Aurora Oil & Gas reports fourth quarter and 2012 annual financial results

PERTH, Western Australia, Feb. 27, 2013 /CNW/ - Aurora Oil & Gas Limited (TSX: AEF) (ASX: AUT) today released financial results for the fourth quarter and year ended December 31, 2012. All figures are reported in US dollars unless otherwise noted.

Financial highlights for the 2012 year:

• Revenue US$295 million up 293%
• EBITDAX US$167 million up 320%
• Funds from operations US$140 million ($0.32 per share) up 251%
• Operating netback US$46.72/boe

4^th quarter 2012 compared to the 3^rd quarter 2012:

• Revenue US$112 million up 32%, 94% generated from liquids
• Funds from operations US$54 million up 31%
• Production up 35% to average of 16,907 boe/d

		Year ended
		Dec 31, 2012	Dec 31, 2011		Increase %
Financial
(US$ thousands unless otherwise stated)
Production revenue - Pre royalty		294,812	75,079		293%
EBITDAX^(1)		167,472	39,796		320%
	Per boe - (US$/boe)^(1)	42.85	38.15		12%
Funds from operations^(1)		139,888	39,815		251%
	Per share - basic (US cents per share)^(1)	32.34	9.88		227%
	Per boe - (US$/boe)^(1)	35.79	38.17		(6%)
Net profit before tax		96,202	32,227		198%
Net profit after tax^(2)		58,846	30,584		92%
	Per share - basic (US cents per share)	13.60	7.49		82%
	Per boe - (US$/boe)	15.06	29.32		(49%)
Adjusted net profit after tax^(1)		63,044	27,573		129%
	Per share - basic (US cents per share)	14.57	6.75		116%
Net capital expenditures (including acquisitions)		700,855	131,217		434%
Weighted average common shares outstanding (million)
	Basic	432.6	408.5		6%
	Diluted	439.4	415.0		6%

(1)	These financial measures are identified and defined below under "Non-IFRS Financial Measures"
(2)	The income tax expense for the year ended December 31, 2012 of $37 million reflects the annualized accounting deferred income tax expense for the year. No current income tax is due for payment for the 2012 year.
(3)	Boe conversion is on a 6:1 basis, as explained below under "Cautionary and Forward-Looking Statements."

			Year ended
			Dec 31, 2012	Dec 31, 2011		Increase %
Operating
Production - Pre royalties
	Natural gas (mscf/d)		11,548	3,951		192%
	Light/medium oil (bbls/d)		5,198	1,252		315%
	Condensate (bbls/d)		2,034	627		224%
	NGL (bbls/d)		1,522	321		374%
		Total oil equivalent (boe/d)	10,678	2,858		274%
Average Product prices achieved
	Natural gas (US$/mscf)		2.90	4.06		(28%)
	Light/medium oil (US$/bbl)		100.21	92.35		8%
	Condensate (US$/bbl)		98.43	92.35		6%
	NGL (US$/bbl)		32.71	56.96		(42%)
Netbacks
	Production revenue (US$/boe)		75.43	71.97		5%
	Royalties (US$/boe)		(19.86)	(19.24)		3%
	Production taxes (US$/boe)		(2.58)	(2.71)		(5%)
	Operating expenses (US$/boe)		(6.27)	(3.75)		67%
	Operating netback (US$/boe)		46.72	46.28		1%
	Depletion, depreciation and amortisation (US$/boe)		(10.02)	(4.19)		139%
	General and administrative expenses (US$/boe)		(3.87)	(8.42)		(54%)
	Finance costs (US$/boe)		(7.17)	(0.13)		5,415%

_{(1)These financial measures are identified and defined below under "Non-IFRS Financial Measures"}

_{(2)The income tax expense for the year ended December 31, 2012 of $37 million reflects the annualized
accounting deferred income tax expense for the year. No current income tax is due for payment for the 2012 year.}

_{(3)Boe conversion is on a 6:1 basis, as explained below under "Cautionary and Forward-Looking Statements."}

Outlook

Looking forward to 2013, the Company is well funded for the planned development program at the Sugarkane field.

Based on the current drilling program for 2013 and current commodity prices, management expect growth in production, revenue and profitability to continue through 2013.

This growth is expected to be funded by a combination of the increasing cash flow generated from production sales and the Company's credit facility. The amount able to be drawn from this facility was recently increased from US$ 150 million to US$ 275 million.

