Calvalley announces financial results for the second quarter ended June 30, 2012

CALGARY, Aug. 9, 2012 /CNW/ - Calvalley Petroleum Inc., (TSX: CVI.A)

Highlights

• Earnings in the second quarter of 2012 were $0.09 per share ($8.1 million) compared to the loss of $0.03 per share (-$2.6 million) in the second quarter of 2011. For the six month period ended June 30, 2012 earnings increased to $0.16 per share ($15.1 million) up significantly from the $0.02 per share ($1.5 million) for the six month period in 2011. During the second quarter of 2011 the reported loss was due to no crude export sales occurring during the quarter. During the first six months of 2011 the Company's operations were subject to production curtailments as a result of pipeline disruptions and security related issues and second quarter production volumes were included in inventory at the quarter end.
  
  
• The Company's working interest share of production volumes before royalties and taxes averaged 2,519 barrels per day in the second quarter 2012 representing a 118 per cent increase over the 1,157 barrels per day for the second quarter of 2011 and a 30 per cent increase over the first quarter volume of 1,942 barrels per day. For the six month period ended June 30, 2012 production volumes were 2,231 barrels per day up from 1,459 barrels per day in the prior period. During the first quarter of 2012 production volumes were impacted by both production curtailments and a two week production shut down. Gross production volumes from the Hiswah and Ras Nowmah fields during the second quarter of 2012 averaged approximately 3,000 and 2,000 barrels per day respectively with the Al Roidhat field being shut-in for the period. Subsequent to the end of the quarter the Al Roidhat field has resumed production. Gross production volumes from the Al Roidhat field are expected to average between 1,200 and 1,500 barrels per day.
  
  
• During the second quarter of 2012 the Company sold an average of 2,773 barrels per day of crude oil compared to nil crude oil shipments in the prior period of 2011. For the six month period to June 30, 2012 crude oil exports have averaged 2,524 barrels per day compared to 788 barrels per day in the comparable period of 2011. For the second quarter of 2012, the average sale price received was $112.21 per barrel which represents a premium of $3.92 to the Dated Brent Crude price of 108.29 for the quarter. The product netback for the second quarter of 2012 was $44.65 per barrel and for the six month ended June 30, 2012 the netback of $45.96 per barrel represents an increase of 11 per cent from $41.48 per barrel for the comparable six month period of 2011.
  
  
• Funds flow from operations ("Cash Flow") for the quarter ended June 30, 2012 was $0.11 per share ($10.5 million) compared to a negative Cash Flow in the prior year period. For the six month period to June 30, 2012 Cash Flow was $0.20 per share ($19.3 million) an increase of 436 per cent from the $3.6 million in the prior year period.
  
  
• Capital expenditures in the second quarter of $0.6 million were down from $1.8 million in the second quarter of 2011 reflecting the limited services available to execute the Company's capital program throughout the first part of 2012. Near the end of the quarter the Company resumed its drilling program with the return of several service companies and their employees to the region. Capital expenditures for the six months to June 30, 2012 of $2.8 million represent a 75 per cent reduction from capital expenditures of $11.1 million for the six month period ending June 30, 2011.
  
  
• Calvalley has a healthy balance sheet with approximately $91 million in working capital at June 30, 2012. The working capital balance increases to over $92 million with inventory of crude oil valued at current market value rather than cost.

Financial information

Significant financial information is included in the table below and is discussed further in the Company's Management Discussion and Analysis.

				Three months ended June 30						Six months ended June 30
(in thousands of US dollars except per share amounts)				2012			2011			2012			2011
Revenue (Gross)				28,321			-			51,676			14,412
Revenue from crude oil sales (net of royalties)				17,752			(82)			32,393			8,858
EBITDA^(1)				12,100			(1,668)			22,319			4,254
Operating income^(1)				10,218			(1,678)			18,931			3,496
Profit (loss)				8,057			(2,613)			15,127			1,461
	Per share			0.09			(0.03)			0.16			0.02
Capital expenditures				596			4,583			2,761			11,079
Funds flow from operations^(1)				19,312			(1,541)			10,450			3,613
	Per share			0.11			(0.02)			0.20			0.04
Cash flow from (used in) operating activities				16,271			(1,641)			3,687			4,686

⁽¹⁾ See "Non-IFRS Measures" disclosure in June 30, 2012 MD&A filed on www.sedar.com

FILING OF REPORTS ON SEDAR

Calvalley's Management's Discussion and Analysis and Unaudited Condensed Consolidated Financial Statements for the three and six months ended June 30, 2012 can be found for viewing by electronic means on The System for Electronic Document Analysis and Retrieval at www.sedar.com. They can also be found on the Company's website at www.calvalleypetroleum.com.

Calvalley is listed on the Toronto Stock Exchange, trading under the symbol "CVI.A".

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

This press release may contain forward-looking statements including, without limitation, financial and business prospects and financial outlooks, and such statements may be forward-looking statements which reflect management's expectations regarding future plans and intentions, growth, results of operations, performance and business prospects and opportunities. Words such as "may", "will", "should", "could", "anticipate", "believe", "expect", "intend", "plan", "potential", "continue", and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve significant risk and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including, but not limited to, changes in general economic and market conditions and other risk factors. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with these forward-looking statements. Investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof.

 

SOURCE: Calvalley Petroleum Inc.

[email protected]

Edmund Shimoon, Chairman & CEO
Gerry Elms, CFO   [phone]