Edge Resources Inc. 3rd Quarter Results (4614G)

TIDMEDG

RNS Number : 4614G

Edge Resources Inc.

04 March 2015

FOR IMMEDIATE RELEASE

TSX Venture Exchange Symbol: EDE

AIM Exchange Symbol: EDG March 4, 2015

EDGE RESOURCES INC. Calgary, Alberta

Edge Resources Inc. Announces Strong Quarterly Performance

Edge Resources Inc. ("Edge" or the "Company") is pleased to announce its unaudited third quarter results for the three month ("Q3 2015") and nine month periods ended December 31, 2014.

Detailed operating and financial results are presented in Edge's unaudited quarterly financial statements and related Management Discussion & Analysis ("MD&A"), which can be accessed on the Company's website (www.edgeres.com) and on SEDAR (www.sedar.com) and are briefly summarised below.

Financial Highlights for the three and nine month periods ending December 31, 2014:

Ø Average production in the quarter increased 20% over the previous quarter to 569 boepd (474 boepd in Q3 2014), despite temporarily shutting-in some heavy oil wells during the construction of the water disposal facility in Eye Hill.

Ø Oil and Natural Gas Sales of $2,608,000 during the quarter (versus $1,932,000 million one-year earlier, with WTI near US$100/bbl) and $8,439,000 for the nine month period, compared to $6,820,000 for the nine month period one-year earlier. Quarter-over-quarter sales increased 11% from $2,357,000 for the period ended September 30, 2014.

Ø Cash generated from operating activities increased 470% to $564,000 versus $99,000 the previous quarter. For the nine month period ending December 31, 2014, cash from operating activities increased 45% to $1,805,000, compared to $1,241,000 for the nine months ended September 30, 2014 and $901,000 for the nine months ended December 31, 2013.

Ø Operating Costs for oil decreased again this quarter to $16.82/bbl, a 21% decrease compared to the previous quarter. This lower operating cost does not yet include the positive impact from the water disposal facility, which became operational after the quarter end.

Ø During the quarter, oil prices dropped materially from WTI US$90/bbl on October 1, 2014 to close at WTI US$53/bbl December 31, 2014, a 41% price slide in a 91 day period.

Brad Nichol, President and CEO of Edge commented, "Despite the headwinds the industry is facing at the moment, our quarterly results were excellent. We generated significant cash from our operations and kept a very tight rein on costs and operational efficiencies. These downturns in our industry allow our team to demonstrate our specialty, which is running a tight, efficient business no matter how hard the wind is blowing in our faces. This quarter, the Company actually achieved production increases, without additional capital expenditure on drilling wells. Additionally, we are looking forward to reaping the savings from our new water disposal facility, which became fully operational in January." Nichol added, "With WTI prices hovering around US$50/bbl, we are unlikely to consume our existing inventory of drilling locations; however, we are keen to acquire production, reserves, land and additional drilling locations when the cost of those acquisitions are expected to be at their lowest in a generation. We expect the competition for assets to be less intense in the heavy and medium oil regimes, where operational expertise is a significant barrier to entry; thus, we intend to remain focused on our heavy and medium oil sandbox where we have already established a clear competitive operational advantage over other potential consolidators."

For more information, visit the company website: www.edgeres.com or contact:

Brad Nichol, President and CEO Phone: [phone]

Sanlam Securities UK Limited (Joint Broker and NOMAD) Phone: [phone]

Simon Clements / James Thomas / Max Bascombe

SP Angel Corporate Finance LLP (Joint Broker) Phone: [phone]

John MacKay / Richard Hail

About Edge Resources Inc.

Edge Resources is focused on developing a balanced portfolio of oil and natural gas assets from properties in Alberta and Saskatchewan, Canada. Management has consistently focused on:

1. Shallow, vertical, conventional programs with reduced capital, operational and geological risks

   2.       Very high or 100% working interests and fully operated assets 
   3.       Pools and horizons with exceptionally high reserves in place 

The management team's very high drilling success rate is based on the safe, efficient deployment of capital and a proven ability to efficiently execute in shallow formations, which gives Edge Resources a sustainable, low-cost, competitive advantage.

