CALGARY, Aug. 27, 2012 /CNW/ - ArPetrol Ltd. ("ArPetrol" or the
"Company") announces its financial and operating results for the
three and six months ended June 30, 2012 and provides an
operational update on activities this year to date as well as an
outlook for the remainder of 2012. The interim condensed
consolidated financial statements and management's discussion and
analysis (MD&A), have been filed on SEDAR at www.sedar.com and
posted on the Company's website at www.arpetrol.com. Second Quarter
2012Summary Operating and Financial ArPetrol had $19 million of
working capital and drilling deposits as at June 30, 2012 and no
long-term debt. Second quarter production averaged 247 boe per day.
This is a decrease of 17 boe per day from the first quarter of 2012
and a decrease of 41 boe per day from the second quarter of 2011.
These declines were due to a compressor outage in June and to
natural declines. To help offset the volume declines, the Company
continues to realize higher prices for its production. For the
second quarter of 2012 the average price received for its natural
gas was $2.87 per mcf, 16 percent higher than the $2.47 per mcf
received in the second quarter of 2011. The average realized price
for natural gas liquids also increased year-on-year with
second-quarter 2012 prices of $70.23 per barrel, more than $10 per
barrel higher from the same period in 2011. These increases reflect
the continued trend of strengthening market prices in Argentina.
The first and second quarter of 2012 average realized prices were
consistent after adjusting for foreign exchange differences.
Processing volumes and revenues also continued to increase during
the first half of 2012 as third-party processing volumes return to
full volumes after the disruption in September 2010. In June 2012,
third-party delivery rates peaked at over 80 million cubic feet per
day with processing revenue for the second-quarter of $1,007,343,
an increase of $598,875 over the same period last year. During the
current quarter third-party processing volumes increased by 12
percent compared to the first-quarter of 2012, while process
disruptions at our gas plant resulted in slightly lower liquids
recovery and revenue. Fixed asset expenditures for the
second-quarter 2012 were $8,306,764. Major expenditures were
incurred to prepare for and mobilize our extended reach drilling
program on our Faro Virgenes block. Net loss for the quarter was
$1,181,161, a 27 percent improvement as compared to the net loss
for the prior year comparative quarter. Summary of Results (Cdn$
except Three months ended June Six Months Ended March 31, shares
outstanding 30, and per boe1 amounts) 2012 2011 2012 20112
(Unaudited) (Unaudited) Financial Production sales 501,736 493,307
1,030,986 1,134,329 Processing 1,007,343 408,468 2,141,954 819,975
revenues Funds flow from (891,604) (1,146,074) (1,519,445)
(2,142,826) operations1 Cash generated (3,295,954) (2,542,833)
(3,429,162) (3,442,101) from operating activities Comprehensive
loss (802,806) (1,628,475) (2,136,028) (3,796,600) Fixed asset
8,306,764 407,254 11,203,356 436,775 expenditures Weighted average
shares outstanding (millions) - basic and 572.5 572.2 572.5 419.5
diluted Operations Production Natural gas - 1,335 1,572 1,395 1,815
Mcf per day Natural gas 24 26 23 27 liquids - bbls per day Total -
boe 247 288 256 330 per day1 Average sales price Natural gas - 2.87
2.47 2.86 2.58 $ per Mcf Natural gas 70.23 59.08 72.88 58.96
liquids - $ per bbl Average operating netback Production - $ 0.98
4.63 1.06 5.10 per boe1 Processing - $ 0.04 (0.10) 0.07 (0.05) per
Mcf processed1 Note 1: See advisories at the end of this news
release with respect to non-IFRS measures and BOE presentation.
Note 2: The unaudited consolidated results for the Company for the
six months ended June 30, 2011 reflect the results of the combined
operations of ArPetrol Inc. and RPT Resources Ltd. (now ArPetrol
Ltd.) from March 18, 2011 until June 30, 2011 and the results from
ArPetrol Inc. only from January 1, 2011 to March 17, 2011.
