VANCOUVER, April 30, 2019 /CNW/ - CruzSur Energy Corp. (the
"Company" or "CruzSur") (TSXV: CZR) announces the filing of its
Annual Audited Consolidated Financial Statements and Management
Discussion & Analysis for the years ended December 31, 2018 and December 31, 2017, as well as its 2018 Year
End Reserves Report. All dollar values in this news release and the
Company's financial disclosures are in United States dollars, unless otherwise
stated.
Financial Statements
Revenues for the year-end were obtained from the working
interest in the Llancanelo, SRDE, KM8, and Mariposa Assets.
The Company recognized impairment losses of $58.9 million on its Colombian and Argentine oil
& gas assets based on identified impairment triggers that
indicated the recoverable value of these assets to be less than the
current carrying value.
Financial Results & Balances
- The Company had a current working capital deficiency of
$13.0 million as of December 31, 2018
|
$ (U.S.
dollars)
Years ended
December 31
|
2018
|
2017
|
|
Cash and cash
equivalents
|
1,616,970
|
8,962,371
|
|
Working Capital
(Deficiency)
|
-13,000,945
|
1,931,860
|
|
Exploration and
Evaluation Assets
|
19,928,304
|
67,609,348
|
|
Property, Plants,
and Equipment
|
2,755,774
|
4,283,111
|
|
Total
Assets
|
29,978,922
|
98,596,379
|
|
Net Oil and
Natural Gas Production, boe
|
99,947
|
67,103
|
|
Net Oil and
Natural Gas Revenue
|
5,257,366
|
2,834,762
|
|
Net Revenue on
Carried Working Interest(1)
|
998,705
|
607,174
|
|
Royalty
Expense
|
1,007,799
|
574,554
|
|
Operating
Expenses
|
3,364,116
|
1,982,364
|
|
Net Operating
Profit
|
1,884,156
|
1,885,018
|
|
Net
Loss
|
61,235,275
|
14,007,177
|
|
Net Loss per
Share, basic & diluted
|
2.53
|
0.74
|
|
Note:
|
|
(1) Represents net
revenue results from the carried interest held by the Company in
the Mariposa Asset.
|
Summary of 2018 Reserves
The reserve report for the Company's Argentina properties (the "Sproule
Report") and the reserve report for the Company's Colombian
properties (the "Petrotech Report") were prepared in
accordance with the definitions, standards and procedures contained
in National Instrument 51-101 - Standards of Disclosure For Oil
and Gas Activities ("NI 51-101") and the Canadian Oil
& Gas Evaluation Handbook (the "COGE Handbook") by
Sproule Associates Limited and Petrotech Engineering Ltd.
Reserves estimates stated herein as at December 31, 2018 are extracted from the relevant
reports. The Sproule Report the Petrotech Reports contain
several cautionary statements that are required by NI 51-101 and
the reserves information presented is subject to the contents of
the full reports.
Year-End 2018 Reserves Highlights:
- Total Company proved plus probable ("2P") Gross Reserves
are 4,790 thousand barrels of oil equivalent ("Mboe") which
includes Argentina 2P Gross
Reserves of 1,770 Mboe (1) and Columbia 2P Gross
Reserves of 3,020 Mboe (1) ; and
- Total Company 2P net present value ("NPV") discounted at
10% Before Tax is $53.2 million, with
Argentina's 2P NPV discounted at
10% Before Tax of $21.8 million and
Colombia's 2P NPV discounted at
10% Before Tax of $31.4 million.
As management continues to review the best strategy forward for
the Company, the timing and nature of the development of the
Company's reserves may be affected.
The following tables provide a summary of the Company's oil and
gas working interest reserves before royalties and NPV of future
net revenue at December 31, 2018
using forecast prices and costs:
Reserves Summary (1)
|
Light &
Medium
Crude Oil
|
Heavy Crude
Oil
|
Conventional
Natural Gas
|
Natural Gas
Liquids
|
BOEs
|
|
Gross
|
Net
|
Gross
|
Net
|
Gross
|
Net
|
Gross
|
Net
|
Gross
|
Net
|
|
Reserves
Category
|
Mbbls
|
Mbbls
|
Mbbls
|
Mbbls
|
MMcf
|
MMcf
|
Mbbls
|
Mbbls
|
Mboe
|
Mboe
|
|
Proved
Producing
|
4
|
3
|
10
|
8
|
864
|
743
|
-
|
-
|
157
|
135
|
|
Proved
Non-Producing
|
-
|
-
|
4
|
3
|
-
|
-
|
-
|
-
|
4
|
3
|
|
Proved
Undeveloped
|
-
|
-
|
-
|
-
|
10,715
|
10,007
|
17
|
16
|
1,803
|
1,684
|
|
Total
Proved
|
4
|
3
|
14
|
12
|
11,579
|
10,750
|
17
|
16
|
1,964
|
1,822
|
|
Total
Probable
|
1
|
1
|
1,584
|
1,410
|
7,376
|
6,880
|
12
|
11
|
2,826
|
2,568
|
|
Total Proved +
Probable
|
4
|
4
|
1,598
|
1,422
|
18,955
|
17,630
|
29
|
26
|
4,790
|
4,390
|
Summary of Net Present Values of Future Net Revenue
(1)
Forecasted Prices and
Costs (2)
Before Income
Taxes, Discounted at (%/year)
(3)
|
Before Tax NPV
@
|
|
0%
|
5%
|
10%
|
15%
|
20%
|
|
Reserves
Category
|
M$
|
M$
|
M$
|
M$
|
M$
|
|
Proved
Producing
|
(943)
|
1,348
|
2,090
|
2,272
|
2,253
|
|
Proved
Non-Producing
|
104
|
102
|
99
|
96
|
92
|
|
Proved
Undeveloped
|
36,006
|
26,326
|
19,510
|
14,619
|
11,048
|
|
Total
Proved
|
35,167
|
27,776
|
21,699
|
16,987
|
13,393
|
|
Total
Probable
|
69,415
|
46,293
|
31,535
|
21,798
|
15,177
|
|
Total Proved +
Probable
|
104,582
|
74,069
|
53,234
|
38,785
|
28,570
|
|
Notes:
|
|
|
(1)
|
It should not be
assumed that the present value of estimated future net cash flows
shown above are representative of the fair market value of the
reserves. Boe have been reported based on natural gas
conversions of six thousand cubic feet (6 Mcf) of natural gas to
one barrel of oil:(1 Bbl). A boe conversation ratio of 6 Mcf:1 Bbl
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 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
Mcf:1 Bbl, utilizing a conversion ratio at 6 Mcf:1 Bbl may be
misleading as an indication of value.
