LONDON, England , Aug. 27, 2015 /CNW/ - Sea Dragon Energy Inc. ("Sea Dragon" or the "Company") (SDX.V) announces its 2015 second Quarter Financial and Operating Results (the "Quarter" or "Q2 2015").

Second Quarter 2015 Highlights:

Operational Performance

• Production
  • Total gross production for the quarter averaged 8,699 boepd (869 boepd net); of which oil was 7,253 boepd (725 boepd net) and gas and liquids 1,446 boepd (145 boepd net).
• NW Gemsa:
  • Average daily oil sales volumes for the quarter were 719 boepd;
  • Unitization discussions continue with the offset operator;
  • Plans in place for workover and drilling campaign to start in third quarter.
• South Disouq:
  • Evaluated the results of the South Disouq 3D seismic acquisition tender;
  • Finalizing contract review with a view to starting acquisition campaign in fourth quarter.
• South Ramadan
  • Partners awarded seismic reprocessing contract, leading to a potential well being drilled in 2016;
  • Reprocessing commenced, with initial phase expected to take 6 months to complete.

Financial Performance

• Net Revenues
  • Realized Net Revenues of US$1 .8MM ( US$57.44 /boe) and a Netback of US$2 .1MM ( US$32.38 /boe);
• Netback
  • Netback increased 13% in US$ terms and 55% in US$/boe terms vs previous quarter despite lower production volumes as a result of higher oil prices in the quarter and a drop in Opex (thanks to a reversal of certain Shukheir Marine opex costs as part of the settlement following relinquishment);
• Working Capital
  • Working capital of US$5 .8MM, of which US$2 .8MM is current and US$3 .0MM of pledged receivables will remain non-current until the South Disouq 3D seismic work program is completed;
  • Exited the quarter with cash on hand of US$0 .5MM:
  • Collected US$1 .4MM in outstanding receivables, equivalent to 3 months;
  • Following the farmout of South Disouq, US$6 .0MM of bank guarantees were replaced by the farminee and cancelled, with the Company recovering US$6 .0MM of restricted cash and repaying US$6 .9MM of debt;
• Accounted for the Relinquishment of Shukheir Marine
  • Submitted a working capital settlement request to EGPC pursuant to concession relinquishment;
  • Recorded the settlement balance during the quarter which resulted in:
    • Operating income gain of US$0 .8MM;
    • Debtor adjustment of US$0 .1MM.

Subsequent to the Quarter

• Strategic Transaction
  • Press Released the announcement of a Strategic Business Combination between Sea Dragon and Madison PetroGas Ltd;
• Operations
  • Current gross production volumes for oil are 6,803/boepd and for gross gas and liquids 1,475/boepd. The Company's interest is 10%;
  • Held an Operating Committee Meeting (OCM) for the South Disouq concession. Partners approved the acquisition of 300km² of seismic based upon improved tender results;
• Financials
  • Made subsequent repayment towards debt facility, with current bank debt now standing at US$1 .75MM;
  • Collected US$1 .8MM in outstanding receivables.

Paul Welch , President & CEO of Sea Dragon commented:

"This has been an active quarter, with preparation of significant work campaigns at NW Gemsa and South Disouq, recognition of settlement balances pursuant to the Shukheir Marine relinquishment, and reduction of debt pursuant to the South Disouq farmout. In parallel, the Company continued to pursue strategic opportunities and was able to reach an agreement on a business combination with Madison Petrogas that will ultimately solidify the business platform and working capital position of the Company and offer new organic growth opportunities upon completion. Against a difficult backdrop in the sector, the progress of the Company and business climate in Egypt continue to be positive and I look forward to reporting on our progress in subsequent periods".

KEY FINANCIAL & OPERATING HIGHLIGHTS

Consolidated financial statements with Management's Discussion and Analysis ("MD&A") are now available on the Company's website at www.seadragonenergy.com and on SEDAR at www.sedar.com.

Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. In particular, statements concerning the 2015 drilling and capital expenditure programs of NW Gemsa, South Ramadan and South Disouq and the results referenced or implied herein should be viewed as forward-looking statements. 

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements".  All reserves information contained herein as well as the net present value of such reserves should be considered as forward looking statements. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such risks and other factors include, among others, costs and timing of exploration and production development, availability of capital to fund exploration and development and political, social and other risks inherent in carrying on business in Egypt.  There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.

Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law. Although Sea Dragon has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Investors are cautioned that such forward-looking statements involve risks and uncertainties.  Actual results may differ materially from those currently anticipated.  See Sea Dragon's Annual Information Form for the year ended December 31, 2014 for a description of the risks and uncertainties associated with the Company's business, including its exploration activities. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.

Notes to Editors

Sea Dragon Energy is an international exploration and development Oil Company with a focus on North Africa . Activities are currently concentrated in Egypt , with interests in three concessions with short- and long-term potential. For further information please see the Company website at www.seadragonenergy.com or the Company's filed documents at www.sedar.com.

SOURCE Sea Dragon Energy Inc.