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.