NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A
VIOLATION OF U.S. SECURITIES LAW.
ROOSTER ENERGY LTD. (the "Company") (www.roosterenergyltd.com) (TSX VENTURE:COQ)
is pleased to announce it has filed on SEDAR (www.sedar.com) its unaudited
interim financial statements and related Management Discussion and Analysis
("MD&A") for the three and nine months end ed September 30, 2013 ("Q3 2013").
Selected financial and operational information for Q3 2013 and subsequent
thereto is outlined below and should be read in conjunction with the financial
statements and MD&A.
Q3 2013 HIGHLIGHTS
-- Production averaged 2,141 boe/day - 41% Liquids
-- EBITDAX of $6.6 million, and net income of $2.0 million
-- Operations at High Island A-494 #B-4 well
Robert P. Murphy, President & Chief Executive Officer, comments that, "Lower
production volumes in this quarter compared to Q3 2012 were partially offset by
higher realized commodity prices (up 28%), and lower operating expenses (down
17%) as we successfully reduced costs associated with non- producing properties.
We currently have one re-completion and a compressor installation scheduled over
the coming months that could add additional production volumes in early 2014.
"Rooster has drilled and completed its operated High Island A-494 #B-4 well in
which it owns 75% working interest in two separate geologic horizons. Our
secondary objective zone was flow tested but developed behind casing
communication with a deeper, water producing sand. This communication, confirmed
by recorded pressure, appears to be the result of poor cement bonding across the
zone of interest. The Company believes a cement squeeze operation can rectify
this behind pipe communication and a successful completion can be accomplished.
The squeeze job will also facilitate a future completion of two apparent newly
discovered behind pipe hydrocarbon bearing reservoirs. There were no proven or
probable reserves assigned to the secondary or apparent two new behind pipe
zones identified in the well included in the Company's 51-101 reserves report at
year-end 2012.
"We made several unsuccessful attempts to establish flow in our primary,
stratigraphically deeper target that wireline logged apparent hydrocarbons in
three sands. After multiple diagnostic operations that measured pressure,
temperature and flow dynamics, we have determined that the primary completion is
plugged off and not communicating with the targeted reservoir. The Company is
currently evaluating its options including acidizing, perforating the production
tubing above the completed interval and/or sidetracking the well and
re-completing the deeper target. The Company's 51-101 reserves report at year-
end 2012 did not have any proven reserves associated with the deeper target,
however it did include estimates of probable reserves assigned to the deeper
target. We expect to have a forward plan for the well by year-end."
SUMMARY FINANCIAL RESULTS
For the three months For the nine months
ended ended
September 30, September 30,
------------------------------------------------
2013 2012 2013 2012
------------------------------------------------
Sales
Oil (Bbl) 75,096 82,984 226,159 140,166
NGL (Bbl) 5,990 29,581 24,681 37,994
Natural gas (Mcf) 695,145 1,175,480 2,393,535 2,302,964
Total (BOE/day) (a) 2,141 3,353 2,380 2,051
Revenue $10,630,237 $12,997,594 $32,920,020 $22,159,397
Total costs and expenses 6,505,958 7,504,688 25,514,653 19,220,541
------------------------------------------------
Operating income (loss) 4,124,279 5,492,906 7,405,367 2,938,856
Unrealized loss on
financing warrants 921,000 - (543,000) -
Finance expenses (b) (1,861,305) (472,027) (4,426,071) (833,687)
------------------------------------------------
Income (loss) before tax
expense 3,183,974 5,020,879 2,436,296 2,105,169
Deferred tax expense
(recovery) 1,161,000 - 1,076,000 -
------------------------------------------------
Income (loss) 2,022,974 5,020,879 1,360,296 2,105,169
------------------------------------------------
------------------------------------------------
Income (loss) per share
Basic 0.02 0.05 0.01 0.02
Diluted 0.02 0.05 0.01 0.02
Capital expenditures $16,369,381 $ 676,390 $26,289,412 $26,742,395
EBITDAX (c) $ 6,595,206 $ 8,606,639 $19,766,356 $ 9,371,574
a. Gas volumes are converted to BOE on the basis of 6 Mcfe per 1 barrel.
b. Finance expense includes accretion for asset retirement obligations.
c. EBITDAX is a non-IFRS measure commonly used in the oil and gas industry.
Such measures do not conform to IFRS and may not be comparable to those
reported by other companies nor should they be viewed as an alternative
to other measures of financial performance calculated in accordance with
IFRS. The company defines EBITDAX as net income before finance expense,
taxes, depreciation, amortization, accretion, exploration and
evaluation, bad debt, impairments, stock-based compensation, and the
non-cash portion of plug and abandonment expense.
ABOUT ROOSTER ENERGY LTD.
Rooster Energy Ltd. is a Houston, Texas, based independent oil and natural gas
exploration & production company focused on the development of resources in the
shallow waters of the Gulf of Mexico. At September 30, 2013, our primary assets
consist of interests in 20 producing oil and/or natural gas wells and 16 federal
lease blocks. The Company is the operator of the majority of its properties and
daily oil and gas production.
Investors are welcome to visit our website at www.roosterenergyltd.com or
contact the following for all corporate updates and investor inquiries:
Forward-Looking Information and Statements
Certain statements and information in this press release may constitute
"forward-looking information" or statements as such terms are used in applicable
Canadian securities laws. Any statement that expresses, involves or includes
expectations of future operations (including drill rig commitments and use of
proceeds), commerciality of any hydrocarbon discovered, production rates,
operating costs, commodity prices, administrative costs, commodity price risk
and other components of cash flow and earnings, management activity,
acquisitions and dispositions, capital spending, access to credit facilities
taxes, regulatory changes, projections, objective, assumptions or future events
that are not statements of historical fact should be viewed as "forward-looking
statements". Events or circumstances may cause actual results to differ
materially from those predicted, a result of numerous known and unknown risks,
uncertainties, and other factors, many of which are beyond the control of the
Company. These risks include, but are not limited to, the risks associated with
the oil and gas industry, commodity prices, and exchange rate changes. Industry
related risks could include, but are not limited to, operational risks in
exploration, development and production, delays or changes in plans, risks
associated with the uncertainty of reserve estimates, or reservoir performance,
health and safety risks and the uncertainty of estimates and projections of
production, costs and expenses. The reader is cautioned not to place undue
reliance on any forward-looking statement in this press release. The Company
disclaims any intention or obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise,
except as required by applicable law.
Financial outlook information contained in this press release about the
Company's prospective cash flows and financial position is based on assumptions
about future events, including economic conditions and proposed courses of
action, based on management's assessment of the relevant information currently
available. Readers are cautioned that any such financial outlook information
contained herein should not be used for purposes other than for which it is
disclosed herein.
Note Regarding BOEs
The term barrel of oil equivalent ("boe") may be mi sleading, particularly if
used in isolation. A conversion ratio for gas of 6 mcf:1 boe is based on an
energy equivalency conversion method primarily applicable at the burner tip and
does not represent a value equivalency at the wellhead. Given that the value
ratio based on the current price of crude oil as compared to natural gas is
significantly equivalency conversion ratio of 6:1, utilizing a conversion on a
6:1 basis is misleading as an indication of value.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICE PROVIDER (AS THAT
TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.
FOR FURTHER INFORMATION PLEASE CONTACT:
Rooster Energy Ltd.
Gary Nuschler, Jr.
Vice President - Finance
(832) 463-0625
www.roosterenergyltd.com
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