Operating Netback(1) increases $6.1 million or 86%; Increase in net revenue by 58%; Net income of $4.3 million; $37.1 million of cash and investments
CALGARY, ALBERTA--(Marketwired - May 31, 2013) - Americas Petrogas Inc. ("Americas Petrogas" or the "Company") (TSX VENTURE: BOE) announces the Company continued to execute on its investment plan on its oil and gas properties in Argentina.
Summary Financial and Operational Highlights
Selected financial and operational information is outlined below and should be read in conjunction with the Company's condensed interim consolidated financial statements and the related Management's Discussion and Analysis ("MD&A") for the quarter, which have been filed on SEDAR under the Company's profile at www.sedar.com and are also available on the Company's website at www.americaspetrogas.com. All amounts are in Canadian dollars unless otherwise stated.
-- Net income: $4,338,091 (attributable to owners of the Company) in the
first quarter of 2013 compared to a net loss of $3,812,288 for the
equivalent period of 2012.
-- Net revenue: increased by $5,263,241 or 58% compared to first quarter of
-- Oil sales volume: during the first quarter of 2013, the Company
continued to produce and sell oil primarily from its Medanito Sur
conventional block. During the first quarter of 2013, sales volume
averaged approximately 2,400 bopd (net), an increase of 41% over the
first quarter of 2012 of approximately 1,700 bopd (net).
-- Operating netback: $13,166,815 ($60.88 per barrel) during the first
quarter of 2013 representing an increase of 86% or $6,084,657 over the
same period of 2012.
-- Oil Plus benefits: in the first quarter of 2013, the Company recognized
approximately $3.4 million of Oil Plus benefits. This is in addition to
$1.3 million recognized in the fourth quarter of 2012, which has already
been received in 2013.
-- Cash position: $37.1 million of consolidated cash, cash equivalents and
short-term investments as of March 31, 2013.
Three months ended March 31
Gross oil sales revenue $ 16,449,646 $ 11,627,807
Operating netback(1) $ 13,166,815 $ 7,082,158
Net income (loss) attributable to
owners of the Company $ 4,338,091 $ (3,812,288)
Funds flow from operations(2) $ 9,874,030 $ 4,789,281
Per share - basic and diluted $ 0.05 $ 0.02
Weighted average number of common
Basic 212,760,484 194,527,273
Diluted 216,952,633 205,356,603
Cash flow from (used in) operating
activities $ 5,465,257 $ (2,228,282)
Capital expenditures $ 27,296,150 $ 21,682,804
Average barrels sold per day 2,403 1,697
Average selling price per barrel $ 76.06 $ 75.29
Operating netback per barrel(1) $ 60.88 $ 45.86
March 31, 2013 2012
Working capital(4) $ 30,342,938 $ 51,974,194
Common shares 212,763,190 212,728,283
Stock options 11,786,843 11,821,750
(1) "Operating netback" is a non-GAAP measure and is calculated as
revenues from oil sales less royalties and production costs. Operating
netback is used as an indicator of operating performance,
profitability and liquidity. Operating netback does not have a
standardized meaning prescribed by IFRS. It is unlikely for non-GAAP
measures to be comparable to similar measures presented by other
companies. For the three months ended March 31, 2013, operating
netback was $13,166,815 (calculated as gross oil sales revenue of
$16,449,646 less royalties of $2,102,781 and production costs of
$1,180,050). For the three months ended March 31, 2012, operating
netback was $7,082,158 (calculated as gross oil sales revenue of
$11,627,807 less royalties of $2,544,183 and production costs of
(2) "Funds flow from operations" is an additional GAAP measure because it
is presented in the consolidated statement of cash flows. Funds flow
from operations and funds flow from operations per share are used to
analyze operating performance and liquidity. Funds flow from
operations is calculated as net cash generated from (used by)
operating activities (as determined in accordance with IFRS) before
changes in non-cash balance sheet operating items. Funds flow from
operations per share is calculated by dividing funds flow from
operations by the weighted average number of shares outstanding. Funds
flow from operations should not be considered an alternative to, or
more meaningful than net cash generated from (used by) operating
activities as determined in accordance with IFRS. Funds flow from
operations per share should not be considered an alternative to, or
more meaningful than earnings (loss) per share as determined in
accordance with IFRS.
(3) Diluted weighted average number of common shares outstanding is
computed by adjusting basic weighted average number of common shares
outstanding for dilutive instruments. The number of shares included
with respect to options, warrants and similar instruments is computed
using the treasury stock method, which assumes any proceeds received
by the Company upon exercise of the in-the-money instruments would be
used to repurchase common shares at the average market price for the
period. For the three months ended March 31, 2013, 4,192,149 (March
31, 2012 - 10,829,330) common shares were deemed to be issued for no
consideration in respect of options.
(4) Working capital is a non-GAAP measure and is calculated as current
assets less current liabilities. Working capital is used to assess
liquidity and general financial strength. Working capital does not
have a standardized meaning prescribed by IFRS. It is unlikely for
non-GAAP measures to be comparable to similar measures presented by
other companies. Working capital should not be considered an
alternative to, or more meaningful than current assets or current
liabilities as determined in accordance with IFRS.
