CALGARY, May 24, 2013 /CNW/ - Sea Dragon Energy Inc.
("Sea Dragon" or the "Company") (TSXV: SDX) announces its 2013
first quarter financial and operating results (the "Quarter" or "Q1
2013"). Highlights:
- Production increased by 47% to average 1,495 bopd for the
quarter (Q1 2012: 1,019 bopd)
- Revenues increased by 34% to US$14.3 MM @ US$106.28/bbl realized price (Q1 2012:
US$10.7 MM @$115.10/bbl price)
- Netbacks increased by 36% to US$5.3MM @ US$39.41/bbl (Q1 2012: US$3.9M @$41.93/bbl)
- Cash flow from operations increased by 394% to US$1.9MM (Q1 2012: US$0.4MM)
- US$5.6MM cash and cash
equivalents at end of Q1 2013
- US$6.8MM of non-cash working
capital and no net debt at end of Q1 2013
- Realized a net loss of US$6.4MM,
due to an impairment charge of US$7.2MM on the Company's Kom Ombo concession,
related to West Al Baraka field. The Company has now completed its
impairment review of Kom Ombo, pursuant to the 2012 and Q1 2013
tests.
Post First Quarter events:
- Production currently stands at 1,959 boepd as the Shukheir
Marine well (SHB-5) was returned to production after a workover in
February that affected the average production level for the
quarter. Quarter end production was 92% above Q1 2012
- Collected US$2.2MM in outstanding
accounts receivable
- Paid back US$1.0MM of debt,
resulting in a cash balance of US$4.0MM and nil net debt
- Awarded the South Disouq Exploration Concession in the Nile
Delta in the EGAS bid round.
Sea Dragon CEO, Paul
Welch, commented:
"Q1 2013 has proved to be a strong first
period for the Company. We remain focused on increasing production
which provides a solid foundation to deliver on our growth strategy
throughout 2013 and beyond. The increased operating cash flow has
enabled the Company to maintain a solid cash position with no net
debt as we continue to develop our existing assets which have
significant resource upside.
Sea Dragon is also well placed to capitalise
on the current market situation in Egypt where the opportunity for
transformational growth exists through participation in exploration
bid rounds and potential acquisitions of discounted assets,
supported by a management team with strong in-country relationships
and expertise. Our recent success in acquiring Shukheir Marine and
in the EGAS bid round award of the South Disouq exploration block
will underpin the next step in our growth process. I look
forward to our continued success in both increasing production and
cash flow from our existing assets while adding new assets to our
portfolio."
KEY FINANCIAL & OPERATING HIGHLIGHTS
|
|
|
|
|
Fiscal Year |
Prior Quarter (1) |
Three
months ended March 31 |
|
|
2013 |
2012 |
Financial $000's |
|
|
|
Cash, end of period |
5,658 |
5,598 |
4,285 |
Working capital |
6,645 |
6,806 |
8,077 |
Funds from operations |
2,083 |
1,962 |
397 |
|
per share |
0.00 |
0.00 |
0.00 |
Net loss |
(6,447) |
(6,820) |
(786) |
|
per share |
(0.02) |
(0.02) |
0.00 |
Capital expenditures |
1,358 |
1,819 |
1,955 |
Total assets |
52,006 |
44,711 |
76,876 |
Shareholders' equity |
41,250 |
34,605 |
68,289 |
Common shares outstanding (000's) |
376,459 |
376,459 |
376,459 |
Warrants outstanding (000's) |
- |
- |
30,000 |
|
|
|
|
Operational |
|
|
|
Oil sales (bbl/d) |
1,273 |
1,495 |
1,019 |
|
|
|
|
Brent oil price ($/bbl) |
110.51 |
112.07 |
118.47 |
Realized oil price ($/bbl) |
105.52 |
106.28 |
115.10 |
Royalties ($/bbl) |
55.49 |
54.76 |
59.53 |
Operating costs ($/bbl) |
4.94 |
12.11 |
13.64 |
Netback ($/bbl) |
45.09 |
39.41 |
41.93 |
(1) Denotes the three months ended
December 31, 2012 |
|
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.
Operational Review
North West Gemsa Concession
During the quarter, the Company drilled two
successful wells and fracture stimulated one additional producer at
North West Gemsa:
- The Geyad-4 ST-2 infill well that was drilled in November 2011 underwent a fracture stimulation in
February, 2013. The Kareem Rahmi sand stimulation was successful
and the well resumed production at 750 bopd.
- The AASE-14st well spud in November
2012 encountered 16 feet of net pay in the Kareem Shagar
sand and 13 feet of net pay in the Kareem Rahmi sand. The
Rahmi sand tested at 3,486 bopd and 3.18 mmscfpd of gas.
- The AASE-16 well spud on February 28,
2013 was completed as a water injection well in the Kareem
Shagar sand. The well encountered 27 feet of good quality wet sand
in the Shagar. The well adds another water injection point to the
field and is anticipated to improve sweep efficiency and maximize
oil recovery.
The NW Gemsa gas conservation project was
completed in February 2013. Gas is
now being recovered and associated condensate and liquefied
petroleum gas volumes are being captured and marketed. The
gas tie-in project involved the installation of an 8" gas pipeline
for transporting associated gas to a nearby processing plant.
Solution gas and incremental liquids production
commenced on February 12, 2013.
Current sales volumes average 10.7 mmscf/d (1,070 mscf/d net) of
sales gas, 100 bbl/d (10 bbl/d net) of condensates and 240 bbl/d
(24 bbl/d net) of LPGs.
Water injection at NW Gemsa is ongoing with five
injectors currently operating at the Al Amir SE Field and one
injector at the Geyad Field. Current total injection rates are
approximately 22,500 bwpd at Al Amir SE and 5,000 bwpd at Geyad.
Cumulative injection to date is 8.0 million barrels at Al Amir SE
and 2.0 million barrels at Geyad.
Cumulative production from the NW Gemsa
Concession has now reached 11.3 million bbls of light oil.
Current production averages 10,300 bopd (1,030
bopd net to the Company). Total production, including solution gas
and natural gas liquids, reached approximately 12,400 boepd (1,240
boepd net to the Company).
Kom Ombo Concession
During the first quarter of 2013 additional
testing results from West Al Baraka field were significantly lower
than anticipated. These results triggered an impairment test for
the Kom Ombo Concession which resulted in a $7.2MM charge.
Current production from Kom Ombo is
approximately 470 bopd gross (235 bopd net to the Company).
Shukheir Marine Concession
In the first quarter of 2013, the Company
performed a successful workover and studied further workover plans
at Shukheir Marine:
- In February 2013 the Company
successfully replaced a corroded tubing string at the Shukheir Bay
field and returned the SHB-5 well to production at 360 bopd.
- The Company is also studying plans to remove skin damage by
using an acid stimulation on the GA-1 well on the Gamma field in
the second half of 2013.
Both of these activities will help in reducing
operating costs per barrel and sustaining production levels.
Finally, the Company is re-mapping its 3D
seismic coverage of the area to evaluate exploratory drilling
opportunities on the Gamma lease in the Nubia Formation and on the
Shukheir Bay lease in the Upper and Lower Rudeis Formations.
Current production from Shukheir Marine stands
at 484 bopd.
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 2013 drilling and capital expenditure
programs of the NW Gemsa, Shukheir Marine and Kom Ombo Concessions
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 Companyundertakes 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,
2012 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 the
Middle East and 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.