PetroNova announces 2013 year end results

CALGARY, April 24, 2014 /CNW/ - PetroNova Inc. ("PetroNova" or the "Company") (TSX-V: PNA), a company engaged in the exploration and development of oil and natural gas resources in Colombia, today announced its operational and financial results for the year ended December 31, 2013.

"PetroNova has partnered with two well-established South American oil and gas exploration and production companies, placing PetroNova in a strategically and financially favorable position as we continue to explore our assets in the PUT-2 and Tinigua Blocks," said Antonio Vincentelli, President and Chief Executive Officer of PetroNova. "PetroNova is working to evaluate the Canelo Sur-2 well and we are looking forward to drilling the high-impact Tinigua prospect."

PetroNova's audited consolidated financial statements as at and for the years ended December 31, 2013 and 2012, together with the notes thereto, and the related management's discussion and analysis for the periods then ended, are available under the Company's profile on SEDAR at www.sedar.com.   In addition, the Company has filed its annual information form for the year ended December 31, 2013 (the "AIF") which contains reserves data and other oil and gas information as required by National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101").

Since January 1, 2013, the Company:  

  • Drilled five wells in the Llanos Basin, resulting in two successful wells (Pendare-2 and Atarraya-4), two unsuccessful wells (Guasco-1 and Cayabana), and one well to be used as a water disposal well (Atarraya-3). At the end of December 2013, the Company's gross production reached 390 barrels of oil per day (bbl/d).

  • Net 2P (proved plus probable) reserves increased 74% to 1,659 Mbbl compared to 2012 as a result of its  step out wells drilled in the CPO-7 and CPO-13 Blocks (collectively, the "Llanos Blocks"), as described in the following table*:

Block Gross Reserves (Mbbl) Net Reserves (Mbbl)
2012 2013 2012 2013
CPO-7 1,318 1,181 653 576
CPO-13 467 1,694 298 1,083
Total 1,785 2,875 951 1,659

Notes:
(1)   Certain columns may not add due to rounding.
(2)   "Gross" means the Company's working interest before the deduction of royalties and without including any royalty interests of the Company.
(3)   "Net" means the Company's working interest after the deduction of royalty obligations, plus the Company's royalty interests.
(4)   Based on forecast prices and costs. See "Disclosure of Reserves Data" contained herein.
     

At December 31, 2013, the Company has reported net 2P reserves of 1,659 Mbbl as described in the following table*:

    Light and Medium
Oil
  Heavy
Oil
  Net Present Value of
Future Net Revenue
Before Income Taxes
  Discounted at 10%/year
(US$ Thousands)
    Gross   Net   Gross   Net
Reserves Category   (Mbbl)   (Mbbl)   (Mbbl)   (Mbbl)
PROVED                      
Developed Producing   300   146   157   100         9,637  
Developed Non-Producing   -   -   -   -         -  
Undeveloped   526   256   1,053   673        14,978  
TOTAL PROVED   826   403   1,210   773      24,615  
TOTAL PROBABLE   356   173   484   309       9,229  
TOTAL PROVED PLUS PROBABLE   1,181   576   1,694   1,083    33,844  

Notes:  
(1)   Certain columns may not add due to rounding.
(2)   "Gross" means the Company's working interest before the deduction of royalties and without including any royalty interests of the Company.
(3)   "Net" means the Company's working interest after the deduction of royalty obligations, plus the Company's royalty interests.
(4)   Based on forecast prices and costs. See "Disclosure of Reserves Data" contained herein.
     
  • Obtained environmental licenses for the Tinigua Block, and the Canelo-Norte and Canelo-Nogal areas of the PUT-2 Block.

  • Entered into an agreement with Suroco Energy Inc. ("Suroco") whereby Suroco's wholly owned subsidiary acquired a 25 percent interest in the PUT-2 Block (for details, please refer to the Company's press release dated July 22, 2013).

