Petroamerica Announces 2015 Third Quarter Results
CALGARY, Nov. 26, 2015 /CNW/ - Petroamerica Oil Corp. (TSX-V: PTA) ("Petroamerica" or the "Company"), a Canadian oil and gas company operating in Colombia, is pleased to announce the financial and operating results for the three and nine months ended September 30, 2015, and to provide an operations update on the Company's activities in Colombia.
Copies of the Company's Management Discussion and Analysis ('MD&A') and Interim Financial Statements have been filed with the Canadian Securities Regulatory authorities and can be viewed or downloaded at the Company's website at www.petroamericaoilcorp.com or at www.sedar.com. The financial results for all periods presented are in United States dollars unless otherwise indicated.
Financial and Operating Highlights:
- Announced the signing of an arrangement agreement with Gran Tierra Energy Inc. ("Gran Tierra") whereby Gran Tierra will acquire the 100% of the Company's outstanding shares. This arrangement is expected to close around the end of January, 2016;
- Completed the acquisition of PetroNova Inc, increasing the Company's interest in the highly prospective PUT-2 block as well as acquiring operatorship and an additional 3 blocks with significant potential;
- Announced a private placement of up to $20 million by way of secured debenture financing with AV Securities Inc., with up to $10 million available for the Company to close on until January 16, 2016 and up to $10 million available for the Company to close on approximately four months later;
- Recognized funds flow from operations in the quarter of $3.5 million ($0.03 per share) in a difficult oil price environment;
- Realized a Brent referenced sales price of $51.16/bbl, an operating netback of $14.54/bbl and a cash netback of $7.54/bbl for the quarter;
- Managed capital expenditures to a minimum, spending $2.2 million throughout the quarter;
- Reduced average unit transportation costs to 9.34/bbl compared to 12.25/bbl for the previous quarter;
Financial and Operating Results
The following table presents the highlights of Petroamerica's financial and operating results.
| (in $000 US except share, per share or unless otherwise noted) |
Q3 2015 |
Q2 2015 |
9 mos 2015 |
Q3 2014 |
||||
| Oil revenue – net of royalties |
$ |
12,887 |
$ |
15,873 |
$ |
45,815 |
$ |
43,150 |
| Funds flow from operations |
$ |
3,505 |
$ |
3,022 |
$ |
8,819 |
$ |
1,048 |
| Funds flow per share- basic |
$ |
0.03 |
$ |
0.03 |
$ |
0.10 |
$ |
0.01 |
| Funds flow per share- diluted |
$ |
0.03 |
$ |
0.03 |
$ |
0.10 |
$ |
0.01 |
| (Loss) income for period |
$ |
(73,299) |
$ |
(2,024) |
$ |
(82,275) |
$ |
(7,947) |
| Total comprehensive (loss) income |
$ |
(70,900) |
$ |
(2,628) |
$ |
(82,872) |
$ |
(14,182) |
| (Loss) income per share - basic |
$ |
(0.72) |
$ |
(0.02) |
$ |
(0.89) |
$ |
(0.10) |
| (Loss) income per share - diluted |
$ |
(0.72) |
$ |
(0.02) |
$ |
(0.89) |
$ |
(0.10) |
| Total assets |
$ |
144,427 |
$ |
230,849 |
$ |
144,427 |
$ |
361,906 |
| Total cash |
$ |
23,102 |
$ |
23,504 |
$ |
23,102 |
$ |
63,221 |
| Notes payable |
$ |
- |
$ |
- |
$ |
- |
$ |
30,718 |
| Shareholders' equity |
$ |
111,551 |
$ |
169,525 |
$ |
111,551 |
$ |
229,246 |
| Exploration costs |
$ |
- |
$ |
- |
$ |
- |
$ |
715 |
| Capital expenditures - excluding acquisition |
$ |
2,229 |
$ |
950 |
$ |
5,717 |
$ |
9,564 |
| Common shares outstanding (000's) |
108,888 |
87,252 |
108,888 |
87,175 |
||||
| Weighted average shares outstanding: |
||||||||
| Basic (000's) |
102,303 |
87,252 |
92,324 |
82,588 |
||||
| Diluted (000's) |
102,303 |
87,252 |
92,324 |
82,588 |
||||
| Average production - boepd |
3,655 |
3,634 |
3,943 |
6,009 |
||||
| Selling price $/boe |
$ |
44.10 |
$ |
54.47 |
$ |
48.47 |
$ |
94.59 |
| Royalty $/boe |
$ |
(5.17) |
$ |
(6.80) |
$ |
(5.70) |
$ |
(18.57) |
| Average transportation costs $/boe |
$ |
(9.34) |
$ |
(12.25) |
$ |
(12.04) |
$ |
(14.87) |
| Average production cost $/boe |
$ |
(15.05) |
$ |
(14.54) |
$ |
(13.29) |
$ |
(15.46) |
| Operating netback $/boe |
$ |
14.54 |
$ |
20.88 |
$ |
17.44 |
$ |
45.69 |
| Cash netback $/boe |
$ |
7.54 |
$ |
8.92 |
$ |
8.67 |
$ |
33.46 |
| Reference price - Brent ($/bbl) |
$ |
51.16 |
$ |
63.50 |
$ |
56.58 |
$ |
103.46 |
