CALGARY, May 14, 2015 /CNW/ - Petroamerica Oil
Corp. (TSX-V: PTA) ("Petroamerica" or the
"Company"), a Canadian oil and gas company operating in
Colombia, is pleased to announce
the financial and operating results for the three months ended
March 31, 2015, and to provide an
operational update on the Company's activities in Colombia.
Copies of the Company's Management Discussion and Analysis
("MD&A") and Interim Financial Statements have been
filed with the Canadian Securities Regulatory authorities and can
be viewed or downloaded at the Company's website at
www.petroamericaoilcorp.com or at www.sedar.com. The financial
results for all periods presented are in United States dollars unless otherwise
indicated.
Quarterly Financial and Operating Highlights:
- Generated over $19 million in
revenue (before royalty) in a challenging oil price environment,
realising a sales price of almost $47
per barrel and an operating net back of approximately $17 per barrel of oil equivalent
('boe');
- Realised an average daily production of 4,587 boe per day
('boepd') for the quarter;
- Closed the quarter with over $55
million in cash;
- Repaid the CDN$35 million
debenture note, and the Company is now debt free;
- Funds flow from operations in the quarter were $2.3 million;
- Corporate efforts to reduce costs over the last two quarters
have resulted in production costs decreasing from $17.38/boe in the fourth quarter of 2014 to
$10.78/boe in the current quarter,
and transportation costs reducing from $14.36/boe to $14.00/boe over the same period. The
Company has also significantly reduced its General and
Administrative costs;
- Capital expenditures for the first quarter of 2015 were
$2.5 million, a reduction of 78% from
the first quarter of 2014 and 87% from the fourth quarter of
2014;
- Contract extensions on 3 blocks, with the objective of building
in flexibility to the forward capital spending program, have been
requested under the low oil price ANH guidelines.
Financial and Operating Results
The following table presents the highlights of Petroamerica's
financial and operating results.
(in $000 US except
share, per share or
unless otherwise noted)
|
|
Q1 2015
|
|
Q4 2014
|
|
Q1 2014
|
|
|
|
|
|
|
|
|
|
Oil revenue – net of
royalties
|
|
$
|
17,055
|
|
$
|
31,540
|
|
$
|
51,702
|
|
Funds flow from
operations
|
|
$
|
2,294
|
|
$
|
16,719
|
|
$
|
26,627
|
|
Funds flow per share-
basic
|
|
$
|
0.00
|
|
$
|
0.02
|
|
$
|
0.04
|
|
Funds flow per share-
diluted
|
|
$
|
0.00
|
|
$
|
0.02
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
(Loss) income for
period
|
|
$
|
(6,952)
|
|
$
|
(54,121)
|
|
$
|
17,612
|
|
Total comprehensive
(loss) income
|
|
$
|
(9,344)
|
|
$
|
(51,030)
|
|
$
|
13,430
|
|
(Loss) income per
share - basic
|
|
$
|
(0.01)
|
|
$
|
(0.06)
|
|
$
|
0.03
|
|
(Loss) income per
share - diluted
|
|
$
|
(0.01)
|
|
$
|
(0.06)
|
|
$
|
0.03
|
|
Total
assets
|
|
$
|
265,016
|
|
$
|
290,430
|
|
$
|
229,012
|
|
Total
cash
|
|
$
|
55,222
|
|
$
|
73,296
|
|
$
|
100,699
|
|
Notes
payable
|
|
$
|
27,623
|
|
$
|
29,933
|
|
$
|
30,638
|
|
Shareholders'
equity
|
|
$
|
171,885
|
|
$
|
180,992
|
|
$
|
150,547
|
|
|
|
|
|
|
|
|
|
Exploration
costs
|
|
$
|
-
|
|
$
|
1,232
|
|
$
|
91
|
|
Capital expenditures
- excluding acquisition
|
|
$
|
2,538
|
|
$
|
19,449
|
|
$
|
11,316
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding (000's)
|
|
872,521
|
|
872,521
|
|
595,148
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
(000's)
|
|
872,521
|
|
872,156
|
|
593,538
|
|
Diluted
(000's)
|
|
872,521
|
|
872,156
|
|
614,623
|
|
|
|
|
|
|
|
|
|
|
|
|
Average production -
boepd
|
|
4,587
|
|
5,988
|
|
6,478
|
|
Selling price
$/boe
|
|
$
|
46.88
|
|
$
|
70.07
|
|
$
|
105.76
|
|
Royalty
$/boe
|
|
$
|
(5.18)
|
|
$
|
(10.56)
|
|
$
|
(19.71)
|
|
Average
transportation costs $/boe
|
|
$
|
(14.00)
|
|
$
|
(14.36)
|
|
$
|
(18.88)
|
|
Average production
