Traverse Energy Announces 2012 First Quarter Results

CALGARY, ALBERTA--(Marketwire - May 10, 2012) - Traverse Energy Ltd. ("Traverse" or "the Company") (TSX VENTURE:TVL) presents financial and operating results for the three months ended March 31, 2012. Unless otherwise stated, the volume conversion of natural gas to barrel of oil equivalent (BOE) is presented on the basis of 6 thousand cubic feet of natural gas being equal to 1 barrel of oil. This conversion ratio is based upon an energy equivalent conversion method primarily applicable at the burner tip and does not represent value equivalence at the wellhead. BOE figures may be misleading, particularly if used in isolation.

HIGHLIGHTS		Three months ended
(Unaudited)		March 31, 2012	Dec. 31, 2011		March 31, 2011
Financial ($ thousands, except per share amounts)
Revenue		1,828	1,569		984
Funds flow from operations		1,217	936		404
	Per share - basic and diluted	0.03	0.02		0.01
Cash flow from operations		1,054	814		768
	(including changes in working capital)
	Per share - basic and diluted	0.02	0.02		0.02
Net income (loss)		357	(584	)	(7	)
	Per share - basic and diluted	0.01	(0.01	)	0.00
Capital expenditures, net of dispositions		2,483	3,279		878
Total assets		18,820	19,781		10,960
Working capital		1,266	2,532		1,924
Common shares
	Outstanding (millions)	42.2	42.2		32.0
	Weighted average (millions)	42.2	40.3		31.9
Operations (units as noted)
Average production
	Natural gas (mcf/day)	697	424		403
	Oil and NGL (bbls/day)	213	172		120
	Working interest production (BOE/day)	207	167		161
	Royalty income (BOE/day)	122	76		26
	Total (BOE/day)	329	243		187
Average sales price
	Natural gas ($/mcf)	2.33	3.28		3.96
	Oil and NGL ($/bbl)	86.88	91.07		78.02
Operating netback ($/BOE)
	Petroleum and natural gas revenue	52.10	67.62		62.53
	Royalties	3.72	8.08		3.78
	Operating and transportation costs	15.03	20.92		15.98
	Working interest operating netback ($/BOE)	33.35	38.62		42.77
	Royalty income netback ($/BOE)	76.33	76.03		33.61
	Total Company operating netback ($/BOE)	49.34	50.39		41.49

Non-GAAP measures

Management uses funds flow from operations and operating netback to analyze operating performance. These measures are commonly utilized in the oil and gas industry and are considered informative for management and stakeholders. The reconciliation between cash flow from operations and funds flow from operations can be found in the statement of cash flows in the financial statements with funds flow from operations calculated before non-cash working capital and asset retirement expenditures. Management believes that in addition to net income (loss), funds flow from operations is a useful supplemental measure as it provides an indication of Traverse's operating performance. Operating netback reflects petroleum and natural gas revenues less royalties, operating and transportation costs and is calculated on a per unit basis. Investors should be cautioned, however, that these measures may not be comparable to measures reported by other companies nor should they be construed as an alternative to cash flow from operations or other measures of financial performance calculated in accordance with GAAP.

Operations Review

Most of the first quarter activities focused on the Company's oil property at Turin which totals in excess of 9,000 acres. Further expansion of the Turin battery was completed. This included the addition of a water disposal and injection facility and a treater capable of handling up to 2,500 barrels of fluid per day. Future drilling can now be accommodated at the facility without further expansion. Traverse shot a 3D seismic survey over a part of the eastern portion of the Turin property. In addition, five 2D seismic lines were shot adjacent to the 3D survey and one 2D line was shot over the western part of the property. This data has now been processed and interpreted resulting in the identification of a number of drilling targets. Traverse is in the process of licensing 5 wells to test coincidental seismic and geological targets. Two of the wells are exploratory; the remaining 3 are development locations. The Company estimates that drilling will commence late in the second quarter of 2012.

In the Carbon area Traverse tied in a horizontal well drilled during the fourth quarter of 2011. The well was projected to drill a 1,000 meter horizontal section in the Pekisko formation but was completed in a 450 meter open hole section. The well was placed on production in January 2012 and is currently producing 45 BOE per day (30% oil). Traverse's land holdings in the greater Carbon area total 40,000 acres at a 100% working interest.

In the Brazeau area of West Central Alberta, an industry partner commenced production in September, 2011 from three horizontal Cardium wells in which the Company has a gross overriding royalty interest. A fourth well commenced production in November, 2011. Traverse's royalty is 5 to 10 percent on oil dependent on production rates and 10 percent of natural gas and associated liquids in 10 sections (6,400 acres). The operator has now drilled nine wells on the Traverse lands. Five additional wells were placed on production during the first quarter of 2012. The production from this property is light oil with associated natural gas and natural gas liquids. The March 2012 production was 125 barrels of oil per day net to Traverse.

At March 31, 2012 undeveloped land holdings totalled 160,500 gross (157,000 net) acres. In 2012, the Company will focus on its existing light oil properties in Central and Southern Alberta. Drilling is planned in the Turin and greater Carbon areas, targeting light to medium gravity oil with associated natural gas. Further drilling in other areas will depend on the availability of working capital. The Company has set an initial budget of up to $15 million for 2012 to be funded from working capital, cash flow and new equity issues and debt where appropriate.

Engagement of Investor Relations Firm

The Company is pleased to announce that it has retained Noble Investment Corp. ("Noble") to provide strategic investor relations and communication services. Noble has been retained for a period of 12 months, effective May 1, 2012 and ending April 30, 2013. Noble will be responsible for the dissemination of corporate data packages, arranging corporate presentations and analyst communications and assisting with shareholder enquiries regarding the Company.

Noble will receive $6,000 per month in remuneration and be reimbursed for all approved expenses. In addition, the Company has granted Noble stock options to acquire 300,000 common shares in the capital of the Company ("Common Shares") at an exercise price of $0.80 per Common Share. The stock options will vest as to one-third on the date of grant; one-third on the date six months from the date of grant; and one-third 12 months from the date of grant.

Other than as described above, neither Noble nor any of its principals have an ownership interest, directly or indirectly, in the Company or its securities, nor has the Company granted Noble or its principals any rights to acquire any such interests.

Noble is a full service investor relations firm headed by Dan Patience. Noble has been conducting investor relations campaigns since 1994 and provides strategic communication services to a diverse range of public companies. Noble also provides comprehensive investor relations representation to a wide and diverse Canadian audience.

Forward-looking information

This press release contains forward-looking information. Forward-looking information is based upon the opinions, expectations and estimates of management as at the date the information is provided and, in some cases, information received from or disseminated by third parties. In particular, the Company's statements with respect to drilling commencing late in the second quarter of 2012; the Company's focus in 2012 on its existing light oil properties in Central and Southern Alberta and planned drilling for the remainder of 2012 contain forward-looking information. This forward-looking information is subject to a variety of substantial known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking information. The Company's Annual Information Form filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describes the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference.

The forward-looking information contained in this press release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Further details on the Company including the March 31, 2012 unaudited interim financial statements, the related management's discussion and analysis and Annual Information Form are available on the Company's website and SEDAR.