Petroamerica announces the financial results for three months ended March 31, 2012 with highlights on Balay oil production revenue and the Las Maracas production start up
2 hours 44 minutes ago
ca.finance.yahoo.com
CALGARY, May 28, 2012 /CNW/ - Petroamerica Oil Corp. (TSXV: PTA.V - News) ("Petroamerica" or the "Company"), a junior oil and gas company operating in Colombia, is pleased to announce the financial and operating results for the three months ended March 31, 2012. Copies of the Company's Management Discussion and Analysis ("MD&A") and Financial Statements have been filed with the Canadian Securities Regulatory Authorities and can be viewed or downloaded at the Company's website at www.petroamericaoilcorp.com or at www.sedar.com.
Highlights include:
(all balances in Canadian dollars, unless otherwise noted)
- The Balay field declared commercial in March 2012;
- The generation of $1.6 million in production revenue from the Balay field, net after royalty, achieving an average sales price of almost US $120 per barrel and an operating netback of approximately US $83 per barrel for the quarter;
- Announcement of $35,000,000 in debt financing, effectively fully funding the Company's operations for the current year;
- Completion of 3D seismic program on CPO-1.
The following table presents the highlights of Petroamerica's financial and operating results for the three months ended March 31, 2012 and 2011.
| Highlights | Three Months Ended March 31 | | | | | | | | | | | | | | | | | | (in $000 except share and per share and per barrel amounts) | | 2012 | | | 2011 | | Oil revenue - net of royalties | $ | 1,566 | | $ | - | | Total sales volumes -bbls | | 14,000 | | | - | | Average selling price US$/bbl | $ | 119.95 | | $ | - | | Average production cost US$/bbl | $ | 26.97 | | $ | - | | Loss for period | $ | (3,660) | | $ | (10,417) | | Total comprehensive loss | $ | (4,498) | | $ | (7,020) | | Loss per share - Basic and Diluted | $ | (0.01) | | $ | (0.02) | | Common shares outstanding | | 578,331,594 | | | 419,833,761 | | Weighted average shares outstanding | | | | | | | Basic and Diluted | | 578,331,594 | | | 420,332,094 | | Exploration costs | $ | 2,206 | | $ | 6,506 | | Total assets | $ | 91,749 | | $ | 80,648 | | Shareholders' equity | $ | 81,906 | | $ | 75,230 | | | | | | | | | Share trading | | | | | | | High | $ | 0.20 | | $ | 0.74 | | Low | $ | 0.10 | | $ | 0.23 | | Close | $ | 0.16 | | $ | 0.26 | | Trading volume | | 103,510,900 | | | 184,244,500 |
First Quarter Financial Summary
For the quarter ended March 31, 2012, the Company reported $1,565,835 in oil revenue, net of royalties, from the sale of 14,000 barrels of oil. The realized sales price was US $119.95 per barrel generating an operating netback of approximately US $83 per barrel.
For the first quarter of 2011, the Company's net loss was $3.7 million ($0.01 per share diluted). The Company's capital expenditures for the first quarter were $5.5 million, all invested in Colombia. These capital expenditures were funded from available cash on hand.
Operations Update
The Balay field was declared commercial on March 1, 2012. For the current quarter, the Balay-1 and Balay-2 wells, which have been on long-term production test since July 14, 2010 and June 24, 2011 respectively, produced at an average gross combined rate of 1,574 barrels of oil per day ("bopd") under electro-submersible pump ("ESP"). The Balay-3 well was completed in early January 2012, and will be converted to a water disposal well as part of the field development plan. The base development plan is scheduled to be approved by the joint venture partners in early June 2012, and includes the conversion of Balay-3 into a water disposal well in the fourth quarter of 2012 and the construction of permanent production facilities and flow lines in 2013. The joint venture partners are also planning to approve at least one additional development well, Balay-4, to be drilled in the third quarter of 2012 and, contingent on results, up to two additional development wells in 2013.
The Las Maracas-2 sidetrack discovery well saw first oil on April 29, 2012 using temporary production facilities as part of a long-term production test. Since then the well has produced under ESP at constant rates of over 1,000 bopd of 37o API oil and between 1 and 4% bulk sediment and water. Long-term production facilities are expected to be commissioned late in May. In order to evaluate this discovery, two follow-up appraisal wells are expected to be drilled back-to-back, with the first well anticipated towards the end of the second quarter of 2012. This first well will also test the deeper exploration potential in the Gacheta and Une Formation reservoirs in the Las Maracas discovery structure. In the event of success, an option is being retained to drill an additional two follow-up early development wells in the second half of the year.
In 2012, the Company plans to participate in the drilling of up to six exploration wells. All of the prospects to be drilled are covered by 3D seismic and are located in the Los Ocarros, El Eden, El Porton, CPO-1, LLA-10 and SSJN-5 Blocks. Most of the exploration drilling is expected take place over the second half of 2012.
