Sea Dragon Energy Inc Third Quarter 2014 Financial and Operating Results

LONDON, England, Nov. 28, 2014 /CNW/ - Sea Dragon Energy Inc. ("Sea Dragon" or the "Company") (TSXV: SDX) announces its 2014 third Quarter Financial and Operating Results (the "Quarter" or "Q3 2014").

Third Quarter 2014 Highlights:

Operational Performance

• Completed the North West Gemsa work-over program during the quarter. Field now producing at a plateau rate of 11,150 boepd.  Significantly reduced capex spend going forward.
• Shukheir Bay 5 work-over, following a tubing leak, was successful and the well returned to production at 233 bopd.
• GA-1 work-over, to remove an obstruction in the tubing string, was successful and the well returned to production at 112 bopd; 2.5 X pre-work-over production rate.
• 26 additional lines of 2D seismic acquired and interpreted in the South Disouq concession resulting in an improved understanding of the concession potential.
• The 3D seismic acquisition tender for the South Disouq concession was initiated during the quarter.
• South Ramadan reprocessed 3D seismic data set acquired and interpretation activity initiated.

Financial Performance

• Recorded sales volumes for the quarter of 1,412 boepd, of which oil sales were 1,248 bopd from both the North West Gemsa and Shukheir Marine concessions (Q3 2013: 1,784 boepd).
• Improved the Accounts Receivables ageing position more than 90 days old by US$0.5 MM to US$2.0 MM (Q2 2014 US$2.5 MM).
• Collected US$3.8 MM of accounts receivables during the quarter.
• Recorded net cash from operating activities of US$0.6 MM for the quarter (Q3 2013: US$0.8 MM).
• Exited the quarter with Working Capital of US$6.3 MM. 

Paul Welch, President & CEO of Sea Dragon commented:

"Q3 was a busy quarter during which a significant amount of necessary remedial work was completed on both our operated and non-operated assets whilst still maintaining focus on our exploration and development projects.

During the quarter we were successful in working over and returning to production two wells that had been shut-in for an extended period in our Shukheir Marine Concession.  Additionally the operator in NW Gemsa completed the last of the planned work-overs for the year.  NW Gemsa is now producing at its forecast plateau rate without the heavy capex spend that we have seen in previous periods, allowing the field to be significantly cash generative despite the current lower realized oil prices.  We remain on track for the 2015 seismic acquisition and drilling programme for South Disouq, supported by the completion of the 3D tender.

I am pleased to report on the noticeable improvement in the overall business and investment climate in Egypt, which we expect to both continue and accelerate into 2015 as the government progresses in resolving the receivable issue. I have been pleased to see that overall market sentiment has turned positive for Egypt and I look forward to reporting on our progress in this improved environment in subsequent periods" 

KEY FINANCIAL & OPERATING HIGHLIGHTS
			THREE MONTHS ENDED SEPTEMBER 30		NINE MONTHS ENDED SEPTEMBER 30
FISCAL YEAR		Prior Quarter (1)	2014	2013	2014	2013
FINANCIAL $000's
Cash, end of period		1,397	1,789	1,300	1,789	1,300
Working capital		6,148	6,317	12,209	6,317	12,209
Funds from operations		1,598	(77)	2,322	2,816	5,233
	per share	0.00	(0.00)	0.01	0.01	0.01
Net Income/(Loss)		(249)	(1,207)	845	(2,490)	(6,636)
	per share	(0.00)	(0.00)	(0.00)	(0.01)	(0.02)
Capital expenditures		1,015	(349)	2,059	5,519	5,513
Total assets		47,119	45,587	43,678	45,587	43,678
Shareholders' equity		33,313	32,208	35,251	32,208	35,251
Common shares outstanding (000's)		376,459	376,459	376,459	376,459	376,459
OPERATIONAL
Oil sales (bbl/d)		1,426	1,248	1,727	1,381	1,647
Gas sales (mcf/d)		927	855	1,117	942	729
NGL sales (bbl/d)		21	21	25	21	16
Total boe/d		1,602	1,412	1,938	1,560	1,784
Brent oil price ($/bbl)		109.70	101.87	110.60	106.55	108.04
Realized oil price ($/bbl)		103.90	95.56	105.10	100.79	102.86
Realized gas price ($/mcf)		1.00	1.00	1.00	1.00	1.00
Realized NGL price ($/bbl)		73.58	68.45	77.35	71.51	65.00
Net realized price ($/bbl)		94.05	86.12	95.07	90.85	95.93
Royalties ($/bbl)		53.69	48.09	49.52	51.95	49.67
Operating costs ($/bbl)		10.57	20.31	12.30	14.13	12.77
Netback ($/bbl)		29.79	17.72	33.26	24.77	33.48
(1) Denotes the three months ended June 30, 2014

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 2014 drilling and capital expenditure programs of the NW Gemsa, Shukheir Marine 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, 2013 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]; Financial PR: Bell Pottinger, Philip Dennis / Joanna Boon, Tel: [phone]; Investor Relations: Brisco Capital Partners Corp., Scott Koyich, Tel: [phone]