| Share trading |
||||||||
| High |
$ |
1.45 |
$ |
1.45 |
$ |
1.60 |
$ |
4.40 |
| Low |
$ |
1.00 |
$ |
1.00 |
$ |
1.00 |
$ |
2.80 |
| Close |
$ |
1.05 |
$ |
1.05 |
$ |
1.05 |
$ |
3.00 |
| Trading volume (000's) |
7,085 |
7,085 |
16,440 |
17,176 |
Third Quarter Financial Summary
For the three months ended September 30, 2015, the Company reported $14.6 million in revenue (before royalties) from the sale of 331 thousand boe or 3,655 boepd. The realized sales price was $44.10/boe generating an operating netback of $14.54/boe and a cash netback of $7.54/boe.
For the third quarter of 2015, the Company's net loss was $73.3 million ($0.72 per share diluted). due primarily to the recognition of $90 million in non-cash depletion & depreciation and impairment expense in the current quarter. The impairment charge is a result of a reevaluation of the carrying value of the Company's assets due to lower projected oil prices. The Company's capital expenditures for the third quarter were $2.2 million, all invested in Colombia. As at September 30, 2015, the Company held 50 thousand barrels of oil ('Mbbls') in inventory.
The Company continues to focus on reducing field operating expenditures. On a per barrel basis, production costs were $15.05 for the third quarter of 2015, a reduction from $15.46/boe for the third quarter of 2014. Transportation costs have been reduced from $14.87/boe in the third quarter of 2014 to $9.34/boe in the current quarter.
Private Placement
On October 27, 2015, the Company announced that that it had entered into an agreement with AV Securities to issue up to $20 million in debt financing, with up to $10 million expected to close in the fourth quarter of 2015 and up to $10 million to close approximately four months later.
Petroamerica is pleased to provide an update that AV Securities Inc. has agreed to extend the initial drawdown deadline for up to $10 million until January 16, 2016 and up to an additional $10 million to be available approximately four months later.
This placement will be cancelled in the event that the Arrangement with Gran Tierra outlined below is completed.
2015 Guidance
The Company is targeting gross company share production (net before royalty) for full-year 2015 of 3,600 boepd. Petroamerica's expected capital spending projection for the same period is now expected to be approximately $6.8 million.
Operations Update
Company working interest ('WI') production (before royalties) for the third quarter of 2015 averaged 3,655 boepd, with 2,388 boepd coming from the Llanos Basin and 1,267 boepd from the Putumayo Basin. Company WI production for the first nine months of 2015 averaged 3,943 boepd. In the fourth quarter, WI production has averaged approximately 2,912 boepd up to and including November 25. Production in the Las Maracas field was lower than expected during this period due to pump failures on two key wells, Las Maracas-9 and Las Maracas-15, which required pump repairs and additional remedial work to minimize the occurrence of future failures. Both wells have been returned to production and the field has been restored to full productivity. Production operations were normal in the Suroriente field during this period, with the exception of a six day production interruption in mid-October, when production was at 25% of productive capacity due to local road blockades which were subsequently removed. Assuming normal operations for the remainder of 2015, the Company expects to meet the previously announced full-year working interest production target of 3,600 boepd.
Arrangement with Gran Tierra
On November 12, 2015, the Company announced that it had entered into an arrangement agreement (the "Arrangement") whereby Gran Tierra has agreed to acquire all of the issued and outstanding common shares of Petroamerica by way of a statutory plan of arrangement under the Business Corporations Act (Alberta) (the "Acquisition"). Under the terms of the Arrangement Agreement, Petroamerica shareholders will receive, at their election, either 0.40 of a Gran Tierra common share or C$1.33 in cash for each Petroamerica share, subject to a maximum of 70 percent of the consideration payable in cash. The acquisition is expected to close on or around the end of January, 2016.
