Petroamerica Announces Third Quarter 2013 Results and Operating Results for the Three and Nine Months Ended September 30, 2013

CALGARY, Nov. 25, 2013 /CNW/ - Petroamerica Oil Corp. (TSXV: PTA) ("Petroamerica" or the "Company"), a Canadian oil  company operating in Colombia, is pleased to announce the financial and operating results for the three and nine months ended September 30, 2013. Copies of the Company's Management Discussion and Analysis and Financial Statements have been filed with the Canadian Securities Regulatory Authorities and can be viewed or downloaded at the Company's website at www.petroamericaoilcorp.com or at www.sedar.com. The financial results for all periods presented are in United States dollars unless otherwise indicated.

Quarterly highlights include:

  • Generated net income of $18.2 million ($0.03 per share basic), funds flow from operations of $35.3 million ($0.06 per share basic) and positive cash flow from operations of $34.1 million ($0.06 per share basic), resulting in cash on hand at September 30 of over $64 million (current cash on hand: $77.9 million);
  • Realized a Brent referenced sales price of $108 per barrel ("/bbl") and an operating netback of approximately $78/bbl;
  • Achieved quarter-over-quarter production growth with total Company average production for the third quarter of 5,951 barrels of oil per day ("bopd"), compared to 5,046 bopd in the second quarter. Production average for the month of October was 6,312 bopd (total Company working interest, a new production high;
  • Participated in the drilling of four development and appraisal wells - Las Maracas-10, Las Maracas-11, Las Maracas-12 and Las Maracas-14, resulting in four oil producers;
  • Drilled La Casona-2 well. The La Casona-2 ST2 has been cased and is currently awaiting the arrival of a workover rig to begin testing the Mirador Formation;
  • Long-term test production facility for the La Casona-1 well commissioned;
  • Increased working interest from 25% to 100% in the exploration area of the El Porton Block with the objective of drilling the Crypto-1 well early in 2014.

The following table presents the highlights of Petroamerica's financial and operating results.

(in $000 US except share, per share or unless
otherwise noted)
      Q3 2013       Q2 2013       9 mos 2013       Q3 2012
                                 
Oil revenue - net of royalties     $  54,794     $   46,105       146,566      $   9,241
Funds flow from operations     $  35,322     $   24,164       82,735     $   4,381
Funds flow per share- basic     $  0.06     $   0.04       0.14     $   0.01
Funds flow per share- diluted     $   0.06     $   0.04       0.14     $   0.01
              $                  
Income (loss) for period     $   18,164     $   11,171       43,448     $   (4,888)
Total comprehensive income (loss)     $   17,013     $   11,389       43,287     $   (4,954)
Income (loss) per share -  basic      $   0.03     $   0.02       0.07     $   (0.01)
Income (loss) per share -  diluted     $   0.03     $   0.02       0.07     $   (0.01)
Total assets     $   216,644     $   185,259       216,644     $   120,872
Total cash     $   64,864     $   47,352       64,864     $   33,342
Notes payable     $   32,413     $   31,482       32,413     $   32,916
Shareholders' equity     $   128,566     $   110,937       128,566     $   77,940
                                 
Exploration costs     $   5,773     $   -       6,099     $   4,472
Capital expenditures     $   17,635     $   25,130       55,665     $   5,965
                                 
Common shares outstanding       582,808,260       580,798,260       582,808,260       578,331,594
                                 
Weighted average shares outstanding                                
Basic       581,097,499       580,782,473       580,607,966       578,331,594
Diluted       605,383,772       600,776,919       605,623,000       578,331,594
                                 
(in $000 US except share, per share or unless
otherwise noted)
      Q3 2013       Q2 2013       9 mos 2013       Q3 2012
                                 
                                 
Average production - bopd       5,951       5,046       5,135       1,522
Selling price $/bbl     $   108.00     $   99.25       105.37     $   106.38
Royalty $/bbl     $   9.90     $   7.86       8.75     $   8.50
Average transportation costs $/bbl     $   18.69     $   15.97       17.55     $   22.35
Average production cost $/bbl     $   1.84     $   4.83       3.15     $   3.21
Operating netback $/bbl     $   77.57     $   70.59       75.92     $   72.31
Funds flow netback$/bbl     $   64.51     $   52.62       59.02     $ 31.29
                                 
