NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A
VIOLATION OF U.S. SECURITIES LAWS.
Greenfields Petroleum Corporation ("Greenfields" or the "Company") (TSX
VENTURE:GNF), an independent exploration and production company with assets in
Azerbaijan, announces financial results for the year-ended December 31, 2013.
Except as otherwise indicated, all dollar amounts referenced herein are
expressed in United States dollars.
Fourth Quarter and Year-End 2013 Financial Results and Operating Highlights
-- The Company's entitlement sales volumes from production for its net
interest in the Bahar Project averaged 522 bbl/d and 7,352 mcf/d or
1,747 boe/d in the fourth quarter 2013 and 523 bbl/d and 5,428 mcf/d or
1,428 boe/d for fiscal year 2013, an improvement of 12% over the prior
quarter, 53% over the fourth quarter 2012 and 31% over fiscal year 2012
when compared on a barrels of oil equivalent basis.
-- The Company recorded net income of $66,000 and EPS of $0.00 for the
fourth quarter 2013 and a net loss of $3.3 million and EPS of ($0.19)
for fiscal year 2013 as compared to a net loss of $5.9 million and EPS
of ($0.28) in the fourth quarter 2012 and a net loss of $16.1 million
and EPS of ($1.04) for fiscal year 2012.
-- Through its interest in Bahar Energy, the Company realized average
netback oil prices of $102.10/bbl for the fourth quarter 2013 and
$101.28/bbl for fiscal year 2012. Realized gas prices have remained
constant during 2013 at $3.96/mcf.
-- The Gum Deniz 774 well commenced drilling on December 12, 2013. At year
end 2013, the well was drilling at a total depth of 1,588 meters and
subsequently reached total depth of 2,566 meters on January 23, 2104.
After testing non-commercial rates in the X reservoir, the well is under
evaluation for further testing in the V-VIII reservoirs and/or possible
sidetracking.
-- During 2013, the Company completed two separate equity transactions for
aggregate gross proceeds of CAD$9.6 million. On June 25, 2013, the
Company completed a non-brokered private placement of 2,000,000 Common
Shares at a price of CAD$3.40 per Common Share for gross proceeds of
CAD$6.8 million or the USD equivalent of $6.5 million. On July 9, 2013,
the Company completed a brokered offering of 821,800 Common Shares at a
price of CAD$3.40 per Common Share for gross proceeds of approximately
CAD$2.8 million or the USD equivalent of $2.65 million.
-- On November 25, 2013, the Company secured a $25 million loan facility
through an arm's length third party. Pursuant to the terms of the loan
agreement, the Company is entitled to draw up to the aggregate of $25
million in tranches based upon the achievement of certain operational
milestones. As at December 31, 2013, the Company had drawn down $5
million of the loan facility.
Select Financial and Operating Information for the year ended December 31, 2013
The selected information below is from the Greenfields' Management Discussion &
Analysis. The Company's complete financial statements as of and for the years
ended December 31, 2013 and 2012, with the notes thereto and the related
Management's Discussion & Analysis can be found either on Greenfields' website
at www.Greenfields-Petroleum.com or on SEDAR at www.sedar.com. All amounts below
are in thousands of US dollars unless otherwise noted.
Greenfields Petroleum Corporation
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(US$000's,except as noted) Year ended
December 31,
----------------------
2013 2012 (4)
--------------------------------------------------- ----------------------
Financial
Revenues (1) 2,432 2,737
Net (loss) income (3,278) (16,075)
Per share, basic and diluted $ (0.19) $ (1.04)
Capital Items
--------------------------------------------------- ----------------------
Cash and cash equivalents 3,068 12,404
Total Assets 49,337 40,560
Working capital (2) 1,734 16,622
Long term loan, convertible debt and Shareholders'
equity (3) 46,924 38,327
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(1) Revenues for the three months and year ended December 31, 2012 reflect
change from proportionate consolidation to equity method of accounting for
the Company's investment in Bahar Energy Limited. 2012 financial results
have been restated to reflect the change in accounting policy effective
January 1, 2013.
(2) The December 31, 2012 working capital balance has been restated to
exclude the Company's share of Bahar Energy Limited working capital due to
the change to equity method accounting noted above.
(3) Convertible debt is combined with shareholders' equity at December 31,
2013 due to the Company's right to settle this debt by issuing shares.
(4) These figures were restated in accordance with the adoption of IFRS
impacting the accounting for the joint venture. See Note 21 of the Audited
Consolidated Financial Statements for the year ended December 31, 2013.
