Canadian oil and natural gas company Crocotta Energy Inc. (CTA.TO) reported Tuesday a net loss in its third quarter that slipped from prior year's profit, as revenues were hurt by lower oil and gas prices. Meanwhile, production grew 33% in the quarter on the acquisition of Salvo Energy corp.
Third-quarter net loss was C$3.92 million or C$0.06 per share, compared to net earnings of C$1.23 million or C$0.04 per share in the year ago quarter.
Funds from operations, or FFO, for the quarter fell 77% to C$1.75 million from C$7.72 million in the same quarter last year. On a per share basis, FFO plunged 87% to C$0.03 from C$0.23 a year ago, reflecting a 65% rise in share count.
Revenues were C$6.56 million for the quarter, down from C$10.78 million in the prior year quarter. Adjusting for royalties, oil and natural gas sales for the quarter declined 36% to C$8.65 million from C$13.55 million a year ago.
The company attributed the decline in revenue to lower oil, NGLs, and natural gas commodity prices, partially offset by the increase in production as a result of the acquisition of Salvo Energy.
Oil and NGLs revenues declined 27% to C$5.59 million from prior year's C$7.64 million. Natural gas revenues plunged 48% to C$3.06 million from C$5.91 million last year.
In the quarter, the company's production was 2,668 barrel of oil equivalent per day, or boe/d, up 33% from 2,007 boe/d last year, helped by the acquisition of Salvo Energy on August 13, 2009, which was producing approximately 1,550 boe/d at the date of acquisition.
Oil and liquids production rose 30% to 1,000 barrels per day, or bbls/d from 767 bbls/d a year earlier. Production of natural gas also grew 35% to 10,005 mcf/d from prior year's 7,438 mcf/d.
Average sales price was C$35.25 per barrel of oil equivalent, down 52% from C$73.40 last year. Oil and NGLs price fell 44% to C$60.81 per barrel, and natural gas price plunged 62% to C$3.32 per mcf.
For the nine months of fiscal 2009, Crocotta Energy's net loss was C$10.42 million or C$0.22 per share, compared to last year's profit of C$5.49 million or C$0.17 per share. FFO for the period fell 80% to C$5.35 million from C$27.14 million in 2008, and FFO per share declined 87% to C$0.11 from C$0.82 a year ago. Oil and natural gas sales for the period dropped 52% to C$22.07 million from C$45.74 million a year earlier.
Crocotta noted that its production profile remained constant in 2009, comprised of 63% natural gas and 37% oil and NGLs, which was equivalent to the production profile for fiscal 2008.
The company said in a statement, "We will be looking for the direction of natural gas prices over the next few weeks as weather will be the primary driver for natural gas prices. The high natural gas storage level will need to be drawn down at a reasonable pace prior to year-end for prices to stabilize higher than the current spot market. Over the longer term, prices for natural gas should still trend higher as drilling continues to be at low levels in both Canada and the United States. Crocotta will set budget levels for 2010 once we have a clearer direction on natural gas prices."
CTA.TO closed Monday's regular trading session at C$1.34, up C$0.02 from the previous day's close.
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