|
|
(2)
|
Based on Sproule's
and Petrotech's forecasted prices for Argentina and Colombia,
respectively, as of December 31, 2018.
|
|
(3)
|
Tables may not add
due to rounding.
|
As at December 31, 2018, CruzSur
held a 100% working interest in the KM8 heavy oil field, a 54%
working interest in the SRDE heavy oil field, and a 18% carried
participating interest in the Mariposa Light oil and Natural gas
field, all in Argentina.
Additionally, the Company held and an 80% working interest in the
Maria Conchita gas property in Colombia. These properties comprise all of the
oil and gas reserves disclosed above.
About CruzSur Energy Corp.
CruzSur is investing in proven leadership and technology to
develop oil and natural gas fields it has acquired in areas
surrounding some of the key energy producing areas in Colombia and Argentina. With decades of proven experience
in Latin America and global energy
development, CruzSur's leadership is working with local partners
and service providers to deliver the energy for Latin America's future.
Additional information is available about the Company on SEDAR
at www.sedar.com and on the Company's website
www.cruzsur.energy.
Forward-Looking Information
Estimates of reserves and resources in this news release are
deemed to be forward-looking information as they involve the
implied assessment, based on certain estimates and assumptions,
that the reserves described exist in the quantities predicted or
estimated, and that the reserves described can be profitably
produced in the future.
Except for the statements of historical fact, this
news release contains certain "forward-looking statements" or
"forward-looking information" (collectively referred to herein as
"forward-looking statements") within the meaning of applicable
securities legislation. Such forward-looking statements include,
without limitation, forecasts, estimates, expectations and
objectives for future operations that are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of the Company. Forward-looking statements are statements
that are not historical facts and are generally, but not always,
identified by the words "expects", "plans", "anticipates",
"believes", "intends", "estimates", "projects", "potential" and
similar expressions, or are events or conditions that "will",
"would", "may", "could" or "should" occur or be achieved. This news
release contains forward-looking statements, pertaining to, among
other things, the following: estimates of recoverable reserves
volumes and the future net revenues associated with those reserves;
the rationalization of the asset portfolio of the Company; future
acquisitions; cost reductions and head count and financial
commitment reductions; possible financing alternatives, including a
share consolidation; the Mandate; the goals of the board and
management relating to the Mandate and the Company generally; and
changes in the plans of the previous management team, including to
plans in respect of the development of the Company's reserves.
Statements regarding future production, capital expenditures and
development plans are subject to all of the risks and uncertainties
normally incident to the exploration for and development and
production of oil and gas that may cause actual results or events
to differ materially from those anticipated in such forward-looking
statements. These risks include, but are not limited to, inflation
or lack of availability of goods and services, environmental risks,
drilling risks, regulatory changes and certain other known and
unknown risks detailed from time to time in the Company's public
disclosure documents, copies of which are available on the
Company's SEDAR profile at www.sedar.com..
Although the Company believes that the material factors,
expectations and assumptions expressed in such forward-looking
statements are reasonable based on information available to it on
the date such statements were made, no assurances can be given as
to future results, levels of activity and achievements and such
statements are not guarantees of future performance. The Company's
actual results may differ materially from those expressed or
implied in forward-looking statements and readers should not place
undue importance or reliance on the forward-looking statements.
Statements including forward-looking statements are made as of the
date they are given and, except as required by applicable
securities laws, the Company disclaims any intention or obligation
to publically update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
The forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
Any "financial outlook" contained in this news release, as
such term is defined by applicable securities laws, 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
Reserves Advisory
The Company's reserves estimates have been prepared and
evaluated in accordance with NI 51-101 and the COGE Handbook.
Proved reserves are those reserves that can be estimated with a
high degree of certainty to be recoverable. There is at least a 90%
probability that the quantities actually recovered will equal or
exceed the estimated proved reserves. Probable reserves are those
additional reserves that are less certain to be recovered than
proved reserves. There is at least a 50% probability that the
quantities actually recovered will equal or exceed the sum of the
estimated proved plus probable reserves.
It should not be assumed that the estimates of future net
revenues presented herein represent the fair market value of the
reserves or resources. Future net revenue values, whether
calculated without discount or using a discount rate, are estimated
values only and do not represent fair market value. There is no
assurance that the forecast prices and cost assumptions will be
attained and variances could be material. The reserve estimates
provided herein are estimates only and there is no assurance that
the estimated reserves will be recovered. Actual oil reserves may
be greater than or less than the estimates provided herein.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE CruzSur Energy Corp.