Enhanced Oil Resources Announces Results for Year-End 2013
HOUSTON, May 1, 2014 /PRNewswire/ - Enhanced Oil Resources Inc. (TSX.V: EOR) (OTCQX: EORIF) ("EOR" or the "Company") is pleased to report its operating and financial results for year ended December 31, 2013 (all amounts in US dollars).
Results for 2013, including non-IFRS measures, compared to 2012 were:
Crude oil sales revenues for the year ended December 31, 2013, increased $1.4 million (or 12.7%) to $13.1 million, compared to $11.7 million in 2012. In addition, net comprehensive loss for the period decreased by $3.4 million (or 61.4%) to $2.1 million in 2013, compared to a $5.5 million net loss for 2012. Loss per share results were $0.01 and $0.03 for 2013 and 2012, respectively, for both basic and fully diluted results. Cash used in operating activities for the year ended December 31, 2013 was $1.7 million compared to $5.8 million in 2012, a decrease of $4.1 million. The significant improvement in operating results was due to decreases in both production lifting costs and workover expenses in 2013, complimented with higher crude oil production and higher crude oil prices. EBITDA for the 2013 was positive $0.8 million, compared to negative $3.5 million for 2012.).
Results of operations for the three months ended December 31, 2013, included crude oil revenues of $3.0 million, and a net loss of $0.3 million, compared to $3.0 million and $1.2 million, respectively, for the three months ended December 31, 2012. In addition, loss per share results (basic and fully diluted) were $0.0 and $0.1 for the three months ended December 31, 2012 and 2013, respectively. The significant improvement in operating results was due to decreases in both production costs (decreased $1.0 million) and general and administrative expenses (decreased $0.2 million), partially offset by higher workover expenses ($0.2 million) and field expenses ($0.1 million). In addition, the Company had a positive EBITDA during the quarter compared to the same period in 2012.
The Company announced that its independent reserves evaluator, Cawley Gillespie & Associates, Inc. (CGA) completed their review of the Company's oil and gas reserves as of December 31, 2013. Estimated total proved reserves increased to 4.5 million barrels from 3.9 million barrels compared to the prior year and after production of 117,000 barrels during 2013. The discounted estimated net present value, (NPV at 10%) of future cash flows attributable to the reserves was $68.5 million at year-end 2013 compared to $54.2 million at the prior year-end. Proved developed reserves were 1,024,000 equivalent barrels (or $30.6 million NPV at 10%), an increase from the 898,000 equivalent barrels ($34.9 million NPV at 10%) reported for 2012. Additional capital of approximately $6.5 million relating to large workover expenses that will be required in the proved developed reserves category in the Crossroads field, accounted for the reduction in the discounted proved developed NPV at 10%. The Company commenced one of these workovers during the first quarter of 2014 at cost of $2.7 million.
Average prices forecast by CGA for the reserves estimates for year-end 2013 were estimated at $94.80 per equivalent barrel compared to $82.43 per equivalent barrel forecast for year-end 2012. Additionally, total development costs for all categories increased to $80.4 million from $61.4 million reported for the prior year. The increase is attributed to higher cost estimates and increased number of development wells in both proved undeveloped (PUD) and proved developed non-producing (PDNP) fields.
About Enhanced Oil Resources Inc.
Enhanced Oil Resources Inc. (TSX.V: EOR; OTCQX: EORIF) trades in Canada on the TSX Venture Exchange under the symbol "EOR" and is quoted in the United States on OTCQX under the symbol "EORIF". Enhanced Oil Resources Inc. is an early-stage company, with a principal goal of increasing crude oil and natural gas production through enhanced oil recovery ("EOR") and infill drilling projects it is initiating in the Permian Basin.
Certain statements contained herein are "forward-looking statements" and "forward-looking information" under applicable securities laws, including statements regarding beliefs, plans, expectations or intentions regarding the future relating to Enhanced Oil Resources Inc.'s operations, business prospects, expansion plans and strategies.
Forward-looking information typically contains statements with words such as "intends", "anticipate", "estimate", "expect", "potential", "could", "plan", "continue", "scheduled" or similar words suggesting future outcomes. Readers are cautioned not to place undue reliance on forward-looking statements because it is possible that expectations, predictions, forecasts, projections and other forms of forward-looking information will not be achieved. Forward-looking statements are based on the opinion and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Although Enhanced Oil Resources believes that the expectations reflected in such forward-looking statements are reasonable, Enhanced Oil Resources can give no assurance that such expectations will prove to be correct, that our horizontal wells will be drilled as expected or result in commercial production or that current oil production will continue or increase as expected or indicated. Further, there can be no assurance that the Company will commence or complete the construction of a connecting pipeline for the transmission of CO2 as contemplated, or within the timeline required under its current CO2 contracts or be able to justify the related economics of the project or complete it in the timeframes discussed or currently contemplated. Readers should refer to Enhanced Oil Resources' current filings, which are available at www.sedar.com, for a detailed discussion of these factors, risks and uncertainties. The forward-looking statements or information contained in this news release are made as of the date hereof and Enhanced Oil Resources undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable laws or regulatory policies.
Certain financial measures, namely Netback and EBITDA, are not prescribed and do not have a standardized meaning prescribed by IFRS and therefore may not be comparable with the calculation of similar measures by other companies. A netback is a per barrel (or mcf) computation determined by deducting royalties, production expenses, transportation and selling expenses from the oil or gas sales price to measure the average net cash received from the barrels or mcf sold. EBITDA refers to income (loss) before interest, income taxes, depletion, depreciation, amortization and accretion and is often referred to as "cash flow from operations".
ON BEHALF OF THE BOARD OF DIRECTORS
Barry D Lasker, CEO
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
SOURCE Enhanced Oil Resources Inc.