VALEURA ANNOUNCES SECOND QUARTER 2010 FINANCIAL AND OPERATING RESULTS
CALGARY, Aug. 27 /CNW/ - Valeura Energy Inc. ("Valeura" or the "Corporation") (TSX-V: "VLE") is pleased to report highlights of the unaudited interim financial and operating results for the Corporation for the three and six months period ended June 30, 2010, and to provide an update on subsequent developments. The complete quarterly reporting package for the Corporation, including the unaudited interim financial statements and associated management discussion and analysis, have been filed on SEDAR at www.sedar.com and posted on the Corporation's website at www.valeuraenergy.com.
Valeura evolved from two predecessor companies PanWestern Energy Inc. ("PanWestern"), a public company that was listed on the TSX Venture Exchange, and Northern Hunter Energy Inc. ("Northern Hunter"), a private oil and gas company. On April 9, 2010, PanWestern and Northern Hunter completed a Plan of Arrangement (the "Arrangement") whereby PanWestern acquired all of the shares of Northern Hunter. On June 29, 2010 PanWestern shareholders approved a change in the name of the Corporation to Valeura Energy Inc.
HIGHLIGHTS
- Closed two private placement financings in April 2010 which provided
net proceeds of $28.5 million.
- Shareholders approved the following at the Annual and Special Meeting
of shareholders on June 29, 2010:
- Appointment of KPMG LLP as auditors of the Corporation;
- Election of a new Board of Directors consisting of William Fanagan
(Chair), Abdel Badwi, Claudio Ghersinich, James McFarland, Kenneth
McKay and Ronald Royal;
- An amended and restated stock option plan;
- A new performance share unit plan;
- Name change to Valeura Energy Inc.; and
- New bylaws for the Corporation.
- Currently pursuing farm-ins, asset acquisitions and corporate
acquisitions to achieve a toe-hold in the international regions of
interest. Executed confidentiality agreements with a number of
companies with international operations and presented non-binding
letters of intent/expressions of interest to a select few, two of
which are being actively progressed.
- Petroleum and natural gas sales from Canadian operations in the
second quarter of 2010 averaged 263 barrels of oil equivalent per day
("boepd") compared to 374 boepd in the second quarter of 2009.
- Funds flow from operations in the second quarter of 2010 was negative
($856,437) compared to negative ($14,761) in the second quarter of
2009 reflecting the impact of one-time transaction costs of $434,057
associated with closing the Arrangement and higher G&A expenses
related to increased international business development activities.
- As at June 30, 2010 the Corporation had a positive working capital
balance of $27.4 million, including cash of $28.5 million, and an
undrawn standby credit facility of $4.0 million. This compares to a
working capital deficit of $4.6 million as at June 30, 2009.
RESULTS SUMMARY
The acquisition by PanWestern of Northern Hunter's shares on April 9, 2010 pursuant to the Arrangement was accounted for under generally accepted accounting principles as a reverse take-over of PanWestern by Northern Hunter. This reflects the fact that Northern Hunter shareholders held more than 50% of the shares in the merged entity, prior to giving effect to the two private placement equity financings.
The unaudited interim consolidated results for the Corporation for the second quarter of 2010 reflect the results of the combined operations of PanWestern and Northern Hunter (now Valeura) whereas prior periods represent the results of Northern Hunter only.
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
(unaudited) 2010 2009 2010 2009
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Financial
($ except share and
per share amounts)
Petroleum and natural
gas revenues (net) 892,878 966,232 1,754,225 1,499,559
Funds flow from
operations(1) (856,437) (14,761) (1,184,443) 42,503
Net income/(loss) (3,145,674) (763,731) (4,890,500) (1,000,839)
Capital expenditures 478,906 1,186,764 892,594 2,792,379
Net working capital
surplus/(deficit) - - 27,436,979 (4,562,621)
Common shares
outstanding
Basic - - 198,327,621 13,405,406
Diluted - - 239,175,121 16,169,406
Share trading
High 0.95 - 0.95 -
Low 0.36 - 0.32 -
Close 0.41 - 0.41 -
Operations
Production
Crude oil &
NGL's (bbls/d) 97 106 88 82
Natural Gas (mcf/d) 994 1,609 980 1,169
Boe/d (at 6:1)(2) 263 374 251 276
Average reference price
WTI (US$ per bbl) 77.99 59.62 78.39 51.46
AECO (Cdn$ per mcf) 3.90 3.81 4.64 4.65
Average realized price
Crude oil (Cdn$ per bbl) 66.44 60.47 68.46 54.25
Natural gas liquids
(Cdn$ per bbl) 45.84 28.14 45.52 26.76
Natural gas
(Cdn$ per mcf) 3.83 3.40 4.32 3.96
Average Operating
Netback (Cdn$ per
BOE at 6:1)(2) 12.00 6.58 14.60 9.60
Notes:
(1) The above table includes non-GAAP measures, which may not be
comparable to other companies. See MD&A for further discussion.
