DALLAS, Sept. 16 /PRNewswire-FirstCall/ -- Sonoran Energy, Inc. (OTC: SNRN), the independent oil and gas exploration and production company, has filed its Quarterly Report (Form 10-Q) for the quarter ended July 31, 2008 with the US Securities and Exchange Commission, which is accessible through the SEC's forms and filings website at www.sec.gov/edgar.shtml.
Sonoran reported a net loss for the quarter of $1,200,565. The Company continues to demonstrate improvement in its operating results as production increases while operating and administrative costs continue to decline. During the quarter, revenue increased by 77% compared to the previous quarter ending April 30, 2008 due to both increased production and prices. The most significant increase in production comes from our KWB field, as the recent concentration of efforts in this area has more than doubled production.
Loss from operations was essentially flat when compared to the first quarter of 2007, but the prior year's quarter included a non-recurring benefit of $515,389 related to a reduction in the estimated cost of settling certain litigation. Without this item, the current quarter would be showing a decrease in loss from operations of $491,236. Key factors in this improvement were declines in operating costs of $99,833 and general and administrative costs of $264,216. Revenues increased by $232,058 over the same quarter of the prior year.
Despite the recent decline in prices, the current production level provides the company with sufficient cash to meet direct operating costs and to cover general and administrative costs. The Company will continue to seek additional capital to allow it to properly develop its existing assets and identify and acquire assets where it can add value.
Other significant developments during the quarter include:
- Sonoran brought 4 additional wells on line in the KWB field in Central Texas. The project economics were made more attractive by using existing well-bores rather than drilling new wells. Additionally, artificial lift was planned for installation in four gas producers, well stimulations planned for three wells, and several new drilling locations were identified.
- The Company continued its efforts to upgrade its facilities in East Texas. These efforts resulted in higher production levels by improving facilities reliability and production stability. Oil production increased by 37% from 2,551 barrels in last quarter ending April 30, 2008 to 3,495 barrels in the current quarter ending July 31, 2008.
- The Company has continued to lower operating costs and increase production resulting in a 15% decline in lease operating expenses per barrel of oil equivalent from $34.32 last quarter to $28.88 for the current quarter.
Since the end of FY 2008, Sonoran has focused its attention on improving production in Central and East Texas and improving its operating cash. The Company plans to continue its strategy of optimizing and growing the value of its US asset base.
Peter Rosenthal, Chairman & CEO commented: "I am pleased to see that we continue to move in the right direction, with lower costs and the recent increase in production, despite our operational challenges in Louisiana earlier in the year. I am optimistic that we will soon be able to start up the development of our high impact wells in Louisiana and are in advanced discussions with several interested parties for a joint-venture structure to share the risk and financial burden of getting these wells into production."
About Sonoran Energy, Inc.
Sonoran Energy is a US-based independent oil and gas company that explores, develops, and enhances the performance of high value oil and gas opportunities. With a focus on health, safety and the environment, we leverage the Company's innovative organizational alignment model with leading technical partners.
For more information contact:
Tel: (212) 889-4350
This news release may contain forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of such forward-looking statements. Such forward-looking statements are made based upon management's beliefs, as well as assumptions made by, and information currently available to, management pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995.
SOURCE Sonoran Energy, Inc.