Share trading                                 
High     $   0.35     $   0.36       0.40     $   0.22
Low     $   0.24     $   0.21       0.21     $   0.12
Close     $   0.33     $   0.26       0.33     $   0.21
Trading volume       59,394,000       46,649,300       166,220,100       52,396,100

 



Third Quarter Financial Summary
For the three months ended September 30, 2013, the Company reported $54.8 million in oil revenue, net of royalties, from the sale of 558,524 barrels of oil.  The realized sales price was $108.00/bbl generating an operating netback of $77.57/bbl.

For the third quarter of 2013, the Company's net income was $18.2 million ($0.03 per share diluted). The Company's capital expenditures for the third quarter were $17.6 million, all invested in Colombia, and primarily for facilities construction, development drilling on the Las Maracas Field, and exploration drilling at Curiara-1 and La Casona-2. These capital expenditures were funded from available cash on hand.

At the end of the third quarter, the Company's cash position was $64.9 million, and the Company holds Canadian $35 million of debt in Senior Notes payable by April 19, 2015.

Operations Update:

  • Total Company production for the month of October averaged 6,312 bopd (Company working interest);
  • Production from the Maracas field averaged 12,450 bopd (gross) for the month of October;
  • Drilling on the Rumi-1 well on the El Eden Block is continuing.  The well is currently drilling at a depth of over 12,000 feet in the Carbonera formation.  Results for this well are expected for mid-December;
  • A workover rig is expected on site to test the La Casona-2 well soon and test production on the La Casona-1 well is expected to start shortly;
  • With an electro-submersible pump installed, the La Guira-1 well produced at high water cuts until the well watered out.

Activity Schedule
A summary of the expected drilling and testing activity, for the remainder of 2013 and the early part of 2014, is provided below:

Prospect/Well Activity Type Block Working
Interest
Timing/Status
La Casona-2 ST2 Appraisal El Eden 40% Testing
La Guira-1 Long-Term Test Los Ocarros 50% Testing
La Casona-1 Long-Term Test El Eden 40% Testing
Rumi-1 Exploration El Eden 40% Drilling
Crypto-1 Exploration El Porton 100% Q1 2014
La Guira-2 Appraisal Los Ocarros 50% Q1 2014
Curiara-1 Long-Term Test El Porton 25% Q1 2014
Malavar-1 Exploration LLA-10 50% Q2 2014


Outlook

As of October 31, 2013, the average total Company working interest production for the year was 5,255 bopd and the Company is on target to exceed its production guidance for 2013 of 5,000 bopd average. Production guidance for 2014 is expected to be released in December 2013.

The Company has revised the projection for its capital spending program for 2013 to approximately $80.0 million, a 14% increase from the original spending estimate of $70.0 million for the year but a 9% decrease from the projection released in August of 2013.  With strong oil prices expected throughout the rest of this year and a current cash position of approximately $77.9 million, the Company expects to be self-funding for the rest of 2013 and 2014. The Company expects to release its 2014 capital budget and work program in December 2013.

PETROAMERICA OIL CORP.
Condensed Consolidated Interim Statements of Financial Position 
(Expressed in United States dollars)

                       
      As at        As at        As at 
      September 30,       December 31,       January 1,
      2013       2012       2012
                       
Assets                       
Current assets                      
  Cash and cash equivalents    $   64,863,955     $   26,774,414       18,972,335
  Trade and other receivables     46,997,880       23,312,242       7,121,566
  Prepayments and deposits     541,719       98,054       410,859
  Crude oil inventory     384,894       3,679,953       554,119
                       
      112,788,448       53,864,663       27,058,879
                       
Non-current assets                      
  Restricted cash      4,642,618       3,895,640       7,793,713
  Property, plant and equipment     68,450,778       35,299,488       14,633,193
  Exploration and evaluation assets     30,762,117       36,336,044       43,816,208
  Deferred tax asset     -       6,979,717       -
                       