Financial Update
On April 19, 2012 the Company closed $35 million in debt financing by issuing 3,500 units at a price of $10,000 per unit. Each unit consists of $10,000 in principal amount of senior secured notes bearing interest at 11.5% per annum, payable quarterly, with a maturity date of April 19, 2015 (the "Notes"), and one warrant entitling the holder to purchase 10,000 common shares of the Company at $0.20 per share until April 19, 2015. The Notes have been secured by the Company's property and are senior to all other indebtedness and liabilities of the Company. The Company expects to use the proceeds raised to support the appraisal and development programs for the Las Maracas and Balay discoveries as well as to support additional development, appraisal and other costs that are expected to arise from the 2012 exploration program and for general corporate purposes.
Outlook
With the successful completion of the debt financing and the funds that were raised as a result, the Company now has the financial resources, either through the current cash on hand or via revenues generated from both the Balay and Las Maracas production, to pursue its extensive exploration and development plans for the current year and well into 2013.
Even though the Balay Field development plan is not expected to be sanctioned by the joint venture partners until early June 2012, the Company and its partners plan to proceed with the full development of the Balay Field. This development will include the planned drilling of the Balay-4 development well and the conversion of the Balay-3 appraisal well to a water disposal well beginning in the third quarter of 2012, as well as the construction of permanent production facilities and flowlines in 2013.
The Company expects that the Las Maracas-2 sidetrack discovery well will continue to produce oil as part of the long-term testing program for the well. The joint venture is also expected to drill at least two follow-up appraisal wells, back to back, over the second and third quarters of 2012. In the event of success, the joint venture retains the option to drill an additional two follow-up early development wells in the second half of 2012. The first appraisal well, Las Maracas-3, in addition to appraising the Las Maracas-2 sidetrack discovery, is expected to target the deeper exploration potential in the Gacheta and Une Formations.
In 2012, the Company plans to participate in the drilling of up to six exploration wells. All of the prospects to be drilled are covered by 3D seismic data and are located in the Los Ocarros, El Eden, El Porton, CPO-1, LLA-10 and Block 5. Most of the exploration drilling is expected to take place in the second half of 2012.
| PETROAMERICA OIL CORP. | | | | | | | | Condensed Consolidated Statements of Financial Position | | | | | (Unaudited - Express in Canadian dollars) | | | | | | | | | | | As at | | | As at | | | | | March 31 | | | December 31 | | | | | 2012 | | | 2011 | | | | | | | | | | Assets | | | | | | | | Current assets | | | | | | | | | Cash and cash equivalents | | $ | 10,608,985 | | $ | 19,294,554 | | | Trade and other receivables | | | 9,654,970 | | | 7,242,516 | | | Prepayments and deposits | | | 531,224 | | | 417,837 | | | Inventories | | | 273,534 | | | 563,530 | | | | | | | | | | | | | 21,068,713 | | | 27,518,437 | | | | | | | | | | Non-current assets | | | | | | | | | Restricted cash | | | 7,844,634 | | | 7,926,079 | | | Property, plant and equipment | | | 14,830,735 | | | 14,881,718 | | | Exploration and evaluation assets | | | 48,004,684 | | | 44,560,366 | | | | | | | | | | | | | 70,680,053 | | | 67,368,163 | | | | | | | | | | Total assets | | $ | 91,748,766 | | $ | 94,886,600 | | | | | | | | | | Liabilities | | | | | | | | Current liabilities | | | | | | | | | Current equity tax | | $ | 429,370 | | $ | 404,703 | | | Accounts payable and accrued liabilities | | | 5,928,292 | | | 5,016,607 | | | | | | | | | | | | | 6,357,662 | | | 5,421,310 | | | | | | | | | | Non-Current liabilities | | | | | | | | | Deferred tax liabilities | | | 2,601,828 | | | 2,601,828 | | | Decommissioning liabilities | | | 174,606 | | | 176,000 | | | Equity tax | | | 708,963 | | | 668,231 | | | | | | | | | | Total liabilities | | | 9,843,059 | | | 8,867,369 | | | | | | | | | | Shareholders' equity | | | | | | | | | Share capital | | | 140,483,641 | | | 140,483,641 | | | Contributed surplus | | | 21,553,149 | | | 21,168,550 | | | Reserves | | | (344,963) | | | 492,924 | | | Deficit | | | (79,786,120) | | | (76,125,884) | | | | | | | | | | | | | 81,905,707 | | | 86,019,231 | | | | | | | | | | Total liabilities and shareholders' equity | | $ | 91,748,766 | | $ | 94,886,600 |