Operational Update and Outlook ArPetrol is drilling the first long
reach well in the Faro Virgenes field, which was spudded on July
23, 2012. Drilling operations are currently ongoing at 2,070
metres. With success, production from the well will be tied into
ArPetrol's 100 percent owned gas plant. Operational delays in
mobilization and surface hole drilling delays have increased the
estimated cost of this well by up to 15 percent above the
previously estimated cost range. The results from the first well
will need to be evaluated before the Company commits to drilling a
second long reach well at Faro and this may require an extended
testing period with the drilling results provided in the
fourth-quarter. Additional financing will be required for the
drilling of a second well. Should only one well be drilled at
Faro due to unsatisfactory well results or an inability to obtain
additional financing, there will be further incremental costs
allocated to the first well to suspend the drilling program and
satisfy prior commitments that were based on a two-well program.
All values in this news release are in Canadian dollars unless
otherwise indicated. 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 million cubic feet (mmcf)
per day. The Company's common shares are listed on the TSXV under
the symbol "RPT". Non-GAAP Measures This news release includes
references to financial measures commonly used in the oil and
natural gas industry. The terms "operating netback" (production
sales and processing sales less royalties, turnover taxes and
operating expenses)and "funds flow from operations" (cash generated
from operating activities before changes in refundable Argentinean
taxes, non-cash working capital, and translation adjustment on
operating items) do not have any standardized meaning under
International Financial Reporting Standards (IFRS), which have been
incorporated into Canadian generally accepted accounting principles
(GAAP) 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 MD&A for the three and six
months ended June 30, 2012, 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 MD&A for the
three and six months ended June 30, 2012, which is filed on SEDAR
at www.sedar.com. BOE Presentation Production information is
commonly reported in units of barrels of oil equivalent (boe). For
purposes of computing such units, natural gas is converted to
equivalent barrels of oil using a conversion factor of six thousand
cubic feet (mcf) to one barrel (bbl). This conversion ratio of 6:1
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. Forward-Looking Information This news release
contains certain forward‐looking statements relating, but not
limited, to operational information, achieving additional
production based on a successful drilling program at Faro, expected
capital expenditures and increased cost estimates, drilling plans
and the timing associated with drilling results, availability of
funding, the ability to realize growth for our shareholders and
expectations regarding the business and political climate in
Argentina. Forward‐looking information typically contains
statements with words such as "anticipate", "believe", "plan",
"intend", "target", "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 forward‐looking 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, plans for and results of future operations and
transactions, future drilling activity and production rates, future
capital and other expenditures (including the amount, nature,
timing and sources of funding thereof), future production and
processing revenue, future economic conditions, future currency and
exchange rates, future pricing, future funding, continued political
stability in the areas in which the Company is operating, and the
Company's continued ability to obtain and retain qualified staff
and equipment in a timely and cost-efficient manner. Although the
Company believes the expectations and assumptions reflected in such
forward‐looking information are reasonable, they may prove to be
incorrect. Forward‐looking information involves significant known
and unknown risks and uncertainties. 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 in
exploration and drilling; inherent uncertainties in interpreting
geological data; changes in plans with respect to exploration or
capital expenditures; the uncertainty of estimates and projections
in relation to costs and expenses; and health, safety and
environmental risks), access to funding, weather delays and natural
disasters, processing interruptions and natural declines, union
activities, change in government policies, the risk of commodity
price and foreign exchange rate fluctuations, and risks associated
with international activity. ArPetrol operates outside of Canada
and as such, ArPetrol is subject to a number of political risks
over which it has no control. These risks may include risks related
to economic, social or political instability or change, the
uncertainty of negotiating with foreign governments, expropriation
and/or nationalization, changes in export or exchange policies,
adverse determinations or rulings by governmental authorities,
changes in energy policies or in the personnel administering them
and currency and inflation risks. See the "Risk Factors" section of
the Company's Annual Information Form for a further description of
these risks and uncertainties facing ArPetrol. The forward‐looking
information included herein is expressly qualified in its entirety
by this cautionary statement. The forward‐looking information
included herein is made as of the date hereof and the Company
assumes no obligation to update or revise any forward‐looking
information to reflect new events or circumstances, except as
required by law. Additional information relating to the Company is
also available on SEDAR at www.sedar.com. Effective August 27, 2012
ArPetrol's Calgary office address will be 700, 815 8 Avenue S.W.,
Calgary, AB T2P 3P2 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.
ArPetrol Ltd. CONTACT: Tim Thomas, President and Chief Executive
Officert.thomas@arpetrol.comOrIan Habke, Chief Financial
Officeri.habke@arpetrol.comArPetrol Ltd.Main Phone: 403-263-6738
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