cost $/boe
|
|
$
|
(10.78)
|
|
$
|
(17.38)
|
|
$
|
(3.40)
|
|
Operating netback
$/boe
|
|
$
|
16.92
|
|
$
|
27.77
|
|
$
|
63.77
|
|
Cash
netback$/boe
|
|
$
|
9.35
|
|
$
|
12.90
|
|
$
|
45.67
|
|
|
|
|
|
|
|
|
|
Share
trading
|
|
|
|
|
|
|
|
High
|
|
$
|
0.16
|
|
$
|
0.44
|
|
$
|
0.38
|
|
Low
|
|
$
|
0.11
|
|
$
|
0.14
|
|
$
|
0.28
|
|
Close
|
|
$
|
0.14
|
|
$
|
0.14
|
|
$
|
0.30
|
|
Trading volume
(000's)
|
|
93,548
|
|
127,071
|
|
61,197
|
|
First Quarter Financial Summary
For the three months ended March 31,
2015, the Company reported $19.2
million in revenue (before royalties) from the sale of 409
thousand boe. The realized sales price was $46.88/boe generating an operating netback of
$16.92/boe.
For the first quarter of 2015, the Company's net loss was
$6.95 million ($0.01 per share diluted). This loss is due
to the low realized oil price in the first quarter of 2015 as well
as the recognition of over $9 million
in non-cash depletion, depreciation and amortization expenses in
the current quarter. The Company's capital expenditures for
the first quarter were $2.5 million,
all invested in Colombia. As at
March 31, 2015, the Company held 47
thousand barrels of oil ("Mbbls") in inventory.
Following the precipitous fall in oil prices starting in the
third quarter of 2014, the Company has achieved a number of cost
savings in the areas of production, operations, transportation and
general and administrative costs.
On a per barrel basis, production costs have been reduced from
$15.46/boe and $17.38/boe in the third and fourth quarters of
2014 respectively to $10.78 for the
first quarter of 2015. Transportation costs have been reduced
from $14.87/boe and $14.36/boe in the third and fourth quarters of
2014 respectively to $14.00/boe in
the current quarter. These savings have been achieved by
negotiating with suppliers and utilizing the lowest cost
transportation routes.
General and administrative costs have also been reduced relative
to prior periods, from $5.3 million
and $7.1 million in the third and
fourth quarter of 2014, respectively, to $1.8 million in the current quarter. While
some of the variances between the current quarter and the fourth
quarter of 2014 can be explained through timing differences and
foreign exchange gains the Company has also taken significant steps
to reduce the overall salary burden. These steps have
effectively reduced the overall staff contingent since the
acquisition of Suroco by approximately 15%, resulting in an
estimated $0.7 million in annualised
savings from employee salaries and benefits. The Company
continues to review additional cost savings initiatives that will
bring about further reductions to its G&A.
Current Financial Status
The Company currently holds approximately $26.0 million of cash, prior to working capital
adjustments, as of the date of this press release. On
April 19, 2015, the Company repaid
the Canadian dollar denominated $35
million debenture that had been in place since April 2012 using cash-on-hand and now has no
debt. The Company is currently projecting that as a direct
result of cost savings initiatives, improvements in the realized
oil price, and changes to the capital spending plans for the
current year, it will maintain sufficient cash to meet all of its
planned commitments throughout the rest of 2015 and into early
2016. As a result, while it will continue to review and
pursue options for additional capital funds, the Company will not
require these funds to continue its planned activities for the rest
of 2015.
2015 First Half Guidance
The Company expects to meet its production target for the first
six months of 2015 of approximately 4,200 boepd, as well as its
capital spending projection for the same period of $12.9 million. Given the continued
volatility of the oil markets, the Company continues to review its
production and capital guidance for the balance of the year.
