CALGARY, Nov. 25, 2015 /CNW/ - ArPetrol Ltd. ("ArPetrol"
or the "Company") (TSXV: RPT) announces its financial and operating
results for the three and nine months ended September 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 Third Quarter 2015
Operating and Financial
Operational difficulties during the third-quarter had a negative
effect on the Company's operating results in the period.
In the third week of August 2015,
an operational difficulty at the ENAP SiPetrol Argentina S.A.
operated third party production facility reduced gas deliveries to
ArPetrol's Faro plant to approximately 35 million cubic feet per
day (MMcf/d). For the third quarter of 2015 third-party
processing volumes averaged 57.5 MMcf/d, a decrease of almost 19
MMcf/d from the same period in the prior year.
In mid-September 2015 a compressor
failure at ArPetrol's Faro field shut-in production for 17 days
until the compressor was replaced at the beginning of
October. Production for the third quarter of 2015 was 160
barrels of oil equivalent per day (boe/d), down from the 218 boe/d
produced during the second quarter of 2015.
Both operational difficulties were fixed by the first week of
October. Third party processing volumes for
October 2015 averaged 79 MMcf/d and
production volumes for October 2015
averaged over 250 boe/d.
ArPetrol's funds flow from operations was $(497,586) during the third quarter of 2015, a
decrease of $787,167 over the third
quarter of 2014. The decrease in funds flow resulted from
both higher cost and lower production and processing volumes.
For the nine months ended September 30,
2015 funds flow from operations was $728,695, a decrease of $249,269 from the nine months to September 30, 2014.
The third quarter 2015 average realized natural gas price was
$5.80 per Mcf, $0.50 per Mcf higher than the price realized in
the second quarter of 2015. The average realize natural gas
price during the third quarter of 2015 increased by $0.97 per Mcf over the third quarter of
2014. The period over period increases in gas prices are
primarily driven by the strengthening $US against the $Cdn.
The Companies natural gas prices are set in $US.
The Company sells its natural gas liquids in the spot market at
prices denominated in $US. During the third quarter of 2015
the Company averaged a net realized price for natural gas liquids
(NGL) of $US75 per barrel (bbl)
compared to $US68 per bbl for the
second quarter of 2015 and $US84 per
bbl for the third quarter of 2014. In Canadian dollars terms
the average net realized prices for NGL was $98.09 per bbl for the third quarter of 2015,
$86.14 per bbl for the second quarter
of 2015 and $84.29 per bbl for the
third quarter of 2014. The strengthening $US versus the $CDN
contributed to improve $CDN prices during each
period.
In the third quarter of 2015 the Company recognized an
impairment in the carrying value of its property, plant and
equipment (PPE). The decline in world oil prices has resulted in a
lack of available capital investment which in turn has changed
management's planned future development spending on its oil and gas
assets. At September 30,
2015, management performed an impairment analysis of the
carrying value of the Company's PP&E and determined it exceeded
the recoverable amount. The recoverable amount was determined
based on the estimated fair value less expected cost of
disposal. This resulted in an impairment loss of $10.5 million relating to the Company's oil and
natural gas assets and was reported in the Argentina segment.
The Company's net loss for the third quarter was $11,275,886, compared to a net loss of
$68,760 for the third quarter of
2014.
As at September 30, 2015 the
Company had working capital of $2.6
million compared to $2.9
million at June 30, 2015 and
$1.5 million at December 31, 2014. The Company has no
long-term debt.
Summary of
Results
|
Three Months Ended
Sept 30,
|
Nine Months Ended
Sept 30,
|
|
(Unaudited)
|
(Unaudited)
|
|
2015
|
2014
|
2015
|
2014
|
Financial
|
|
|
|
|
(Cdn$ except shares
outstanding)
|
|
|
|
|
Processing
revenues
|
1,902,145
|
2,234,764
|
6,919,409
|
6,536,899
|
Production
sales
|
598,111
|
769,086
|
1,891,262
|
2,051,441
|
Funds flow from
operations (1)
|
(497,586)
|
289,581
|
728,695
|
977,964
|
Cash generated from
(used in) operating activities
|
169,789
|
491,997
|
1,090,283
|
502,657
|
Net income
(loss)
|
(11,275,886)
|
(68,760)
|
(10,858,137)
|
1,414,026
|
Capital
expenditures
|
621
|
6,241
|
6,299
|
148,155
|
Weighted average
shares outstanding
|
|
|
|
|
|
– basic and diluted
(2)(3)(4)
|
22,490,468
|
22,901,468
|
22,679,373
|
22,901,468
|
Per Share Funds flow
from operations (2)
|
(0.02)
|
0.01
|
0.03
|
0.04
|
Per Share Net
income(2)
|
(0.50)
|
0.00
|
(0.48)
|
0.06
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
Processing
|
|
|
|
|
|
Processing Volumes –
Mcf per day
|
57,556
|
76,413
|
72,957
|
76,307
|
|
Processing
Revenue
|
1,902,145
|
2,234,764
|
6,919,409
|
6,536,899
|
|
Operating Netback
(1)
|
567,032
|
1,108,187
|
3,077,831
|
3,595,572
|
|
Average Operating
Netback - $ per Mcf processed (1)
|
0.10
|
0.16
|
0.15
|
0.17
|
|
|
|
|
|
Production
|
|
|
|
|
|
Natural gas – Mcf per
day
|
867
|
1,330
|
1,029
|
1,279
|
|
NGL – bbls per
day
|
15
|
23
|
16
|
22
|
|
Total – boe per day
(1)
|
160
|
244
|
188
|
235
|
|
Average operating
netback - $ per boe(1)
|
(16.58)
|
3.20
|
(4.44)
|
5.07
|
|
|
|
|
|
Average sales
price
|
|
|
|
|
|
Natural gas – $ per
Mcf
|
5.80
|
4.83
|
5.31
|
4.47
|
|
NGL – $ per
bbl
|
98.09
|
84.29
|
91.40
|
81.45
|
|
|
|
|
|
Foreign Exchange
Rates – Period Ended
|
|
|
|
|
|
US Dollar / Canadian
Dollar
|
1.34
|
1.12
|
|
|
|
Argentina Peso / US
Dollar
|
9.41
|
8.44
|
|
|
|
Argentina Peso /
Canadian Dollar
|
7.02
|
7.61
|
|
|
|
|
|
|
|
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
September 30, 2015 the Company has purchased 411,000
Shares.
|
All values in the news release are in Canadian dollars unless
otherwise indicated.
Outlook
ArPetrol had a challenging third quarter but returned to stable
operations in October 2015. The Company's outlook for
the fourth quarter estimates processing volumes of 67 to 75 MMcf/d
and production of 225 to 275 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
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
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.