Invicta Energy Corp. Announces Financial and Operating Results for the Second Quarter of 2012
23 August 2012 - 9:00PM
PR Newswire (Canada)
CALGARY, Aug. 23, 2012 /CNW/ - Invicta Energy Corp. ("Invicta" or
the "Company") is pleased to report its financial and operating
results for the three and six months ended June 30, 2012. Invicta's
interim condensed financial statements and related management's
discussion and analysis for three months and six months ended June
30, 2012 have been filed and are available on the SEDAR website at
www.sedar.com and may also be obtained on Invicta's website at
www.invictaenergy.ca. HIGHLIGHTS -- Drilled 6.0 gross (3.3 net)
horizontal oil wells at Kindersley, Saskatchewan. Two wells were
brought on production by the end of the quarter and the other four
wells were producing by the third week of July, 2012. -- Production
results from the six well drilling program at Kindersley have once
again exceeded the Company's expected Viking type curves. -- 133%
increase in net light oil production year to date from 150 bbl/d,
(the initial rate of 2012) to 350 bbl/d (current field estimate).
Oil production is 85% of total corporate production and 96% of
corporate revenue. -- Achieved operating costs for the quarter of
$8.76/boe (11% decrease from Q1 2012 and 64% decrease from Q2
2011). -- Operating netback continues to be top quartile at
$57.75/boe and $56.08/boe for three months and six months ended
June 30, 2012 respectively. -- Achieved funds flow from operations
of $972,138 ($0.01/share) and earnings of $159,353 ($0.00/share)
for the quarter. -- Credit facility raised $3 million to $13
million August 15, 2012 based on the recent successful drilling
program. -- Prepared for drilling a further 8 gross (4.4 net)
horizontal wells at Kindersley during the remaining six months of
2012. HIGHLIGHTS Three months ended Six months ended June 30 June
30 2012 2011 2012 2011 (unaudited) (unaudited) Operations Drilling
Oil wells (net) 6.0(3.3) 4.0(2.2) 11.0(6.0) 5.0(2.8) Undeveloped
land holdings (net 48,260 29,870 48,260 29,870 acres) Average daily
production Crude oil (bbls/d) 217 46 219 48 Natural gas 331 264 391
311 (mcf/d) Total equivalent 272 90 285 100 (boe/d) Average product
prices Crude oil (Cdn $ 81.52 $ 94.85 $ 84.37 $ 90.70 $/bbl)
Natural gas (Cdn $ 1.73 $ 3.74 $ 1.86 $ 3.71 $/mcf) Total
equivalent $ 67.13 $ 59.54 $ 67.63 $ 55.11 (Cdn $/boe) Royalties
(Cdn $ 0.62 $ 8.27 $ 2.21 $ 7.44 $/boe) Production and operating
costs $ 8.76 $ 24.54 $ 9.34 $ 17.31 (Cdn $/boe) Operating netback $
57.75 $ 26.73 $ 56.08 $ 30.36 (1) (Cdn $/boe) Financial Petroleum
and $ 1,664,316 $ 489,673 $ 3,487,099 $ 995,850 natural gas revenue
Funds flow from $ 972,138 $ (252,202) $ 1,946,115 $ (528,324)
operations(1) Per share - basic $ 0.01 $ (0.01) $ 0.03 $ (0.01) and
diluted Earnings (loss) $ 159,353 $ (346,624) $ 339,703 $ (843,984)
Per share - basic $ 0.00 $ (0.01) $ 0.00 $ (0.02) and diluted
Capital $ 2,734,731 $ 2,879,473 $ 5,817,685 $ 3,672,081
expenditures Net debt (working $ 6,974,403 $ (476,891) $ 6,974,403
$ (476,891) capital)(1) Shares outstanding 75,609 54,662 75,609
54,662 (000) Weighted average shares Outstanding 75,604 47,756
75,542 41,736 (000) (1)The term funds flow from operations
should not be considered an alternative to, or more meaningful
than, cash flow from operating activities as determined in
accordance with IFRS as an indicator of the Company's performance.
