CALGARY,
Nov. 28, 2014 /CNW/ - ArPetrol
Ltd. ("ArPetrol" or the "Company") (TSXV: RPT) announces its
financial and operating results for the three and nine months ended
September 30, 2014 and provides an
operational update on activities to date this year as well as an
outlook for the remainder of 2014 and 2015. The Company's interim
condensed consolidated financial statements and management's
discussion and analysis (MD&A) for the reporting period have
been filed on SEDAR at www.sedar.com and posted on the Company's
website at www.arpetrol.com.
Summary for the Third Quarter 2014
Operating and Financial
ArPetrol's working capital position is
$1.8 million at the end of the third
quarter of 2014, with an increase of $0.4
million from the second quarter of the year. This is a
significant improvement compared to a deficit of $0.8 million at the end of 2013.
The Company had drawn $1.0
million on its short-term loan at the end of the third
quarter 2014. Subsequent to the quarter end the Company made
a $500,000 loan repayment reducing
the balance of the short-term loan to $0.5
million. The remaining amount will be repaid by the end of
2014.
During the third quarter of 2014 the Company
processed 76 million cubic feet (Mmcf) of third-party gas
generating $2.2 million of revenue
and $1.1 million of operating netback
from processing. Processing revenue has been consistent at
around $2 million per quarter since
the third quarter of 2013 when the Company signed its new gas
processing contract.
ArPetrol's third quarter production averaged 244
barrels of oil equivalent per day (boe/d). This is an
increase of 26 boe/d from the second quarter of 2014. Second
quarter 2014 production was affected by equipment issues early in
the quarter. Third-quarter 2014 production was also
positively affected by a change to the gas lift configuration on
our wells. Fourth quarter 2014 production to date is
averaging over 240 boe/d.
The third quarter 2014 average realized natural
gas price was $4.83 per thousand
cubic feet (Mcf), $0.46 per Mcf
higher than the price realized in the second quarter of 2014 and
$0.88 per Mcf higher than the third
quarter of 2013. This higher price during 2014 reflects the
Company's new gas sales contract and changing exchange
rates.
The average price realized for natural gas
liquids (NGLs) in the quarter was $84.29 per barrel (bbl), an increase of
$2.11 per bbl over the second quarter
of 2014.
There were $6,241
in capital expenditures during the quarter.
Summary of Results
(Cdn$ except shares
outstanding
and per
boe1 amounts)
|
Three Months
Ended
September
30,
|
Nine Months
Ended
September
30,
|
|
2014
|
2013
|
2014
|
2013
|
Financial
|
|
|
|
|
Production
sales
|
769,086
|
513,717
|
2,051,441
|
1,563,031
|
Processing
sales
|
2,234,764
|
2,211,991
|
6,536,899
|
4,381,509
|
Funds flow from (used
in) operations1
|
289,581
|
(2,644,813)
|
977,964
|
(1,357,619)
|
Cash from (used in)
operating activities
|
491,997
|
(3,541,000)
|
502,657
|
(1,793,743)
|
Comprehensive (loss)
income
|
67,436
|
(4,245,285)
|
(133,469)
|
(3,236,478)
|
Fixed asset
expenditures
|
6,241
|
34,898
|
148,155
|
2,015,258
|
Weighted average
shares outstanding
|
|
|
|
|
– basic and diluted
2,3
|
22,901,468
|
22,901,468
|
22,901,468
|
22,901,468
|
|
|
|
|
|
Operations
|
|
|
|
|
Third Party
Processing –MMcf per day
|
76
|
80
|
76
|
72
|
Production
|
|
|
|
|
Natural gas – Mcf per
day
|
1,330
|
999
|
1,279
|
1,166
|
Natural gas liquids –
bbls per day
|
23
|
20
|
22
|
24
|
Total – boe per
day1
|
244
|
186
|
235
|
219
|
Average sales
price
|
|
|
|
|
Natural gas – $ per
Mcf
|
4.83
|
3.95
|
4.47
|
3.41
|
Natural gas liquids –
$ per bbl
|
84.29
|
81.79
|
81.45
|
73.00
|
Operating
netback
|
|
|
|
|
Production – $ per
boe1
|
3.20
|
3.21
|
5.07
|
1.30
|
Processing – $ per Mcf
processed1
|
0.16
|
0.18
|
0.17
|
0.10
|
|
Note 1: See
advisories at the end of this news release with respect to non-IFRS
measures and boe presentation.
|
|
Note 2: All
outstanding warrants, stock options and convertible debentures were
excluded in calculating the weighted-average number of dilutive
common share outstanding, as they were determined to be
anti-dilutive.
|
|
Note 3: On June
2, 2014 the Company completed a consolidation of its issued and
outstanding common shares on the basis of twenty-five (25)
pre-consolidation common shares for each one (1) post-consolidation
common share. All share and per share numbers have been
adjusted to reflect this consolidation.
|
|
All values in this
news release are in Canadian dollars unless otherwise
indicated.
|
Operational Update and Outlook
During the third quarter of 2014, ArPetrol
continued its progress towards a stable revenue generating company
with a balance sheet that supports its operations. The
new gas processing contracts have provided ArPetrol with a
significant increase in processing revenue and this is expected to
continue during 2015.
The Company's 2014 outlook includes estimated
production of 200 to 240 boe/d, estimated processing volumes of 70
to 80 MMcf/d and estimated capital expenditures for maintenance and
improvements of $0.8 million to $1.2
million. In 2015, the Company's forecasted cash flows
will allow it to be self-funding and cover its capital expenditures
and build cash throughout the year.
