Petro Resources Announces Financial Results for Year-End 2007

SOURCE:

Petro Resources Corporation

2008-04-01 10:48:00

Petro Resources Announces Financial Results for Year-End 2007

HOUSTON, TX–( EMWNews – April 1, 2008) – Petro Resources Corporation (AMEX: PRC) (“the

Company”) announces today the financial results of operations for the year

ended December 31, 2007.

For the twelve months ended December 31, 2007


--  Revenue from oil and gas sales increased to $6,920,533 for 2007 as

    compared to $151,416 for 2006.

--  Cash flow from operations of $853,615 which represents an increase of

    $1,608,424 from the same period in 2006.

--  Proved reserves of 2,716,602 barrels of oil equivalent (boe), net of

    production, up from 27,249 boe at year end 2006.

--  Proved reserves consist of 90.6% crude oil and 9.4% natural gas.

--  The present value of the proved reserves discounted at 10% is in

    excess of $54 million.

--  Shareholders equity grew to $39,724,419 as compared to $10,698,758

    for 2006.

    

Partial financial tables are found at the end of this press release. Please

refer to the Company’s Annual Report on Form 10-K for the year ended

December 31, 2007 which was filed on March 31, 2008 for complete financials

and accompanying notes.

Management Comments

Mr. Wayne Hall, Chief Executive Officer of Petro Resources, said: “I am

very pleased with the operational success the Company achieved in 2007.”

Mr. Hall continued, “The significant increase in proved reserves,

production and revenue are primarily the result of our acquisition and

enhanced oil recovery operations in the Williston Basin along with

exploratory drilling success in both the Williston Basin in North Dakota

and the Cinco Terry Field in Texas. Our 2007 results provide a meaningful

benchmark that should make it easier for investors to value the Company.”

About Petro Resources

Petro Resources Corporation is an independent exploration and production

company engaged in the acquisition of properties and leases, exploration,

development, exploitation, and production of oil and natural gas in the

continental United States.

Forward-looking Statements

The statements contained in this press release that are not historical are

“forward-looking statements” within the meaning of Section 27A of the

Securities Act of 1933, as amended (the “Securities Act”), and Section 21E

of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),

including statements, without limitation, regarding the Company’s

expectations, beliefs, intentions or strategies regarding the future. Such

forward-looking statements relate to, among other things: (1) the Company’s

proposed exploration and drilling operations on its various properties, (2)

the expected production and revenue from its various properties, and (3)

estimates regarding the reserve potential of its various properties. These

statements are qualified by important factors that could cause the

Company’s actual results to differ materially from those reflected by the

forward-looking statements. Such factors include but are not limited to:

(1) the Company’s ability to finance the continued exploration and drilling

operations on its various properties, (2) positive confirmation of the

reserves, production and operating expenses associated with its various

properties; and (3) the general risks associated with oil and gas

exploration and development, including those risks and factors described

from time to time in the Company’s reports and registration statements

filed with the Securities and Exchange Commission, including but not

limited to the Company’s Annual Report on Form 10-K for the year ended

December 31, 2007 filed with the SEC on March 31, 2008. The Company

cautions readers not to place undue reliance on any forward-looking

statements. The Company does not undertake, and specifically disclaims any

obligation, to update or revise such statements to reflect new

circumstances or unanticipated events as they occur.


