Petroamerica announces the financial and operating results for the three and twelve months ended December 31, 2012

CALGARY, April 29, 2013 /CNW/ - Petroamerica Oil Corp. (TSX-V: PTA) ("Petroamerica" or the "Company"), a junior oil and gas company operating in Colombia, is pleased to announce the financial and operating results for the three and twelve months ended December 31, 2012. Copies of the Company's Management Discussion and Analysis ("MD&A") and 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.

2012 Highlights:
(all balances in Canadian dollars, unless otherwise noted)

• Commencement of production and oil sales from the Las Maracas field on the Los Ocarros Block. This field has contributed 451,317 barrels ("bbls") of oil (Company working interest, before royalties) of production in the year, and 361,338 bbls in sales (net of royalties) in the year;
• Generated revenue of over $42 million for the year, after royalties, leading to positive funds flow from operations of $15.6 million ($0.03 per share) with an operating netback of over US $71 per barrel;
• Achieved average daily production for the year of 1,392 bbls of oil per day ("bopd") (Company working interest, before royalties), with the fourth quarter average production of 3,247 bopd (Company working interest, before royalties);
• Exited the year with production of 4,156 bopd (Company working interest, before royalties), an 845% increase over the December 31, 2011 exit rate of 422 bopd (Company working interest, before royalties);
• Year on year increase of 68% in 2P reserves, from 3.03 million barrels at December 31, 2011 to 5.08 million barrels at December 31, 2012;
• Drilled La Casona light oil discovery (El Eden Block) and two new deeper pool discoveries (Gacheta and Une Formations) at the Las Maracas fields (Los Ocarros Block);
• Drilled five successful appraisal and development wells (Las Maracas-3, 4, 5 and 6 and Balay-4); and
• Securing of the $35 million debt financing on April 19, 2012.

Quarterly highlights include:

• Commencement of production and oil sales from the Las Maracas-5 and Las Maracas-6 wells on the Los Ocarros Block. These wells have contributed a combined 91,459 barrels of production in the current quarter;
• Generated revenue of over $27 million, after royalties, leading to positive funds flow from operation of $15.1 million ($0.03 per share) with an operating netback of approximately US $71 per barrel;
• Achieved average daily production of 3,247 bopd, exiting the quarter at daily production of 4,156 bopd.

The following table presents the highlights of Petroamerica's financial and operating results for the three and twelve months ended December 31, 2012 and 2011.

	Three Months Ended December 31						Year ended December 31
(in $000 CDN except share, per share and per barrel amounts, unless otherwise noted)	2012			2011			2012			2011
Oil revenue - net of royalties	$	27,389		$	5,416		$	42,848		$	10,454
Funds flow from operations	$	15,067		$	2,127		$	15,568		$	(12,080)
Funds flow per share		0.03			0.01			0.03			(0.02)
Loss for period	$	4,189		$	(3,052)		$	(4,755)		$	(31,919)
Total comprehensive income (loss)	$	5,816		$	(4,176)		$	(5,760)		$	(28,219)
Loss per share -  Basic and Diluted	$	0.01		$	(0.00)		$	(0.01)		$	(0.06)
Total assets	$	135,684		$	94,887		$	135,684		$	94,887
Total cash	$	26,639		$	19,295		$	26,639		$	19,295
Notes payable	$	32,606		$	-		$	32,606		$	-
Shareholders' equity	$	83,349		$	86,019		$	83,349		$	86,019
Exploration expenditures, before writeoffs	$	895		$	1,925		$	2,463		$	1,774
Capital expenditures	$	11,603		$	10,008		$	31,535		$	30,008
Common shares outstanding		578,671,594			578,331,594			578,671,594			578,331,594
Weighted average shares outstanding
Basic		578,382,898			521,900,717			578,344,490			521,900,717
Diluted		589,468,094			521,900,717			588,732,980			521,900,717
Average daily production - bbls		3,247			422			1,392			334
Selling price US$/bbl	$	107.69		$	112.70		$	107.70		$	108.15
Royalty US$/bbl	$	8.82		$	9.02		$	8.71		$	8.65
Average transportation costs US$/bbl	$	22.21		$	15.16		$	21.20		$	15.94
Operating cost US$/bbl	$	5.21		$	14.30		$	6.51		$	12.47
Operating netback US$/bbl	$	71.45		$	74.23		$	71.28		$	71.09
Funds flow netback/bbl	$	53.77		$	42.54		$	35.75		$	(114.50)
Share trading
High	$	0.37		$	0.15		$	0.37		$	0.74
Low	$	0.22		$	0.08		$	0.10		$	0.08
Close	$	0.35		$	0.11		$	0.35		$	0.11
Trading volume		94,420,800			108,092,700			286,403,100			477,565,700

