CALGARY,
Oct. 21, 2013 /CNW/ - ArPetrol Ltd.
("ArPetrol" or the "Company") (TSXV: RPT) provides an operational
update on activities.
Operating Update
ArPetrol's third-party processing volumes for
the third quarter averaged 80 million cubic feet per day (MMcf/d),
15 MMcf/d above the average volumes for the second quarter of 2013.
The increase in processing volumes in the third quarter of 2013 was
a result of third-party operational improvements. These volumes
generated fees of $0.29 per thousand
cubic feet (Mcf), reflecting the new tariff agreements entered into
with YPF S.A. and ENAP SiPetrol Argentina S.A., which agreements
remain subject to completion of final documentation.
ArPetrol's third quarter production averaged 186
barrels of oil equivalent per day (boe/d). This is a decrease of 55
boe/d from the second quarter of 2013. The decrease resulted from
some operational issues and natural production declines.
The average realized natural gas price was
$3.95 per Mcf, $0.40 per Mcf higher than the price realized in
the second quarter of 2013. For the period of October 1 to December 31, the price received is
expected to be US$3.23 per Mcf. For
natural gas liquids (NGLs), average third-quarter 2013 prices were
$83.33 per barrel, $15.61 per barrel higher than in the second
quarter of 2013. The changes in NGLs pricing reflect commodity
fluctuations in the Argentine market, and an adjustment to second
quarter revenues recorded in the third quarter.
Insider Loan and Outlook
ArPetrol's independent directors have approved a
secured loan from Carrera Investments Corp., a corporation managed
by a director of ArPetrol, and a syndicate of other directors for
advances up to an aggregate amount of $1.9
million to facilitate the payment of trade payables in
Argentina. The loan will
bear interest at 12% per annum and will be secured by the assets of
the Company. The loan has a maturity date of December 31, 2014, with earlier payment
obligations triggered upon certain events and ArPetrol may repay
the loan at any time. The loan is considered to be a related party
transaction and is subject to the provisions of Multilateral
Instrument 61-101 - "Protection of Minority Security Holders in
Special Transactions". Exemptions are available from
those requirements as there is no equity component to the loan, and
the non-conflicted directors have determined that the loan is being
made on reasonable, arm's length commercial terms. The loan is
subject to the completion of definitive documentation.
The Company has concluded settlements with
several of its third party contractors representing a significant
portion of past due amounts, which settlements will be paid with
proceeds of the insider loans. The Company will continue to pursue
settlements with the remaining creditors in Argentina, including the creditor that
initiated an arbitration proceeding in Argentina. There is no certainty whether or
not any other remaining contractors will pursue legal remedies
relating to outstanding payables.
The Company continues to pursue other ways to
generate cash and reduce costs to clean up the balance sheet, while
not risking the safe and efficient operation of its revenue
generating assets.
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 per day.
The Company's common shares are listed on the TSXV under the symbol
"RPT".
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 the
pending completion of final documentation for the insider loan, the
gas plant processing contracts and settlements with creditors, the
expected natural gas prices for the fourth quarter, the continued
negotiations with third party creditors, the efforts to generate
cash and reduce future costs and expenses. Forward-looking
information typically contains statements with words such as
"anticipate", "believe", "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 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, the ability to complete final documentation with the
counterparties on the agreed terms, the willingness of remaining
creditors to negotiate settlements, future production and
processing revenue, future economic conditions, future currency and
exchange rates, 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. 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 uncertainty regarding the willingness of third
parties to negotiate settlements or alternative payment schedules,
uncertainty regarding the outcome of the arbitration proceeding
initiated by the creditor in Argentina and the cost of same, uncertainty
whether any other creditors will commence legal proceedings and the
costs of same, the risk that final agreements will not be reached
with various counterparties, risks associated with the oil and
natural gas industry (e.g., operational risks and health, safety
and environmental risks), the ability to retain management and
staff, the inability to access funding and continue as a going
concern, weather-induced delays and natural disasters,
interruptions to production and processing revenue, production
declines, the other uncertainties regarding future revenues, union
activities and labour issues in Argentina, change in government policies, the
risk of commodity price changes, the risk of foreign exchange rate
fluctuations (which may not be as favourable as those currently
experienced), currency controls and a change in the manner and
rates at which the Company is exchanging currency, and risks
associated with international activity and political risks over
which it has no control, changes in export or exchange policies,
adverse determinations or rulings by governmental authorities.
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.
ArPetrol's head office address is 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.
SOURCE ArPetrol Ltd.