Sea Dragon Energy Inc First Quarter 2015 Financial and Operating Results

LONDON, England, May 29, 2015 /CNW/ - Sea Dragon Energy Inc. ("Sea Dragon" or the "Company") (TSXV: SDX) announces its 2015 first Quarter Financial and Operating Results (the "Quarter" or "Q1 2015").

First Quarter 2015 Highlights:

Operational Performance

• Production
  • Average daily sales volumes for the quarter were 993 boepd, including 881 boepd from NW Gemsa and 112 boepd from Shukheir Marine.
• NW Gemsa:
  • Continued strong production performance, in line with budget;
  • Undertook a review of the 2015 budget with the operator, with a target to reduce costs by 20%-25% year on year.
• South Disouq:
  • Completed the 45% farm-out of the South Disouq concession;
  • Received US$1.9MM in past costs;
  • Received US$6.0MM in replacement guarantees by Farminee;
  • Evaluated the results of the South Disouq 3D seismic acquisition tender;
  • Technical and commercials evaluations presented to partners and Egyptian authorities.
• South Ramadan
  • Reviewed the work program and budget for the South Ramadan concession;
  • Changed focus of 2015 budget to G&G work leading to a potential well drilling in 2016.
• Shukheir Marine
  • Reviewed cost, profitability and future prospectivity of the concession;
  • Relinquished the Shukheir Marine concession; effective January 31, 2015.

Financial Performance

• Realized Net Revenues of US$2.6MM and a Netback of US$1.9MM (US$20.90/boe);
• Netback increased 35% in US$ terms and 72% in US$/boe terms vs previous quarter as a result of:
  • Net oil revenues down by 33%, due to a 22% drop in volumes and 52% in realized prices;
  • Offset by a 60% drop in Opex (improving realized opex to US$8.40/boe);
• Exited the quarter with cash on hand of US$3.1MM:
  • Collected US$1.3MM in outstanding receivables, equivalent to a receivables position of 3 months production;
  • Paid down US$1.2MM against the Company's debt facility;
• Working capital of US$5.2MM of which US$2.2MM is current and US$3.0MM of pledged receivables is non-current until the South Disouq 3D seismic work program is completed;
• Completed a G&A cost reduction review and plan for the year.

Subsequent to the Quarter

• Current production volumes are 854/boepd, due to:
  • NW Gemsa production decline;
  • Shukheir Marine relinquishment;
• Brent prices have remained stable and above US$60/bbl;
• Replaced bank guarantees of US$6.0MM:
  • Restricted cash of US$6.0MM returned to the Company and used to pay down the debt Facility;
  • Bank debt is now standing at US$2.8MM, reducing further to US$2.0MM in June;
• Collected US$0.8MM in outstanding receivables.

Paul Welch, President & CEO of Sea Dragon commented:

"The Company undertook a complete review of its 2015 operations and budgets during the period.

This resulted in significant reductions in forecast capital expenditures and operating costs across the asset base, with the most significant being the relinquishment of the Shukheir Marine concession. All our remaining assets were determined to perform well in this environment. I am also delighted to report that all aspects of our South Disouq farm-out are now complete and the partners are keen to move the work program forward.

While the changes in oil price have been challenging to manage they do, however, create opportunities for significant savings in the services sector. This will be important to us in future periods as we start to acquire 3D seismic in South Disouq and drill additional wells in NW Gemsa and South Ramadan.

Finally, during the period, the Company significantly reduced its debt levels which will lead to lower operating costs in the future.

Overall, the business climate in Egypt continues to be positive and I look forward to reporting on our progress in subsequent periods".

KEY FINANCIAL & OPERATING HIGHLIGHTS

			THREE MONTHS ENDED MARCH 31
$000s except per unit amounts		Prior Quarter (1)	2015	2014
FINANCIAL
Gross Revenue		8,115	4,365	13,942
Royalties		(4,760)	(1,746)	(8,135)
Net Revenues		3,355	2,619	5,807
Operating Costs		(1,972)	(751)	(1,857)
Netback ^(2)		1,383	1,868	3,950
Net Income/(Loss)		(6,471)	(516)	(1,033)
	per share	(0.02)	(0.00)	(0.00)
Funds from operations		(1,261)	283	1,297
	per share	(0.00)	0.00	0.00
Cash, end of period		2,966	3,105	875
Working capital		5,055	2,243	5,747
Capital expenditures		(1,204)	188	4,853
Total assets		40,283	38,011	40,026
Shareholders' equity		25,828	25,355	33,363
Common shares outstanding (000's)		376,459	376,459	376,459
OPERATIONAL
Oil sales (bbl/d)		1,239	993	1,489
Gas sales (mcf/d)		-	-	1,058
NGL sales (bbl/d)		-	-	22
Total boe/d		1,239	993	1,686
Oil sales volumes (bbls)		113,999	89,403	133,970
Gas sales volumes (mcf)		-	-	95,226
NGL sales volumes (bbls)		-	-	1,942
Total sales volumes (boe)		113,999	89,403	151,779
Brent oil price ($/bbl)		76.37	53.78	108.14
Net realized price ($/bbl)		71.18	48.83	91.86
Royalties ($/bbl)		41.75	19.53	53.60
Operating costs ($/bbl)		17.30	8.40	12.23
Netback ($/bbl)		12.13	20.90	26.02

(1) Denotes the three months ended December 31, 2014

(2) Netback  is a non-GAAP measure that represents sales net of all operating expenses and government royalties. Management believes that
netback is a useful supplemental measure to analyze operating performance and provide an indication of the results generated by the
Company's principal business activities prior to the consideration of other income and expenses. Management considers netbacks an
important measure as it demonstrates the Company's profitability relative to current co modity prices. Netback may not be comparable to
similar measures used by other companies.

Consolidated financial statements with Management's Discussion and Analysis ("MD&A") are now available on the Company's website at www.seadragonenergy.com and on SEDAR at www.sedar.com.

Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. In particular, statements concerning the 2015 drilling and capital expenditure programs of NW Gemsa, South Ramadan and South Disouq and the results referenced or implied herein should be viewed as forward-looking statements. 

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements".  All reserves information contained herein as well as the net present value of such reserves should be considered as forward looking statements. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such risks and other factors include, among others, costs and timing of exploration and production development, availability of capital to fund exploration and development and political, social and other risks inherent in carrying on business in Egypt.  There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.

Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law. Although Sea Dragon has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Investors are cautioned that such forward-looking statements involve risks and uncertainties.  Actual results may differ materially from those currently anticipated.  See Sea Dragon's Annual Information Form for the year ended December 31, 2014 for a description of the risks and uncertainties associated with the Company's business, including its exploration activities. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

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 THE RELEASE.

Notes to Editors

Sea Dragon Energy is an international exploration and development Oil Company with a focus on North Africa. Activities are currently concentrated in Egypt, with interests in three concessions with short- and long-term potential. For further information please see the Company website at www.seadragonenergy.com or the Company's filed documents at www.sedar.com.

SOURCE Sea Dragon Energy Inc.

Sea Dragon Energy Inc.: Paul Welch, President and Chief Executive Officer, Tel: [phone]; Olivier Serra, Chief Financial Officer, Tel: [phone]