 

Net asset value
	As at December 31
	2012			2011
Net asset value - proved plus probable reserves discounted at 10% - Pre Tax	$	205,600,000		$	123,000,000
Net asset value - proved plus probable reserves discounted at 10% - After Tax	$	160,079,557		$	105,832,554
NAV/Share - diluted, Pre Tax	$	0.33		$	0.25
NAV/Share - diluted, After Tax	$	0.26		$	0.18

Note: Net asset value is determined by adding the 2P reserve value, subtracting outstanding debt and adding cash and the potential cash from in the money options and warrants.  Net asset value per share is determine by taking the net asset value and dividing it by the sum of the outstanding common shares at December 31, 2012 and 2011 plus the potential number of shares issued from in the money options and warrants.

Fourth Quarter Financial Summary
For the three months ended December 31, 2012, the Company reported $27.4 million in oil revenue, net of royalties, from the sale of 278,665 barrels of oil.  The realized sales price was US $107.69 per barrel generating an operating netback of approximately US $71 per barrel.

For the fourth quarter of 2012, the Company's net income was $4.2 million ($0.01 per share diluted), due to the increased production from the Las Maracas Field and strong oil prices. The Company's capital expenditures for the fourth quarter were $16.6 million, all invested in Colombia. These capital expenditures were funded from available cash on hand.  As at December 31, 2012, the Company held 91,171 barrels of oil in inventory.

Operations Update

• March production averaged 4,296 bopd (Company working interest), compared to 4,669 in February and 4,232 in January. Production for April to date has averaged 4,542 bopd (Company working interest) and the current year production forecast is for 4,500 bopd (Company working interest).
• On the Los Ocarros block, the Las Maracas-8 well was spud on March 24, 2013, and on its completion the Las Maracas-9 well was spud on April 15, 2013.  The Company anticipated that, including these two wells, up to six additional appraisal/development wells and one water disposal well will be drilled in the current year.
• Production facilities on the Los Ocarros field are currently under construction and are expected to be commissioned and operational towards the end of the second quarter of 2013. These facilities have been designed to handle up to 40,000 barrels of fluid per day - 15,000 barrels of oil and 25,000 barrels of water.
• Testing of La-Casona-1 well completed and this well will be put on long term production test once suitable production facilities, including natural gas compression equipment, is secured.  Production from this well is expected to begin sometime in the third quarter of 2013.
• The Curiara-1 well on the El Porton block (25% Company working interest) is proceeding and has reached a depth of approximately 16,000 feet.
• The capital budget for exploration, appraisal and development has been set at $70 million.

Exploration and Appraisal Drilling in 2013

A summary of exploration and appraisal drilling expected to take place over the near term is provided below:

Prospect/Well		Well Type		Block		Working Interest		Timing
Curiara-1		Exploration		El Porton		25%		Drilling
La Guira-1		Exploration		Los Ocarros		50%		Q3 2013 Spud
Rumi-1 (Chiriguaro Este)		Exploration		El Eden		40%		Q2 2013 Spud
Malavar-1		Exploration		Llanos-10		50%		Q4 2013 Spud
La Casona-2		Appraisal		El Eden		40%		Q2 2013 Spud
Las Maracas-9		Development		Los Ocarros		50%		Drilling
Las Maracas-10		Development		Los Ocarros		50%		Q2 2013 Spud

Outlook

Given the Company's working capital position at the end of 2012, strong oil prices projected for 2013 and the expected completion of the Las Maracas production facilities by the end of the second quarter of 2013, the Company expects to fully finance all of its current development and exploration activities from a combination of funds on hand and through current and future cash flows and does not anticipate needing outside funding for the current year. However, this does not preclude that, in the event of exploration success, the Company may be required to obtain additional financing to support appraisal and development activities.

With the La Casona-1 discovery on the El Eden block, the Company plans on drilling at least one appraisal well on the block, which is scheduled to occur sometime in the second quarter of 2013, as well as procuring equipment to put the current well on long term test.  This equipment should be in place sometime early in the third quarter of 2013, and the testing program is expected to commence shortly thereafter.

