Americas Petrogas Announces 2013 Results and Reserves
Operating Netback(1) of $57.9 million or $73.72 per barrel; Net
revenue of $54.5 million; $18.3 million of cash and investments
CALGARY, ALBERTA--(Marketwired - May 5, 2014) -
Americas Petrogas Inc. ("Americas Petrogas" or the "Company")
(TSX-VENTURE:BOE) announces its 2013 results and updated reserve
estimates.
Summary Financial and
Operational Highlights
Selected financial and operational information is outlined below
and should be read in conjunction with the Company's annual
consolidated financial statements and the related Management's
Discussion and Analysis ("MD&A") for the year, which have been
filed on SEDAR under the Company's profile at www.sedar.com and are
also available on the Company's website at
www.americaspetrogas.com. All amounts are in Canadian dollars
unless otherwise stated.
| ($ in thousands, except per share, and per
barrel amounts) |
Year ended December 31 |
|
|
|
2013 |
|
|
2012 |
|
| Gross oil sales revenue |
$ |
63,018 |
|
$ |
53,795 |
|
|
|
|
|
|
|
|
| Net revenue(1) |
$ |
54,500 |
|
$ |
46,207 |
|
|
|
|
|
|
|
|
| Operating netback (including Oil Plus benefits)(2) |
$ |
57,874 |
|
$ |
35,607 |
|
|
|
|
|
|
|
|
| Operating netback (including Oil Plus benefits) per
barrel(2) |
$ |
73.72 |
|
$ |
50.11 |
|
|
|
|
|
|
|
|
| Operating netback (excluding Oil Plus benefits) per
barrel(2) |
$ |
43.69 |
|
$ |
48.29 |
|
|
|
|
|
|
|
|
| Net income (loss) attributable to owners of the
Company |
$ |
(11,755 |
) |
$ |
(12,500 |
) |
|
|
|
|
|
|
|
| Earnings (loss) per share - basic and diluted |
$ |
(0.06 |
) |
$ |
(0.06 |
) |
|
|
|
|
|
|
|
| Funds flow from operations(3) |
$ |
43,855 |
|
$ |
21,744 |
|
|
|
Per share - basic |
$ |
0.21 |
|
$ |
0.11 |
|
|
|
Per share - diluted |
$ |
0.20 |
|
$ |
0.10 |
|
|
|
|
|
|
|
|
| Weighted average number of common shares
outstanding(4) |
|
|
|
Basic |
|
212,669,147 |
|
|
205,767,533 |
|
|
|
Diluted |
|
214,836,413 |
|
|
212,642,586 |
|
|
|
|
|
|
|
|
| Cash flow from operating activities |
$ |
31,354 |
|
$ |
9,791 |
|
|
|
|
|
|
|
|
| Capital expenditures |
$ |
84,172 |
|
$ |
75,864 |
|
|
|
|
|
|
|
|
| Average barrels sold per day |
|
2,151 |
|
|
1,947 |
|
|
|
|
|
|
|
|
| Average selling price per barrel |
$ |
80.27 |
|
$ |
75.70 |
|
|
|
|
|
|
|
|
|
|
|
| ($ in thousands) |
|
December 31, 2013 |
|
December 31, 2012 |
|
|
|
|
|
| Cash and cash equivalents |
$ |
18,334 |
$ |
12,426 |
| Working capital(5) |
$ |
21,687 |
$ |
51,974 |
|
|
|
|
|
| Equity outstanding |
|
|
|
|
|
|
Common shares |
|
212,572,440 |
|
212,728,283 |
|
|
Stock options |
|
17,946,093 |
|
11,821,750 |
Notes:
|
(1) |
"Net
revenue" is an additional GAAP measure because it is presented in
the consolidated statement of income (loss). Net revenue is gross
revenue less royalties. The Company uses "net revenue" as an
indicator of operating performance. |
|
(2) |
"Operating netback" is a non-GAAP measure and is calculated as
revenues from oil sales less royalties and production costs.