      103,855,513       82,510,889       66,243,114
                       
Total assets    $  216,643,961      $   136,375,552     $   93,301,993
                       
Liabilities                       
Current liabilities                       
  Current equity tax    $ 374,055     $   436,255       397,944
  Current income tax     17,624,514       781,833       -
  Accounts payable and accrued liabilities     30,179,572       17,179,319       4,932,830
                       
      48,178,141       18,397,407       5,330,774
                       
Non-Current  liabilities                       
  Deferred tax liability   $ 5,025,115     $   -      $ 2,558,377
  Decommissioning liabilities     2,461,558       1,057,926       173,061
  Notes payable     32,412,960       32,772,378       -
  Equity tax     -       374,016       657,072
                       
Total liabilities      88,077,774       52,601,727       8,719,284
                       
Shareholders' equity                      
  Share capital     137,369,818       136,417,181       136,336,156
  Contributed surplus     24,182,679       23,630,314       20,611,065
  Translation reserve     3,187,271       3,347,728       2,500,283
  Deficit     (36,173,581)       (79,621,398)       (74,864,795)
                       
      128,566,187       83,773,825       84,582,709
                       
Total liabilities and shareholders' equity    $   216,643,961      $   136,375,552       93,301,993



PETROAMERICA OIL CORP.
Condensed Consolidated Interim Statements of Net Income (Loss) and Comprehensive Income (Loss)
(Expressed in United States dollars)

                                   
        Three months ended September 30     Nine months ended September 30
          2013       2012       2013       2012
                                   
Revenue                                  
                                   
  Oil revenue - net of royalties         54,794,043     $   9,240,519     146,565,954       15,452,126
          54,794,043       9,240,519       146,565,954       15,452,126
                                   
Expenses                                  
                                   
  Production         (1,029,451)       (305,636)       (4,784,394)       (1,624,147)
  Transportation         (10,438,880)       (2,127,752)       (26,617,490)       (2,736,492)
  Purchased oil         -       -       (2,623,753)       -
  Exploration and evaluation         (5,773,352)       (4,471,554)       (6,098,861)       (6,617,467)
  Depletion and depreciation         (7,903,006)       (1,220,317)       (22,260,085)       (2,359,288)
  General and administration         (2,473,451)       (1,701,746)       (7,045,141)       (5,805,722)
  Share-based payments         (226,358)       (300,468)       (711,218)       (1,000,887)
                                   
          (27,844,498)       (10,127,473)       (70,140,942)       (20,144,003)
                                   
  Finance and other         (1,371,637)       (1,322,160)       (3,870,004)       (2,029,058)
  Impairment of accounts receivable         -       (1,919,635)       -       (1,919,635)
  Foreign exchange (loss) gain         595,758       (758,835)       522,154       (321,847)
                                   
          (775,879)       (4,000,630)       (3,347,850)       (4,270,540)
                                   
Income (loss) before income taxes         26,173,666       (4,887,584)       73,077,162       (8,962,417)
                                   
Current income tax expense         (3,734,994)       -       (17,624,514)       -
Deferred tax expense         (4,274,562)       -       (12,004,831)       -
                                   
Net income (loss) for the period         18,164,110       (4,887,584)       43,447,817       (8,962,417)
                                   
Other comprehensive income                                   
Items that will not be reclassified subsequently to income or (loss):                                
  Reserve on translation of foreign operations                                   
  and net investments in foreign operations         (1,150,713)       (66,319)       (160,457)       89,419
                                   
Other comprehensive income (loss)         (1,150,713)       (66,319)       (160,457)       89,419
                                   
Total comprehensive income (loss)        $ 17,013,397     $   (4,953,903)       43,287,360     $   (8,872,998)
                                   
Basic income (loss) per share        $   0.03     $   (0.01)       0.07     $   (0.02)
Diluted income (loss) per share        $   0.03     $   (0.01)       0.07     $   (0.02)
                                   
