ArPetrol Ltd. announces first quarter 2012 financial and operating results
CALGARY, May 18, 2012 /CNW/ - ArPetrol Ltd. ("ArPetrol" or the "Company") (TSXV: RPT) is pleased to announce its financial and operating results for the three months ended March 31, 2012 and to provide an operational update on activities this year to date as well as an outlook for the remainder of 2012. The interim condensed consolidated financial statements and management's discussion and analysis, have been filed on SEDAR at www.sedar.com and posted on the Company's website at www.arpetrol.com.
First Quarter 2012 Summary
Operating and Financial
ArPetrol had $30 million of working capital as at March 31, 2012 and no long-term debt.
First quarter production averaged 264 boe per day. Compressor problems at the Company gas plant in February and natural decline rates contributed to a reduction in production versus the prior year comparative quarter.
Processing revenue was $1,134,611 in the first quarter of 2012, almost double the $576,830 earned in the fourth quarter of 2011. Third party processing volumes are returning to normal rates after the disruption at third party facilities in September 2010 and are currently at approximately 80% of capacity.
Capital expenditures for the first-quarter 2012 were $2,896,592. Major expenditures were made to drill one exploration well on our Catriel Viejo Sur ("CVS") concession in the Rio Negro province and to prepare for our extended reach drilling program on our Faro Virgenes block.
Net loss for the quarter was $1,066,167, a 41% improvement compared to the net loss for the prior year comparative quarter.
Summary of Results
(Cdn$ except shares outstanding and per boe1 amounts) | Three Months Ended March 31, | |||||
(Unaudited) | ||||||
2012 | 20112 | |||||
Financial | ||||||
Production sales | 536,957 | 641,022 | ||||
Processing revenues | 1,134,611 | 411,507 | ||||
Funds flow from operations 1 | (627,841) | (996,752) | ||||
Cash generated from operating activities | (133,208) | (899,268) | ||||
Net loss and comprehensive loss | 1,333,222 | 2,168,125 | ||||
Capital expenditures | 2,896,592 | 29,521 | ||||
Weighted average shares outstanding (millions) | ||||||
- basic and diluted | 572.5 | 267.7 | ||||
Operations | ||||||
Production | ||||||
Natural gas - Mcf per day | 1,454 | 2,062 | ||||
Natural gas liquids - bbls per day | 22 | 28 | ||||
Total - boe per day 1 | 264 | 372 | ||||
Average sales price | ||||||
Natural gas - $ per Mcf | 2.90 | 2.65 | ||||
Natural gas liquids - $ per bbl | 76.87 | 59.04 | ||||
Average operating netback | ||||||
Production - $ per boe 1 | 3.71 | 5.48 | ||||
Processing - $ per Mcf processed 1 | 0.09 | 0.01 | ||||
Note 1: See advisories at the end of this news release with respect to non-IFRS measures and BOE presentations.
Note 2: The unaudited consolidated results for the Company for the three months ended March 31, 2011 reflect the results of the combined operations of ArPetrol Inc. and RPT Resources Ltd. (now ArPetrol Ltd.) from March 18, 2011 until March 31, 2011 and the results from ArPetrol Inc. only from January 1, 2011 to March 17, 2011.
Operational Update and Outlook
ArPetrol plans to continue with its investment programs and meet its commitments in Argentina in order to progress its business plan to deliver value growth for shareholders in a market where we see an increasing commodity price environment. Other oil and gas companies have also announced their continued commitment to invest in their properties in Argentina.
ArPetrol has initiated mobilization for a June 2012 spud of the first long reach well in the Faro Virgenes field. The first well is expected to take 45-50 days to drill. Production from the well, expected to exceed 6 million mcf per day, will be tied into ArPetrol's 100 percent owned gas plant. With success ArPetrol would expect to drill a second well.
All values in this news release are in Canadian dollars unless otherwise indicated.
About ArPetrol Ltd.
ArPetrol is a Calgary-based publicly traded company currently engaged in oil and natural gas exploration, development and production and third-party natural gas processing in Argentina where it also owns and operates a gas processing facility with capacity of 85 million cubic feet (MMcf) per day.
The Company is the resulting entity from the business combination of the Company (formerly RPT Resources Ltd. ("RPT") and ArPetrol Inc. (now ArPetrol Holdings Inc., a wholly owned subsidiary of the Company) completed in the first quarter of 2011. This business combination is described further in the Company's consolidated financial statements as at and for the year ended December 31, 2011. 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 and processing revenue less royalties, turnover taxes and operating expenses) and "funds flow from operations" (cash generated from operating activities before changes in non-cash working capital, and translation adjustment on operating items) 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 income (loss) or other measures determined in accordance with IFRS, as an indicator of the Company's performance.
See the management's discussion and analysis for the three months ended March 31, 2012, 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 netbacks and a detailed calculation of such netbacks is presented in the management's discussion and analysis for the three months ended March 31, 2012, which is filed on SEDAR (accessible at www.sedar.com).
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, targeted production rates, anticipated third-party deliveries and processing volumes, expected capital expenditures, drilling plans and the timing associated therewith, availability of funding, future pricing, the ability to realize growth for our shareholders and expectations regarding the business and political climate in Argentina. Forward‐looking information typically contains statements with words such as "anticipate", "target", "estimate", "expect", "potential", "could", "should", 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 future operations and transactions, the expected increase in throughput and processing revenues, future drilling activity and production rates, future capital and other expenditures (including the amount, nature, timing and sources of funding thereof), future production and processing revenue, future economic conditions, future currency and exchange rates, future pricing, future funding, continued political stability in the areas in which the Company is operating, and the Company's continued ability to obtain and retain qualified 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 the oil and natural gas industry (e.g., operational risks in exploration and drilling; inherent uncertainties in interpreting geological data; changes in plans with respect to exploration or capital expenditures; the uncertainty of estimates and projections in relation to costs and expenses; and health, safety and environmental risks), access to funding, weather delays and natural disasters, processing interruptions and natural declines, union activities, change in government policies, the risk of commodity price and foreign exchange rate fluctuations, and risks associated with international activity.
ArPetrol operates outside of Canada and as such, ArPetrol is subject to a number of political risks over which it has no control. These risks may include risks related to 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, changes in energy policies or in the personnel administering them and currency and inflation risks. See the "Risk Factors" section of the Company's AIF for a further description of these risks and uncertainties facing ArPetrol.
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.
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.
Tim Thomas, President and Chief Executive Officer
[email protected]
Or
Ian Habke, Chief Financial Officer
[email protected]
ArPetrol Ltd.
Main Phone: 403-263-6738
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