Funds flow from operating activities is a non-IFRS measure that
represents cash provided by operating activities before changes in
non-cash working capital. Per share amounts are calculated using
weighted average shares outstanding consistent with the calculation
of loss per share. Other industry benchmarks and terms such as net
debt and operating netback are not recognized measures under IFRS.
Management believes these are useful supplemental measures of,
firstly, the total amount of current and long-term debt the Company
has, and secondly, the amount of revenues received after the
royalties and operating costs. Net debt, which terms represent
current assets less current liabilities is used to assess
efficiency, liquidity and the general financial strength of the
Company. Readers are cautioned, however, that these measures should
not be construed as an alternative to other terms such as current
debt or net earnings in accordance with IFRS as measures of
performance. The Company's method of calculating these measures may
differ from other companies, and accordingly, may not be comparable
to measures used by other companies. OPERATIONS UPDATE Kindersley,
Saskatchewan During the second quarter, the Company completed its
six well drilling program at a 100% success rate. This program was
hampered by wet spring conditions which delayed the timing and
subsequent production startup of these wells. However, the Company
is pleased to report that the initial production rates of the six
wells have exceeded the forecasted Viking type curves. Five of the
six wells have 30 day production rates ranging from 50-90 bbl/d.
One well is still producing at 80 bbl/d after 70 days. All six
wells are flowlined into existing Company infrastructure which
allows conservation of the solution gas. Current net field
production from the Kindersley property is 340 bbl/d and 350 mcf/d
of solution gas. Invicta acquired a section of petroleum and
natural gas rights in the second quarter. At quarter end the
Company's drilling inventory is in excess of 200 locations. The
Company is preparing locations for the upcoming drilling programs
with an expectation of drilling another 8 gross (4.3 net) wells by
year end. Central Alberta The Company completed a 21 sq km 3D
program over one of its Central Alberta properties. The 3D program
is currently being interpreted for horizontally drillable locations
for light oil. Nine additional sections of petroleum and natural
gas rights, prospective for Viking & Mannville light oil, were
acquired subsequent to the second quarter. The Company looks
forward to initiating drilling activity on the Alberta prospects in
early 2013. GUIDANCE The Company has successfully completed two
drilling programs at Kindersley to date and looks forward to
drilling the remaining 8 gross (4.3 net) wells of the forecasted 20
gross (11 net) well program for 2012. The capital expenditures for
year remain forecasted at $14 million. We are very pleased with our
financial results to date, especially our top quartile net back of
$56.08 year to date. Invicta is on track to achieving the
previously forecasted $6.4 million funds flow ($0.09/share) and
annualized fourth quarter funds flow of $10 million
($0.13/share). Volatility in realized oil prices and delays
in bringing on the wells drilled in the second quarter, were offset
by lower operating costs and royalty rates. The Company's
exit oil production remains at 535 bbl/d. The exit production
will be 625 -675 boe/d, approximately 7% lower than the previously
forecasted 675 -725 boe/d as the Company has reduced the forecast
for solution gas to reflect curtailments at third party processing
facilities. It is important to note that solution gas volumes
have a large impact on the BOE measure, but very little impact on
financial results as oil production accounts for 96% of oil and
natural gas revenues. OUTLOOK Invicta is positioned for growth with
top quartile operating netbacks and a drilling inventory in excess
of 200 development locations on its low risk light oil resource
play at Kindersley. The Company continues to work on a number
of light oil prospects in Central Alberta and looks forward to
drilling and developing its next core area in 2013. About the
Company Invicta is a Calgary based, emerging junior oil and gas
company exploring and developing light oil opportunities in
Saskatchewan and Alberta. The Company's current focus is the
development of its Viking resource play in Kindersley,
Saskatchewan. Cautionary Statements: This press release contains
certain forward-looking statements (forecasts) under applicable
securities laws relating to future events or future performance.