(5) As of the current date, 212,779,440 common shares and 18,135,593 stock
options are outstanding.
First Quarter Highlights and Recent Developments
-- Eleven conventional wells were drilled during the first quarter of 2013,
some of which are currently on production and some of which are being
tied in for production. Recent drilling on Medanito Sur has resulted in
the discovery of new production areas, including El Alpataco, El Calden
Este and Amilcar.
-- In March 2013, a workover was completed on the LHo.x-1 well on the
Totoral block, individually testing each of the three fractured
intervals. This testing determined that all of the fracture stages are
vertically connected and confirmed the large extension of the fractures
from the hydraulic stimulation in the well. The detailed analysis
completed on all of the static information available, logs, conventional
and sidewall cores, shows no evidence that there could be free water in
the Vaca Muerta formation. Therefore, management is of the opinion that
the water comes from the underlying Quebrada del Sapo and/or Lotena
formations. Plans are being made to put the well on production, with
Early Production Facilities, beginning in the third quarter for a test
period of at least six (6) months. As well, Americas Petrogas is
considering the drilling of one or two Vaca Muerta vertical appraisal
wells in order to optimize the evaluation of the formation.
Additionally, consideration is being given to horizontal drainage of the
Vaca Muerta formation, as this area may be technically and economically
ideal for a horizontal drilling development.
-- Ryder Scott Company has been engaged to prepare a resources report on
the Company's unconventional properties. The report is expected to be
completed by early third quarter of 2013.
-- In respect of the Bayovar concession in Peru, the Company completed a
brine mineral resource estimate relating to Potassium Chloride (KCl,
potash) in accordance with National Instrument 43-101.
-- In April 2013, the Company began the process of exercising the option to
acquire an interest in the Bayovar concession. The exercising of the
option is subject to government approval of the required documents for
exercising the option.
"We are pleased with our results this quarter, generating $13.2 million of operating netback at $60.88 per barrel, including Oil Plus benefits, and $4.3 million of net income," said Barclay Hambrook, President and Chief Executive Officer. Mr. Hambrook went on to say, "Our new discoveries on Medanito Sur during first quarter are expected to increase our production in forthcoming months."
For further information regarding the Company's financial results, financial position and related changes, please see the consolidated financial statements and the related MD&A.
About Americas Petrogas Inc.
Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol "BOE". Americas Petrogas has conventional and unconventional shale oil and gas and tight sands oil and gas interests in numerous blocks in the Neuquen Basin of Argentina. Americas Petrogas has joint venture partners, including ExxonMobil and Apache, on various blocks in the shale oil and gas corridor in the Neuquen Basin, Argentina. Americas Petrogas also owns an 80% interest in GrowMax Agri Corp., a private company involved in the exploration for near-surface potash, phosphates and other minerals, and potential development of a fertilizer project in Peru. Indian Farmers Fertiliser Co-operative Limited (IFFCO) owns a 20% interest in GrowMax Agri Corp. For more information about Americas Petrogas Inc., please visit www.americaspetrogas.com
This Press Release contains forward-looking information including, but not limited to, the Company's goals and growth, estimates of reserves, production and cash flows, new production areas on the Medanito Sur block, production at the LHo.x-1 well on the Totoral block, consideration of drilling additional wells on Totoral block, the timing and completion of a resources report on the Company's unconventional properties, exercising and pending approval of the option to acquire an interest in the Bayovar concession, exploration, appraisal and development activities related to conventional and unconventional oil and gas, and other exploration, development and production activities in respect of the projects in Argentina and Peru. There can be no assurance that the Company will successfully exercise the option to acquire an interest in the Bayovar concession. Additional forward-looking information is contained in the Company's MD&A for this quarter and the Company's Annual MD&A for December 31, 2012, and reference should be made to the additional disclosures of the assumptions, risks and uncertainties relating to such forward-looking information in those MD&A documents.
Forward-looking information is based on management's expectations regarding the Company's future growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, plans for and results of drilling activity (including the timing, location, depth and the number of wells), environmental matters, business prospects and opportunities and expectations with respect to general economic conditions. Such forward-looking information reflects management's current beliefs and assumptions and is based on information, including reserves information, currently available to management. Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information, including but not limited to, risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production, delays or changes to plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of geological interpretations; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environment risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and third parties located in foreign jurisdictions and the risk associated with international activity.
Although the forward-looking information contained herein is based upon assumptions which management believes to be reasonable, the Company cannot assure investors that actual results will be consistent with this forward-looking information. This forward-looking information is made as of the date hereof and the Company assumes no obligation to update or revise this information to reflect new events or circumstances, except as required by law. Because of the risks, uncertainties and assumptions inherent in forward-looking information, prospective investors in the Company's securities should not place undue reliance on this forward-looking information.
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 THE RELEASE.
Barclay Hambrook, P. Eng., MBA President and CEOP: (403) 685-1888