Bahar Energy Limited (Joint Venture)
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Total Joint Venture Company's share
---------------------------------------------
(US$000's,except as
noted) Year ended December 31,
---------------------------------------------
2013 2012 2013 2012
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Financial
Revenues 87,707 71,890 29,233 23,961
Net (loss) income 7,288 (22,907) 2,429 (7,635)
Operating
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Average Entitlement
Sales Volumes (1)
Oil and condensate
(bbl/d) 1,570 1,290 523 430
Natural gas (mcf/d) 16,287 11,942 5,428 3,980
Barrel oil equivalent
(boe/d) 4,284 3,281 1,428 1,093
Average Oil Price
Oil price ($/bbl) $ 103.40 $ 104.35 $ 103.40 $ 104.35
Net realization price
($/bbl) $ 101.28 $ 102.23 $ 101.28 $ 102.23
Brent oil price ($/bbl) $ 108.51 $ 111.64 $ 108.51 $ 111.64
Natural gas price
($/mcf) $ 3.96 $ 3.96 $ 3.96 $ 3.96
Capital Items
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Total Assets 175,503 100,048 58,495 33,346
Total Liabilities 46,784 34,914 15,593 11,637
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Net Assets 128,719 65,134 42,902 21,709
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(1) Daily volumes represent the Joint Venture's and Company's share of the
Contractor Parties entitlement volumes net of 10% compensatory petroleum
beginning October 1, 2013 and the government's share of profit petroleum.
"We are very pleased to see the substantial improvements in year-over-year
production rates from the ERDPSA and its impact on Bahar Energy's income for
2013. The income improvement is attributable to the higher revenues and savings
in operating and administrative expenses. The increases in production and
reductions in expenses are clearly the result of a focus on drilling and
workover activities in the Gum Deniz Oil and Bahar Gas fields and the
organization's efforts to improve its overall cost structure," stated A. Wayne
Curzadd, Senior Vice President and Chief Financial Officer of the Greenfields.
About Greenfields Petroleum Corporation
Greenfields is a junior oil and natural gas Company focused on the development
and production of proven oil and gas reserves principally in the Republic of
Azerbaijan. The Company plans to expand its oil and gas assets through further
farm-ins, and acquisitions of Production Sharing Agreements from foreign
governments containing previously discovered but under-developed international
oil and gas fields, also known as "greenfields". More information about the
Company may be obtained on the Greenfields website at
www.greenfields-petroleum.com.
Forward-Looking Statements
This press release contains forward-looking statements. More particularly, this
press release may include, but is not limited to, statements concerning:
increased average production, drilling and completion plans and the expected
timing thereof, securing the production and operating period of the Bahar
Contract and seismic acquisition. In addition, the use of any of the words
"initial, "scheduled", "can", "will", "prior to", "estimate", "anticipate",
"believe", "should", "forecast", "future", "continue", "may", "expect", and
similar expressions are intended to identify forward-looking statements. The
forward-looking statements contained herein are based on certain key
expectations and assumptions made by the Company, including, but not limited to,
expectations and assumptions concerning the success of optimization and
efficiency improvement projects, the availability of capital, current
legislation, receipt of required regulatory approval, the success of future
drilling and development activities, the performance of existing wells, the
performance of new wells, general economic conditions, availability of required
equipment and services, weather conditions and prevailing commodity prices.
Although the Company believes that the expectations and assumptions on which the
forward-looking statements are based are reasonable, undue reliance should not
be placed on the forward-looking statements because the Company can give no
assurance that they will prove to be correct.
Since forward-looking statements address future events and conditions, by their
very nature they involve inherent risks and uncertainties most of which are
beyond the control of Greenfields. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the forward-looking
information prove incorrect, actual results, performance or achievements could
vary materially from those expressed or implied by the forward-looking
information. These risks include, but are not limited to, risks associated with
the oil and gas industry in general (e.g., operational risks in development,
exploration and production; delays or changes in plans with respect to
exploration or development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections relating to
production, costs and expenses, and health, safety, political and environmental
risks), commodity price and exchange rate fluctuations, changes in legislation
affecting the oil and gas industry and uncertainties resulting from potential
delays or changes in plans with respect to exploration or development projects
or capital expenditures. Additional risk factors can be found under the heading
"Risk Factors" in Greenfields' Annual Information Form and similar headings in
Greenfields' Management's Discussion & Analysis which may be viewed on
www.sedar.com.
The forward-looking statements contained in this press release are made as of
the date hereof and Greenfields 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
securities laws. The Company's forward-looking information is expressly
qualified in its entirety by this cautionary statement.
Notes to Oil and Gas Disclosures
Barrels Oil Equivalent or "boe" may be misleading, particularly if used in
isolation. The volumes disclosed in this press release under the headings "Third
Quarter and Year-to-Date 2013 Financial Results and Operating Highlights" and
"Operating Highlights and Plans" uses a 5.559 mcf: 1boe conversion ratio as the
Bahar Contract (ERDPSA) uses a 5.559 mcf: 1boe conversion ratio to measure total
field production in calculating the 6,944 boe production threshold to earn the
full 25 year initial term of the Bahar Contract.
The volumes disclosed in this press release under the heading "Selected
Information" uses a 6mcf: 1boe, as such is typically used in oil and gas
reporting and is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
wellhead. The Company uses a 6mcf: 1boe ratio to calculate its share of
entitlement sales from the Bahar Project for its financial reporting and
reserves disclosure, but, for greater clarity, not for the purposes of the
information under the headings "Select Financial and Operating Information for
the year ended December 31, 2013" in this press release.
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 this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Greenfields Petroleum Corporation
John W. Harkins
Chief Executive Officer
(832) 234-0836
www.greenfields-petroleum.com
Greenfields Petroleum Corporation
A. Wayne Curzadd
Chief Financial Officer
(832) 234-0835
info@greenfieldspetroleum.com
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