COSTA Energy Inc. (TSX Venture Exchange: COE) has released its financial and operating results for the three and nine months ended September 30, 2007.
Three months ended September 30, 2007 (Unaudited)
Production and Prices
Natural gas sales (mcf/d) - 355
Oil and NGL sales (bbls/d) - 21
Average daily sales 6:1 (boe/d) - 80
Average natural gas price ($/mcf) - $6.92
Average oil and NGL price ($/bbl) - $71.54
Financial ($)
Oil and gas revenue ($000's) - $362
Net loss ($000's) - $(579)
Per share, basic and diluted - $(0.02)
Shares
Weighted average basic and diluted - 39,851,682
Outstanding at period end - 43,260,735
Financial
COSTA had a net loss of $0.58 million for the three months ended September 30, 2007, including a ceiling test impairment of $0.30 million. The impairment was due to a lack of any reserve additions and reduced gas prices in the October 1, 2007 price deck used to value reserves at September 30, 2007. COSTA had a deficit of $9.34 million and a working capital deficiency of $0.96 million (including $883,000 principal amount of subordinated debentures) at the end of the third quarter of 2007.
COSTA has reduced its G&A, restricted its capital program and is looking at a combination of property sales and/or other financings to continue to work on its financial position.
Outlook
Costa has been marketing the sale of our Pembina and Veteran properties and it is expected that a sale will be completed in the fourth quarter of this year. The Company is negotiating a farm-out for the drilling of the three wells at Alderson before the end of this year. A farm-out agreement is also being negotiated on a prospect north of Edmonton that would be drilled in the first quarter of 2008.
The Company will continue to evaluate the sale of fully developed properties; and the sale or farm-out of properties that are not consistent with the Company's current conservative risk profile. -- www.cnxmarketlink.com
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