ArPetrol Ltd. announces first quarter 2015 financial and operating results
CALGARY, May 28, 2015 /CNW/ - ArPetrol Ltd. ("ArPetrol" or the "Company") (TSXV: RPT) announces its financial and operating results for the three months ended March 31, 2015 and provides an operational update on activities to date this year as well as an outlook for the remainder of 2015. The Company's interim condensed consolidated financial statements and management's discussion and analysis (MD&A) for the reporting period have been filed on SEDAR at www.sedar.com and posted on the Company's website at www.arpetrol.com.
Summary of the First Quarter 2015
Operating and Financial
The Company continues to generate strong operating results. During the first-quarter of 2015 our funds flow from operations was $683,553 driven by strong gas processing results. During the first-quarter of 2015 gas processing revenues were $2.5 million generating an operating netback of $1.2 million. This is an improvement of over $800,000 from the fourth-quarter of 2014 which was affected by an maintenance shut-down.
Production during the first quarter of 2015 averaged 187 barrels of oil equivalent per day (boe/d), an increase of 1 boe/d from the fourth quarter of 2014 and down 55 boe/d from the first quarter of 2014. The decrease from the first quarter of 2014 was due to a maintenance shut-down at the beginning of December 2014 and a slow return to full production.
The first quarter 2015 average realized natural gas price was $4.89 per thousand cubic feet (Mcf), $0.46 per Mcf higher than the price realized in the fourth quarter of 2014 and $0.68 per Mcf higher than the first quarter of 2014. The Company's natural gas prices are set in $US and the changes in the realized prices are primarily driven by the strengthening $US against the $Cdn.
The average price realized for natural gas liquids (NGL) in the quarter was $86.14 per barrel, a decrease of $2.89 per barrel over the fourth quarter 2014 and a $4.84 per barrel increase over the first quarter of 2014. The Company sells its natural gas liquids in the spot market with the prices denominated in $US. The changes to the realized price reflect the declining price in the Argentine market offset by the effect of a strengthening $US against the $Cdn.
ArPetrol had working capital of $2.6 million at March 31, 2015, an improvement of almost $1 million from December 31, 2014.
The Company's net income for the first quarter was $218,605, compared to net income of $1,643,581 for the first quarter of 2014.
In January 2015 the Company received approval to commence a normal course issuer bid permitting the Company to repurchase, for cancellation, up to 1,822,521 common shares in the capital of the Company. The normal course issuer bid commenced on January 6, 2015 and is approved for one year. As of May 15, 2015 the Company has purchased 197,500 common shares of the Company. ArPetrol plans to continue to purchase shares of the Company under the normal course issuer bid.
| Summary of Results |
Three Months Ended Mar 31, |
|||||
| (Unaudited) |
||||||
| 2015 |
2014 |
|||||
| Financial |
||||||
| (Cdn$ except shares outstanding) |
||||||
| Processing revenues |
2,479,500 |
2,246,910 |
||||
| Production sales |
546,039 |
650,151 |
||||
| Funds flow from operations (1) |
683,553 |
679,720 |
||||
| Cash generated from (used in) operating activities |
(345,035) |
(1,056,213) |
||||
| Net income |
218,605 |
1,643,581 |
||||
| Capital expenditures |
4,596 |
- |
||||
| Weighted average shares outstanding (millions) |
||||||
| – basic and diluted (2)(3)(4) |
22,848,813 |
22,901,468 |
||||
| Per Share Funds flow from operations (2) |
0.03 |
0.03 |
||||
| Per Share Net income(2) |
0.01 |
0.07 |
||||
| Operations |
||||||
| Processing |
||||||
| Processing Volumes – Mcf per day |
83,310 |
75,210 |
||||
| Processing Revenue |
2,479,500 |
2,246,910 |
||||
| Operating Netback (1) |
1,224,833 |
1,358,565 |
||||
| Average Operating Netback - $ per Mcf processed (1) |
0.16 |
0.21 |
||||
| Production |
||||||
| Natural gas – Mcf per day |
1,035 |
1,330 |
||||
| NGL – bbls per day |
14 |
20 |
||||
| Total – boe per day (1) |
187 |
242 |
||||
| Average operating netback - $ per boe(1) |
(4.58) |
3.67 |
||||
| Average sales price |
||||||
| Natural gas – $ per Mcf |
4.89 |
4.21 |
||||
| NGL – $ per bbl |
86.14 |
81.30 |
||||
| Foreign Exchange Rates – Period Ended |
||||||
| US Dollar / Canadian Dollar |
1.26 |
1.11 |
||||
| Argentina Peso / US Dollar |
8.81 |
7.94 |
||||
| Argentina Peso / Canadian Dollar |
6.98 |
7.28 |
||||
| Notes: |
|
| (1) |
See advisories at the end of this news release with respect to non-IFRS measures and boe presentation. |
| (2) |
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. |
| (3) |
On June 2, 2014, the Company completed a consolidation of its issued and outstanding common shares on the basis of 25 pre - consolidation common shares for each 1 post-consolidation common share. All share and per share numbers have been adjusted to reflect this consolidation. |