Operations Update
Company working interest ('WI') production (before
royalties) for the first quarter of 2015 averaged 4,587 boepd, with
2,546 boepd coming from the Llanos Basin and 2,041 boepd from the
Putumayo Basin. Production operations, which have been
hampered by a number of field issues, were largely back to normal
in April, with no significant production disruptions for
operational wells and no additional pump failures. The primary
focus continues to be on cost control over maximization of oil
production. For the month of April, total Company WI
production was 4,064 boepd, with 2,260 boepd from the Llanos and
1,804 boepd from the Putumayo.
In the Quinde Field of the Putumayo Block, the drilling rig that
has been located at the Quinde surface pad since 2013, and used for
both drilling and well servicing operations, is being
demobilized. This will allow the remaining well operations at
Quinde-3 and Quinde-6 to be conducted with a less expensive, more
efficient service rig that will be contracted under terms that
reflect the current oil price environment. The Quinde-6 well
requires a cleanout and pump repair to resume production, and the
Quinde-3 go-forward evaluation plan is still under discussion with
the operator. The timing of recommencement of the Cohembi and
Quinde development drilling programs is uncertain at this time, and
will continue to be revisited as 2015 unfolds.
PETROAMERICA OIL
CORP.
|
Condensed
Consolidated Interim Statements of Financial
Position
|
|
As
at
|
|
As
at
|
|
March 31,
|
|
December
31,
|
(thousands of United
States dollars)
|
2015
|
|
2014
|
Assets
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
55,222
|
|
$
|
73,296
|
|
Trade and other
receivables
|
13,923
|
|
13,825
|
|
Prepayments and
deposits
|
343
|
|
463
|
|
Crude oil
inventory
|
1,840
|
|
2,096
|
|
71,328
|
|
89,680
|
Non-current
assets
|
|
|
|
|
Restricted
cash
|
10,895
|
|
11,065
|
|
Property, plant and
equipment
|
126,429
|
|
134,711
|
|
Exploration and
evaluation assets
|
56,364
|
|
54,974
|
|
193,688
|
|
200,750
|
Total
assets
|
$
|
265,016
|
|
$
|
290,430
|
Liabilities
|
|
|
|
Current
liabilities
|
|
|
|
|
Current equity
tax
|
$
|
501
|
|
$
|
-
|
|
Current income
tax
|
2,648
|
|
2,459
|
|
Accounts payable and
accrued liabilities
|
21,986
|
|
38,803
|
|
Notes
payable
|
27,623
|
|
29,933
|
|
52,758
|
|
71,195
|
Non-current
liabilities
|
|
|
|
|
Decommissioning
liabilities
|
10,165
|
|
9,939
|
|
Deferred tax
liability
|
28,825
|
|
26,750
|
|
Stock appreciation
rights liability
|
1,383
|
|
1,554
|
Total
liabilities
|
93,131
|
|
109,438
|
Shareholders'
equity
|
|
|
|
|
Share
capital
|
226,492
|
|
226,492
|
|
Contributed
surplus
|
24,875
|
|
24,638
|
|
Translation
reserve
|
(8,758)
|
|
(6,366)
|
|
Deficit
|
(70,724)
|
|
(63,772)
|
|
171,885
|
|
180,992
|
Total liabilities
and shareholders' equity
|
$
|
265,016
|
|
$
|
290,430
|
PETROAMERICA OIL
CORP.
