CALGARY, Aug. 31, 2015 /CNW/ - ArPetrol Ltd.
("ArPetrol" or the "Company") (TSXV: RPT) announces its financial
and operating results for the three and six months ended
June 30, 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 Second Quarter 2015
Operating and Financial
The Company continues to generate positive operating
results. During the second-quarter of 2015 ArPetrol's funds
flow from operations was $542,728 ,
an increase of $534,932 over the
second quarter of 2014. The increase was due to improved
operating performance, reduced general and administrative expenses,
lower bank charges on the repatriation of funds from Argentina and foreign exchange. For the
six months to June 30, 2015 funds
flow from operations was $1,226,281,
an increase of $537,901 from the six
months to June 30, 2014. This
increase primarily occurred in the second quarter of 2015 .
During the second quarter of 2015 gas processing revenues were
$2.5 million generating an operating
netback of $1.3 million. This
is consistent with the results from the first quarter of 2015.
During the second quarter of 2015 production averaged 218
barrels of oil equivalent per day (boe/d), an increase of 31 boe/d
from the first quarter of 2015. This increase was due to a
slow return to full production after a maintenance shut-down at the
beginning of December 2014.
The second quarter 2015 average realized natural gas price was
$5.30 per Mcf, $0.41 per Mcf higher than the price realized in
the first quarter of 2015. Each year our gas prices increases
in May in line with the terms of our gas sales agreement.
This increase will continue until the end of the
year. The average realize natural gas price during the
second quarter of 2015 increased by $0.93 per Mcf over the second quarter of
2014. The year over year increase in gas prices is primarily
driven by the strengthening $US against the $Cdn. The
Companies natural gas prices are set in $US.
The average realized price for natural gas liquids (NGL) in the
second quarter of 2015 was $86.14 per
barrel (bbl), consistent with the first quarter of 2015 and a
$3.96 per bbl increase over the
second quarter of 2014. The Company sells its natural gas
liquids (NGLs) in the spot market with the prices denominated in
United States dollars. The
changes to the realized prices between the second quarter of 2015
and the second quarter of 2014 reflect the strengthening of
the United States dollar against
the Canadian dollar. Realized prices in United States dollars remained consistent
between the same periods.
The Company's net income for the second quarter was $199,144, compared to net loss of $160,794 for the second quarter of
2014.
As at June 30, 2015 the Company
had working capital of $2.9 million
compared to $2.6 million at
March 31, 2015. The Company has
no long-term debt.
Summary of
Results
|
Three Months Ended
Jun 30,
|
Six Months Ended
Jun 30,
|
|
(Unaudited)
|
(Unaudited)
|
|
2015
|
2014
|
2015
|
2014
|
Financial
|
|
|
|
|
(Cdn$ except shares
outstanding)
|
|
|
|
|
|
|
|
|
|
Processing
revenues
|
2,537,764
|
2,055,225
|
5,017,264
|
4,302,135
|
Production
sales
|
729,112
|
632,204
|
1,293,151
|
1,282,355
|
Funds flow from
operations (1)
|
542,728
|
8,660
|
1,226,281
|
688,380
|
Cash generated from
(used in) operating activities
|
1,273,002
|
(1,045,556)
|
927,967
|
(10,657)
|
Net income
(loss)
|
199,144
|
(160,794)
|
417,749
|
1,482,786
|
Capital
expenditures
|
1,082
|
141,914
|
5,678
|
141,914
|
Weighted average
shares outstanding
|
|
|
|
|
|
– basic and diluted
(2)(3)(4)
|
22,567,160
|
22,901,468
|
22,775,391
|
22,901,468
|
Per Share Funds flow
from operations (2)
|
0.02
|
0.00
|
0.05
|
0.03
|
Per Share Net
income(2)
|
0.01
|
(0.01)
|
0.02
|
0.06
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
Processing
|
|
|
|
|
|
Processing Volumes –
Mcf per day
|
78,286
|
77,286
|
80,785
|
76,253
|
|
Processing
Revenue
|
2,537,764
|
2,055,225
|
5,017,264
|
4,302,135
|
|
Operating Netback
(1)
|
1,280,879
|
1,128,820
|
2,510,799
|
2,487,385
|
|
Average Operating
Netback - $ per Mcf processed (1)
|
0.18
|
0.16
|
0.18
|
0.18
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
Natural gas – Mcf per
day
|
1,187
|
1,176
|
1,112
|
1,252
|
|
NGL – bbls per
day
|
20
|
22
|
17
|
21
|
|
Total – boe per day
(1)
|
218
|
218
|
202
|
230
|
|
Average operating
netback - $ per boe(1)
|
4.97
|
8.73
|
0.45
|
6.08
|
|
|
|
|
|
Average sales
price
|
|
|
|
|
|
Natural gas – $ per
Mcf
|
5.30
|
4.37
|
5.11
|
4.29
|
|
NGL – $ per
bbl
|
86.14
|
82.18
|
85.76
|
81.78
|
|
|
|
|
|
Foreign Exchange
Rates – Period Ended
|
|
|
|
|
|
US Dollar / Canadian
Dollar
|
1.24
|
1.07
|
|
|
|
Argentina Peso / US
Dollar
|
9.14
|
8.14
|
|
|
|
Argentina Peso /
Canadian Dollar
|
7.40
|
7.63
|
|
|
|
|
|
|
|
|
|
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 shares
("Shares") outstanding, as they were determined to be
anti-dilutive.
|
(3)
|
On June 2, 2014, the
Company completed a consolidation of its issued and outstanding
Shares on the basis of 25 pre - consolidation common
shares for each 1 post-consolidation 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 Shares of the Company. The normal course issuer bid
commenced on January 6, 2015 and is approved for one year. As of
June 30, 2015 the Company has purchased 411,000 Shares.
|
|
|
|
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. The Company's 2015 outlook remains unchanged from
the first quarter of 2015 including estimated processing volumes of
70 to 80 million cubic feet per day (MMcf/d) and production of 190
to 240 boe/d. Finally, ArPetrol continues to evaluate
at all strategic opportunities available to the Company.
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 forward-looking 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 strategic opportunities and the
repurchase of shares under the normal course issuer bid.
Forward-looking 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 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 sustain
consistent processing and production volumes, future production and
processing revenue, the extension of third party gas processing
contracts, 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, the expiration of third party gas processing
contracts, 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
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.
Any financial outlook or future oriented financial information
in this news release is provided for the purpose of providing
information about management's current expectations and plans
relating to the future. Readers are cautioned that reliance on such
information may not be appropriate for other purposes.
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 MD&A for more information regarding non-IFRS
measures used herin 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 (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). 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.