Calvalley announces financial results for the third quarter ended September 30, 2013

CALGARY, Nov. 6, 2013 /CNW/ - Calvalley Petroleum Inc., (TSX: CVI.A)

Highlights

  • Earnings in the third quarter of 2013 were $0.07 per share ($5.3 million) compared to $0.05 per share ($4.5 million) in the third quarter of 2012. For the nine month period ended September 30, 2013 earnings were $0.21 per share ($17.2 million) compared to $0.21 per share ($19.6million) for the nine month period in 2012. Inventory of crude oil at the end of September 30, 2013 was approximately 41,500 barrels and represents an increase of 12,500 barrels from June 30, 2013.
  • The Company's working interest share of production volumes before royalties and taxes averaged 2,558 barrels per day in the first nine months of 2013 representing a 12 per cent increase over the 2,280 barrels per day for the first nine months of 2012. For the three month period ended September 30, 2013 production volumes were 2,495 barrels per day compared to 2,378 barrels per day in the prior period of 2012.
  • During the third quarter of 2013 the Company sold an average of 2,170 barrels per day of crude oil compared to 1,740 barrels per day in the prior period of 2013. For the nine month period to September 30, 2013 crude oil exports have averaged 2,282 barrels per day compared to 2,261 barrels per day in the comparable period of 2012. For the third quarter of 2013, the average sale price received was $110.91 per barrel which represents a premium of $0.62 to the Dated Brent Crude price of $110.29 for the quarter. The product netback for the third quarter of 2013 was $43.60 per barrel, and for the nine month ended September 30, 2013, the netback of $42.49 per barrel represents a decrease of 7 per cent from $45.48 per barrel for the comparable nine month period of 2012 reflecting lower realized prices for crude oil.
  • Funds flow from operations ("Cash Flow") for the quarter ended September 30, 2013 was $0.09 per share ($7.1 million) compared to $0.06 per share ($5.9 million) in the prior year period. For the nine month period to September 30, 2013 Cash Flow was $0.28 per share ($23.1 million) compared to $0.27 per share ($25.2 million) in the prior year period.
  • Capital expenditures in the third quarter of $2.8 million include the costs of equipment and services for the current year drilling program and are up slightly from $2.1 million in the third quarter of 2012. Capital expenditures for the nine months to September 30, 2013 of $6.8 million are up 39 per cent from capital expenditures of $4.9 million for the comparable period of 2012. Detailed engineering work on the water filtration and injection project at Hiswah is planned to be completed before year end and the facility is expected to be completed in 2014.
  • Calvalley has a strong balance sheet with approximately $83 million in working capital at September 30, 2013. The working capital balance increases to $85 million with inventory of crude oil valued at current market value rather than cost.
  • The Company has recently received reports on simulation studies for the Hiswah field and the Al Roidhat field which were completed by separate independent engineering firms.

    At Hiswah, a simulation of various scenarios for the development of the reservoir through the full implementation of a waterflood was completed. The results of the simulation confirm previous Company forecasts that, based on certain criteria for field development, recoveries of crude oil can be significantly enhanced with the implementation of a waterflood. One criteria for field development is to increase the capacity for water injection. The next step in development of the waterflood project has been initiated being the preparation of detailed engineering work, by a third party, for a water filtration and water injection facility with a capacity of 40,000 barrels per day. The Company is planning to drill several injection wells in 2014 which represents the next step in implementation of the waterflood project. The response to the increased volume of water being injected into the Hiswah field is expected to take several months from the start of water injection.

    At Al Roidhat, a simulation of various scenarios for the development of the reservoir through additional drilling and water recycling was completed. The results of the simulation indicate that recoveries of crude oil can be significantly enhanced through the following;

    i)     drilling producing wells in the less developed part of the field,
    ii)     increasing the drilling density in developed parts of the field, and
    iii)     building facilities for water handling and water recycling throughout the reservoir.

    The Company is planning to drill several producing wells in the Al Roidhat field in 2014 as part of the plan to optimize recoveries of crude oil from the Al Roidhat field.

    The results of the simulations are subject to various risks and uncertainties and are based upon certain plans and assumptions, the Company cannot assure that results determined by the simulations will be consistent with results of the Company's future plans and activities.
  • The Company is currently drilling its prospect at Al Hedba. Results from this well will be released when the drilling operation has been completed.

Financial information
Significant financial information is included in the table below and is discussed further in the Company's Management Discussion and Analysis.

           
(in thousands of US dollars except per share amounts) Three months ended
September 30
Nine months ended
September 30
2013 2012 2013 2012
Revenue (Gross) 22,143 17,511 67,895 69,187
Revenue from crude oil sales (net of royalties) 13,880 10,979 42,557 43,372
EBITDA(1) 8,341 6,850 27,026 29,169
Operating income(1) 6,595 5,646 21,539 24,577
Earnings 5,300 4,518 17,177 19,645
  Per share 0.07 0.05 0.21 0.21
Capital expenditures 2,788 2,100 6,773 4,861
Funds flow from operations(1) 7,083 5,880 23,137 25,192
  Per share 0.09 0.06 0.28 0.27
Cash flow from operating activities 7,019 10,819 24,092 27,089

(1) See "Non-IFRS Measures" disclosure in September 30, 2013 MD&A filed on www.sedar.com

FILING OF REPORTS ON SEDAR

Calvalley's Management's Discussion and Analysis and Unaudited Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2013 can be found for viewing by electronic means on The System for Electronic Document Analysis and Retrieval at www.sedar.com. They can also be found on the Company's website at www.calvalleypetroleum.com.

Calvalley is an international oil and gas company, with offices in Calgary, Alberta, Canada, that operates its 50% working interest in Block 9 of the Masila Basin, in The Republic of Yemen.

Forward-looking Statements
This press release may contain forward-looking statements. Words such as "may", "will", "should", "could", "anticipate", "believe", "expect", "intend", "plan", "potential", "continue", and similar expressions may have been used to identify these forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to management. In particular, statements in respect to the Hiswah water filtration and injection project, the implementation of a waterflood and the drilling of water injection wells at Hiswah, development activities and drilling plans at Al Roidhat and the drilling of the Al Hedba well contain forward looking information. Forward-looking statements involve significant risk and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including, but not limited to, operational risks, availability of supplies and services, potential delays or changes in plans with respect to exploration or development projects or capital expenditures, delays and interruptions in drilling and completion activities for undetermined periods, success in drilling activities, changes in general economic and market conditions and other risk factors. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with these forward-looking statements. Investors should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this press release are made as of the date of this press release and Calvalley assumes no obligation to update or revise them to reflect new events or circumstances except as expressly required by applicable securities law. 

SOURCE: Calvalley Petroleum Inc.

For further information:

investorrelations@calvalleypetroleum.com

Edmund Shimoon, Chairman & CEO
Gerry Elms, CFO   +1 (403) 297-0490

Profil de l'entreprise

Calvalley Petroleum Inc.

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