Petro-Reef Resources Ltd. (TSX VENTURE:PER) ("Petro-Reef" or the "Company") has
released its third quarter 2011 results. Full financial details are contained in
the financial statements and management's discussion and analysis filed on
SEDAR.
Production volumes and prices
For the three months ended September 30, 2011, the Company produced an average
of 605 barrels of oil equivalent per day (boe/d) comprising 187 bbl/d of oil and
natural gas liquids and 2,508 mcf/d per day of natural gas. The Company received
an average of $67.73 per barrel for oil and $3.95 per thousand cubic feet for
natural gas.
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Three months ended September 30 2011 2010 % Change
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Daily production
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Crude Oil and NGLs (bbl/d) 187 109 71.6
Natural Gas (mcf/d) 2,508 3,334 (24.8)
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Oil equivalent (boe/d @ 6:1) 605 665 (9.0)
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Realized commodity prices
---------------------------------------------
Crude Oil and NGLs (bbl) 67.73 70.02 (3.3)
Natural Gas (mcf) 3.95 3.39 16.5
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Oil equivalent (boe @ 6:1) 37.34 28.47 31.2
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For the nine months ended September 30, 2011, the Company produced an average of
666 barrels of oil equivalent per day (boe/d) comprising 215 bbl/d of oil and
natural gas liquids and 2,707 mcf/d per day of natural gas. The Company received
an average of $78.18 per barrel for oil and $3.87 per thousand cubic feet for
natural gas.
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Nine months ended September 30 2011 2010 % Change
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Daily production
---------------------------------------------
Crude Oil and NGLs (bbl/d) 215 122 76.2
Natural Gas (mcf/d) 2,707 4,130 (34.5)
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Oil equivalent (boe/d @ 6:1) 666 811 (17.9)
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Realized commodity prices
---------------------------------------------
Crude Oil and NGLs (bbl) 78.18 74.06 5.6
Natural Gas (mcf) 3.87 4.15 (6.7)
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Oil equivalent (boe @ 6:1) 40.96 32.29 26.9
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Cash flow and earnings
Total revenue increased 19.5% to $2,079,442 for the three month period ended
September 30, 2011 compared to $1,740,840 for the same period ended in 2010. As
a result of a 71.6% increase in oil volumes over Q3 2010, Petro-Reef realized a
combined price per boe for the three month period ended September 30, 2011 of
$37.34 representing a 31.2% increase compared to the realized price per unit of
production of $28.47 for the same period in 2010.
For the three month period ended September 30, 2011, Petro-Reef generated cash
flows from operations of $597,981 an increase of 9.9% compared to $544,140 for
the three month period ended September 30, 2010.
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Three months ended
September 30 2011 2010 % Change 2011 2010
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($ / boe) ($ / boe)
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Gross revenue 2,079,442 1,740,840 19.5 37.34 28.47
Realized gain (loss)
on risk management
contracts (87,337) 417,704 - (1.57) 6.83
Royalties (277,493) (307,934) (9.9) (4.98) (5.04)
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Revenue after
royalties 1,714,612 1,850,610 (7.3) 30.79 30.26
Operating expenses 729,330 721,091 1.1 13.10 11.79
General &
administrative
expenses 276,278 370,835 (25.5) 4.96 6.06
Interest expense 111,023 214,544 (48.3) 1.99 3.51
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Cash flow 597,981 544,140 9.9 10.74 8.90
Unrealized gain on
risk management
contracts 649,420 28,413 2,185.6 11.66 0.46
Other income 142,611 - - 2.56 -
Stock based
compensation 242,431 25,056 867.6 4.35 0.41
Accretion 18,108 17,206 5.2 0.33 0.28
Depletion and
depreciation 1,118,518 1,349,326 (17.1) 20.09 22.07
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Net Income (loss)
before income taxes 10,955 (819,035) (101.3) 0.20 (13.39)
Deferred income tax
(recovery) (160,727) (186,192) (13.7) (2.89) (3.04)
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Net Income (loss) 171,682 (632,843) (127.1) 3.08 (10.35)
Per Share - Basic and
diluted 0.00 (0.02)
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Total revenue increased 4.3% to $7,451,193 for the nine month period ended
September 30, 2011 compared to $7,142,624 for the same period in 2010. As a
result of a 76.2% increase in oil volumes over 2010, Petro-Reef realized a
combined price per boe for the nine month period ended September 30, 2011 of
$40.96 representing a 26.9% increase compared to the realized price per unit of
production of $32.29 for the same period in 2010.