|
Condensed
Consolidated Interim Statements of Income (Loss) and Comprehensive
Income (Loss)
|
|
|
|
Three months ended
March 31
|
(thousands of United
States dollars, except per share amounts)
|
2015
|
|
2014
|
Revenue
|
|
|
|
|
|
Oil revenue - net of
royalties
|
|
$
|
17,055
|
|
$
|
51,702
|
|
|
17,055
|
|
51,702
|
Expenses
|
|
|
|
|
|
Production
|
|
(4,409)
|
|
(2,044)
|
|
Transportation
|
|
(5,728)
|
|
(11,341)
|
|
Purchased
oil
|
|
-
|
|
(1,625)
|
|
Exploration and
evaluation
|
|
-
|
|
(91)
|
|
Depletion and
depreciation
|
|
(9,050)
|
|
(9,533)
|
|
Colombian equity
tax
|
|
(501)
|
|
-
|
|
General and
administration
|
|
(1,816)
|
|
(2,735)
|
|
Share-based
payments
|
|
(197)
|
|
(199)
|
|
|
(21,701)
|
|
(27,568)
|
|
Finance and
other
|
|
(1,510)
|
|
(1,292)
|
|
Foreign exchange
gain
|
|
1,943
|
|
5,692
|
|
|
433
|
|
4,400
|
Income (loss)
before income taxes
|
|
(4,213)
|
|
28,534
|
Current income tax
expense
|
|
(663)
|
|
(6,514)
|
Deferred tax
expense
|
|
(2,076)
|
|
(4,408)
|
Net income (loss)
for the period
|
|
(6,952)
|
|
17,612
|
Other
comprehensive loss
|
|
|
|
|
Items that may be
reclassified subsequently to income or (loss):
|
|
Reserve on
translation of foreign operations
|
|
(2,392)
|
|
(4,182)
|
Total
comprehensive income (loss)
|
|
$
|
(9,344)
|
|
$
|
13,430
|
Basic income
(loss) per share
|
|
$
|
(0.01)
|
|
$
|
0.03
|
Diluted income
(loss) per share
|
|
$
|
(0.01)
|
|
$
|
0.03
|
Weighted average
number of basic
|
|
|
|
|
|
common shares
outstanding
|
|
872,520,851
|
|
593,538,038
|
Weighted average
number of diluted
|
|
|
|
|
|
common shares
outstanding
|
|
872,520,851
|
|
614,623,454
|
PETROAMERICA OIL
CORP.
|
Condensed
Consolidated Interim Statements of Changes in Equity
|
(thousands of United
States dollars)
|
|
Share
Capital
|
|
Contributed
surplus
|
|
Translation
reserve
|
|
Deficit
|
|
Total
equity
|
Balance at January
1, 2015
|
|
$
|
226,492
|
|
$
|
24,638
|
|
$
|
(6,366)
|
|
$
|
(63,772)
|
|
$
|
180,992
|
Net loss for the
period
|
|
-
|
|
-
|
|
-
|
|
(6,952)
|
|
(6,952)
|
Other comprehensive
loss
|
|
-
|
|
-
|
|
(2,392)
|
|
-
|
|
(2,392)
|
Total
comprehensive loss
|
|
-
|
|
-
|
|
(2,392)
|
|
(6,952)
|
|
(9,344)
|
Share-based
payments
|
|
-
|
|
237
|
|
-
|
|
-
|
|
237
|
Balance at March
31, 2015
|
|
$
|
226,492
|
|
$
|
24,875
|
|
$
|
(8,758)
|
|
$
|
(70,724)
|
|
$
|
171,885
|
|
|
|
|
|
|
|
|
|
|
|
(thousands of United
States dollars)
|
|
Share
Capital
|
|
Contributed
surplus
|
|
Translation
reserve
|
|
Deficit
|
|
Total
equity
|
Balance at January
1, 2014
|
|
$
|
138,936
|
|
$
|
24,079
|
|
$
|
(1,172)
|
|
$
|
(25,745)
|
|
$
|
136,098
|
Net income for the
period
|
|
-
|
|
-
|
|
-
|
|
17,612
|
|
17,612
|
Other comprehensive
loss
|
|
-
|
|
-
|
|
(4,182)
|
|
-
|
|
(4,182)
|
Total
comprehensive income (loss)
|
|
-
|
|
-
|
|
(4,182)
|
|
17,612
|
|
13,430
|
Warrants
exercised
|
|
1,117
|
|
(166)
|
|
-
|
|
-
|
|
951
|
Share-based
payments
|
|
-
|
|
68
|
|
-
|
|
-
|
|
68
|
Balance at March
31, 2014
|
|
$
|
140,053
|
|
$
|
23,981
|
|
$
|
(5,354)
|
|
$
|
(8,133)
|
|
$
|
150,547
|
PETROAMERICA OIL
CORP.
