voyager's internal records and may be subject to change by operators' third-party legal counsel in preparing final division order title opinions for each well.

**  The "IP Rate" means the initial production rate for each well expressed in barrels of oil per day, as communicated to us by the respective operator. Initial production is generally the 24-hour "Peak Production Rate," although the calculation may vary from operator to operator. Peak Production Rates may be measured following the initial day of production, depending on operator procedure or well profiles. The IP Rate may be estimated based on other third-party estimates or limited data available at this time. The IP Rate is measured using crude oil production only, without considering any associated natural gas production.

*** Initial Production Rate not provided by operator.

Current Drilling Activity

The following table illustrates 64 Gross (2.50 Net) Bakken or Three Forks wells drilling, awaiting completion or completing in which Voyager is participating with a working interest as of November 8, 2011:

* The working interest noted above are based on Voyager's internal records and may be subject to change by operators' third-party legal counsel in preparing final division order title opinions for each well.

Operating Expenses

During the quarter ended September 30, 2011, Voyager reported total operating expenses of $2,310,151 compared to operating expenses of $690,896 for the three months ended September 30, 2010.  This change in operating expenses between the comparative periods of $1,619,255 primarily resulted from increases in depletion of oil and gas properties and combined production expenses and taxes of $1,223,771 and $454,754, respectively.

This increase in depletion and production-related costs is due primarily to production from 46 gross (1.66 net) producing Bakken and Three Forks wells in the Williston Basin as of September 30, 2011, compared to production from three gross (0.16 net) wells as of September 30, 2010.

Liquidity

As of September 30,2011, Voyager had a cash balance of $22,226,461, compared to $31,596,324 as of June 30, 2011. Net cash used in operating activities was $1,031,927 for the nine months ended September 30, 2011 compared to $1,285,478 for the nine months ended September 30, 2010. 

Financing

In September 2011, we exercised our option to extend the term of our 12.00% Senior Secured Promissory Notes ("Notes") to September 2012. We were required to make an extension payment equal to two percent (2%) of the $15,000,000 principal amount of the Notes, or $300,000. This $300,000 has been capitalized as debt issuance costs on the condensed balance sheet and is being amortized to interest expense over the remaining term of the Notes using the effective interest method. The amortization of the debt issuance costs for the nine months ended September 30, 2011 was $6,575. We may pre-pay the Notes at any time without penalty during the extended term.

Non-GAAP Financial Measures

In addition to reporting financial results as defined under GAAP, Voyager also presents net earnings before interest, income taxes, depreciation, depletion, and amortization (adjusted EBITDA), which is a non-GAAP performance measure. Adjusted EBITDA consists of net earnings after adjustment for those items described in the table below. Adjusted EBITDA does not represent and should not be considered an alternative to GAAP measurements, such as net earnings (loss) (its most comparable GAAP financial measure), and Voyager's calculations thereof may not be comparable to similarly titled measures reported by other companies. By eliminating the items described below, Voyager believes the measure is useful in evaluating its fundamental core operating performance. Voyager also believes that adjusted EBITDA is useful to investors because similar measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies in similar industries. Voyager's management uses adjusted EBITDA to manage its business, including in preparing its annual operating budget and financial projections. Voyager's management does not view adjusted EBITDA in isolation and also uses other measurements, such as net earnings (loss) and revenues to measure operating performance. The following table provides a reconciliation of net earnings (loss), the most directly comparable GAAP measure, to adjusted EBITDA for the periods presented:

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About Voyager Oil & Gas

Voyager Oil & Gas, Inc. is an exploration and production company based in Billings, Montana. Voyager's primary focus is oil shale resource prospects in the continental United States.  Voyager currently controls approximately 143,000 net acres in the following five primary prospect areas:

• 32,000 core net acres targeting the Bakken/Three Forks in North Dakota and Montana;
   
• 10,000 net acres targeting the Niobrara formation in Colorado and Wyoming;
   
• 800 net acres targeting a Red River prospect in Montana;
   
• 33,500 net acres in a joint venture targeting the Heath Shale formation in Musselshell, Petroleum, Garfield and Fergus Counties of Montana; and
   
• 67,000 net acres in a joint venture in the Tiger Ridge gas field in Blaine, Hill and Chouteau Counties of Montana.

For additional information on Voyager Oil & Gas visit the Company's new website at: http://www.voyageroil.com/.

SAFE HARBOR

This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this report, such as statements regarding our future expectations to increase our production are forward-looking statements (often, but not always, using words such as "expects", "anticipates", "plans", "estimates", "potential", "possible", "probable", or "intends", or stating that certain actions, events or results "may", "will", "should", or "could" be taken, occur or be achieved). Forward-looking statements are based on our current expectations and assumptions about future events and involve inherent risks and uncertainties. These risks include, but are not limited to, the volatility in commodity prices for crude oil and natural gas, the presence or recoverability of estimated reserves, the ability to replace reserves, environmental risks, drilling and operating risks, exploration and development risks, competition and government regulation or other actions. Additional information on these and other factors which could affect Voyager's operations or financial results are included in Voyagers' reports on file with the Securities and Exchange Commission. Such factors (many of which are beyond our control) could cause actual results to differ materially from those set forth in the forward-looking statements.. Readers should not place undue reliance on any such forward-looking statements, which are made only as of the date hereof. Voyager undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in Voyager's expectations.