                      PETRO RESOURCES CORPORATION

                      CONSOLIDATED BALANCE SHEETS





                                                  December 31, December 31,

                                                      2007         2006

                        Assets

Current assets

   Cash and cash equivalents                      $ 15,399,547 $  4,285,204

   Accounts receivable                                 924,607       91,344

   Prepaids                                             25,519       11,602

Deferred financing costs, net of amortization of

 $1,513,586                                          2,378,492            -

Total current assets                                18,728,165    4,388,150





Property and equipment

Oil and natural gas properties, successful

 efforts accounting

    Unproved                                        24,676,434    3,728,112

    Proved properties, net                          18,936,428      527,958

Furniture and fixtures, net                            118,354            -

Total property and equipment                        43,731,216    4,256,070



Other assets

   Investment in partnership                         3,892,944    2,293,104

Deposit                                                 10,257       10,257

Total other assets                                   3,903,201    2,303,361



Total Assets                                      $ 66,362,582 $ 10,947,581



           Liabilities and Shareholders' Equity

Current liabilities

   Accounts payable                               $  1,525,474 $    216,870

   Accrued liabilities                                 210,351        1,300

   Stock payable                                        34,068            -

Short-term debt, net of discount of $2,956,206      11,344,136            -

    Total current liabilities                       13,114,029      218,170



Market value of derivatives                          1,832,316            -

Asset retirement obligation                          1,434,114       30,653

Total liabilities                                   16,380,459      248,823



Minority interest                                    3,025,375            -



Redeemable Preferred Stock

Series A Convertible Preferred Stock, $3 stated

 value, issued 2,410,776 shares; cumulative,

 dividend rate 10% per annum with liquidation

 preferences                                         7,232,329            -



Shareholders' equity

Preferred stock, $0.01 par value; 10,000,000

 shares authorized, 2,410,776 shares of Series A

 Preferred Stock issued and outstanding as of

 December 31, 2007 (reported above)                          -            -



Common stock, $0.01 par value; 100,000,000 shares

 authorized, 36,599,372 and 19,677,317 shares

 issued and outstanding as of December 31, 2007

 and December 31, 2006 respectively                    365,994      196,773

  Additional paid in capital                        49,723,515   14,816,718

Accumulated deficit                                (10,365,090)

(4,314,733)

Total shareholders' equity                          39,724,419   10,698,758



Total Liabilities and Shareholders' Equity        $ 66,362,582 $ 10,947,581









                          PETRO RESOURCES CORPORATION

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY





                   Common Stock       Additional                 Total

                 Number                Paid-in    Accumulated Shareholders'

               of Shares    Total      Capital      Deficit      Equity



Balance,

 December 31,

 2005          16,191,317    161,913    5,038,037    (415,748)   4,784,202



Shares and

 warrants sold

 in private

 placement,

 net            3,486,000     34,860    8,180,140           -    8,215,000

Stock options

 issued to the

 board of

 directors                              1,598,541                1,598,541

Net loss for

 the year

 ended

 December 31,

 2006                   -          -            -  (3,898,985)  (3,898,985)

Balance,

 December 31,

 2006          19,677,317 $  196,773 $ 14,816,718 $(4,314,733) $10,698,758



Exchange of

 preferred

 stock for

 common

 stockand      (1,573,800)   (15,738)  (4,705,663)          -   (4,721,401)

 warrants

Legal expense

 on preferred

 stock                  -          -      (14,705)          -      (14,705)

Preferred

 stock

 dividend               -          -            -    (510,928)    (510,928)

Restricted

 stock issued

 to Chief

 Financial

 Officer           25,000        250       62,750           -       63,000

Shares issued

 for purchase

 of property    3,144,655     31,447   10,691,827           -   10,723,274

Stock options

 issued for

 consulting

 services               -          -       58,000           -       58,000

Stock options

 to board of

 directors              -          -      913,701           -      913,701

Stock options

 to Chief

 Financial

 Officer                -          -       83,135           -       83,135

Stock issued

 for cash      15,326,200    153,262   28,353,470           -   28,506,732

Offering costs

 to issue

 stock                  -          -     (535,718)          -     (535,718)

Net loss for

 the year

 ended

 December 31,

 2007                   -          -            -  (5,539,429)  (5,539,429)

Balance,

 December 31,

 2007          36,599,372    365,994   49,723,515 (10,365,090)  39,724,419









                        PETRO RESOURCES CORPORATION

                  CONSOLIDATED STATEMENTS OF OPERATIONS







                                                      Year Ended

                                                      December 31

                                                2007                2006

 Revenue

   Oil and gas sales                      $  6,920,533        $    151,416

   Other income                                100,000                   -

 Gain (loss) on sale of property                     -           1,394,754

                                             7,020,533           1,546,170

 Expenses

   Lease operating expenses                  3,510,521              55,172

   Exploration                               1,767,898           2,150,729

   Impairment of oil & gas properties           95,272             614,770

   Depreciation, depletion and

    accretion                                1,781,263             304,396

 General and administrative                  2,751,647           2,602,632



 Total expenses                              9,906,601           5,727,699



  Loss from operations                      (2,886,068)         (4,181,529)