For the nine month period ended September 30, 2011, Petro-Reef generated cash
flows from operations of $3,185,377 an increase of 7.3% compared to $2,968,875
for the nine month period ended September 30, 2010.
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Nine months ended
September 30 2011 2010 % Change 2011 2010
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($ / boe) ($ / boe)
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Gross revenue 7,451,193 7,142,624 4.3 40.96 32.29
Realized gain on risk
management contracts 392,617 545,188 (28.0) 2.16 2.46
Royalties (1,160,450) (942,824) 23.1 (6.38) (4.26)
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Revenue after
royalties 6,683,360 6,744,988 (0.9) 36.73 30.49
Operating expenses 2,407,057 2,171,154 10.9 13.23 9.81
General &
administrative
expenses 784,154 1,143,307 (31.4) 4.31 5.17
Interest expense 306,772 461,652 (33.5) 1.69 2.09
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Cash flow 3,185,377 2,968,875 7.3 17.51 13.42
Unrealized gain on
risk management
contracts 140,630 954,139 (85.3) 0.77 4.31
Other income 393,530 173,663 126.6 2.16 0.79
Stock based
compensation 575,684 128,815 346.9 3.16 0.58
Accretion 52,437 49,993 4.9 0.29 0.23
Depletion and
depreciation 3,985,968 4,740,098 (15.9) 21.91 21.43
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Loss before income
taxes (894,552) (822,229) 8.8 (4.92) (3.72)
Deferred income tax
expense (recovery) (14,002) 277,226 (105.1) (0.08) 1.25
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Net loss (880,550)(1,099,455) (19.9) (4.84) (4.97)
Per Share - Basic and
diluted (0.02) (0.03)
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Financial
Effective September 30, 2011 the Petro-Reef renewed its loan facilities with a
Canadian Chartered Bank. Facility A is a revolving operating demand loan with a
maximum limit of $14,000,000. Facility B is a non-revolving
acquisition/development demand loan that provides an additional $6,000,000 of
financing. Interest is at prime plus 1.0% per annum for Facility A and prime
plus 1.5% per annum for Facility B. Petro-Reef has the ability to borrow by way
of Bankers Acceptances.
At September 30, 2011 the balance owing on Facility A was $11,334,128 (December
31, 2010 - $9,627,691). At September 30, 2011 the balance owing on Facility B
was $nil (December 31, 2010 - $nil).
The Company has the ability to draw on the development loan for the drilling of
new wells subject to certain working capital ratio restrictions.
In August, 2011 Petro-Reef Resources Ltd. closed a private placement financing
of Flow -through Shares for gross proceeds of $2,391,200. Pursuant to the
offering, Petro-Reef issued 5,978,000 common shares on a flow-through basis at a
purchase price of 40 cents per common share.
About Petro-Reef Resources Ltd.
Petro-Reef Resources Ltd. is a Calgary-based crude oil and natural gas
exploration and production company with producing properties in Alberta, Canada.
Additional information about the Company is available under Petro-Reef's profile
on SEDAR at www.sedar.com.
BOE Reference
Reference is made to barrels of oil equivalent ("BOE"). BOE may be misleading,
particularly if used in isolation. In accordance with National Instrument
51-101, a BOE conversion ratio of six mcf of natural gas to one bbl of oil has
been used, which is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
wellhead.
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