CALGARY, May 21, 2013 /CNW/ - ArPetrol Ltd. ("ArPetrol" or
the "Company") (TSXV: RPT) announces its financial and operating
results for the three months ended March 31,
2013 and provides an operational update on activities to
date this year as well as an outlook for the remainder of 2013. 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 First Quarter 2013
Operating and Financial
ArPetrol's first quarter production averaged 230
barrels of oil equivalent per day (boe/d). This is a decrease of 22
boe/d from the fourth quarter of 2012 and a decrease of 34 boe/d
from the first quarter of 2012. The decrease from the fourth
quarter of 2012 and first quarter of 2012 resulted from compressor
issues during the first quarter of 2013 and natural production
declines.
The average realized natural gas price was
$2.79 per thousand cubic feet (Mcf),
$0.01 per Mcf lower than the price
realized in the fourth quarter of 2012 and $0.06 per Mcf lower than in the first quarter of
2012. For natural gas liquids (NGL), average first-quarter 2013
prices were $68.94 per barrel,
$3.45 per barrel higher than in the
fourth quarter of 2012, and $6.82 per
barrel lower than in the same period in 2012. The changes in
natural gas and NGL pricing reflect commodity fluctuations in the
Argentine market.
Third-party processing volumes averaged 72.1
million cubic feet per day (MMcf/d), 1.9 MMcf/d below the fourth
quarter of 2012 and 12.7 MMcf/d above the first quarter of 2012.
These volumes generated processing sales of $1,127,507 in the first quarter of 2013, an
increase of $25,710 over the fourth
quarter of 2012 and a decrease of $7,104 from the same period in 2012.
Capital expenditures for the quarter were
$234,806. Expenditures were incurred
for suspension work on the first well of the Company's
extended-reach drilling program on its Faro Virgenes block.
Net income for the quarter was $1,726,730, compared to a net loss of
$1,066,167 for the first quarter of
2012. During the first quarter ArPetrol recorded an unrealized
foreign exchange gain of $2.8 million
which was the major factor in generating net income.
ArPetrol had a working capital deficit of
$0.8 million as at March 31, 2013, which will increase as a result
of the rig demobilization at Faro Virgenes. The Company has no
long-term debt.
Summary of Results |
|
|
(Cdn$ except shares outstanding and
per boe1 amounts) |
|
Three Months Ended
March 31, |
|
|
2013 |
2012 |
|
|
|
Financial |
|
|
|
|
Production sales |
|
|
477,544 |
529,250 |
Processing sales |
|
|
1,127,507 |
1,134,611 |
Funds flow from operations1 |
|
|
(682,551) |
(620,307) |
Cash from (used in) operating activities |
|
|
437,660 |
(133,208) |
Comprehensive income (loss) |
|
|
2,205,035 |
(1,333,222) |
Fixed asset expenditures |
|
|
234,806 |
2,896,592 |
Weighted average shares outstanding |
|
|
|
|
- basic and diluted 2 |
|
|
572,536,704 |
572,536,704 |
|
|
|
|
|
|
Operations |
|
|
|
|
Production |
|
|
|
|
Natural gas - Mcf per day |
|
|
1,208 |
1,454 |
Natural gas liquids - bbls per
day |
|
|
28 |
22 |
Total - boe per
day1 |
|
|
230 |
264 |
Average sales price |
|
|
|
|
Natural gas - $ per Mcf |
|
|
2.79 |
2.85 |
Natural gas liquids - $ per bbl |
|
|
68.94 |
75.76 |
Average operating netback |
|
|
|
|
Production - $ per
boe1 |
|
|
(3.47) |
1.15 |
Processing - $ per Mcf
processed1 |
|
|
0.05 |
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.
Gas Plant
The Company is in the later stages of negotiations on a new
third party gas processing agreement to replace the current third
party gas processing agreement expiring on June 30, 2013. The Company expects the new
agreement to be in place before July 1,
2013, at improved rates, to allow continued and
uninterrupted third party gas processing beyond the expiry of the
current agreement.
Operational Update and Outlook
The Company recently signed a new agreement with improved
pricing for the sale of its natural gas production. Starting
May 1st, and continuing to
September 30th, the
Company will receive $US3.65 per Mcf
of natural gas sold under the agreement, a 31% increase over the
current price. For the period of October
1st to December
31st, the price received will be $US3.23 per Mcf. The Company can sell 100% of its
production under the new agreement.
The Company's recently announced sale of its overriding royalty
interests in non-operated properties in the Williston Basin of North Dakota has closed and gross cash
proceeds of $US 594,000 have been
received.
The Company continues to pursue and evaluate a
broad range of strategic alternatives through its previously
announced strategic review process with the assistance of its
financial advisor, Raymond James Ltd.
The Company will continue to focus on
consistent, safe and efficient operations at its producing and
processing assets.
ArPetrol has continued discussions with
contractors to manage payment schedules on past due amounts to
allow sufficient time to provide a long-term solution for the
Company. However, there is no certainty whether or not any
contractors will pursue legal remedies relating to outstanding
payables. There is uncertainty regarding the Company's ability to
continue to operate as a going concern (see the financial
statements and MD&A filed on SEDAR for complete
disclosure).
Annual General Meeting
The Company has decided to cancel until further notice its
previously announced June 18, 2013
Annual General Meeting. The postponement was made to allow
additional time for the Company to review the results of its
current strategic review process.
All values in this news release are in Canadian
dollars unless otherwise indicated.
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 (MMcf)
per day. The Company's common shares are listed on the TSXV under
the symbol "RPT".
Non-GAAP 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 refundable Argentinean
taxes, foreign exchange on non-cash working capital, non-cash
working capital, and translation adjustment on operating items) do
not have any standardized meaning under International Financial
Reporting Standards (IFRS), which have been incorporated into GAAP,
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 months ended
March 31, 2013, 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 months ended March
31, 2013.
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 working capital deficiency, the
ability to negotiate with service providers and extend payment
schedules until a long-term solution for the Company can be
achieved, the pursuit of strategic alternatives and future
financing, the possibility to improve and extend the contractual
terms for the gas processing business, the timing of reaching
agreements with third parties, 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, plans for and results of the strategic review process
discussed below, the willingness of creditors to extend payment
schedules until a long-term solution is achieved, the ability to
improve and extend the gas processing agreements and the timing
thereof, future operations and transactions, future capital and
other expenditures (including the amount, nature, timing,
availability and sources of funding thereof), future production and
processing revenue, future economic conditions, future currency and
exchange rates, future pricing, 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 risks
associated with uncertainty regarding the availability of a
strategic alternative and the outcome of the strategic review
process, uncertainty regarding the willingness of third parties to
negotiate alternative contractual arrangements and payment
schedules, uncertainty whether any creditors will commence legal
proceedings, the risk of expiry of the existing gas processing
agreements without having new agreements in place, risks associated
with the oil and natural gas industry (e.g., operational risks in
demobilization of the drilling rig, 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 inability to access funding and continue as a going
concern, 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, change in government policies, 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.
ArPetrol's head office address is 700, 815 8
Avenue S.W., Calgary, AB T2P
3P2
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.