Company Makes Progress Executing Business Plan
Note: All figures are quoted in U.S. dollars unless otherwise noted.
CALGARY, May 9, 2013 /PRNewswire/ - Ivanhoe Energy Inc. (TSX: IE;NASDAQ: IVAN) reported today its financial results and operating highlights for the first quarter of 2013.
First Quarter Financial Summary
Ivanhoe Energy filed its quarterly financial report on Form 10-Q with the U.S. Securities and Exchange Commission and its Interim Financial Statements with the Canadian Securities Administrators for the period ended March 31, 2013.
| Three months
ended Mar. 31,
|(US$000s, except per share amounts) (unaudited)||2013||2012|
|Net loss from continuing operations||(11,975)||(10,856)|
|Net loss per share, from continuing operations*||(0.03)**||(0.03)|
|Net cash used in operating activities||(18,586)||(6,892)|
|Cash and cash equivalents (end of period)||61,980||42,260|
* Basic and diluted
** Net loss per share from continuing operations does not reflect the common share consolidation, which took effect April 25, 2013.
In the first quarter of 2013, the Company posted a net loss from continuing operations of $12.0 million, which was $1.1 million higher compared to $10.9 million in the same period in 2012. This increase in 2013 is mainly attributable to higher general and administrative expenses related to staff and legal costs partially offset by higher foreign currency exchange gains and deferred income tax recoveries.
Capital expenditures were $7.5 million in the first quarter of 2013, which include the following highlights:
- The Canadian operation invested $4.9 million on a winter data acquisition program that included seismic and drilling activities. The data will provide further information for initial development, including determining optimal well pair locations.
- The Ecuadorian operation invested $1.8 million on environmental and road work in preparation for drilling a new appraisal well.
- In Mongolia, the Company exhausted a credit held with a seismic service provider and conducted a 106 kilometer 2-D seismic program, without the expenditure of cash.
General and Administrative Expenses
General and administrative ("G&A") expenses in the first quarter of 2013 were $12.7 million, compared to $8.3 million incurred during the same period in 2012. The Q1 2012 amount of $8.3 million includes a reclassification of $2.2 million associated with Sunwing discontinued operations; without that reclassification, the previously reported Q1 2012 amount was $10.5 million. The increase in G&A related to continuing operations includes higher legal fees, Asian staff severance and retention payments and the excess of short-term incentive compensation over the 2012 accrual.
Liquidity and Capital Resources
At the end of the first quarter 2013, Ivanhoe Energy had approximately $62.0 million in cash and cash equivalents, as compared to $42.3 million at the end of the same period of 2012. The $62.0 million includes $20.0 million released from the restricted cash balance stemming from the completion of the Zitong transaction and associated release of the cash collateral under the performance bond, which was assumed by Shell China.
The Company feels this is sufficient liquidity to fund operating activities in 2013 and into 2014.
Ivanhoe Energy continues to make progress in its efforts to commercialize HTL. The Company is processing new third-party crudes in its Feedstock Test Facility in San Antonio, Texas and is also conducting test runs of HTL Synthetic Crude Oil in a refinery environment. This work is underway to generate additional data in support of various partnership discussions. The company has also been working closely with SBM Offshore on potential offshore projects, and has published new marketing materials which are available at www.ivanhoeenergy.com.
Tamarack - Canada
As was previously reported in Q1 2013, Ivanhoe Energy received a Completeness Determination on the Tamarack application from Alberta Environment and Sustainable Resource Development. Having received this, the Company then entered the final stages of the regulatory process, which is working with the Energy Resources Conservation Board (ERCB) and local stakeholders to resolve concerns identified in the filed Statements of Concern (SOCs). During Q1 2013 the Company completed discussions with three stakeholders that operate in close proximity to, and are most impacted by, the Tamarack Project. The Company established long-term relationships and agreements with Northland Forest Products Ltd., the Regional Municipality of Wood Buffalo, and Fort McMurray # 468 First Nation. Each of these stakeholders formally removed their SOCs. The Company continues to progress discussions with the remaining four stakeholders who have filed SOCs.
Ivanhoe Energy is an independent international heavy oil exploration and development company focused on pursuing long-term growth in its reserves and production using advanced technologies, including its proprietary heavy oil upgrading process (HTLTM). Core operations are in Canada, United States, Ecuador and Mongolia, with business development opportunities worldwide. Ivanhoe Energy trades on the Toronto Stock Exchange with the ticker symbol IE and on the NASDAQ Capital Market with the ticker symbol IVAN.
For more information about Ivanhoe Energy Inc. please visit www.ivanhoeenergy.com.
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to the potential for commercialization and future application of the heavy oil upgrading technology and other technologies, statements relating to the continued advancement of Ivanhoe Energy's projects, statements relating to the timing and amount of proceeds of agreed upon and contemplated disposition transactions, statements relating to anticipated capital expenditures, statements relating to the timing and success of regulatory review applications, and other statements which are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions relating to matters that are not historical facts are forward-looking statements. Although Ivanhoe Energy believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that the Company's projects will experience technological and mechanical problems, new product development will not proceed as planned, the HTLTM technology to upgrade bitumen and heavy oil may not be commercially viable, geological conditions in reservoirs may not result in commercial levels of oil and gas production, the availability of drilling rigs and other support services, uncertainties about the estimates of reserves, the risk associated with doing business in foreign countries, environmental risks, changes in product prices, our ability to raise capital as and when required, our ability to complete agreed upon and planned asset dispositions, competition and other risks disclosed in Ivanhoe Energy's 2012 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on EDGAR and the Canadian Securities Commissions on SEDAR.
SOURCE Ivanhoe Energy Inc.