Forward-looking statements are necessarily based upon assumptions
and judgements with respect to the future including, but not
limited to, the outlook for commodity markets and capital markets,
the performance of producing wells and reservoirs, well development
and operating performance, general economic and business
conditions, weather, the regulatory and legal environment and other
risks associated with oil and gas operations. In some cases,
forward-looking statements can be identified by terminology such as
"may", "will", "should", "expect", "projects", "plans",
"anticipates" and similar expressions. These statements represent
management's expectations or beliefs concerning, among other
things, future operating results and various components thereof
affecting the economic performance of Invicta. Undue reliance
should not be placed on these forward-looking statements which are
based upon management's assumptions and are subject to known and
unknown risks and uncertainties, including the business risks
discussed above, which may cause actual performance and financial
results in future periods to differ materially from any projections
of future performance or results expressed or implied by such
forward-looking statements. Accordingly, readers are cautioned that
events or circumstances could cause results to differ materially
from those predicted. In the interest of providing Invicta
shareholders and potential investors with information regarding the
Company, including management's assessment of Invicta's future
plans and operation, certain statements throughout this press
release constitute forward looking statements. All
forward-looking statements are based on the Company's beliefs and
assumptions based on information available at the time the
assumption was made. The use of any of the words
"anticipate", "continue", "estimate", "expect", "may", "will",
"project", "should", "believe" and similar expressions are intended
to identify forward looking statements. By its nature, such
forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such forward
looking statements. Invicta believes the expectations
reflected in those forward looking statements are reasonable but no
assurance can be given that these expectations will prove to be
correct and such forward looking statements contained throughout
this press release should not be unduly relied upon. These
statements speak only as of the date specified in the
statements. In particular, this press release may contain
forward looking statements pertaining to the following: -- the
performance characteristics of the Company's oil and natural gas
properties; -- oil and natural gas production levels; -- capital
expenditure programs; -- the quantity of the Company's oil and
natural gas reserves and anticipated future cash flows from such
reserves; -- projections of commodity prices and costs; -- supply
and demand for oil and natural gas; -- expectations regarding the
ability to raise capital and to continually add to reserves through
acquisitions and development; and -- treatment under governmental
regulatory regimes. The material assumptions in making these
forward-looking statements include certain assumptions disclosed in
the Company's most recent management's discussion and analysis
included in the material available on this press release. The
Company's actual results could differ materially from those
anticipated in the forward looking statements contained throughout
this press release as a result of the material risk factors set
forth below, and elsewhere in this press release: -- volatility in
market prices for oil and natural gas; -- liabilities inherent in
oil and natural gas operations; -- uncertainties associated with
estimating oil and natural gas reserves; -- competition for, among
other things, capital, acquisitions of reserves, undeveloped lands
and skilled personnel; -- incorrect assessments of the value of
acquisitions and exploration and development programs; --
geological, technical, drilling and processing problems; --
fluctuations in foreign exchange or interest rates and stock market
volatility; -- failure to realize the anticipated benefits of
acquisitions; -- general business and market conditions; and --
changes in income tax laws or changes in tax laws and incentive
programs relating to the oil and gas industry. These factors should
not be construed as exhaustive. Unless required by law,
Invicta does not undertake any obligation to publicly update or
revise any forward looking statements, whether as a result of new
information, future events or otherwise. Barrels of oil equivalent
(boe) may be misleading, particularly if used in isolation. A boe
conversion ratio of six thousand cubic feet (mcf) of natural gas to
one barrel (bbl) of oil is based on an energy conversion method
primarily applicable at the burner tip and is not intended to
represent a value equivalency at the wellhead. All boe conversions
in this press release are derived by converting natural gas to oil
in the ratio of six thousand cubic feet of natural gas to one
barrel of oil. Certain financial amounts are presented on a per boe
basis, such measurements may not be consistent with those used by
other companies. Neither the TSX Venture Exchange nor its
Regulation Services Provider (as the term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release. Invicta Energy
Corp. CONTACT: Gordon Reese President &
CEOgord@invictaenergy.ca(403) 265-8890 ext 1orCarrie McLauchlinVice
President, Finance & CFOcarriem@invictaenergy.ca(403) 265-8890
ext 4
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