ArPetrol continues to look at all strategic
opportunities available to the Company. These include growing
its production and processing asset base in Argentina,
considering merger opportunities to grow the Company in new basins
or considering the possible sale of assets.
About ArPetrol Ltd.
ArPetrol is a Calgary-based publicly traded company engaged
in oil and natural gas exploration, development and production and
third-party natural gas processing in Argentina, where it owns and operates a gas
processing facility with capacity of 85 million cubic feet per day.
The Company's common shares are listed on the TSXV under the symbol
"RPT".
Non-IFRS Measures
This news release includes references to
financial measures commonly used in the oil and natural gas
industry. The terms "operating netback" (production sales and
processing sales less royalties, turnover taxes and operating
expenses) and "funds flow from operations" (cash generated
from operating activities before changes in non-cash working
capital) do not have any standardized meaning under International
Financial Reporting Standards (IFRS), and may not be comparable
with similar measures presented by other companies. Funds flow from
operations should not be considered an alternative to, or more
meaningful than, cash generated from operating activities, net loss
or other measures determined in accordance with IFRS, as an
indicator of the Company's performance.
See the MD&A for the three and nine months
ended September 30, 2014, filed on
SEDAR at www.sedar.com and on the Company's website, for further
discussion, including a reconciliation of funds flow from
operations to cash generated from operating activities which is the
most directly comparable measure calculated in accordance with
IFRS. There is no IFRS measure that is reasonably comparable to
operating netback and a detailed calculation of such netbacks is
presented in the MD&A for the three and nine months ended
September 30, 2014.
Boe Presentation
Production information is commonly reported in
units of barrels of oil equivalent (boe). For purposes of computing
such units, natural gas is converted to equivalent barrels of oil
using a conversion factor of six thousand cubic feet (Mcf) to one
barrel (bbl). This conversion ratio of 6:1 represents energy
equivalency, which is primarily applicable at the burner tip, and
does not represent a value equivalency at the wellhead. Such
disclosure of boe may be misleading, particularly if used in
isolation.
Forward-Looking Information
This news release contains certain
forward‐looking statements relating, but not limited, to
operational information, the ability to maintain processing rates
and revenue in the same range as realized in the third quarter, the
ability to negotiate a settlement agreement with the remaining
service provider, the ability to be self-funding and maintain
positive cash flow in 2015, estimated production volumes,
processing volumes and capital expenditures, the repayment of the
Company's short term loan by year-end, the development of a go
forward strategic plan and the pursuit of strategic and growth
opportunities, the possible sale of assets to deliver value, and
the ability or inability to continue as a going concern.
Forward‐looking information typically contains statements with
words such as "anticipate", "believe", "expect", "plan", "intend",
"estimate", "propose", "project", or similar words suggesting
future outcomes. The Company cautions readers and prospective
investors in the Company's securities not to place undue reliance
on forward‐looking information as, by its nature, it is based on
current expectations regarding future events that involve a number
of assumptions, inherent risks and uncertainties, which could cause
actual results to differ materially from those anticipated by the
Company.
Forward-looking information is based on
management's current expectations and assumptions regarding, among
other things, the willingness of the remaining creditor to settle
outstanding amounts, future operations and transactions, future
capital and other expenditures (including the amount, nature,
timing, availability and sources of funding thereof), stable
processing volumes, future production and processing revenue,
future economic conditions, future currency and exchange rates,
future pricing, the ability to repatriate funds from Argentina, continued political stability in
the areas in which the Company is operating, and the
Company's continued ability to obtain and retain qualified
management and staff and equipment in a timely and cost-efficient
manner. Although the Company believes the expectations and
assumptions reflected in such forward‐looking information are
reasonable, they may prove to be incorrect.
Forward‐looking information involves significant
known and unknown risks and uncertainties. A number of factors
could cause actual results to differ materially from those
anticipated by the Company, including but not limited to
uncertainty regarding the willingness of the remaining creditor to
negotiate a settlement or whether it will commence legal
proceedings , risks associated with the oil and natural gas
industry (e.g., operational risks for its producing assets risks
inherent in future drilling programs and the operation of the gas
plant, and health, safety and environmental risks), the ability to
retain management and staff, the ability to continue as a going
concern, difficulties that may be encountered to repatriate funds,
weather-induced delays and natural disasters, interruptions to
production and processing revenue, production declines, the
uncertainty regarding future revenues, union activities and labour
issues in Argentina, uncertainty
regarding the ability to pursue strategic opportunities or a sale
of assets, the risk of commodity price changes, the risk of foreign
exchange rate fluctuations (which may not be as favourable as those
currently experienced), currency controls and a change in the
manner and rates at which the Company is exchanging currency, and
risks associated with international activity and political risks
over which it has no control (including risks related to the
general economic and business conditions in Argentina, economic, social or political
instability or change, the uncertainty of negotiating with foreign
governments, expropriation and/or nationalization, changes in
export or exchange policies, adverse determinations or rulings by
governmental authorities, and changes in energy policies or in the
personnel administering them).
The forward‐looking information included herein
is expressly qualified in its entirety by this cautionary
statement. The forward‐looking information included herein is made
as of the date hereof and the Company assumes no obligation to
update or revise any forward‐looking information to reflect new
events or circumstances, except as required by law.
Additional information relating to the Company is
also available on SEDAR at www.sedar.com.
AR Petrol's head office address is 1130, 396 -
8 Avenue S.W., Calgary, AB
T2R 0C5
Neither the TSXV nor its Regulation Services
Provider (as defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this release.
SOURCE ArPetrol Ltd.