CALGARY, March 21, 2013 /CNW/ - ArPetrol Ltd. ("ArPetrol"
or the "Company") (TSXV: RPT) announces its financial and operating
results for the three months and year ended December 31, 2012 and provides an operational
update on activities to date this year as well as an outlook for
the remainder of 2013. The Company's consolidated financial
statements and management's discussion and analysis (MD&A) for
the reporting periods have been filed on SEDAR at www.sedar.com and
posted on the Company's website at www.arpetrol.com.
Summary for the Three Months and Year Ended
December 31, 2012
Operating and Financial
ArPetrol had a working capital deficit of
$2.5 million as at December 31, 2012 and no long-term debt.
Fourth-quarter production averaged 252 barrels
of oil equivalent per day (boe/d). This is an increase of 25 boe/d
from the third quarter of 2012 and a decrease of 49 boe/d from the
fourth quarter of 2011. The increase from the third quarter of 2012
resulted from the correction of generator issues experienced in the
third quarter of 2012, and the decline from the fourth quarter of
2011 was due to natural production declines.
Partly offsetting the volume declines, the
Company realized higher prices for its natural gas production. For
the fourth quarter of 2012 the average sales price was $2.80 per thousand cubic feet (Mcf), $0.05 per Mcf higher than in the third quarter of
2012. The average realized price for natural gas liquids decreased
to $65.49 per barrel for the fourth
quarter of 2012, 10 percent lower than the $71.99 per barrel realized in the third quarter
of 2012.
Third-party processing volumes and revenues
continued to increase during the fourth quarter of 2012. Processing
sales for the fourth quarter were $1,101,797, an increase of $142,158 over the third quarter of 2012 and
$524,967 over the same period of the
prior year. During the fourth quarter of 2012, daily third-party
processing volumes increased by 5 percent over the third quarter of
2012, and were more than double the volumes processed in the same
period in 2011.
Capital expenditures for the fourth-quarter and
year-ended December 31, 2012 were
$2,174,298 and $28,875,715, respectively. Major expenditures
were incurred for mobilization, drilling and suspension work for
the first well of the Company's extended-reach drilling program on
its Faro Virgenes block.
Net loss for the year was $25,772,561, compared to a net loss of
$7,489,387 for the prior year.
Summary of Results
(Cdn$ except shares
outstanding and per
boe1 amounts) |
Three months ended
December 31, |
Year Ended
December 31, |
2012 |
2011 |
2012 |
20112 |
|
(Unaudited) |
|
Financial |
|
|
|
|
Production sales |
519,332 |
593,491 |
1,991,401 |
2,218,229 |
Processing sales |
1,101,797 |
576,830 |
4,203,390 |
1,747,517 |
Funds flow from
operations1 |
(366,380) |
(1,043,214) |
(2,982,279) |
(4,294,440) |
Cash generated from operating
activities |
(2,120,160) |
(1,438,456) |
(9,055,438) |
(6,376,378) |
Comprehensive loss |
(12,805,846) |
(2,671,973) |
(26,030,923) |
(7,227,889) |
Fixed asset expenditures |
2,174,298 |
2,199,168 |
28,875,715 |
3,022,004 |
Weighted average shares
outstanding |
|
|
|
|
- basic and diluted |
572,536,704 |
572,536,704 |
572,536,704 |
496,666,117 |
|
|
|
|
|
Operations |
|
|
|
|
Production |
|
|
|
|
|
Natural gas - Mcf per day |
1,339 |
1,647 |
1,343 |
1,746 |
|
Natural gas liquids - bbls per day |
29 |
26 |
24 |
26 |
|
Total - boe per day1 |
252 |
301 |
247 |
317 |
Average sales price |
|
|
|
|
|
Natural gas - $ per Mcf |
2.80 |
2.76 |
2.82 |
2.52 |
|
Natural gas liquids - $ per bbl |
65.49 |
73.59 |
68.95 |
64.30 |
Average operating netback |
|
|
|
|
|
Production - $ per boe1 |
(1.59) |
5.31 |
0.61 |
5.17 |
|
Processing - $ per Mcf processed1 |
0.04 |
(0.00) |
0.06 |
(0.05) |
Note 1: See advisories at the end of this news
release with respect to non-IFRS measures and boe presentation.
Note 2: The unaudited consolidated results for
the Company for the year ended December 31,
2011 reflect the results of the combined operations of
ArPetrol Inc. and RPT Resources Ltd. (now ArPetrol Ltd.) from
March 18, 2011 until December 31, 2011 and the results from ArPetrol
Inc. only from January 1, 2011 to
March 17, 2011.
Note 3: All outstanding warrants, stock options
and convertible debentures were excluded in calculating the
weighted-average number of dilutive common share outstanding, as
they were determined to be anti-dilutive.
Operational Update and Outlook
The Company is continuing to pursue and evaluate
a broad range of strategic alternatives through its previously
announced strategic review process with the assistance of its
financial advisor, Raymond James.
Management is also focused on re-negotiating its existing natural
gas processing contract to achieve current market rates in advance
of the expiry of those contracts in July
2013. For the existing producing and processing assets the
Company will continue to focus on consistent, safe and efficient
operations.