 Other income and (expense)

   Interest income                             171,557             286,564

   Interest expense                           (743,023)             (4,020)

 Loss on derivative contracts               (2,458,165)                  -



  Loss before minority interest             (5,915,699)         (3,898,985)



   Minority interest                           376,270                   -



 Net loss                                   (5,539,429)         (3,898,985)



 Dividend on Series A Convertible

  Preferred                                   (510,928)                  -



 Net loss attibutable to common

  stockholders                            $ (6,050,357)       $ (3,898,985)



 Earnings per common share

   Basic and diluted                      $      (0.28)       $      (0.20)



 Weighted average number of common

  shares outstanding

   Basic and diluted                        21,253,995          19,201,991









                        PETRO RESOURCES CORPORATION

                  CONSOLIDATED STATEMENTS OF CASH FLOWS





                                                      Year Ended

                                                      December 31

                                                2007              2006



Cash flows from operating activities

Net loss                                     $ (5,539,429)   $ (3,898,985)

Adjustments to reconcile net income to net

 cash (used in) provided by operating

 activities:

Minority interest                                (376,270)               -

Depletion, depreciation, and accretion          1,781,263          304,396

Amortization included in interest expense         468,938                -

Amortization of insurance expense                 125,972                -

Impairment                                         95,272          614,770

Dry hole costs                                  1,310,988        2,141,907

Issuance of common stock and stock options

 for services                                   1,117,836        1,598,541

Gain on sale of property                                -       (1,394,754)

Unrealized loss on derivative contracts         1,832,316                -

Changes in operating assets and

 liabilities:

Accounts receivable and accrued revenue          (833,263)         (91,344)

Prepaid expenses                                        -          (11,602)

Accounts payable                                  626,873           77,726

Accrued expenses                                  243,119          (95,464)

Net cash provided by (used in) operating

 activities                                       853,615         (754,809)



Cash flows from investing activities

Capital expenditures                          (14,266,262)      (8,240,421)

Acquisition of Williston Basin                (14,097,855)                -

Deposits                                                -          (10,257)

Investment in partnership                      (1,599,840)      (2,293,104)

Proceeds from sale of properties                        -        3,953,785

Net cash used in investing activities         (29,963,957)      (6,589,997)



Cash flows from financing activities

Proceeds from sale of common stock, net        27,971,014        8,215,000

Repayment of officer advances                           -           (2,500)

Issuance of preferred stock                     2,000,000                -

Costs to issue preferred stock                    (14,705)               -

Financing costs                                (3,892,078)               -

Proceeds from loan                             28,534,442                -

Principal payment on loan                     (14,373,988)               -

Net cash provided by financing activities      40,224,685        8,212,500



Net increase (decrease) in cash                11,114,343          867,694

Cash, beginning of period                       4,285,204        3,417,510



Cash, end of period                        $   15,399,547    $   4,285,204



Supplemental disclosure of cash flow

 information

Cash paid for interest                     $    1,944,388    $       4,020

Cash paid for federal income taxes                      -                -



Non-cash transactions

Common stock issued in acquisition of

 Williston Basin properties                    10,723,274                -

Royalty and minority interest issued in

 connection with debt                           4,837,429                -

Preferred stock dividend paid in preferred

 shares                                           510,928                -

Cancellation of common stock in exchange

 for preferred stock                            4,721,401                -

Capitalized interest in oil and gas

 properties                                     1,675,802                -

Property and equipment included in

 accounts payable                          $      681,731    $           -





Contact:
Brad Holmes
Investor Relations
(713) 654-4009 or
Don Kirkendall, President
(832) 369-6986

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