Aurora Oil & Gas reports second quarter 2013 financial results

PERTH, Western Australia, Aug. 7, 2013 /CNW/ - Aurora Oil & Gas Limited (TSX: AEF) (ASX: AUT) today released financial results for the three and six months ended June 30, 2013. All figures are reported in US dollars unless otherwise noted.

Highlights for the second quarter of 2013, including non-IFRS measures, compared to the corresponding quarter in 2012 are:

• Revenue US$134 million up 134%, 93% generated from liquids
  
• EBITDAX US$80 million up 154%
  
• Operating netback US$46.15/boe
  
• Funds from operations US$66 million up 150%
  
• Average production up 145% to approximately 20,380 boe/d (pre royalty)

		Three months ended			Six months ended
		Jun 30, 2013	Jun 30, 2012	Increase %	Jun 30, 2013
Financial
(US$ thousands unless otherwise stated)
Production revenue - Pre royalty		134,190	57,341	134%	261,729
EBITDAX^(1)		80,380	31,639	154%	156,000
	Per boe - (US$/boe)	43.35	41.57	4%	44.15
Funds from operations^(1)		65,601	26,292	150%	131,099
	Per share - basic (US cents per share)	14.65	6.21	136%	29.27
	Per boe - (US$/boe)	35.38	34.54	2%	37.10
Net profit before tax		39,979	20,287	97%	85,347
Net profit after tax^(2)		25,694	10,330	149%	55,305
	Per share - basic (US cents per share)	5.74	2.44	135%	12.35
	Per boe - (US$/boe)	13.86	13.57	2%	15.65
Adjusted net profit after tax^(1)		25,694	13,330	93%	55,305
	Per share - basic (cents per share)	5.74	3.19	80%	12.35
Net capital expenditures (including acquisitions)		106,395	319,306	(67%)	328,503
Net capital expenditures (excluding acquisitions)		106,395	147,884	(28%)	213,263
		As at	As at
		Jun 30, 2013	Dec 31, 2012	Increase %
Weighted average common shares outstanding (million)
	Basic	447.9	432.6	4%
	Diluted	456.7	439.4	4%

(1)	These financial measures are identified and defined below under "Non-IFRS Financial Measures"
(2)	The income tax expense for the quarter ended June 30, 2013 of $14 million reflects the annualized accounting deferred income tax expense for the year. No current income tax is due for payment for the 2013 year.

			Three months ended			Six months ended
			Jun 30, 2013	Jun 30, 2012	Increase %	Jun 30, 2013
Operating
Production - Pre royalties
	Natural gas (mscf/d)		24,874	7,002	255%	23,578
	Light/medium oil (bbls/d)		7,974	5,792	38%	7,184
	Condensate (bbls/d)		4,824	466	935%	5,188
	NGL (bbls/d)		3,434	939	266%	3,220
		Total oil equivalent (boe/d)	20,377	8,364	144%	19,521
Revenue derived commodity price
	Natural gas (US$/mscf)		4.04	1.97	105%	3.87
	Light/medium oil (US$/bbl)		99.33	96.49	3%	101.96
	Condensate (US$/bbl)		98.23	94.83	4%	99.98
	NGL (US$/bbl)		31.50	27.71	14%	32.20
Netbacks			US$/boe	US$/boe		US$/boe
	Production revenue		72.37	75.34	(4%)	74.08
	Royalties		(19.25)	(20.24)	(5%)	(19.77)
	Production taxes		(2.43)	(2.51)	(3%)	(2.47)
	Operating expenses		(4.54)	(6.57)	(31%)	(5.13)
	Operating netback		46.15	46.03	0.26%	46.71
	Depletion, depreciation and amortisation		(12.11)	(9.53)	27%	(11.42)
	General and administrative expenses		(2.80)	(4.46)	(37%)	(2.55)
	Finance costs		(8.72)	(7.25)	20%	(7.60)
	Net profit before tax		21.56	26.65	(19%)	24.16
	Net profit after tax		13.86	13.57	2%	15.65

_{(1)     These financial measures are identified and defined below under "Non-IFRS Financial Measures"
(2)     Boe conversion is on a 6:1 basis, as explained below under "Cautionary and Forward-Looking Statements."}

Outlook

Looking forward for the remainder of 2013, Aurora is well funded for the planned development programs for its operated and non-operated acreage at the Sugarkane Field. 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 development programs.