We have commenced the rig down and
demobilization from the Faro Virgenes drilling location. This
represents the last major operational component of the drilling
program commenced in 2012. Based on its current cost estimates,
ArPetrol expects to face a further negative working capital
position following final demobilization of the rig. The Company
estimates its demobilization commitment at $2.5 million. ArPetrol has continued discussions
with contractors to manage payment schedules on past due amounts to
allow sufficient time to provide a long-term solution for the
Company. However, there is no certainty whether or not any
contractors will pursue legal remedies relating to outstanding
payables. There is uncertainty regarding the Company's ability to
continue to operate as a going concern (see the financial
statements and MD&A filed on SEDAR for complete
disclosure).
All values in this news release are in Canadian
dollars unless otherwise indicated.
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".
Non-GAAP Measures
This news release includes references to
financial measures commonly used in the oil and natural gas
industry. The terms "operating netback" (production sales and
processing sales less royalties, turnover taxes and operating
expenses) and "funds flow from operations" (cash generated from
operating activities before changes in refundable Argentinean
taxes, foreign exchange on non-cash working capital, non-cash
working capital, and translation adjustment on operating items) do
not have any standardized meaning under International Financial
Reporting Standards (IFRS), which have been incorporated into GAAP,
and may not be comparable with similar measures presented by other
companies. Funds flow from operations should not be considered an
alternative to, or more meaningful than, cash generated from
operating activities, net loss or other measures determined in
accordance with IFRS, as an indicator of the Company's
performance.
See the MD&A for the three months and year
ended December 31, 2012, filed on
SEDAR at www.sedar.com and on the Company's website, for further
discussion, including a reconciliation of funds flow from
operations to cash generated from operating activities which is the
most directly comparable measure calculated in accordance with
IFRS. There is no IFRS measure that is reasonably comparable to
operating netback and a detailed calculation of such netbacks is
presented in the MD&A for the three months and year ended
December 31, 2012.
Boe Presentation
Production information is commonly reported in
units of barrels of oil equivalent (boe). For purposes of computing
such units, natural gas is converted to equivalent barrels of oil
using a conversion factor of six thousand cubic feet (Mcf) to one
barrel (bbl). This conversion ratio of 6:1 represents energy
equivalency, which is primarily applicable at the burner tip, and
does not represent a value equivalency at the wellhead. Such
disclosure of boe may be misleading, particularly if used in
isolation.
Forward-Looking Information
This news release contains certain
forward‐looking statements relating, but not limited, to
operational information, the expected working capital deficiency,
the ability to negotiate with service providers and extend payment
schedules until a long term solution for the Company can be
achieved, the pursuit of strategic alternatives and future
financing, the possibility to improve and extend the contractual
terms for the gas processing business, and the ability or inability
to continue as a going concern. Forward‐looking information
typically contains statements with words such as "anticipate",
"believe", "expect", "plan", "intend", "estimate", "propose",
"project", or similar words suggesting future outcomes. 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.
Forward-looking information is based on
management's current expectations and assumptions regarding, among
other things, plans for and results of the strategic review
process, the willingness for creditors to extend payment schedules
until a long term solution is achieved, the ability to improve and
extend the gas processing contracts, future operations and
transactions, future capital and other expenditures (including the
amount, nature, timing, availability and sources of funding
thereof), future production and processing revenue, future economic
conditions, future currency and exchange rates, future pricing,
continued political stability in the areas in which the Company is
operating, and the Company's continued ability to obtain and retain
qualified staff and equipment in a timely and cost-efficient
manner. Although the Company 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 Company, including but not limited to risks
associated with uncertainty regarding the availability of a
strategic alternative and the outcome of the strategic review
process, uncertainty regarding the willingness of third parties to
negotiate alternative contractual arrangements and payment
schedules, uncertainty whether any creditors will commence legal
proceedings, the risk of expiry of the existing gas processing
contracts without having new contracts in place, risks associated
with the oil and natural gas industry (e.g., operational risks in
demobilization of the rig or future drilling programs, and health,
safety and environmental risks), the ability to retain staff, the
inability to access funding and continue as a going concern,
weather-induced delays and natural disasters, interruptions to
production and processing revenue, production declines, the
uncertainty regarding future revenues, union activities and labour
issues in Argentina, change in
government policies, the risk of commodity price changes, the risk
of foreign exchange rate fluctuations (which may not be as
favourable as those being achieved today), currency controls and a
change in the manner and rates at which the Company is exchanging
currency, and risks associated with international activity and
political risks over which it has no control (including risks
related to the general economic and business conditions in
Argentina, economic, social or
political instability or change, the uncertainty of negotiating
with foreign governments, expropriation and/or nationalization,
changes in export or exchange policies, adverse determinations or
rulings by governmental authorities, changes in energy policies or
in the personnel administering them).
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.
ArPetrol's head office address is 700, 815 8
Avenue S.W., Calgary, AB T2P
3P2
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.
SOURCE ArPetrol Ltd.