Operating netback is used as an indicator of operating performance,
profitability and liquidity. "Operating netback (excluding Oil Plus
benefits)" excludes any Oil Plus benefits credited to production
costs. "Operating netback (including Oil Plus benefits)" is net of
any Oil Plus benefits credited to production costs. Operating
netback does not have a standardized meaning prescribed by IFRS. It
is unlikely for non-GAAP measures to be comparable to similar
measures presented by other companies. For the year ended December
31, 2013, operating netback including Oil Plus benefits was $57.9
million (calculated as gross oil sales revenue of $63.0 million
less royalties of $8.5 million plus production costs recovery of
$3.4 million). For the year ended December 31, 2012, operating
netback was $35.6 million (calculated as gross oil sales revenue of
$53.8 million less royalties of $7.6 million and production costs
of $10.6 million). |
|
(3) |
"Funds flow from operations" is an additional GAAP measure because
it is presented in the consolidated statement of cash flows. Funds
flow from operations and funds flow from operations per share are
used to analyze operating performance and liquidity. Funds flow
from operations is calculated as net cash generated from (used by)
operating activities (as determined in accordance with IFRS) before
changes in non-cash balance sheet operating items. Funds flow from
operations per share is calculated by dividing funds flow from
operations by the weighted average number of shares outstanding.
Funds flow from operations should not be considered an alternative
to, or more meaningful than net cash generated from (used by)
operating activities as determined in accordance with IFRS. Funds
flow from operations per share should not be considered an
alternative to, or more meaningful than earnings (loss) per share
as determined in accordance with IFRS. |
|
(4) |
Diluted weighted average number of common shares outstanding is
computed by adjusting basic weighted average number of common
shares outstanding for dilutive instruments. The number of shares
included with respect to options, warrants and similar instruments
is computed using the treasury stock method, which assumes any
proceeds received by the Company upon exercise of the in-the-money
instruments would be used to repurchase common shares at the
average market price for the period. For the year ended December
31, 2013, 2,167,266 (year ended December 31, 2012 - 6,875,053)
common shares were deemed to be issued for no consideration in
respect of options. |
|
(5) |
Working capital is a non-GAAP measure and is calculated as current
assets less current liabilities. Working capital is used to assess
liquidity general financial strength. Working capital does not have
a standardized meaning prescribed by IFRS. It is unlikely for
non-GAAP measures to be comparable to similar measures presented by
other companies. Working capital should not be considered an
alternative to, or more meaningful than current assets or current
liabilities as determined in accordance with IFRS. |
- Net loss: net loss attributable to owners of the Company was
$11.8 million or $0.06 per share during the year ended December 31,
2013, compared to a net loss of $12.5 million or $0.06 per share
for the equivalent period of 2012. The loss for 2013 is primarily
attributable to a non-cash, foreign exchange loss on an
intercompany loan between the Canadian parent company and its
Argentina subsidiary.
- Cash position: $18.3 million of consolidated cash and cash
equivalents as of December 31, 2013.
- Oil Plus benefits: during the year ended December 31, 2013, the
Company recognized $25.5 million of Oil Plus benefits (related to
production and reserve increases). This is in addition to $1.3
million of Oil Plus benefits recognized in the fourth quarter of
2012. As of the current date, a total of $26.8 million of Oil Plus
benefits have already been collected. An additional $11.5 million
has been applied for and remains to be collected.
Reserves
The Company has released the results of an independent reserves
evaluation effective December 31, 2013. The report was completed by
Chapman Petroleum Engineers Ltd. ("Chapman") and was prepared in
accordance with National Instrument 51-101. The full content of the
Company's Statement of Reserves Data and Other Oil and Gas
Information for the year ended December 31, 2013, including the
significant assumptions, has been included in the Company's Annual
Information Form for the year ended December 31, 2013, which has
been filed on SEDAR (www.sedar.com).
The summary information that follows has been derived from that
evaluation.
| Proved Reserves
(gross): 2,035,000 barrels of oil equivalent (boe) |
| Proved Reserves
(net): 1,722,000 boe |
| Proved +
Probable Reserves (gross): 10,224,000 boe |
| Proved +
Probable Reserves (net): 8,835,000 boe |
| Proved +
Probable + Possible Reserves (gross): 65,436,000 boe |
| Proved +
Probable + Possible Reserves (net): 56,632,000 boe |
Highlights and Recent
Activities
- On September 19, 2013, Americas Petrogas announced a strategic
review, which commenced a process to review strategic alternatives
for maximizing shareholder value. The Company engaged Jefferies LLC
as its sole financial advisor to assist management in evaluating a
range of strategic alternatives. The strategic review is ongoing
and the Company continues to evaluate a range of alternatives.