|
Condensed
Consolidated Interim Statements of Cash Flows
|
|
|
Three months ended
March 31
|
(thousands of United
States dollars)
|
|
2015
|
|
2014
|
Operating
activities
|
|
|
|
|
Net income (loss) for
the year
|
|
$
|
(6,952)
|
|
$
|
17,612
|
Items not involving
cash:
|
|
|
|
|
|
Share-based
payments
|
|
197
|
|
199
|
|
Depletion and
depreciation
|
|
9,050
|
|
9,533
|
|
Unrealized foreign
exchange gain
|
|
(2,352)
|
|
(5,408)
|
|
Deferred tax
expense
|
|
2,076
|
|
4,408
|
|
Accretion and
amortization
|
|
275
|
|
283
|
|
|
2,294
|
|
26,627
|
Net
changes in non-cash working capital
|
|
(18,027)
|
|
20,679
|
Cash provided by
(used in) operating activities
|
|
(15,733)
|
|
47,306
|
Investing
activities
|
|
|
|
|
Exploration and
evaluation expenditures
|
|
(1,390)
|
|
(1,358)
|
Property, plant and
equipment expenditures
|
|
(951)
|
|
(9,937)
|
Cash used in
investing activities
|
|
(2,341)
|
|
(11,295)
|
Financing
activities
|
|
|
|
|
Warrants
exercised
|
|
-
|
|
951
|
Cash provided by
financing activities
|
|
-
|
|
951
|
Increase
(decrease) in cash and cash equivalents during the
period
|
|
(18,074)
|
|
36,962
|
Cash and cash
equivalents, beginning of period
|
|
73,296
|
|
63,737
|
Cash and cash
equivalents, end of period
|
|
$
|
55,222
|
|
$
|
100,699
|
Forward Looking Statements:
This news release includes information that constitutes
"forward-looking information" or "forward-looking statements".
Statements relating to "reserves" or "resources" are deemed to be
forward looking statements, as they involve the implied assessment,
based on certain estimates and assumptions, that the resources and
reserves described can be profitably produced in the future. More
particularly, this news release contains statements concerning
expectations regarding regulatory and partner approvals on the
Company's development plan, drilling and operational opportunities
and the timing associated therewith, expectations regarding the
establishment of a new debt facility, test results and the timing
thereof, anticipated reserve life of the Company's assets,
potential future acquisitions and other statements, expectations,
beliefs, goals, objectives, assumptions and information about
possible future conditions, results of operations or performance,
the use of available cash on hand in addition to the potential
exploration and development opportunities and expectations
regarding regulatory approval and the overall strategic direction
of the Company. The forward-looking statements contained in
this document, including expectations and assumptions concerning
the obtaining of the necessary regulatory approvals, including ANH
approval, and the assumptions, opinions and views of the Company or
cited from third party sources, are solely opinions and forecasts
which are uncertain and subject to risks.
A multitude of factors can cause actual events to differ
significantly from any anticipated developments and although the
Company believes that the expectations represented by such
forward-looking statements are reasonable, undue reliance should
not be placed on the forward-looking statements because there can
be no assurance that such expectations will be realized. Material
risk factors include, but are not limited to: the inability to
obtain regulatory approval, including ANH approval, for the
transfer of participating interests and/or operatorship for the
Company's properties, the risks of the oil and gas industry
in general, such as operational risks in exploring for, developing
and producing crude oil and natural gas, market demand and
unpredictable shortages of equipment and/or labour, changes or
fluctuations in production levels, the size of oil and natural gas
reserves or resources; incorrect assessments of the value of
acquisitions and exploration and development programs; geological,
technical, drilling, production and processing problems; potential
delays or changes in plans with respect to exploration or
development projects or capital expenditures; fluctuations in oil
and gas prices, foreign currency exchange rates and interest rates,
and reliance on industry partners.
Readers should also note that even if the drilling program as
proposed by the Company is successful, there are many factors that
could result in production levels being less than anticipated or
targeted, including without limitation, greater than anticipated
declines in existing production due to poor reservoir performance,
mechanical failures or inability to access production facilities,
among other factors.
Neither the Company nor any of its subsidiaries nor any of
its officers, directors or employees guarantees that the
assumptions underlying such forward-looking statements are free
from errors nor does any of the foregoing accept any responsibility
for the future accuracy of the opinions expressed in this document
or the actual occurrence of the forecasted developments.
The forward-looking statements contained in this document are
made as of the date hereof and the Company undertakes no obligation
to update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities
laws.
Use of "boe"
'boe' may be misleading if used in isolation.
Throughout this press release the calculation of barrels of oil
equivalent ("boe") is at a conversion rate of 6,000 cubic feet
("cf") of natural gas for one barrel of oil and is based on an
energy conversion method at the burner tip and does not represent a
value equivalence at the wellhead.
Neither the 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 release.
SOURCE Petroamerica Oil Corp.