When the production facilities at Las Maracas are complete, the joint venture is expected to be able to begin to produce the field at its optimum level.  These facilities, which have been designed to handle up to 15,000 barrels of oil and 25,000 barrels of water per day are expected to be completed by the end of May, 2013.  Further to this, with the proposed development drilling program for 2013, the overall production from this field is expected to increase, which would further enhance the revenues and cash flows that the Company will experience.

The Company is actively managing its exploration and development portfolio as well as reviewing current and future business opportunities within the oil and gas sector in Colombia with a view to ensuring that the Company is able to maintain and expand its asset base over the mid to long term.  These opportunities could involve farm-ins, asset purchases or other forms of business combinations, and will be assessed on their merits as they arise.

PETROAMERICA OIL CORP.
Consolidated Statements of Financial Position
(Expressed in Canadian dollars)
			As at December 31 2012			As at December 31 2011
Assets
Current assets
	Cash and cash equivalents		$	26,638,557		$	19,294,554
	Trade and other receivables			23,193,953			7,242,516
	Prepayments and deposits			97,557			417,837
	Crude oil inventory			3,661,280			563,530
				53,591,347			27,518,437
Non-current assets
	Restricted cash		$	3,875,873		$	7,926,079
	Property, plant and equipment			35,120,374			14,881,718
	Exploration and evaluation assets			36,151,670			44,560,366
	Deferred tax asset			6,944,301			-
				82,092,218			67,368,163
Total assets			$	135,683,565		$	94,886,600
Liabilities
Current liabilities
	Current equity tax		$	434,041		$	404,703
	Current income tax		$	777,865		$	-
	Accounts payable and accrued liabilities			17,092,149			5,016,607
				18,304,055			5,421,310
Non-Current  liabilities
	Deferred tax liabilities		$	-		$	2,601,828
	Decommissioning liabilities			1,052,558			176,000
	Notes payable			32,606,087			-
	Equity tax			372,118			668,231
Total liabilities				52,334,818			8,867,369
Shareholders' equity
	Share capital		$	140,563,498		$	140,483,641
	Contributed surplus			24,178,135			21,168,550
	Reserves			(512,303)			492,924
	Deficit			(80,880,583)			(76,125,884)
				83,348,747			86,019,231
Total liabilities and shareholders' equity			$	135,683,565		$	94,886,600

 

PETROAMERICA OIL CORP.
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian dollars)
			Year ended December 31
			2012			2011
Revenue
	Oil revenue - net of royalties		$	42,848,355		$	10,454,251
				42,848,355			10,454,251
Expenses
	Operating			(12,172,323)			(2,887,282)
	Exploration and evaluation			(15,377,777)			(24,048,883)
	Depletion and depreciation			(6,297,083)			(3,313,733)
	Impairment of property, plant and equipment			(6,200,808)			-
	General and administration			(9,409,867)			(7,453,893)
	Share-based payments			(1,800,985)			(3,764,191)
	Equity tax			-			(1,485,092)
				(51,258,843)			(42,953,074)
	Finance and other			(3,170,186)			548,323
	Foreign exchange (loss) gain			(145,214)			258,251
	Loss on disposal of investments			-			(1,674,353)
	Impairment of accounts receivable			(1,803,940)			-
				(5,119,340)			(867,779)
Loss before income taxes				(13,529,828)			(33,366,602)
Current income tax expense				(771,000)			-
Deferred tax recovery				9,546,129			1,447,355
Net loss for the year				(4,754,699)			(31,919,247)
Other comprehensive (loss) income
	Reserve on translation of foreign operations and net investments in foreign operations			(1,005,227)			2,415,890
	Net change in fair value of available-for-sale investments			-			1,284,150
Other comprehensive (loss) income				(1,005,227)			3,700,040
Total comprehensive loss			$	(5,759,926)		$	(28,219,207)
Basic and diluted loss per share			$	(0.01)		$	(0.06)
Weighted average number of basic and diluted common shares outstanding				578,344,490			521,900,717

 