| (4) |
In January 2015 the Company received approval to commence a normal course issuer bid permitting the Company to repurchase, for cancellation, up to 1,822,521 common shares in the capital of the Company. The normal course issuer bid commenced on January 6, 2015 and is approved for one year. As of March 31, 2015 the Company has purchased 122,000 common shares of the Company. |
| All values in the news release are in Canadian dollars unless otherwise indicated. |
|
Outlook
ArPetrol has made significant progress towards a stable revenue generating company with a balance sheet that supports its operations and is expected to provide funds to pursue new initiatives.
The Company's 2015 outlook includes estimated processing volumes of 70 to 80 million cubic feet per day (MMcf/d) and production of 190 to 240 boe/d.
The Company continues to look for farm-in partners to allow it to accelerate the development of the defined reserves at Faro Virgenes.
Finally, ArPetrol continues to evaluate at all strategic opportunities available to the Company. YPF S.A. and Enap SiPetrol Argentina S.A., the third-party providers of natural gas processed at the Company's Faro Virgenes plant, recently announced a significant multi-year expansion to their Magallanes field. The Company sees this increase in activity in southern Santa Cruz as a positive sign for its business development activities in the region. Additionally, the Company is actively pursuing new mid-stream opportunities through-out the region.
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 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 forwardlooking information relating, but not limited, continued positive cash flow in 2015, processing revenue and cash flow, estimated production volumes and processing volumes, the pursuit of farm-in and growth opportunities and the repurchase of shares under the normal course issuer bid. Forwardlooking information typically contains statements with words such as "anticipate", "believe", "forecast", 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 forwardlooking 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, the ability to sustain consistent processing and production volumes, future production and processing revenue, future economic conditions, future currency and exchange rates, the ability to repatriate funds from Argentina, future pricing, continued political stability in the areas in which the Company is operating, the reduction of G&A and expenses, and the Company's continued ability to obtain and retain qualified management and staff and equipment in a timely and cost-efficient manner. 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; 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 disruptions at the gas plant, increased maintenance costs or other expenditures at the gas plant, interruptions to production and processing revenue, production declines, changes in commodity prices and revenues, increased costs, unavailability of funding, and other risks associated with international activity and Argentina. ArPetrol operates outside of Canada and as such, is subject to a number of political risks over which it has no control. The forwardlooking information included herein is expressly qualified in its entirety by this cautionary statement. The forwardlooking information included herein is made as of the date hereof and the Company assumes no obligation to update or revise any forwardlooking information to reflect new events or circumstances, except as required by law.
Non-IFRS Measures
This news release includes references to financial measures commonly used in the oil and natural gas industry. The terms "operating netback" (production and processing revenue less royalties, turnover taxes and operating expenses) and "funds flow from operations" (cash generated from operating activities before changes in non-cash working capital) do not have any standardized meaning under International Financial Reporting Standards ("IFRS") 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 income (loss) or other measures determined in accordance with IFRS, as an indicator of the Company's performance.
See the management's discussion and analysis (MD&a) for the reporting period and the year ended December 31, 2014, 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 netbacks and a detailed calculation of such netbacks is presented in the "Results of Operations" section of the MD&A.
BOE Presentation. Production information is commonly reported in units of barrels of oil equivalent. For purposes of computing such units, natural gas is converted to equivalent barrels of oil using a conversion factor of six thousand cubic feet to one barrel. The 6:1 conversion ratio 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.
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.
SOURCE ArPetrol Ltd.
Share this article