| PETROAMERICA OIL CORP. | | | | | | | | Condensed Consolidated Statements of Loss and Comprehensive Loss | | (Unaudited - Express in Canadian dollars) | | | | | | | | | | | Three months ended March 31 | | | | | 2012 | | | 2011 | | Revenue | | | | | | | | | Oil revenue - net of royalties | | $ | 1,565,835 | | $ | - | | | | | 1,565,835 | | | - | | | | | | | | | | Expenses | | | | | | | | | | | | | | | | | Production | | | (377,285) | | | - | | | Exploration and evaluation | | | (2,205,830) | | | (6,506,038) | | | Depreciation, depletion and amortization | | | (727,057) | | | (1,435) | | | General and administration | | | (2,139,802) | | | (2,100,056) | | | Share-based payments | | | (384,599) | | | (1,591,104) | | | Equity tax and other | | | - | | | (1,422,650) | | | | | | | | | | | | | (5,834,573) | | | (11,621,283) | | | | | | | | | | | Interest Income | | | 255,977 | | | 180,141 | | | Interest and financing fees | | | (113,692) | | | (198,708) | | | Foreign exchange gain (loss) | | | 482,928 | | | (148,524) | | | Loss on disposal of investments | | | - | | | (1,674,352) | | | Accretion | | | (16,711) | | | - | | | | | | | | | | | | | 608,502 | | | (1,841,443) | | | | | | | | | | Loss before income taxes | | | (3,660,236) | | | (13,462,726) | | | | | | | | | | Current income tax | | | - | | | (114) | | Deferred tax recovery | | | - | | | 3,045,572 | | | | | | | | | | Net loss for the period | | | (3,660,236) | | | (10,417,268) | | | | | | | | | | Other comprehensive (loss) income | | | | | | | | | Reserve on translation of foreign operations | | | | | | | | | and net investments in foreign operations | | | (837,887) | | | 2,113,486 | | | Net change in fair value of available-for-sale investments | | - | | | 1,284,150 | | | | | | | | | | Other comprehensive (loss) income | | | (837,887) | | | 3,397,636 | | | | | | | | | | Total comprehensive loss | | $ | (4,498,123) | | $ | (7,019,632) | | | | | | | | | | Basic and diluted loss per share | | $ | (0.01) | | $ | (0.02) | | | | | | | | | | Weighted average number of basic and diluted | | | | | | | | | common shares outstanding | | | 578,331,594 | | | 419,833,761 | | PETROAMERICA OIL CORP. | | | | | | | | | | | | | | | | | | | | Condensed Consolidated Statements of Changes in Equity | | | | | | | | | | | | | | | (Unaudited - Express in Canadian dollars) | | | | | | | | | | | | | | | | | | | | | | Share Capital | | | Contributed
surplus | | | Fair value
reserve | | | Translation
reserve | | | Deficit | | | Total equity | | | | | | | | | | | | | | | | | | | | | | Balance at January 1, 2012 | | $ | 140,483,641 | | $ | 21,168,550 | | $ | - | | $ | 492,924 | | $ | (76,125,884) | | $ | 86,019,231 | | | | | | | | | | | | | | | | | | | | | | Net loss for the period | | | - | | | - | | | - | | | - | | | (3,660,236) | | | (3,660,236) | | Other comprehensive loss | | | - | | | - | | | - | | | (837,887) | | | - | | | (837,887) | | | | | | | | | | | | | | | | | | | | | | Total comprehensive loss | | | - | | | - | | | - | | | (837,887) | | | (3,660,236) | | | (4,498,123) | | | | | | | | | | | | | | | | | | | | | | Share-based payments | | | - | | | 384,599 | | | - | | | - | | | - | | | 384,599 | | | | | | | | | | | | | | | | | | | | | | Balance at March 31, 2012 | | $ | 140,483,641 | | $ | 21,553,149 | | $ | - | | $ | (344,963) | | $ | (79,786,120) | | $ | 81,905,707 | | | | | | | | | | | | | | | | | | | | | | | | | Share Capital | | | Contributed
surplus | | | Fair value
reserve | | | Translation
reserve | | | Deficit | | | Total equity | | | | | | | | | | | | | | | | | | | | | | Balance at January 1, 2011 | | $ | 114,438,212 | | $ | 13,141,128 | | $ | (1,284,150) | | $ | (1,922,966) | | $ | (44,206,637) | | $ | 80,165,587 | | | | | | | | | | | | | | | | | | | | | | Net loss for the period | | | - | | | - | | | - | | | - | | | (10,417,268) | | | (10,417,268) | | Other comprehensive income | | | - | | | - | | | 1,284,150 | | | 2,113,486 | | | - | | | 3,397,636 | | | | | | | | | | | | | | | | | | | | | | Total comprehensive income (loss) | | | - | | | - | | | 1,284,150 | | | 2,113,486 | | | (10,417,268) | | | (7,019,633) | | | | | | | | | | | | | | | | | | | | | | Share-based payments | | | 698,617 | | | 1,384,987 | | | - | | | - | | | - | | | 2,083,604 | | | | | | | | | | | | | | | | | | | | | | Balance at March 31, 2011 | | $ | 115,136,829 | | $ | 14,526,115 | | $ | - | | $ | 190,520 | | $ | (54,623,905) | | $ | 75,229,559 |