PETROAMERICA OIL CORP.
Consolidated Statements of Changes in Equity
(Expressed in Canadian dollars)
		Share Capital			Contributed surplus			Fair value reserve			Translation reserve			Deficit			Total equity
Balance at January 1, 2012		$	140,483,641		$	21,168,550		$	-		$	492,924		$	(76,125,884)		$	86,019,231
Net loss for the year			-			-			-			-			(4,754,699)			(4,754,699)
Other comprehensive loss			-			-			-			(1,005,227)			-			(1,005,227)
Total comprehensive loss			-			-			-			(1,005,227)			(4,754,699)			(5,759,926)
Warrants issued pursuant to debt offering			79,857			1,289,572			-			-			-			1,369,429
Warrant issue costs			-			(69,116)			-			-			-			(69,116)
Warrants exercised			-			(11,856)			-			-			-			(11,856)
Share-based payments			-			1,800,985			-			-			-			1,800,985
Balance at December 31, 2012		$	140,563,498		$	24,178,135		$	-		$	(512,303)		$	(80,880,583)		$	83,348,747
		Share Capital			Contributed surplus			Fair value reserve			Translation reserve			Deficit			Total equity
Balance at January 1, 2011		$	114,438,212		$	13,141,128		$	(1,284,150)		$	(1,922,966)		$	(44,206,637)		$	80,165,587
Net loss for the year			-			-			-			-			(31,919,247)			(31,919,247)
Other comprehensive income			-			-			1,284,150			2,415,890			-			3,700,040
Total comprehensive income (loss)			-			-			1,284,150			2,415,890			(31,919,247)			(28,219,207)
Issue of share capital			26,846,161			4,753,739			-			-			-			31,599,900
Transaction costs			(1,499,349)			(284,391)			-			-			-			(1,783,740)
Share-based payments			698,617			3,558,074			-			-			-			4,256,691
Balance at December 31, 2011		$	140,483,641		$	21,168,550		$	-		$	492,924		$	(76,125,884)		$	86,019,231

 

PETROAMERICA OIL CORP.
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
			Year ended December 31
			2012			2011
Operating activities
Net loss for the period			$	(4,754,699)		$	(31,919,247)
Items not involving cash:
	Share-based payments			1,800,985			3,764,191
	Depletion and depreciation			6,297,083			3,313,733
	Loss on disposal of investments			-			1,674,353
	Deferred tax recovery			(9,546,129)			(1,447,355)
	Unrealized foreign exchange loss			136,751			2,289,276
	Accretion and amortization			714,745			-
	Impairment of property, plant and equipment assets			6,200,808			-
	Impairment of exploration and evaluation assets			12,914,561			10,244,787
	Impairment of accounts receivable			1,803,940			-
Net changes in non-cash working capital:
	Changes in trade and other receivables			(19,576,003)			(6,764,577)
	Changes in prepayments and deposits			320,682			(256,052)
	Changes in crude oil inventory			(3,097,183)			(31,646)
	Changes in accounts payable, accrued liabilities and equity tax			6,190,948			4,699,617
	Changes in current income tax			777,865			-
Cash provided by (used in) operating activities				184,354			(14,432,920)
Investing activities
Exploration and evaluation expenditures				(13,836,677)			(10,315,907)
Property, plant and equipment expenditures				(17,698,026)			(19,691,697)
Interest received				1,382,626			691,858
Proceeds on sale and farm out				-			10,678,500
Payment for assets relinquished				-			(6,800,000)
Restricted cash investments				4,050,207			2,300,000
Proceeds from marketable securities				-			2,441,347
Cash used in investing activities				(26,101,870)			(20,695,899)
Financing activities
Issuance of equity, net of costs				-			29,816,160
Exercise of warrants				68,000			-
Issuance of notes payable, net of costs				33,193,519			-
Proceeds on exercise of stock options				-			492,500
Cash provided by financing activities				33,261,519			30,308,660
Effect of foreign currency exchange rate changes on cash and cash equivalents				-			2,990
Increase (decrease) in cash and cash equivalents during the year				7,344,003			(4,817,169)
Cash and cash equivalents, beginning of period				19,294,554			24,111,723
Cash and cash equivalents, end of period			$	26,638,557		$	19,294,554

Forward Looking Statements:

This news release includes information that constitutes "forward-looking information" or "forward-looking statements". 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, the use of proceeds of the financing and of available cash on hand in addition to the potential exploration and development opportunities and expectations regarding regulatory approval and the 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; 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. 

Data obtained from the initial testing results at the referenced wells, which may include barrels of oil produced and levels of water-cut, should be considered to be preliminary until a further and detailed analysis or interpretation has been done on such data. The test results disclosed in this press release are not necessarily indicative of long-term performance or of ultimate recovery. The reader is cautioned not to unduly rely on such results as such results may not be indicative of future performance of the well or of expected production results for the Company in the future.

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.

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.

Nelson Navarrete
President and CEO

Colin Wagner
CFO

Ralph Gillcrist
COO and Executive Vice President Exploration & Business Development

Tel Bogota, Colombia: [phone]
Tel Calgary, Canada: [phone]
Email: [email protected]
Web Page: www.PetroamericaOilCorp.com