The increase in the level of funding available exceeds forecast working capital requirements and provides capacity for capital expenditure programs in excess of that presently forecast for the Sugarkane field.

The selected financial and operational information outlined above should be read in conjunction with Aurora's audited annual financial report and related Management's Discussion and Analysis for the year ended December 31, 2012, which will be filed on SEDAR and will be available for review at www.sedar.com and on our website at www.auroraoag.com.au. Aurora's audited annual financial report and the financial information contained in this announcement were prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures compliance with International Financial Reporting Standards (IFRS).

Briefing Conference Call

Aurora will host a 2012 annual results briefing conference call on the following date:

February 27, 2013 at 6.30 p.m. Eastern Time (Canada)
February 28, 2013 at 7.30 a.m. Western Time (Australia)

Presentation PDF File

Aurora has filed a presentation to accompany the briefing conference call. Please access the presentation from the Corporate Presentations page of Aurora's website using the link below.

http://www.auroraoag.com.au/irm/content/corporate-presentations.aspx?RID=201

Call-in Details

To access either briefing call by telephone, please use one of the following numbers

From the USA: Operator Assisted Toll-Free Dial-In Number: 1 [phone]

From outside the USA International Dial-In #:  [phone]

Conference ID #: 98998323

Toll Free International Numbers:

Australia	1-800-287-011
Austria	0-800-297-216
China, North	10-800-714-1191
China, South	10-800-140-1195
France	0-800-917-449
Germany	0-800-183-0171
Hong Kong	800-901-563
Ireland	1-800-760-620
Japan	00-53-11-60-858
Korea (South)	003-0813-1987
Netherlands	0-800-022-1164
Norway	800-105-67
Singapore	800-101-2564
Switzerland	0-800-835-354
Taiwan	00-801-127-130
United Kingdom	0-800-051-7107

Please connect approximately ten minutes prior to the beginning of the call to ensure participation.

A recording of each briefing conference call will also be available on the Company's website following the briefing at http://www.auroraoag.com.au

About Aurora

Aurora is an Australian and Toronto listed oil and gas company active in the over pressured liquids rich region of the Eagle Ford Shale in Texas, United States.  The Company is engaged in the development and production of oil, condensate and natural gas in Karnes, Live Oak and Atascosa counties in South Texas.  Aurora participates in approximately 77,000 highly contiguous gross acres in the heart of the trend, including approximately 19,100 net acres within the liquids rich zones of the Eagle Ford.

Cautionary and Forward-Looking Statements

Statements in this press release reflect management's expectations relating to, among other things, target dates, Aurora's expected drilling program and the ability to fund development are forward-looking statements, and can generally be identified by words such as "will", "expects", "intends", "believes", "estimates", "anticipates" or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that some or all of the reserves described can be profitably produced in the future. These statements are not historical facts but instead represent management's expectations, estimates and projections regarding future events.

Although management believes the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are based on the opinions, assumptions and estimates of management at the date the statements are made, and are 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. These factors include risks related to: exploration, development and production; oil and gas prices, markets and marketing; acquisitions and dispositions; competition; additional funding requirements; reserve estimates being inherently uncertain; incorrect assessments of the value of acquisitions and exploration and development programs; environmental concerns; availability of, and access to, drilling equipment; reliance on key personnel; title to assets; expiration of licences and leases; credit risk; hedging activities; litigation; government policy and legislative changes; unforeseen expenses; negative operating cash flow; contractual risk; and management of growth. In addition, if any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this document. Such assumptions include, but are not limited to, general economic, market and business conditions and corporate strategy. Accordingly, investors are cautioned not to place undue reliance on such statements.

All of the forward-looking information in this press release is expressly qualified by these cautionary statements. Forward-looking information contained herein is made as of the date of this document and Aurora disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise, except as required by law.

Non - IFRS Financial Measures

References are made in this Annual Report to certain financial measures that do not have any standardized meanings prescribed by International Financial Reporting Standards ("IFRS"). Such measures are neither required by, nor calculated in accordance with IFRS, and therefore are considered Non-IFRS financial measures. Non-IFRS financial measures may not be comparable with the calculation of similar measures by other companies. Funds from operations, EBITDAX, net operating income, operating netback and adjusted net profit after tax are commonly used in the oil and gas industry.

