TORONTO,
May 31, 2012 /PRNewswire/ -
PetroMagdalena Energy Corp. (TSXV: PMD) filed on May 30, 2012 its unaudited interim condensed
consolidated financial statements and Management's Discussion and
Analysis ("MD&A") for the three months ended March 31, 2012. These documents will be posted on
the Company's website at www.petromagdalena.com and at
www.sedar.com under the Company's SEDAR profile.
Luciano Biondi,
the Company's Chief Executive Officer, stated: "We are continuing
to build on our success from 2011. In the first quarter of 2012, we
have growth in production, revenues and operating netback compared
with both the fourth quarter and the first quarter of last year.
Continued exploration success led to two new discoveries in the
first quarter of 2012 and as we commence the development phase of
our 2012 drilling campaign, we remain on track to achieve our 2012
production guidance. We experienced blockades in the Llanos Basin
this year, yet we are encouraged with our progress in developing
closer working relationships with the community, its leaders and
the regional and central government to promote improved relations
going forward. We continue to work for sustainable solutions in the
area."
Financial and Operating Summary
|
|
First Quarter |
|
|
2012 |
|
2011 |
|
|
|
|
|
Financial |
|
|
|
|
Revenue from oil and gas sales |
$ |
31,012 |
$ |
20,837 |
Gross margin (3) |
|
12,027 |
|
4,987 |
Net loss (4) |
|
(10,152) |
|
(10,333) |
Basic and diluted loss per share |
|
(0.07) |
|
(0.08) |
Total assets at period end |
|
343,559 |
|
387,193 |
Total debt (5) at period end |
|
57,874 |
|
12,030 |
|
|
|
|
|
Operational |
|
|
|
|
Average daily production (boed)
(1) |
|
3,847 |
|
2,294 |
Total sales (boe) (2) |
|
299,614 |
|
256,532 |
Operating netback ($/boe) (3) |
|
74.66 |
|
52.27 |
|
(1) |
Company share, gross before deduction of ANH royalties |
(2) |
Company share, net after deduction of ANH royalties |
(3) |
See Additional Financial Measures in the MD&A. |
(4) |
2012 includes $17.5 million of costs for exploratory wells at
Santa Cruz, Arrendajo and Cubiro that did not discover proved
reserves. |
(5) |
Includes amounts due within one year and obligation under
finance lease. |
First Quarter 2012 Highlights
Production: The Company is
maintaining its guidance of an average gross production of 4,300 to
4,700 boed for 2012. The Company's gross share of production for
the first quarter of 2012 averaged 3,847 boed, up 6% from the
fourth quarter of 2011 and up 68% from the first quarter a year
ago. The discoveries at Cernicalo and Azor added approximately 330
boed to the Company's gross share of production in the first
quarter of 2012. An 11-day illegal protest in the province of
Casanare in March 2012 temporarily
disrupted trucking operations in the area and adversely impacted
the Company's gross share of production for the first quarter of
2012 by approximately 171 boed.
Revenues: Stronger oil prices and
increased production levels grew revenues in the first quarter of
2012 to $31.0 million, up 12% from
the fourth quarter of 2011 and up 49% from the first quarter a year
ago. An approximately 24,000 bbls increase in net oil inventories
from Arrendajo and Cubiro in the first quarter of 2012 to
approximately 54,000 bbls will reverse as sales are completed in
the second quarter of 2012.
Operating netback: The Company's
operating netback increased to $74.66
per boe in the first quarter of 2012, an approximate $13 per boe improvement compared with the fourth
quarter of 2011 and $22 per boe
higher than the first quarter of 2011. An approximate $3 per boe increase in revenues to $110 per boe, coupled with reductions in
production and transportation costs contributed to the Company's
fifth consecutive quarter of operating netback improvement.
G&A expenses: G&A of
$3.4 million, or approximately
$11 per boe sold, in the first
quarter of 2012 was in line with G&A in the fourth quarter of
2011 and well below the $4.7 million
incurred in the first quarter a year ago. Continued production
growth in 2012 is expected to maintain G&A at approximately
$10 to $11 per boe sold.
Exploration: Successful
discoveries in the first quarter of 2012 at Cernicalo in the Cubiro
Block and Azor in the Arrendajo Block are expected to add to the
Company's 13.3 MMbbls of 2P oil reserves reported as of
December 31, 2011.
Liquidity: The Company received
$11.3 million of proceeds in
March 2012 from a new three-year term
loan with a local Colombian bank to help fund an expansion in the
2012 work program as a result of the new discoveries.
Net Loss: The net loss for the
first quarter of 2012 amounted to $10.2
million or $0.07 per share
compared with a net loss of $10.3
million or $0.08 per share in
the first quarter last year. The 2012 first quarter net loss
includes $17.5 million of costs for
exploratory wells at Santa Cruz,
Arrendajo and Cubiro that did not discover proved reserves.
2012 Outlook
On May 23, 2012,
the Company announced the resolution of a blockade affecting the
Cubiro Block involving an illegal protest where public roads in the
province of Casanare were being blocked, leading to a lack of
public order in the area. Rig operations were interrupted and
trucking operations were halted, which impacted production
schedules. This was the third blockade in recent months, impacting
a total of 44 production days and adversely impacting the Company's
gross share of production by approximately 90,000 bbls, or 250 boed
on an annualized basis. The Company's gross share of daily
production has averaged approximately 4,000 boed since operations
resumed. The Company believes that the steps taken during the
recent blockade to increase its connection to the local community
will reduce the likelihood of further such occurrences. Despite
these disruptions, the Company continues to expect that its daily
average production in 2012 will average between 4,300 to 4,700 boed
for the full year. This estimate is conservatively based solely on
planned development wells at Cubiro and Arrendajo and does not
include any production from exploration wells planned to be drilled
during the balance of 2012.
