Aurora Oil & Gas Reports Third Quarter 2013 Financial Results

PERTH, Western Australia, Nov. 8, 2013 /CNW/ - Aurora Oil & Gas Limited (TSX: AEF) (ASX: AUT) today released financial results for the three and nine months ended September 30, 2013. All figures are reported in US dollars unless otherwise noted.

Highlights for the third quarter of 2013, including non-IFRS measures, compared to the corresponding quarter in 2012 are:

  • Revenue US$144 million up 68%, 94% generated from liquids
  • EBITDAX US$81 million up 62%
  • Operating netback US$45.08/boe
  • Funds from operations US$66 million up 60%
  • Average daily production up 71% to approximately 21,438 boe/d (pre royalty)
           
  Three months ended   Nine months
ended
  Sept 30,
2013
Sept 30,
2012
Increase
%
Sept 30,
2013
Financial        
(US$ thousands unless otherwise stated)        
         
Production revenue - Pre royalty 143,615  85,452  68%  405,344 
EBITDAX(1) 80,887  49,916  62%  236,887 
  Per boe - (US$/boe) 41.01  43.29  (4%) 43.03 
Funds from operations(1) 66,019  41,189  60%  197,118 
  Per share - basic (US cents per share) 14.72  9.21  60%  43.99 
  Per boe - (US$/boe) 33.47  35.72  (6%) 35.80 
Net profit before tax 38,335  24,923  54%  123,682 
Net profit after tax(2) 24,674  16,013  54%  79,979 
  Per share - basic (US cents per share) 5.50  3.58  54%  17.85 
  Per boe - (US$/boe) 12.51  13.89  (10%) 14.53 
Adjusted net profit after tax(1) 25,656  16,013  60%  80,961 
  Per share - basic (cents per share) 5.72  3.58  60%  18.07 
Net capital expenditures (including acquisitions) 139,517  161,215  (13%) 468,020 
Net capital expenditures (excluding acquisitions) 139,517  161,215  (13%) 353,020 
         
  As at As at    
  Sept 30,
2013
Dec 31,
2012
Increase
%
 
         
Weighted average common shares outstanding (million)        
  Basic 448.1  432.6  4%   
  Diluted 457.4  439.4  4%   
(1)   These financial measures are identified and defined below under "Non-IFRS Financial Measures"
(2)   The income tax expense for the quarter ended September 30, 2013 of $13.6 million reflects the annualized accounting deferred income tax expense for the year. No current income tax is due for payment for the 2013 year.
     

             
  Three months ended   Nine months
ended
  Sept 30,
2013
Sept 30,
2012
Increase
%
Sept 30,
2013
Operating        
Production - Pre royalties        
  Natural gas (mscf/d) 25,351  14,155  79%  24,175 
  Light/medium oil (bbls/d) 8,718  5,885  48%  7,701 
  Condensate (bbls/d) 4,356  2,354  85%  4,908 
  NGL (bbls/d) 4,139  1,934  114%  3,530 
    Total oil equivalent (boe/d) 21,438  12,532  71%  20,167 
         
Revenue derived commodity price        
  Natural gas (US$/mscf) 3.81  2.53  51%  3.85 
  Light/medium oil (US$/bbl) 102.30  101.29  1%  101.77 
  Condensate (US$/bbl) 102.75  101.32  1%  101.32 
  NGL (US$/bbl) 30.21  30.16  31.41 
         
Netbacks US$/boe US$/boe   US$/boe
  Production revenue 72.81  74.11  (2%) 73.62 
  Royalties (19.63) (19.54) (19.72)
  Production taxes (2.42) (2.54) (5%) (2.46)
  Operating expenses (5.68) (6.43) (12%) (5.33)
  Operating netback 45.08 45.61  (1%) 46.12 
         
  Depletion, depreciation and amortisation (12.66) (12.24) 3%  (11.87)
  General and administrative expenses (4.08) (2.31) 77%  (3.09)
  Finance costs (8.25) (7.85) 5%  (7.83)
  Net profit before tax 16.94  21.62  (22%) 22.46 
  Net profit after tax 12.51  13.89  (10%) 14.53 
(1)   These financial measures are identified and defined below under "Non-IFRS Financial Measures"
(2)   Boe conversion is on a 6:1 basis, as explained below under "Cautionary and Forward-Looking Statements."

Outlook

Looking forward for the remainder of 2013 and early 2014, Aurora is well funded for the planned development programs for its operated and non-operated acreage at the Sugarkane Field. Management now updates its guidance for the full year capital program to between US$490 million and US$510 million, an increase of 10%, reflecting the increased level of drilling activity and investment in infrastructure during 2013.

Based on the current drilling program for 2013 and preliminary indicators for the first quarter of 2014 and assuming current commodity prices, management expect growth in production, revenue and profitability to continue through 2013 and early 2014. This growth is expected to be funded by a combination of the increasing cash flow generated from production sales and Aurora's existing credit facility. The amount able to be drawn from this facility was increased from US$200 million to US$300 million during the third quarter of 2013. The facility remains undrawn and fully available.