This acquisition of Petroamerica is highly strategic and will strengthen Gran Tierra's position as the premier operator and land holder in the Putumayo Basin. Gran Tierra has the financial capacity to pursue additional exploration and development projects within Petroamerica's asset portfolio maximizing its value.
Petroamerica established a special committee comprised of independent Directors, to explore various transaction alternatives available to Petroamerica, including transactions similar in nature to the Acquisition. The offer from Gran Tierra was unanimously recommended to the board of directors by the special committee, and the board of directors of Petroamerica, with the exception of one director who recused himself for potential conflict reasons but who unequivocally supports the transaction, has unanimously recommended approval of the Acquisition determining that the Acquisition is in the best interests of Petroamerica shareholders.
| PETROAMERICA OIL CORP. |
|||||
| Condensed Consolidated Interim Statements of Financial Position |
|||||
| As at |
As at |
||||
| September 30, |
December 31, |
||||
| (thousands of United States dollars) |
2015 |
2014 |
|||
| Assets |
|||||
| Current assets |
|||||
| Cash and cash equivalents |
$ |
23,102 |
$ |
73,296 |
|
| Trade and other receivables |
12,250 |
13,825 |
|||
| Prepayments and deposits |
998 |
463 |
|||
| Crude oil inventory |
1,712 |
2,096 |
|||
| 38,062 |
89,680 |
||||
| Non-current assets |
|||||
| Restricted cash |
14,626 |
11,065 |
|||
| Property, plant and equipment |
24,552 |
134,711 |
|||
| Exploration and evaluation assets |
67,187 |
54,974 |
|||
| 106,365 |
200,750 |
||||
| Total assets |
$ |
144,427 |
$ |
290,430 |
|
| Liabilities |
|||||
| Current liabilities |
|||||
| Current income tax |
$ |
394 |
$ |
2,459 |
|
| Accounts payable and accrued liabilities |
15,852 |
38,803 |
|||
| Notes payable |
- |
29,933 |
|||
| 16,246 |
71,195 |
||||
| Non-current liabilities |
|||||
| Decommissioning liabilities |
10,753 |
9,939 |
|||
| Deferred tax liability |
5,226 |
26,750 |
|||
| Stock appreciation rights liability |
651 |
1,554 |
|||
| Total liabilities |
32,876 |
109,438 |
|||
| Shareholders' equity |
|||||
| Share capital |
239,077 |
226,492 |
|||
| Contributed surplus |
25,484 |
24,638 |
|||
| Translation reserve |
(6,963) |
(6,366) |
|||
| Deficit |
(146,047) |
(63,772) |
|||
| 111,551 |
180,992 |
||||
| Total liabilities and shareholders' equity |
$ |
144,427 |
$ |
290,430 |
|
| PETROAMERICA OIL CORP. |
||||||||||
| Condensed Consolidated Interim Statements of (Loss) Income and Comprehensive (Loss) Income |
||||||||||
| Three months ended September 30 |
Nine months ended September 30 |
|||||||||
| (thousands of United States dollars, except per share amounts) |
2015 |
2014 |
2015 |
2014 |
||||||
| Revenue |
||||||||||
| Oil revenue - net of royalties |
$ |
12,887 |
$ |
43,150 |
$ |
45,815 |
$ |
142,677 |
||
| 12,887 |
43,150 |
45,815 |
142,677 |
|||||||
| Expenses |
||||||||||
| Production |
(4,983) |
(8,777) |
(14,233) |
(13,769) |
||||||
| Transportation |
(3,093) |
(8,441) |
(12,899) |
(29,954) |
||||||
| Purchased oil |
- |
- |
- |
(1,625) |
||||||
| Exploration and evaluation |
- |
(715) |
- |
(1,069) |
||||||
| Depletion and depreciation |
(6,434) |
(10,938) |
(22,518) |
(29,888) |
||||||
| Colombian equity tax |
- |
- |
(501) |
- |
||||||
| Impairment |
(90,394) |
- |
(90,394) |
- |
||||||
| General and administration |
(2,164) |
(5,272) |
(7,592) |
(11,745) |
||||||
| Transaction costs |
(966) |
(7,818) |
(976) |
(9,047) |
||||||
| Share-based payments |
135 |
(360) |
23 |
(2,352) |
||||||
| (107,899) |
(42,321) |
(149,090) |
(99,449) |
|||||||
| Finance and other |
497 |
(1,744) |
(1,443) |
(4,245) |
||||||
| Foreign exchange gain (loss) |
(1,802) |
1,185 |
1,025 |
3,028 |
||||||
| (1,305) |
(559) |
(418) |
(1,217) |
|||||||
| Income (loss) before income taxes |
(96,317) |
270 |
(103,693) |
42,011 |
||||||
| Current income tax expense |
389 |
(2,971) |
(390) |
(18,781) |
||||||
| Deferred tax recovery (expense) |
22,629 |
(5,246) |
21,808 |
(7,134) |
||||||
| Net income (loss) for the period |
(73,299) |
(7,947) |
(82,275) |
16,096 |
||||||
| Other comprehensive income (loss) |