(2) BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6.0 mcf per 1.0 bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the well head.
OUTLOOK
The Corporation is pursuing a strategy to build a global exploration and production company with a portfolio of assets in at least one or two regions of the world. Selected countries in Latin America, the Middle East and North Africa ("MENA") region and the Mediterranean Basin are of prime interest but the Corporation may pursue acquisitions in other regions on an opportunistic basis that otherwise meet its criteria of acceptable political and contract risk, attractive fiscal and royalty regimes, established infrastructure and significant deal flow.
The Corporation is currently pursuing farm-ins, asset acquisitions and corporate acquisitions. Targets include underexploited, onshore oil and gas assets (conventional and non-conventional) and undercapitalized companies that can provide material exploitation, development and step-out exploration upside. The Corporation is seeking to leverage its knowledge of certain countries and hydrocarbon basins and its proven technical and operational skills in applying best available technologies to capture value.
The Corporation is currently pursuing potential transactions in the regions of interest and has multiple proposals under active discussion with companies with assets in these regions. These include a mix of opportunities identified by the Corporation from its own efforts as well as opportunities presented to it by companies attracted by the track record of the management team and the board of directors, as well as the success of the recent financing.
Confidentiality agreements have been executed with several companies and non-binding letters of intent/expressions of interest have been presented to a select few, two of which are being actively progressed. The flow of potential opportunities continues to be robust to complement these more advanced initiatives.
ABOUT VALEURA
Valeura Energy Inc. is a Calgary, Alberta based public company currently engaged in the exploitation, development and production of petroleum and natural gas in Western Canada. The Corporation is pursuing a new strategy to expand internationally to selected countries in Latin America, the MENA region and the Mediterranean Basin.
FORWARD LOOKING INFORMATION
This news release contains certain forward-looking statements relating, but not limited, to operational information, future transaction and operational plans and the timing associated therewith, anticipated capital budgets and estimated costs. Forward-looking information typically contains statements with words such as "anticipate", "estimate", "expect", "potential", "could", or similar words suggesting future outcomes. The Corporation cautions readers and prospective investors in the Corporation's securities to not place undue reliance on forward-looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by the Corporation.
Forward looking information is based on management's current expectations and assumptions regarding, among other things, the Corporation's growth strategies, plans for and results of future transactions, future drilling activity, future capital and other expenditures (including the amount, nature and sources of funding thereof), future economic conditions, future currency and exchange rates, continued political stability of the areas in which the Corporation is anticipating completing transactions, the Corporation's continued ability to obtain and retain qualified staff and equipment in a timely and cost efficient manner and the receipt of all necessary approvals for transactions. In addition, budgets are based upon the Corporation's current acquisition plans and exploration plans and anticipated costs both of which are subject to change based on, among other things, the actual results of acquisitions, drilling activity, unexpected delays and changes in market conditions. Although the Corporation believes the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect.
Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by the Corporation including, but not limited to, risks associated with the oil and gas industry (e.g. operational risks in exploration; inherent uncertainties in interpreting geological data; changes in plans with respect to exploration or capital expenditures; the uncertainty of estimates and projections in relation to costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with third parties in countries other than Canada, the uncertainty regarding government and other approvals and the risk associated with international activity. The forward-looking information included in this news release is expressly qualified in its entirety by this cautionary statement. The forward-looking information included herein is made as of the date hereof and Valeura assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law.
Additional information relating to Valeura is also available on SEDAR at www.sedar.com.
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 news release.
For further information: Jim McFarland, President and CEO, Valeura Energy Inc., (403) 930-1150, [email protected]; Steve Bjornson, CFO, Valeura Energy Inc., (403) 930-1151, [email protected]; www.valeuraenergy.com
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