Insignia Energy Reports Q4 Results, Provides Outlook

Insignia Energy Ltd. (ISN.TO) said fourth quarter production averaged 3,595 boe/d consisting of 997 bbls/d of oil and natural gas liquids (28% of production) and 15,587 mcf/d of natural gas, which represented a 2.4% increase from the same quarter in 2011 and a 4.6% increase on a fully diluted per share basis. It also represented the company's highest quarterly average since inception. In addition, funds from operations for the fourth quarter were $5.6 million ($0.10/share), up 81% from the previous quarter.

Outlook: "While 2012 was a challenging year for natural gas prices, trading at its lowest yearly average price since 1998, 2013 natural gas prices appear to be showing signs of recovery with improved supply/demand fundamentals. That said, as with the overall world economy, this recovery is both volatile and conservative.

"Notwithstanding these challenges, during the past several years including 2012, Insignia has taken a conservative approach to both its capital spending and managing its balance sheet. We believe this has been a prudent strategy in order to position the company for long term sustainability and ultimately to maximize shareholder value over the longer term. In short, in this period of low natural gas prices, it has not been our intention to accelerate the production of our quality, long life natural gas reserves at the expense of participating in marginally economic projects or eroding our balance sheet.

"This conservative approach has allowed us to preserve the integrity of the company's reserves which have stayed relatively flat over the past four years. During this period, we have also actively managed our land base through opportunistic dispositions and tuck in, strategic acquisitions in each of our core areas. Through these acquisitions, we have expanded our potential drilling inventory by over 30% or from 150 net locations at the end of 2011 to over 200 net locations currently. In addition, we would note that of these locations only 26 or 13% are included in our year end 2012 reserves report which suggests that there is extensive upside on our land base."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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