||||||||||
| Items that may be reclassified subsequently to income or (loss): |
||||||||||
| Reserve on translation of foreign operations |
2,399 |
(6,235) |
(597) |
(8,286) |
||||||
| Total comprehensive income (loss) |
$ |
(70,900) |
$ |
(14,182) |
$ |
(82,872) |
$ |
7,810 |
||
| Basic income (loss) per share |
$ |
(0.72) |
$ |
(0.10) |
$ |
(0.89) |
$ |
0.24 |
||
| Diluted income (loss) per share |
$ |
(0.72) |
$ |
(0.10) |
$ |
(0.89) |
$ |
0.23 |
||
| Weighted average number of basic |
||||||||||
| common shares outstanding |
102,303,306 |
82,587,679 |
92,324,291 |
67,176,269 |
||||||
| Weighted average number of diluted |
||||||||||
| common shares outstanding |
102,303,306 |
82,587,679 |
92,324,291 |
69,053,745 |
||||||
| PETROAMERICA OIL CORP. |
||||||||||
| Condensed Consolidated Interim Statements of Changes in Equity |
||||||||||
| (thousands of United States dollars) |
Share Capital |
Contributed |
Translation |
Deficit |
Total equity |
|||||
| Balance at January 1, 2015 |
$ |
226,492 |
$ |
24,638 |
$ |
(6,366) |
$ |
(63,772) |
$ |
180,992 |
| Net loss for the period |
- |
- |
- |
(82,275) |
(82,275) |
|||||
| Other comprehensive loss |
- |
- |
(597) |
- |
(597) |
|||||
| Total comprehensive loss |
- |
- |
(597) |
(82,275) |
(82,872) |
|||||
| Issue of share capital |
12,585 |
- |
- |
- |
12,585 |
|||||
| Share-based payments |
- |
846 |
- |
- |
846 |
|||||
| Balance at September 30, 2015 |
$ |
239,077 |
$ |
25,484 |
$ |
(6,963) |
$ |
(146,047) |
$ |
111,551 |
| (thousands of United States dollars) |
Share Capital |
Contributed |
Translation |
Deficit |
Total equity |
|||||
| Balance at January 1, 2014 |
$ |
138,936 |
$ |
24,079 |
$ |
(1,172) |
$ |
(25,745) |
$ |
136,098 |
| Net income for the period |
- |
- |
- |
16,096 |
16,096 |
|||||
| Other comprehensive loss |
- |
- |
(8,286) |
- |
(8,286) |
|||||
| Total comprehensive income (loss) |
- |
- |
(8,286) |
16,096 |
7,810 |
|||||
| Issue of share Capital |
79,300 |
- |
- |
- |
79,300 |
|||||
| Warrants exercised |
5,676 |
(472) |
- |
- |
5,204 |
|||||
| Stock options exercised |
172 |
(65) |
- |
- |
107 |
|||||
| Share-based payments |
- |
916 |
- |
- |
916 |
|||||
| Cancellation of shares |
(189) |
- |
- |
- |
(189) |
|||||
| Balance at September 30, 2014 |
$ |
223,895 |
$ |
24,458 |
$ |
(9,458) |
$ |
(9,649) |
$ |
229,246 |
| PETROAMERICA OIL CORP. |
|||||||||
| Condensed Consolidated Interim Statements of Cash Flows |
|||||||||
| Three months ended September 30 |
Nine months ended September 30 |
||||||||
| (thousands of United States dollars) |
2015 |
2014 |
2015 |
2014 |
|||||
| Operating activities |
|||||||||
| Net (loss) income for the period |
$ |
(73,299) |
$ |
(7,947) |
$ |
(82,275) |
$ |
16,096 |
|
| Items not involving cash: |
|||||||||
| Share-based payments |
(135) |
360 |
(23) |
2,352 |
|||||
| Depletion and depreciation |
6,434 |
10,938 |
22,518 |
29,888 |
|||||
| Unrealized foreign exchange (gain) loss |
2,715 |
(7,355) |
(345) |
(9,956) |
|||||
| Deferred tax expense (recovery) |
(22,629) |
5,246 |
(21,808) |
7,134 |
|||||
| Impairment of property, plant and equipment |
90,394 |
- |
90,394 |
- |
|||||
| Accretion and amortization |
25 |
324 |
358 |
901 |
|||||
| Abandonment expenditures |
- |
(518) |
- |
- |
|||||
| 3,505 |
1,048 |
8,819 |
45,897 |
||||||
| Net changes in non-cash working capital |
(2,772) |
4,734 |
(23,694) |
8,963 |
|||||
| Cash provided by (used in) operating activities |
733 |
5,782 |
(14,875) |
54,860 |
|||||
| Investing activities |
|||||||||
| Short term investing activities |
- |
22,884 |
- |
(7,106) |
|||||
| Exploration and evaluation expenditures |
(1,852) |
(899) |
(3,372) |
(2,974) |
|||||
| Property, plant and equipment expenditures |
(300) |
(6,810) |
(1,840) |
(21,141) |
|||||
| Restricted cash investments |
443 |
- |
(2,008) |
- |
|||||
| Corporate acquisition, net of cash acquired |
574 |
(10,777) |
574 |
(10,777) |
|||||
| Cash (used in) provided by investing activities |
(1,135) |
4,398 |
(6,646) |
(41,998) |
|||||
| Financing activities |
|||||||||
| Repayment of long-term debt |
- |
(28,500) |
(28,674) |
(28,500) |
|||||
| Stock options exercised |
- |
72 |
- |
107 |
|||||
| Warrants exercised |
- |
3,217 |
- |
- |
|||||
