CALGARY, ALBERTA--(Marketwire - March 8, 2013) - Tuscany Energy Ltd. (News - Market indicators) ("Tuscany" or the "Company") announces that it has filed its 2012 MD&A, Financial Statements and Annual Information Form on SEDAR. These are also available on the Company's website at www.tuscanyenergy.com.

For the year ended December 31, 2012, Tuscany reported significant production and revenue gains over the prior year, and exited the year with no debt.

The key focus for Tuscany during 2012 was to:

• increase and optimize its heavy oil production, and
• maintain a positive working capital position.

Due to the weakness of heavy oil prices throughout the year, it was found prudent to focus the bulk of the Company's capital expenditures on upgrading its battery and water disposal facilities. As a result, the Company was able to increase its oil production level at low costs, while simultaneously lowering its future operating costs, due to reduced trucking.

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Operations

During 2012, Tuscany drilled three horizontal heavy oil wells at its Macklin, Saskatchewan field. The Company now has a total of 19 (net 11.05) horizontal heavy oil wells producing from its key fields in Saskatchewan, with 12 wells at Evesham (7.2 net wells) and 7 wells at Macklin (3.85 net wells).

At the Evesham field, third quarter water disposal upgrading encompassed the deepening and re-completion of a vertical well for water disposal and the connection of this well by pipeline to existing infrastructure. The Macklin expansion in the third quarter included the tie in of an existing water disposal well to the main battery, by pipeline, and reconfiguration of the battery. 

As a result of continuing weak heavy oil prices in 2013, we have deferred drilling operations until late spring . The Company plans to further increase its ability to handle water at the Evesham field which will result in increased fluid production and ultimately an increase in oil production early this year.

Financial

For the year ended December 31, 2012, revenues increased to $7.5 million compared with $6.1 million in the prior year. Cash flow from operations decreased to $2.7 million from $3.2 million in 2011, due to higher operating costs.

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For the three month period, Tuscany's revenues net of royalties decreased to $1.7 million compared with $2.5 million in Q4 2011. This decrease was primarily due to a decline in oil prices compared with Q4 2011, and a reduction of processing fee revenues, partially offset by increased oil and gas production. Cash flow from operations for Q4 2012 decreased to $796,000 compared with $1.7 million in Q4 2011. The decrease in cash flow resulted primarily from a drop in heavy oil prices from $87.78 per barrel to $61.81 per barrel during the quarter.

Tuscany incurred $256,000 of net capital expenditures during the quarter compared with $3.0 million for Q4 2011. For the year ended December 31, 2012, net capital spending was $4.0 million compared with $7.8 million in the prior year. Capital expenditures for the three and twelve month periods ended December 31, 2012, were financed from cash flow from operations, proceeds from sales of Magnum Hunter shares, and non-core property sales.

At December 31, 2012, Tuscany had positive working capital of $380,000 compared with net debt of $447,000 at the beginning of the year. The Company also had access to a credit facility of $8.5 million, which remained undrawn.

Production

For the year ended December 31, 2012, the Company's average production increased to 354 BOEd from 247 BOEd in the prior year. The Company's average Q4 2012 production increased to 372 BOEd compared with 332 BOEd in Q4 2011.

Outlook

Tuscany anticipates 2013 average prices for its heavy oil production in excess of $60 per barrel. At these prices the Company believes that its heavy oil projects will have positive economics which would warrant continued development. However, heavy oil prices realized in December 2012 of approximately $45 per barrel and weak January 2013 prices has resulted in the delay of winter drilling activities. Tuscany has paused development drilling until after spring breakup. By then Management expects heavy oil prices to have strengthened.

In the near term, Tuscany is focused on capital maintenance, reducing operating costs and sustaining production levels. In addition, the Company believes it can currently achieve growth, once heavy oil prices recover, by continuing to develop its Dina oil properties at Macklin and Evesham from working capital and operating cash flows, while minimizing the reliance on bank debt to finance future capital expenditures.

Management believes longer term growth will result from the development of new production and reserves from Tuscany's additional heavy oil prospects, which have been developed over the past three years.

ADVISORY: Certain information regarding the Company in this News Release including management's assessment of future plans and operations may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, wells not performing as expected, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhausted. Additional information on these and other factors that could effect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at the Company's website (www.tuscanyenergy.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Where amounts are expressed on a barrel of oil equivalent (boe) basis, natural gas volumes have been converted to barrels of oil at six thousand cubic feet (mcf) per barrel (bbl). Boe figures may be misleading, particularly if used in isolation. A boe conversion of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References to oil in this discussion include crude oil and natural gas liquids (NGLs).