For 2012, the Company will continue with a
capital and exploration program focused on its core oil assets and
leveraging its successes in the 2011 drilling campaign. A revised
budget in the range of $75 to $80
million has been approved for the 2012 work program. The
2012 work program includes funding to drill the three exploration
wells started in the fourth quarter of 2011 and will continue the
emphasis on Cubiro and Arrendajo with up to eleven development
wells and three more exploration wells (Petirrojo-1X, Azor Sur-1X and Copa A Norte-1X). In the second
half of 2012, the Company will be working to commence its
exploration program at Mecaya in the Putumayo Basin, starting with
the acquisition of seismic data, leading to a workover well and
development well in 2013. At Carbonera, drilling commenced in
mid-March of 2012 of the Cantoclara-1X exploration well (formerly
called San Roque-1). The Company funded the Cantoclaro-1X well, due
to the YPF farm-out not yet finalized. Seismic acquisition is also
being planned in 2012 for Topoyaco. At Cubiro, the Company will
invest approximately $4 million to
replace rental oil facilities to reduce production costs. The
Company also expects to commence the exploration program in the
second half of 2012 on the LLA-47 block in the Llanos Basin with a
3D seismic survey. The revised budget for the Company's capital and
exploration program for 2012 is fully funded by cash balances, cash
from operations, the $10 million
local bank facility entered into in March
2012, proceeds from non-core assets dispositions and farm-in
arrangements.
Webcast
Management will hold a webcast on Thursday, May 31, 2012 at 9:00 a.m. (Eastern Time) to discuss the 2012
first quarter results. Analysts and interested investors are
invited to participate as follows:
Audience Toll Free: 1 (888) 895-5271
Audience Toll:1 (847) 619-6547
Confirmation #: 32515414
A playback of this conference call will be
available online at www.petromagdalena.com
PetroMagdalena is a Canadian-based oil and
gas exploration and production company, with working interests
in 19 properties in five basins in Colombia. Further information can be obtained
by visiting our website at www.petromagdalena.com.
All monetary amounts in U.S. dollars unless
otherwise stated. This news release contains certain
"forward-looking statements" and "forward-looking information"
under applicable Canadian securities laws concerning the business,
operations and financial performance and condition of
PetroMagdalena. Forward-looking statements and forward-looking
information include, but are not limited to, statements with
respect to estimated production and reserve life of the various oil
and gas projects of PetroMagdalena; the estimation of oil and gas
reserves; the realization of oil and gas reserve estimates; the
timing and amount of estimated future production; costs of
production; success of exploration activities; and currency
exchange rate fluctuations. Except for statements of historical
fact relating to the company, certain information contained herein
constitutes forward-looking statements. Forward-looking statements
are frequently characterized by words such as "plan," "expect,"
"project," "intend," "believe," "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are
made, and are based on a number of assumptions and subject to a
variety of risks and uncertainties and other factors that could
cause actual events or results to differ materially from those
projected in the forward-looking statements. Many of these
assumptions are based on factors and events that are not within the
control of PetroMagdalena and there is no assurance they will prove
to be correct. Factors that could cause actual results to vary
materially from results anticipated by such forward-looking
statements include changes in market conditions, risks relating to
international operations, fluctuating oil and gas prices and
currency exchange rates, changes in project parameters, the
possibility of project cost overruns or unanticipated costs and
expenses, labour disputes and other risks of the oil and gas
industry, failure of plant, equipment or processes to operate as
anticipated. Although PetroMagdalena has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be anticipated, estimated or
intended. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
PetroMagdalena undertakes no obligation to update forward-looking
statements if circumstances or management's estimates or opinions
should change except as required by applicable securities laws. The
reader is cautioned not to place undue reliance on forward-looking
statements.
Statements concerning oil and gas reserve
estimates may also be deemed to constitute forward-looking
statements to the extent they involve estimates of the oil and gas
that will be encountered if the property is developed. Boe may be
misleading, particularly if used in isolation. A boe conversion
ratio of 6 mcf:1 bbl is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead. Estimated values of
future net revenue disclosed do not represent fair market
value.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release.
Glossary
1P: Proven reserves |
G&A: General and Administrative
Expenses |
2P: Proven + Probable reserves |
MMCF: Million Cubic Feet |
3P: Proven + Probable + Possible reserves |
MD: Measured Depth |
ANH: Agencia Nacional de Hidrocarburos |
MMBBLS: Million Barrels of Oil |
API: American Petroleum Institute |
MMBTU: Millions British Thermal
Unit |
BBLS: Barrels of Oil |
NPV: Net Present Value |
BOE: Barrels of Oil Equivalent |
PSI: Pounds per Square Inch. The unit
of pressure. |
BOFD: Barrels of Fluid Per Day |
TD: Total Depth of the well |
BOPD: Barrels of Oil Per Day |
TVD: True Vertical Depth of the
well |
BOEPD: Barrels of Oil Equivalent Per Day |
TVDSS: True Vertical Depth Sub
Sea |
BS&W: Basic Sediments and Water |
WI: Working Interest |
E&PC: Exploration & Production
Contract |
WTI: West Texas Intermediate Oil
Price Index |
ESP: Electric Submersible Pump |
|
FOB: Freight on Board |
|
SOURCE PetroMagdalena Energy Corp.