| Cancellation of shares |
- |
(189) |
- |
(189) |
|||||
| Cash used in financing activities |
- |
(25,400) |
(28,674) |
(23,378) |
|||||
| Decrease in cash and cash equivalents during the period |
(402) |
(15,220) |
(50,194) |
(10,516) |
|||||
| Cash and cash equivalents, beginning of period |
23,504 |
68,441 |
73,296 |
63,737 |
|||||
| Cash and cash equivalents, end of period |
$ |
23,102 |
$ |
53,221 |
$ |
23,102 |
$ |
53,221 |
|
Forward Looking Statements:
This news release includes information that constitutes "forward-looking information" or "forward-looking statements". Statements relating to "reserves" or "resources" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future. More particularly, this news release contains statements concerning expectations regarding regulatory and partner approvals on the Company's development plan, drilling and operational opportunities and the timing associated therewith, , test results and the timing thereof, , potential future acquisitions and other statements, expectations, beliefs, goals, objectives, assumptions and information about possible future conditions, results of operations or performance, the use of available cash on hand in addition to the potential exploration and development opportunities and expectations regarding regulatory approval and the overall strategic direction of the Company. The forward-looking statements contained in this document, including expectations and assumptions concerning the obtaining of the necessary regulatory approvals, including ANH approval, and the assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are uncertain and subject to risks.
A multitude of factors can cause actual events to differ significantly from any anticipated developments and although the Company believes that the expectations represented by such forward-looking statements are reasonable, undue reliance should not be placed on the forward-looking statements because there can be no assurance that such expectations will be realized. Material risk factors include, but are not limited to: the inability to obtain regulatory approval, including ANH approval, for the transfer of participating interests and/or operatorship for the Company's properties, the risks of the oil and gas industry in general, such as operational risks in exploring for, developing and producing crude oil and natural gas, market demand and unpredictable shortages of equipment and/or labour, changes or fluctuations in production levels, the size of oil and natural gas reserves or resources; incorrect assessments of the value of acquisitions and exploration and development programs; geological, technical, drilling, production and processing problems; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; fluctuations in oil and gas prices, foreign currency exchange rates and interest rates, and reliance on industry partners.
Readers should also note that even if the drilling program as proposed by the Company is successful, there are many factors that could result in production levels being less than anticipated or targeted, including without limitation, greater than anticipated declines in existing production due to poor reservoir performance, mechanical failures or inability to access production facilities, among other factors.
Neither the Company nor any of its subsidiaries nor any of its officers, directors or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments.
The forward-looking statements contained in this document are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Use of "boe"
'boe' may be misleading if used in isolation. Throughout this press release the calculation of barrels of oil equivalent ("boe") is at a conversion rate of 6,000 cubic feet ("cf") of natural gas for one barrel of oil and is based on an energy conversion method at the burner tip and does not represent a value equivalence at the wellhead.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Petroamerica Oil Corp.
Ralph Gillcrist, President and CEO; Colin Wagner, CFO, Tel Bogota, Colombia: +57-1-744-0644, Tel Calgary, Canada: +1-403-237-8300, Email: [email protected], Web Page: www.PetroamericaOilCorp.com
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