The increase in the level of funding available exceeds forecast working capital requirements for 2013 and provides capacity for capital expenditure programs in excess of that presently forecast for the Sugarkane Field.

The selected financial and operational information outlined above should be read in conjunction with Aurora's unaudited interim financial report and related Management's Discussion and Analysis for the three and nine months ended September 30, 2013, which will be filed on SEDAR and will be available for review at www.sedar.com and on our website at www.auroraoag.com.au. Unless otherwise indicated, Aurora's unaudited interim financial report and the financial information contained in this announcement has been prepared in accordance with Australian Accounting Standards ("AAS") and in compliance with International Financial Reporting Standards (IFRS).

Briefing Conference Call

Aurora will host a third quarter 2013 results briefing conference call on the following date:

November 11, 2013 at 4.30 p.m. Central Time/ 5:30 p.m. Eastern Time (North America) (Note amended time)
November 12, 2013 at 6.30 a.m. Western Time/ 9:30 a.m. Eastern Time (Australia)

Presentation PDF File

Aurora has filed a presentation to accompany the briefing conference call. Please access the presentation from the Corporate Presentations page of Aurora's website using the link below.

http://www.auroraoag.com.au/irm/content/corporate-presentations.aspx?RID=201

Call-in Details

To access either briefing call by telephone, please use one of the following numbers

From the USA: Operator Assisted Toll-Free Dial-In Number: 1 (888) 231-8191

From outside the USA International Dial-In #:  +1 (647) 427-7450

Conference ID #: 92275115

Toll Free International Numbers:

Australia    1-800-287-011
Austria     0-800-297-216
China, North    10-800-714-1191
China, South    10-800-140-1195
France     0-800-917-449
Germany    0-800-183-0171
Hong Kong    800-901-563
Ireland     1-800-760-620
Japan     00-53-11-60-858
Korea (South)    003-0813-1987
Netherlands    0-800-022-1164
Norway     800-105-67
Singapore    800-101-2564
Switzerland    0-800-835-354
Taiwan    00-801-127-130
United Kingdom    0-800-051-7107
   

Please connect approximately ten minutes prior to the beginning of the call to ensure participation.

A recording of each briefing conference call will also be available on the Company's website following the briefing at http://www.auroraoag.com.au

About Aurora

Aurora is an Australian and Toronto listed oil and gas company active in the over-pressured liquids rich region of the Eagle Ford shale in Texas, United States. Aurora is engaged in the development and production of oil, condensate and natural gas in Karnes, Live Oak and Atascosa counties in South Texas.  Aurora participates in approximately 80,300 highly contiguous gross acres in the heart of the trend, including approximately 22,100 net acres within the Sugarkane Field in the over-pressured and liquids core of the Eagle Ford.


Cautionary and Forward-Looking Statements

Statements in this press release reflect management's expectations relating to, among other things, target dates, Aurora's expected drilling program and the ability to fund development are forward-looking statements, and can generally be identified by words such as "will", "expects", "intends", "believes", "estimates", "anticipates" or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions that some or all of the reserves described can be profitably produced in the future. These statements are not historical facts but instead represent management's expectations, estimates and projections regarding future events.

References herein to "Sugarkane" or the "Sugarkane Field" are references to the Sugarkane natural gas and condensate field within the Eagle Ford and includes the two contiguous fields designated by the Texas Railroad Commission as the Sugarkane and Eagleville Fields.

Although management believes the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are based on the opinions, assumptions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include risks related to: exploration, development and production; oil and gas prices, markets and marketing; acquisitions and dispositions; competition; additional funding requirements; reserve estimates being inherently uncertain; changes in the rate and/or location of future drilling programs on our acreage by our operator(s), incorrect assessments of the value of acquisitions and exploration and development programs; environmental concerns; availability of, and access to, drilling equipment; reliance on key personnel; title to assets; expiration of licences and leases; credit risk; hedging activities; litigation; government policy and legislative changes; unforeseen expenses; negative operating cash flow; contractual risk; and management of growth. In addition, if any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this document. Such assumptions include, but are not limited to, general economic, market and business conditions and corporate strategy. Accordingly, investors are cautioned not to place undue reliance on such statements.

All of the forward-looking information in this press release is expressly qualified by these cautionary statements. Forward-looking information contained herein is made as of the date of this document and Aurora disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise, except as required by law.

Non - IFRS Financial Measures

Within this Report references are made to certain financial measures that do not have any standardized meanings prescribed by IFRS. Such measures are neither required by, nor calculated in accordance with IFRS, and therefore are considered Non-IFRS financial measures. Non-IFRS financial measures may not be comparable with the calculation of similar measures by other companies. Funds from operations, EBITDAX, net operating income, operating netback and adjusted net profit after tax are commonly used in the oil and gas industry.

EBITDAX

EBITDAX represents net income (loss) for the period before income tax expense or benefit, gains and losses attributable to the disposal of projects, finance costs, depletion, depreciation and amortization expense, other non-cash charges, expenses or income, one-off or non-recurring fees, expenses and charges and exploration and evaluation expenses.