| PETROAMERICA OIL CORP. | | | | | | | | Condensed Consolidated Statements of Cash Flows | | | | | | | (Unaudited - Express in Canadian dollars) | | | | | | | | | | Three months ended March 31 | | | | | 2012 | | | 2011 | | | | | | | | | | Operating activities | | | | | | | | Net loss for the period | | $ | (3,660,236) | | $ | (10,417,268) | | Items not involving cash: | | | | | | | | | Share-based payments | | | 384,599 | | | 1,591,104 | | | Depreciation, depletion and amortization | | | 727,057 | | | 1,435 | | | Loss on disposal of investments | | | - | | | 1,674,352 | | | Deferred tax recovery | | | - | | | (3,045,572) | | | Unrealized foreign exchange loss | | | 746,222 | | | 221,841 | | | Accretion | | | 16,711 | | | - | | Net changes in non-cash working capital balances: | | | - | | | - | | | Changes in trade and other receivables | | | (2,336,225) | | | (1,477,974) | | | Changes in prepayments and deposits | | | (113,789) | | | 27,550 | | | Changes in inventories | | | 289,996 | | | 13,367 | | | Changes in accounts payable and accrued liabilities | | | (1,281,705) | | | 5,666,253 | | | | | | | | | | | | | | | | | | Cash used in operating activities | | | (5,227,370) | | | (5,744,912) | | | | | | | | | | Investing activities | | | | | | | | Exploration and evaluation expenditures | | | (2,263,651) | | | (8,704,043) | | Property, plant and equipment expenditures | | | (1,120,115) | | | - | | Interest received | | | 63,875 | | | 25,700 | | Payment for assets relinquished | | | - | | | (6,800,000) | | Restricted cash investments | | | - | | | 2,300,000 | | Proceeds from marketable securities | | | - | | | 2,441,347 | | Cash used in provided by investing activities | | | (3,319,891) | | | (10,736,996) | | | | | | | | | | Financing activities | | | | | | | | Proceeds on exercise of stock options | | | - | | | 492,500 | | Cash provided by financing activities | | | - | | | 492,500 | | | | | | | | | | Effect of foreign currency exchange rate changes on cash held | | | (138,308) | | | 3,738 | Decrease in cash and cash equivalents during the period
| | | (8,685,569) | | | (15,985,670) | | Cash and cash equivalents, beginning of period | | | 19,294,554 | | | 24,111,723 | | | | | | | | | | Cash and cash equivalents, end of period | | $ | 10,608,985 | | $ | 8,126,053 | | | | | | | | | | | | | | | | | | Interest paid | | | - | | | - | | Income tax paid | | | - | | | - |
Forward Looking Statements:
This news release includes information that constitutes "forward-looking information" or "forward-looking statements". More particularly, this news release contains statements concerning expectations regarding the conversion of the Balay-3 well to a water disposal well, regulatory and partner approvals on the Company's development plan, drilling, production and operational opportunities and the timing thereof, the use of proceeds of the recently completed Note financing and anticipated production in addition to the potential exploration and development opportunities and expectations regarding regulatory approval and the general strategic direction of the Company. The forward-looking statements contained in this document, including expectations and assumptions concerning the obtaining of the necessary regulatory approvals, including ANH approval, and the assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are uncertain and subject to risks. A multitude of factors can cause actual events to differ significantly from any anticipated developments and although the Company believes that the expectations represented by such forward-looking statements are reasonable, undue reliance should not be placed on the forward-looking statements because there can be no assurance that such expectations will be realized. Material risk factors include, but are not limited to: the inability to obtain regulatory approval, including ANH approval, for the transfer of participating interests and/or operatorship for the Company's properties, the risks of the oil and gas industry in general, such as operational risks in exploring for, developing and producing crude oil and natural gas, market demand and unpredictable shortages of equipment and/or labour; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; fluctuations in oil and gas prices, foreign currency exchange rates and interest rates, and reliance on industry partners.
Neither the Company nor any of its subsidiaries nor any of its officers, directors or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments.
The forward-looking statements contained in this document are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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 this release.
Contacts
Nelson Navarrete
President and CEO
Petroamerica Oil Corp.
Tel: 57-1-629-3534
Email: investorrelations@pta-oil.com
Colin Wagner
CFO
Petroamerica Oil Corp.
Tel: 403-237-8300
Email: investorrelations@pta-oil.com |