  • Spud Canelo Sur-2, its first exploratory well on the PUT-2 Block, which reached the programmed total depth of 9,970 feet. After suspension of activity due to community-related issues, work at the well has resumed, the well has been cased and its evaluation is ongoing.

  • Received approval from the Agencia Nacional de Hidrocarburos (the "ANH") for an extension of the phase 2 exploration program for the Tinigua Block to June 17, 2014 and the Company is in the process to request an additional extension.

  • Entered into an agreement with a wholly owned subsidiary of Pacific Rubiales Energy Corp. ("Pacific Rubiales") whereby Pacific Rubiales acquired a 50 percent interest in the Tinigua Block (for details, please refer to the Company's press release dated February 28, 2014).

  • Reported an average gross production of 258 bbl/d from extended production testing in 2013 and a daily gross production of 390 bbl/d at the end of the year.

  • The Company also announces that Eugenio Ochoa, VP Exploration, will retire from the Company as of April 30, 2014. The Company thanks him for his dedicated and valuable services during his tenure. Exploration functions will be conducted by current PetroNova personnel.

Outlook:

PetroNova is continuing with its scheduled exploration plans and commitments and anticipates the following activities to occur during the remainder of 2014:

  • Continue the extended testing of discoveries on the Llanos Blocks.

  • Complete the 3D seismic campaign at Atarraya and Pendare on the CPO-7 and CPO-13 Blocks, respectively.

  • Drill four exploratory wells in the Llanos Blocks.

  • Complete the evaluation of the Canelo Sur-2 well on the PUT-2 Block.

  • Commence civil works to drill a first exploratory well on the Tinigua Block.

In Colombia, extractive industries are experiencing delays in the process of acquiring drilling permits. While the Company has a good number of permits and continues to progress its exploration drilling program, part of this progress is dependent upon receipt of future government approvals or permits.

Summary Financial Information:

                                 
SELECTED FINANCIAL INFORMATION       Year ended       Year ended       Three months ended December
(US$, except shares and data per share)       2013       2012       2013 2012
Revenues       165,583       186,388       38,621 52,215
Net loss       4,750,465       14,476,356       1,354,178 10,727,730
Loss per share       0.02       0.08       0.01 0.05
Weighted average shares       216,943,437       177,187,498       225,971,277 211,455,147
Working Capital       4,623,746       25,833,938            
Cash and equivalents and short-term investments       13,195,300       34,638,532            
Exploration and evaluation assets       79,398,125       58,441,392            
Block deposits       5,316,009       5,176,340            
Total assets       107,288,803       105,542,768            
Shareholders' equity       94,637,935       94,748,646            
                               

* Disclosure of Reserves Data:

The 2013 reserves data contained herein is based upon an independent evaluation by Petrotech Engineering Ltd. ("Petrotech") with an effective date of December 31, 2013 (the "2013 Petrotech Report") and the 2012 reserves data contained herein is based upon an independent evaluation by Petrotech with an effective date of December 31, 2012 (the "2012 Petrotech Report"). The 2013 Petrotech Report and 2012 Petrotech Reserves Report were prepared in accordance with the standards contained in the COGE Handbook and the reserves definitions contained in NI 51-101 and CSA Notice 51-324. All of the Company's reserves are located onshore in Colombia and are attributable to the Llanos Blocks, of which the Company has a 20% interest. As at December 31, 2013, no reserves were attributable to the PUT-2 Block or the Tinigua Block.

The forecast pricing assumptions employed by Petrotech in estimating the Company's 2013 and 2012 reserves data are contained in the AIF and the annual information form of the Corporation dated April 18, 2013 for the year ended December 31, 2012, respectively.

It should not be assumed that the estimates of future net revenues presented represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. The recovery and reserve estimates of the Company's crude oil reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil reserves may be greater than or less than the estimates provided herein. In addition, the estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. Readers should review the definitions and more detailed information contained in the AIF.