Condensed Interim Balance Sheets

(amounts in Canadian dollars)

(unaudited)

 
                                                December 
                                                   31,       March 31, 
                                       Note       2014          2014 
Assets 
Current assets                                     $             $ 
     Cash and cash equivalents                      34,401        39,446 
     Accounts receivable                           749,329     1,401,293 
     Deposits and prepaid expenses                 110,778        86,836 
     Fair value of derivative 
      instruments                                  247,390             - 
Total current assets                             1,141,898     1,527,575 
------------------------------------  -----  -------------  ------------ 
Non-current assets 
     Exploration and evaluation 
      assets                                        74,061        74,061 
     Property, plant and equipment      3       36,068,261    37,768,037 
------------------------------------  -----  -------------  ------------ 
Total non-current assets                        36,142,322    37,842,098 
------------------------------------  -----  -------------  ------------ 
Total assets                                    37,284,220    39,369,673 
------------------------------------  -----  -------------  ------------ 
Liabilities 
Current liabilities 
     Bank overdraft                                      -       858,756 
     Accounts payable and accrued 
      liabilities                                2,469,394     1,832,726 
     Bank debt                          4        5,800,000     5,700,000 
     Fair value of derivative 
      instruments                                        -       667,316 
Total current liabilities                        8,269,394     9,058,798 
Loans payable                           5       10,446,356     9,843,616 
Decommissioning provisions                       7,853,000     6,044,000 
------------------------------------  -----  -------------  ------------ 
Total liabilities                               26,568,750    24,946,414 
------------------------------------  -----  -------------  ------------ 
 
Shareholders' Equity 
Share capital                                   36,111,048    36,094,048 
Contributed surplus                              2,645,237     2,425,249 
Deficit                                       (28,040,815)  (24,096,038) 
------------------------------------  -----  -------------  ------------ 
Total shareholders' equity                      10,715,470    14,423,259 
------------------------------------  -----  -------------  ------------ 
Total liabilities and shareholders' 
 equity                                         37,284,220    39,369,673 
------------------------------------  -----  -------------  ------------ 
 

Condensed Interim Statements of Net Loss and Comprehensive Loss

(amounts in Canadian dollars)

(unaudited)

 
                                              Three months ended            Nine months ended 
                                            December       December      December       December 
                                               31,          31, 2013        31,          31, 2013 
                                    Note       2014                         2014 
 
Revenue 
      Oil and natural gas 
       sales                                $ 2,608,050   $ 1,932,460    $ 8,439,181    $ 6,819,801 
      Royalties                               (520,231)     (314,986)    (1,579,546)    (1,132,406) 
---------------------------------  -----  -------------  ------------  -------------  ------------- 
Revenue, net of royalties                     2,087,819     1,617,474      6,859,635      5,687,395 
---------------------------------  -----  -------------  ------------  -------------  ------------- 
Other income (losses) 
      Realized gain (loss) 
       on financial derivatives                  65,303      (43,219)      (245,084)      (139,548) 
      Unrealized gain (loss) 
       on financial derivatives                 451,500     (190,536)        914,706       (23,564) 
      Gain on disposition 
       of oil and natural gas 
       interests                     3                -             -              -        185,000 
      Loss on settlement of 
       decommissioning provision               (28,379)             -       (28,379)              - 
      Other income                                5,388        12,567         27,580         39,050 
---------------------------------  -----  -------------  ------------  -------------  ------------- 
Total income, before 
 expenses                                     2,581,631     1,396,286      7,528,458      5,748,333 
---------------------------------  -----  -------------  ------------  -------------  ------------- 
Expenses 
      Operating                                 870,643       841,265      2,706,339      2,525,505 
      Transportation                            124,560        88,806        318,773        254,916