The following table reconciles net profit after tax to EBITDAX:

  Three months ended
Sept 30,
  Nine months ended
Sept 30,
  2013 2012   2013 2012
(US$ thousands)          
Net profit after tax 24,674  16,013    79,979  35,048 
Adjustments:          
  Share based payment expense 1,462  991    4,325  3,296 
  Depletion, depreciation and amortisation expense 24,978  14,117    65,344  24,125 
  Interest income (11) (31)   (44) (224)
  Finance costs 16,269  9,056    43,115  17,811 
  Net foreign exchange loss / (gain) (124) (27)   282  (3,055)
  Gain on foreign currency derivatives not qualifying as hedge   (1,167)
  Other income (22)   (99) (1)
  Net gain on sale of available for sale assets   (770)
  Income tax expense 13,661  8,910    43,703  23,940 
  Exploration and evaluation costs 887    282  3,930 
  EBITDAX 80,887  49,916    236,887  102,933 

Funds from Operations

Funds from operations represent funds provided by operating activities before changes in non-cash working capital.

The following table reconciles net profit after tax to funds from operations:

  Three months ended Sept 30,   Nine months ended Sept 30,
  2013 2012   2013 2012
(US$ thousands unless otherwise stated)          
           
Net profit after tax 24,674  16,013    79,979  35,048 
Add/(less) non-cash items          
  Depletion, depreciation and amortisation expense 24,978  14,117    65,344  24,125 
  Amortisation of borrowing costs and discount / premium on financial instruments 1,167  1,140    3,277  2,112 
  Share based payment expense 1,462  991    4,325  3,296 
  Income tax expense 13,661  8,910    43,703  23,940 
  Net foreign exchange loss / (gain) (124) (27)   282  (3,056)
  Employee benefit provision 201  45    208  268 
           
Funds from operations 66,019  41,189    197,118  85,733 

The Company considers funds from operations and EBITDAX as key measures as both assist in demonstrating the ability of the business to generate the cash flow necessary to fund future growth through capital investment. Neither should be considered as an alternative to, or more meaningful than net income or cash provided by operating activities (or any other IFRS financial measure) as an indicator of the Company's performance. Because EBITDAX excludes some, but not all, items that affect net income, the EBITDAX presented by the Company may not be comparable to similarly titled measures of other companies.

Adjusted Net Profit After Tax

Adjusted net profit after tax represents net profit after tax before non-recurring items.

The following table reconciles net profit after tax to adjusted net profit after tax:

  Nine months ended
Sept 30,
  2013 2012
(US$ thousands unless otherwise stated)    
     
Net profit after tax 79,979  35,048 
Adjustments for non-recurring items:    
  Income tax expense - change in estimated provision for the year ended December 31, 2011 3,000 
  Income tax expense - change in estimated provision for the year ended December 31, 2012 982 
Adjusted net profit after tax 80,961  38,048 

Management also uses certain industry benchmarks such as net operating income and operating netback to analyse financial and operating performance.

Net Operating Income

Net operating income represents net oil and gas revenue attributable to Aurora after distribution of royalty payments.

Operating Netback

Operating netback as presented, represents revenue from production less royalties, state taxes, transportation and operating expenses calculated on a boe basis. Management considers operating netback an important measure to evaluate its operational performance as it demonstrates its field level profitability relative to current commodity prices.

Defined Reserves and Resource Terms

  • "bbls" means barrels.
  • "boe" means barrels of oil equivalent and have been calculated using liquid volumes of oil, condensate and NGLs and treated volumes of gas converted using a ratio of 6 mscf to 1 bbl of liquid equivalent unless otherwise stated.
  • "scf" means standard cubic feet.
  • "m" or "M" prefix means thousand.
  • "mm" or "MM" prefix means million.
  • "NGLs" means natural gas liquids
  • "b" or "B" prefix means billion.
  • "/d" suffix means per day.

Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mscf: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 mscf:1 bbl, utilising a conversion ratio of 6 mscf:1 bbl may be misleading. Unless stated otherwise, all per boe references are a reference to Aurora's per boe production on a working interest basis before deduction of royalties.

SOURCE: Aurora Oil & Gas Limited

For further information:

Media Contact:

Shaun Duffy
F T I Consulting
Tel: +61 8 9485 8888
Shaun.Duffy@fticonsulting.com

Executive Management Contact:

Jonathan Stewart
Executive Chairman
Tel: +61 8 9380 2700

Douglas E. Brooks
Chief Executive Officer
Tel: +1 713 402 1920

Head Office
Level 1, 338 Barker Road, Subiaco, WA 6008, Australia
PO Box 20, Subiaco, WA 6904
T +61 8 9380 2700, f + 61 8 9380 2799, e info@auroraoag.com.au

Houston
Aurora USA Oil & Gas, Inc. a subsidiary of Aurora Oil & Gas Limited
1200 Smith Street, Suite 2300, Houston TX 77002-5500
T + 1 713 402 1920, f + 1 713 357 9674

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Aurora Oil & Gas Limited

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