About PetroNova:

The Company, through its subsidiaries, is engaged in the exploration for, and the acquisition and development of, oil and natural gas resources in South America, specifically in Colombia. The Company's assets currently include the Company's interests in the PUT-2 and Tinigua Blocks located in the Caguan-Putumayo Basin in Colombia, both of which are operated by the Company, and the non-operated Llanos Blocks located in the Llanos Basin in Colombia. The common shares of the Company trade on the TSX Venture Exchange under the stock symbol "PNA".

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.

Caution Regarding Forward-Looking Statements and Information:

Certain statements and information contained in this press release constitute forward-looking statements and information (collectively "forward-looking statements") within the meaning of applicable securities laws. These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "intend", "plan", "continue", "estimate", "budget", "targeting", "project", "expect", "may", "will", "might", "should", "could", "believe", "predict" and "potential" and similar expressions are intended to identify forward-looking statements. Such statements represent the Company's internal projections, estimates, expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Management believes the expectations reflected in these forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon.

In particular, this press release contains forward-looking statements pertaining to estimates of the Company's reserves and the net present value of such reserves and the Company's future exploration and development activities and the timing thereof, including the extended testing of discoveries on the Llanos Blocks; the completion of the 3D seismic campaign at Atarraya and Pendare on the CPO-7 and CPO-13 Blocks, respectively; the drilling of four exploratory wells in the Llanos Blocks; the completion of the valuation of the Canelo Sur-2 well on the PUT-2 Block; and the commencement of civil works to drill a first exploratory well on the Tinigua Block. In addition, statements relating to "reserves" or "resources" are by their nature forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves described can be profitably produced in the future. The recovery and reserve estimates of PetroNova's reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered.

With respect to forward-looking statements contained in this press release, assumptions have been made regarding, among other things: general economic, market and business conditions in Colombia and globally; future crude oil and natural gas prices; the continued availability of capital, undeveloped lands and skilled personnel; the ability to obtain equipment in a timely manner to carry out exploration and development activities; the regulatory framework governing royalties, taxes and environmental matters in Colombia and any other jurisdictions in which the Company may conduct its business in the future; the ability of the Company to obtain the necessary approvals, permits and licences to conduct its operations; the applicability of technologies for recovery and production of the Company's oil and natural gas resources and reserves; the recoverability of the Company's oil and gas resources and reserves; future capital and exploration expenditures to be made by the Company; future sources of funding for the Company's exploration program; the geography of the areas in which the Company is exploring; and adequate weather and environmental conditions.

Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain risk factors, including, but not limited to: general economic, market and business conditions; risks related to the exploration, development and production of oil and natural gas; risks inherent in the Company's international operations, including security and legal risks in Colombia; risks related to the timing of completion of the Company's projects; competition for, among other things, capital, the acquisition of resources and skilled personnel; actions by governmental authorities, including changes in government regulation and taxation; the failure of the Company to obtain the necessary approvals, permits and licences to conduct its operations; environmental risks and hazards; the availability of capital on acceptable terms; the failure of the Company or the holder of certain licenses or leases to meet specific requirements of such licenses or leases; adverse claims made in respect of the Company's properties or assets; failure to engage or retain key personnel; geological, technical, drilling and processing problems, including the availability of equipment and access to properties; failure by counterparties to make payments or perform their operational or other obligations to the Company in compliance with the terms of contractual arrangements between the Company and such counterparties; and the other factors discussed under the heading "Risk Factors" in the AIF and the Company's other continuous disclosure documents filed from time to time with applicable securities regulatory authorities in Canada and which may be accessed on PetroNova's SEDAR profile at www.sedar.com.

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements included in this press release are expressly qualified by this cautionary statement and are made as of the date of this press release. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws. 

SOURCE PetroNova Inc.

For further information:

Antonio Vincentelli
President & Chief Executive Officer  
954 317 3990
antonio.vincentelli@petronova.com

Stelvio Di Cecco
Chief Financial Officer
954 317 3990
stelvio.dicecco@petronova.com

Abby Garfunkel
Investor Relations
403-218-2887
agarfunkel@tmxequicom.com