Tri-Valley Corporation Reports 11% Increase in Revenues from Oil and Gas
Operations in the First Quarter of 2011
Stockholders’ Equity Increased 50% Over 2010 Year End
Conference Call Today at 4:30 p.m. Eastern Time
Bakersfield, CA, May 9, 2011 – Tri-Valley Corporation (NYSE Amex: TIV) today announced its financial results for the first quarter ended March 31, 2011. Oil and gas revenues grew 11% to $658,000 in the first quarter of 2011 compared with $590,000 in the first quarter of 2010, due to higher oil prices and increased oil production. Net production in the recent first quarter totaled 7,004 barrels of oil compared with 6,110 barrels in the same quarter of 2010, an increase of 15%. Net production costs increased 7% in the 2011 first quarter compared with the same quarter a year ago.
“These results demonstrate the strong leverage potential of our oil and gas business model, following the initiatives we put in place last year to increase oil production and reduce costs,” said Maston N. Cunningham, Tri-Valley’s President and CEO. “Oil and gas revenues from operations increased 11% in the quarter with a corresponding increase in production expenses of just 7%. With higher oil prices and our success in driving additional production at both our Pleasant Valley and Claflin oil projects, we anticipate continued revenue growth and improvement on our bottom-line during 2011.”
“In Alaska, we continue to move forward on our efforts to find operational and financial partners to assist in the exploration and development of our two gold exploration properties – Richardson and Shorty Creek. Finally, with the successful raise of capital during the quarter through the sale of common stock under our at-the-market (“ATM”) equity offering programs with C. K. Cooper & Company, we ended the first quarter with $1.6 million in cash, an increase of $1 million from the level at the end of December 2010, and stockholders’ equity of $9.2 million at March 31, 2011, compared with $6.2 million and $0.9 million at December 31, 2010, and March 31, 2010, respectively.”
Operational highlights during the first quarter of 2011 included:
| ● | Implemented actions to reduce general and administrative costs by approximately $1.0 million annually, |
| ● | Exchanged and cancelled the remaining Series A and Series B warrants associated with the April 6, 2010, registered direct offering, reducing exposure to future dilution and providing financial flexibility, |
| ● | Embarked on the first phase of the extended development and enhanced oil production at the Claflin oil project in the Edison oil field near Bakersfield, California, |
| ● | Completed two at-the-market (“ATM”) equity offering programs with C.K. Cooper & Company acting as agent, raising gross proceeds that in aggregate totaled $6.0 million with total net proceeds of $5.6 million, |
| ● | Reached a favorable settlement of lease termination litigation brought in 2009 by the lessors of the Lenox Ranch oil and gas leases located in the Pleasant Valley oil sands project, near Oxnard, California, and |
| ● | Resolved the continued listing deficiency with the NYSE Amex. |
“We continued to make progress on several key initiatives in the second quarter. We completed a $5 million private placement that allows us to continue the development of Claflin. As of April 30, 2011, we had $6.3 million in cash. We completed Phase One of our Claflin project, drilling 8 of 22 new wells planned at the project and expect to begin production from some of the new wells later this month following an initial steam injection cycle. At Pleasant Valley, we continue the preparations for the implementation of SAGD this year that we believe will result in improved oil recovery. We remain committed to our goal of generating 1,000 barrels of oil per day from our two oil fields in California by year-end.”
“Discussions with representatives from our OPUS partnership are ongoing, and we hope to reach an agreement this year that will facilitate the financing and development of the Pleasant Valley oil sands project which will accrete value to both Tri-Valley and our OPUS partners. We are optimistic that with an improved financial performance, outlook for continued growth, and a path towards the monetization of our Alaskan mineral assets, we should be well-positioned to generate enhanced valuation for our shareholders,” concluded Mr. Cunningham.
First Quarter Financial Highlights
Total revenues for the first quarter of 2011 increased to $721,000 compared with $1.2 million in the first quarter of 2010, which included $591,000 from gains on the sales of assets. Oil and gas revenues increased 11% to $658,000.
Total costs and expenses decreased 6% to $3.2 million in the first quarter of 2011 compared with $3.4 million in the prior year’s first quarter. The decrease was largely due to a significant reduction in warrant expense, as well as, lower mining exploration expenses and depreciation and interest expense, partially offset by an increase in general and administrative expenses. The increase in general and administrative expense reflected higher legal expenses from ongoing litigation related to our Pleasant Valley leases and capital formation fees incurred in the recent first quarter, partially offset by lower total salary and benefits expenses, attributable to cost reductions initiated during the first quarter of 2010. Oil production costs increased 7% in the first quarter.
The net loss in the recent first quarter was $2.5 million, or $0.05 per share, compared with a net loss of $2.2 million, or $0.07 per share in the first quarter of 2010. The increase in the net loss of $275,000 in the 2011 first quarter was primarily attributable to the lack of comparable gains on sales of assets in the prior year’s first quarter.
Conference Call
The Company has scheduled a conference call to discuss its first quarter 2011 results and current business developments today, May 9, 2011, at 4:30 p.m. ET. To access the call, please dial 877-941-0844. To access the live webcast of the call, visit Tri-Valley’s website at www.tri-valleycorp.com.
An audio replay will be available for seven days following the call at 800-406-7325. The password required to access the replay is 4436246#. An archived webcast will also be available at www.tri-valleycorp.com.
About Tri-Valley
Tri-Valley Corporation explores for and produces oil and natural gas in California and has two exploration-stage gold properties in Alaska. Tri-Valley is incorporated in Delaware and is publicly traded on the NYSE Amex exchange under the symbol "TIV." Our Company website, which includes all SEC filings, is www.tri-valleycorp.com.
Note Regarding Forward-Looking Statements
All statements contained in this press release that refer to future events or other non-historical matters are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “hope,” “intends,” “may,” “plans,” “potential,” or “predicts,” or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions based on management’s expectations as of the date of this press release, and involve known and unknown risks, uncertainties and other factors, including: our ability to obtain additional funding; fluctuations in oil and natural gas prices; imprecise estimates of oil reserves; drilling hazards such as equipment failures, fires, explosions, blow-outs, and pipe failure; shortages or delays in the delivery of drilling rigs and other equipment; problems in delivery to market; adverse weather conditions; compliance with governmental and regulatory requirements; geographical concentration of oil and gas reserves in the State of California; changes in, or inability to enter into or maintain, strategic and joint venture partnerships; pending and threatened lawsuits against us; potential rescission rights stemming from our potential violation of Section 5 of the Securities Act of 1933; and such other risks and factors that are discussed in our filings with the Securities and Exchange Commission, or SEC, from time to time, including, but not limited to, under “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 1A. Risk Factors,” contained in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed with the SEC on May 9, 2011, and under “Part I, Item 1A. Risk Factors” and “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2010, filed with the SEC on March 22, 2011. Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this press release to conform such statements to actual results or to reflect events or circumstances occurring after the date of this press release.
| Company Contacts: | Investor Contacts: | Media Contact: |
| John Durbin | Doug Sherk/Jenifer Kirtland | Chris Gale |
| (661) 864-0500 | EVC Group, Inc. | EVC Group, Inc. |
| jdurbin@tri-valleycorp.com | (415) 896-6820 | (646) 201-5431 |
| | dsherk@evcgroup.com | cgale@evcgroup.com |
| | jkirtland@evcgroup.com | |