EBITDAX

EBITDAX represents net income (loss) for the period before income tax expense or benefit, gains and losses attributable to the disposal of projects, finance costs, depletion, depreciation and amortization expense, other non-cash charges, expenses or income, one-off or non-recurring fees, expenses and charges and exploration and evaluation expenses.

The following table reconciles net profit after tax to EBITDAX:

		Dec-12	Dec-11
		US$'000	US$'000
Net profit after tax		58,846	30,584
Adjustments:
	Share based payment expense	4,398	4,052
	Depletion, depreciation and amortisation expense	39,161	4,367
	Interest income	(247)	(649)
	Finance costs	28,027	136
	Net foreign exchange (gain)	(3,042)	(989)
	(Gain) on foreign currency derivatives not qualifying as hedges	(1,167)	-
	Net (gain) on sale of available for sale assets	(770)	-
	Other income	(29)	-
	Income tax expense	37,356	1,643
	Exploration and evaluation costs	4,939	652
EBITDAX		167,472	39,796

Funds from Operations

Funds from operations represent funds provided by operating activities before changes in non-cash working capital.

The following table reconciles net profit after tax to funds from operations:

			Dec-12	Dec-11
			US$'000	US$'000
Net profit after tax			58,846	30,584
Add/(less) non-cash items:
		Depletion, depreciation and amortisation expense	39,161	4,367
		Amortisation of borrowing costs and discount/premium of financial instrument	2,927	66
		Share based payment expense	4,398	4,052
		Income tax expense	37,356	1,643
		Net foreign exchange (gain)	(3,042)	(989)
		Employee benefit provision	242	92
Funds from operations			139,888	39,815

The Company considers funds from operations and EBITDAX as key measures as both assist in demonstrating the ability of the business to generate the cash flow necessary to fund future growth through capital investment. Neither should be considered as an alternative to, or more meaningful than net income or cash provided by operating activities (or any other IFRS financial measure) as an indicator of the Company's performance. Because EBITDAX excludes some, but not all, items that affect net income, the EBITDAX presented by the Company may not be comparable to similarly titled measures of other companies.

Adjusted Net Profit After Tax

Adjusted net profit after tax represents net profit after tax before non-recurring items.

The following table reconciles net profit after tax to adjusted net profit after tax:

		Dec-12	Dec-11
		US$'000	US$'000
Net profit after tax		58,846	30,584
Adjustments for non-recurring items:
	Income tax expense - change in estimated provision for the year ended December 31, 2011	3,011	(3,011)
	(Gain) on foreign currency derivatives not qualifying as hedges	(1,167)	-
	Net (gain) on sale of available for sale assets	(770)	-
	Exploration and evaluation costs - Eureka Energy Limited	3,124	-
Adjusted net profit after tax		63,044	27,573

Management also uses certain industry benchmarks such as net operating income and operating netback to analyse financial and operating performance.

Net Operating Income

Net operating income represents net oil and gas revenue attributable to Aurora after distribution to royalty holders.

Operating Netback

Operating netback as presented, represents revenue from production less royalties, state taxes, transportation and operating expenses calculated on a boe basis. Management considers operating netback an important measure to evaluate its operational performance as it demonstrates its field level profitability relative to current commodity prices.

Defined Reserves and Resource Terms

• "bbls" means barrels.

• "boe" means barrels of oil equivalent and have been calculated using liquid volumes of oil, condensate and NGLs and treated volumes of gas converted using a ratio of 6 mscf to 1 bbl of liquid equivalent unless otherwise stated.

• "scf" means standard cubic feet.

• "btu" means British thermal units.

• "m" or "M" prefix means thousand.

• "mm" or "MM" prefix means million.

• "b" or "B" prefix means billion.

• "/d" suffix means per day.

Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mscf: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.  Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 mscf:1 bbl, utilising a conversion ratio of 6 mscf:1 bbl may be misleading. Unless stated otherwise, all per boe references are a reference to Aurora's per boe production on a working interest basis before deduction of royalties.

 

SOURCE: Aurora Oil & Gas Limited

Level 20, 77 St. Georges Terrace, Perth, Western Australia 6000, GPO Box 2530 Perth, Western Australia 6001, T+61 8 9440 2626, F [phone], E [email protected], W www.auroraoag.com.au

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