- In 2014, the Board of Directors of the Agency for Promotion of
Private Investment ("ProInversion"), an agency of the government of
Peru, authorized the Peruvian state-owned company Activos Mineros
S.A.C. and the Executive Director of ProInversion to execute the
transfer agreement granting an interest in the Bayovar Property to
APPSA, Americas Petrogas' Peruvian subsidiary.
- The Company drilled a total of 24 wells on Medanito Sur in
2013, the majority of which were in the earlier part of the year.
This drilling resulted in the discovery of new production areas,
including El Alpataco, El Calden Este, Amilcar and La Meseta.
However, so far in 2014, as the Company reduces its capital
expenditures in an effort to preserve its cash position, no new
wells have been drilled and coupled with natural decline, oil sales
volumes in 2014 are expected to be significantly lower in
comparison to corresponding periods in 2013. For the months of
January and February 2014, the Company sold approximately 1,253
bopd (net). The Company is, however, as part of its strategic
review, evaluating alternative forms of financing including, but
not limited to, joint ventures and farm outs, which, if successful,
would allow the Company to increase its drilling activity.
- Ryder Scott Company estimated (updated as of March 31, 2014)
that the Company has 7.6 billion BOE (27% oil/condensate and 73%
gas) P50 Best Case Unrisked Prospective (Recoverable) Resources in
the Company's nine unconventional shale oil and shale gas
properties located in Argentina. The Company's interests in the
nine properties evaluated by Ryder Scott vary from 39% to 90%. See
the Company's Annual MD&A for the year ended December 31, 2013
for further information.
- In respect of the Company's unconventional, Vaca Muerta shale
exploration wells, the Company, in conjunction with its partner,
ExxonMobil, continued to conduct long-term production testing on
the LTE.x-1 well and continued to analyze data relating to the
ALL.x-1 well and the ADA.x-1 well. A multi-stage hydraulic
stimulation program on the ADA.x-1 well was completed in September
2013 and testing of the well began in late November.
For further information regarding the Company's financial
results, financial position and related changes, please see the
consolidated financial statements and the related MD&A.
The Company has posted a new Investor Presentation on its
website at www.americaspetrogas.com.
About Americas Petrogas
Inc.
Americas Petrogas Inc. is a Canadian company whose shares trade
on the TSX Venture Exchange under the symbol "BOE". Americas
Petrogas has conventional and unconventional shale oil and gas and
tight sands oil and gas interests in numerous blocks in the Neuquén
Basin of Argentina. Americas Petrogas has joint venture partners,
including ExxonMobil and Apache, on various blocks in the shale oil
and gas corridor in the Neuquén Basin, Argentina. Americas Petrogas
also owns an 80% interest in GrowMax Agri Corp., a private company
involved in the exploration for near-surface potash, phosphates and
other minerals, and potential development of a fertilizer project
in Peru. Indian Farmers Fertiliser Co-operative Limited (IFFCO)
owns a 20% interest in GrowMax Agri Corp. For more information
about Americas Petrogas Inc., please visit
www.americaspetrogas.com.
This Press Release contains forward-looking information
including, but not limited to, the Company's goals and growth,
estimates of reserves and resources, production and cash flows,
drilling activities on the Medanito Sur block, reviewing various
strategic alternatives, continuing to aggressively de-risk and
operate a majority of the Company's substantial Vaca Muerta Shale
position in the Neuquén Basin, expanding the Company's application
of unconventional drilling technology, and exploiting the Company's
large inventory of conventional projects through ongoing
development drilling, production testing of the LTE.x-1 well,
analysis relating to the ALL.x-1 well and ADA.x-1 well, testing of
the ADA.x-1, extension of commitments on the Company's various
blocks and the possibility of relinquishments in connection
therewith, the approval and execution of the transfer documents
required for the acquisition by the Company of the Bayover Property
interest and the timing thereof, exploration, appraisal and
development activities related to conventional and unconventional
oil and gas, and other exploration, development and production
activities in respect of the projects in Argentina and Peru. The
recovery and resources estimates for the Company's properties
described in this Press Release are estimates only and there is no
guarantee that the estimated resources will be recovered. The
actual resources for the Company's properties may be greater or
less than those calculated. Additional forward-looking information
is contained in the Company's Annual MD&A and Annual
Information Form for the year ended December 31, 2013, and
reference should be made to the additional disclosures of the
assumptions, risks and uncertainties relating to such
forward-looking information in those documents.
