ArPetrol Ltd. provides operational update
17 September 2012 - 10:40PM
PR Newswire (Canada)
CALGARY, Sept. 17, 2012 /CNW/ - ArPetrol Ltd. ("ArPetrol" or the
"Company") announces an operational update on its Faro Virgenes
extended reach drilling program. The first Faro Virgenes extended
reach well was drilled to a Measured Depth (MD) of 3467m at an
inclination of 76 degrees. The top of the Springhill formation
reservoir section was encountered on prognosis. While preparing the
hole to run 9 5/8" casing, the drill string became stuck at 2399m
MD. ArPetrol has made multiple attempts to free the drill string,
without success. As a consequence, ArPetrol has severed the drill
string and has set cement plugs to temporarily suspend operations.
The incident, operations associated with attempts to remedy the
incident, suspension activities, and the cost of tools lost in hole
have added approximately $4 million to well costs. Further
costs will be incurred for personnel and equipment demobilization
(related to, among other things, service providers, rental tools,
the drilling camp and the drilling rig) and unused equipment
restocking. Following this the working capital of the Company
would be estimated to be approximately $2 million, however, this
will vary depending on the final demobilization costs as well as
any currency exchange fluctuations. Based on its technical work and
consultation with the drilling experts, the Company determined that
approximately an additional $10 million would have been required to
reactivate the drilling, completion, tie-in and production testing
of the well at this time. The Company has attempted to identify
sources of additional funding to continue with this well, but based
on these attempts has determined that the required funding is not
currently available. Management and the board of directors wish to
continue to advance this project and remain committed to create
value from the Company's assets. They will be reviewing
strategic alternatives in order to identify and consider all
options available in order to determine the optimal course of
action for the Company and its shareholders, including a potential
financing, a farm-out or disposition of assets, a joint venture,
and a sale or merger of the Company. Conference Call ArPetrol will
discuss these recent developments in a conference call today,
September 17(th), at 12pm MDT (2pm EDT) and would like to invite
shareholders and interested parties to participate. Tim
Thomas, the President & Chief Executive Officer of ArPetrol,
will make a brief presentation and then take questions.
Interested parties may participate by dialing 1-855-353-9183
(Canada & US) or (403) 532-5601 (Calgary & International),
and the participant passcode is 33045#. About ArPetrol Ltd.
ArPetrol is a Calgary-based publicly traded company engaged in oil
and natural gas exploration, development and production and
third-party natural gas processing in Argentina, where it owns and
operates a gas processing facility with capacity of 85 million
cubic feet (mmcf) per day. The Company's common shares are listed
on the TSXV under the symbol "RPT". Forward-Looking Information
This news release contains certain forward‐looking statements
relating, but not limited, to cost estimates related to personnel
and demobilization, the estimated working capital following
demobilization, cost estimates to reactivate the well, the impact
of currency fluctuations and controls on all cost estimates,
drilling plans and ability to rectify the drilling problems that
have been encountered, and the availability of future
financing or another strategic alternative. The Company
cautions readers and prospective investors in the Company's
securities not to 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 Company. A
number of factors could cause actual results to differ materially
from those anticipated by the Company, including but not limited to
risks associated with the oil and natural gas industry (e.g.,
operational risks in demobilization, or reactivating, drilling and
completing the well; the ability to retain staff and equipment; and
health, safety and environmental risks), weather delays and natural
disasters, union activities, change in government policies,
currency fluctuations and controls, a change in the manner and
rates at which the Company is exchanging its currency, the risk of
interruptions to production and processing revenue, changes in
commodity prices, increased costs, unavailability of funding or a
strategic alternative or transaction, and other risks associated
with international activity. ArPetrol operates outside of
Canada and as such, is subject to a number of political risks over
which it has no control. The forward‐looking information included
herein is expressly qualified in its entirety by this cautionary
statement. The forward‐looking information included herein is made
as of the date hereof and the Company 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 the Company is also available on SEDAR at
www.sedar.com. Neither the TSXV nor its Regulation Services
Provider (as defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this release.
ArPetrol Ltd. CONTACT: Tim Thomas, President and Chief Executive
Officert.thomas@arpetrol.comOrIan Habke, Chief Financial
Officeri.habke@arpetrol.comArPetrol Ltd.Main Phone: 403-263-6738
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