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 Aurora's existing credit facility. The amount able to be drawn from this facility was increased from US$150 million to US$200 million during the first quarter of 2013.

The selected financial and operational information outlined above should be read in conjunction with Aurora's unaudited interim financial report and related Management's Discussion and Analysis for the three and six months ended June 30, 2013, 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. Unless otherwise indicated, Aurora's unaudited interim financial report and the financial information contained in this announcement has been prepared in accordance with Australian Accounting Standards ("AAS") and in compliance with International Financial Reporting Standards (IFRS).

Briefing Conference Call

Aurora will host a second quarter 2013 results briefing conference call on the following date:

August 7, 2013 at 7.00 p.m. Eastern Time/ 6:00 p.m. Central Time (North America)
August 8, 2013 at 7.00 a.m. Western Time/ 9:00 a.m. Eastern 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 #: 20244762

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. Aurora 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 79,700 highly contiguous gross acres in the heart of the trend, including approximately 21,800 net acres within the Sugarkane Field in the over-pressured and liquids core of the Eagle Ford.

Executive Management Contact:

Jonathan Stewart

Douglas E. Brooks

Executive Chairman

Group Chief Executive Officer

Tel: [phone]

Tel: [phone]

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.

References herein to "Sugarkane" or the "Sugarkane Field" are references to the Sugarkane natural gas and condensate field within the Eagle Ford and includes the two contiguous fields designated by the Texas Railroad Commission as the Sugarkane and Eagleville Fields.

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; changes in the rate and/or location of future drilling programs on our acreage by our operator(s), 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

Within this Report references are made to certain financial measures that do not have any standardized meanings prescribed by 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:

		Three months ended Jun 30,				Six months ended Jun 30,
		2013	2012			2013	2012
(US$ thousands)
Net profit after tax		25,694	10,330			55,305	19,305
Adjustments:
	Share based payment expense	1,489	1,078			2,863	2,305
	Depletion, depreciation and amortisation expense	22,451	7,250			40,366	10,008
	Interest income	(23)	(152)			(33)	(193)
	Finance costs	16,169	5,522			26,846	8,755
	Net foreign exchange loss / (gain)	362	(2,972)			406	(3,028)
	Gain on foreign currency derivatives not qualifying as hedge	-	(1,167)			-	(1,167)
	Other income	(47)	(1)			(77)	(1)
	Net gain on sale of available for sale assets	-	(770)			-	(770)
	Income tax expense	14,285	9,957			30,042	15,030
	Exploration and evaluation costs	-	2,564			282	3,043
EBITDAX		80,380	31,639			156,000	53,017

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:

			Three months ended Jun 30,		Six months ended Jun 30,
			2013	2012	2013	2012
	(US$ thousands unless otherwise stated)
	Net profit after tax		25,694	10,330	55,305	19,035
	Add/(less) non-cash items
		Depletion, depreciation and amortisation expense	22,451	7,250	40,366	10,008
		Amortisation of borrowing costs and discount / premium on financial instruments	1,333	612	2,110	972
		Share based payment expense	1,489	1,078	2,863	2,305
		Income tax expense	14,285	9,957	30,042	15,030
		Net foreign exchange loss / (gain)	362	(2,973)	406	(3,029)
		Employee benefit provision	(13)	38	7	223
Funds from operations			65,601	26,292	131,099	44,544

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:

	Six months ended Jun 30,
	2013	2012
(US$ thousands unless otherwise stated)
Net profit after tax	55,305	19,035
Adjustments for non-recurring items:
Income tax expense - change in estimated provision for the year ended December 31, 2011	-	3,000
Adjusted net profit after tax	55,305	22,035

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 of royalty payments.

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.
  
• "m" or "M" prefix means thousand.
  
• "mm" or "MM" prefix means million.
  
• "NGLs" means natural gas liquids
  
• "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

Aurora Oil & Gas Limited ABN 90 008 787 988
HEAD OFFICE
Level 20, 77 St. Georges Terrace, Perth, WA 6000, Australia
GPO Box 2530 Perth, WA 6001, Australia
t [phone], f [phone], e [email protected]

HOUSTON
Aurora USA Oil & Gas, Inc. a subsidiary of Aurora Oil & Gas Limited
1111 Louisiana, Suite 4550, Houston, TX 77002 USA
t [phone], f [phone]
www.auroraoag.com.au