Forward‐looking information is based on management's
expectations regarding the Company's future growth, results of
operations, production, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, plans for and results of drilling activity
(including the timing, location, depth and the number of wells),
environmental matters, business prospects and opportunities and
expectations with respect to general economic conditions. Such
forward‐looking information reflects management's current beliefs
and assumptions and is based on information, including reserves and
resources information, currently available to management.
Forward‐looking information involves significant known and unknown
risks and uncertainties. A number of factors could cause actual
results, performance or achievements to differ materially from any
future results, performance or achievements expressed or implied by
the forward‐looking information, including but not limited to,
risks associated with the oil and gas industry (e.g. operational
risks in development, exploration and production, delays or changes
to plans with respect to exploration or development projects or
capital expenditures; the uncertainty of reserve estimates; the
uncertainty of geological interpretations; the uncertainty of
estimates and projections in relation to production, costs and
expenses and health, safety and environment risks, extensions of
concessions and commitments), the risk of commodity price and
foreign exchange rate fluctuations, the uncertainty associated with
negotiating with foreign governments and third parties located in
foreign jurisdictions and the risk associated with international
activity and the risk of being unable to raise significant funds on
terms acceptable to the Company to meet its capital and operating
expenditure requirements in respect of its properties.
Although the forward-looking information contained herein is
based upon assumptions which management believes to be reasonable,
the Company cannot assure investors that actual results will be
consistent with this forward-looking information. This
forward-looking information is made as of the date hereof and the
Company assumes no obligation to update or revise this information
to reflect new events or circumstances, except as required by law.
Because of the risks, uncertainties and assumptions inherent in
forward-looking information, prospective investors in the Company's
securities should not place undue reliance on this forward-looking
information.
The term BOE (barrels of oil equivalent) is used in this press
release. All calculations converting natural gas to BOE have been
made using a conversion ratio of six thousand cubic feet (six
"Mcf") of natural gas to one barrel of oil, unless otherwise
stated. The use of BOE may be misleading, particularly if used in
isolation, as the conversion ratio of six Mcf of natural gas to one
barrel of oil is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead. Given that the value ratio based
on the current price of crude oil as compared to natural gas is
significantly different from the energy equivalency of 6:1,
utilizing a conversion on a 6:1 basis may be misleading as an
indication of value.
Prospective Resources are those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations by application of future development
projects. Prospective resources have both an associated chance of
discovery and a chance of development. Uncertainty Ranges are
described by the COGEH as low, best, and high estimates for
reserves and resources. The Best Estimate is considered to be the
best estimate of the quantity that will actually be recovered. It
is equally likely that the actual remaining quantities recovered
will be greater or less than the best estimate. If probabilistic
methods are used, there should be at least a 50 percent probability
(P50) that the quantities actually recovered will equal or exceed
the best estimate.
In the case of undiscovered resources or a subcategory of
undiscovered resources, there is no certainty that any portion of
the resources will be discovered. If discovered, there is no
certainty that it will be commercially viable to produce any
portion of the resources. For undiscovered hydrocarbons, the term
'unrisked' means that no geologic or chance of discovery ("play
risk") has been incorporated into the hydrocarbon volume
estimates.
The estimates of resources for individual properties may not
reflect the same confidence level as estimates of resources for all
properties, due to the effects of aggregation.
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 THE RELEASE.
Americas Petrogas Inc.Barclay Hambrook, P. Eng., MBAPresident
and CEO(403)
685-1888inquiries@americaspetrogas.comwww.americaspetrogas.com
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