Weighted average number of basic                                   
  common shares outstanding         581,097,499       578,331,594       580,607,966       578,331,594
Weighted average number of diluted                                   
  common shares outstanding         605,383,772       578,331,594       605,623,000       578,331,594



PETROAMERICA OIL CORP.
Condensed Consolidated Interim Statements of Changes in Equity
(Expressed in United States dollars)

                                         
        Share Capital       Contributed
surplus 
      Translation
reserve 
      Retained
earnings (deficit)
      Total equity 
                                         
Balance at January 1, 2013     $   136,417,181        $ 23,630,314        $ 3,347,728        $ (79,621,398)       83,773,825
                                         
Net income for the period        -       -       -       43,447,817       43,447,817
Other comprehensive loss       -       -       (160,457)       -       (160,457)
                                         
Total comprehensive income (loss)       -       -       (160,457)       43,447,817       43,287,360
                                         
Warrants exercised       880,419       (131,488)       -       -       748,931
Stock options exercised       72,218       (27,365)       -       -       44,853
Share-based payments       -       711,218       -       -       711,218
                                         
Balance at September 30, 2013      137,369,818       24,182,679       3,187,271       (36,173,581)      128,566,187
                                         
        Share Capital        Contributed
surplus 
      Translation
reserve 
      Deficit        Total equity 
                                         
Balance at January 1, 2012     $   136,336,156       20,611,065       2,500,283       (74,864,795)     84,582,709
                                         
Net loss for the period        -       -       -       (8,962,417)       (8,962,417)
Other comprehensive income        -       -       89,419       -       89,419
                                         
Total comprehensive income (loss)       -       -       89,419       (8,962,417)       (8,872,998)
                                         
Warrants issued pursuant to debt offering       -       1,299,114       -       -       1,299,114
Warrant issue costs       -       (69,626)       -       -       (69,626)
Share-based payments       -       1,000,886       -       -       1,000,886
                                         
Balance at September 30, 2012      136,336,156     22,841,439     2,589,702       (83,827,212)       77,940,085



PETROAMERICA OIL CORP.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in United States dollars)

                               
    Three months ended September 30      Nine months ended September 30
      2013       2012       2013       2012
                               
Operating activities                               
Net income (loss) for the period     18,164,110       (4,887,584)     $  43,447,817      (8,962,417)
Items not involving cash:                              
  Share-based payments     226,358       300,468       711,218       1,000,887
  Depletion and depreciation     7,903,006       1,220,317       22,260,085       2,359,288
  Unrealized foreign exchange (gain) loss     (992,551)       834,295       (1,980,346)       345,600
  Deferred tax expense     4,274,562       -       12,004,831       -
  Accretion and amortization     214,613       278,196       759,234       492,355
  Impairment of exploration & evaluation assets     5,532,297       4,715,870       5,532,297       4,715,870
  Impairment of accounts receivables     -       1,919,635       -       1,919,635
Net changes in non-cash working capital balances:                              
  Changes in trade and other receivables      (9,633,047)       384,442       (23,685,638)       (6,507,708)
  Changes in prepayments and deposits      334,877       143,034       (443,665)       183,042
  Changes in crude oil inventory     107,687       (55,292)       3,505,248       (1,189,211)
  Changes in accounts payable, accrued liabilities and equity tax     4,193,045       (3,645,385)       12,564,037       (3,731,503)
  Changes in current income tax payable     3,734,994       -       16,842,681       -
                               
Cash provided by (used in) operating activities     34,059,951       1,207,996       91,517,799       (9,374,162)
                               
Investing activities                               
Exploration and evaluation expenditures     518,694       (3,519,460)       (15,263,871)       (9,474,450)
Property, plant and equipment expenditures     (17,456,632)       (2,042,345)       (38,958,171)       (6,045,008)
Restricted cash investments     -       5,073,190       -       5,073,190
Interest received     -       309,026       -       750,779
Cash used in investing activities     (16,937,938)       (179,589)       (54,222,042)       (9,695,489)
                               
Financing activities                               
Stock options exercised     -       -       44,853       -
Issuance of notes payable, net of costs     -       17,471       -       33,439,150
Warrants exercised     389,546       -       748,931       -
Cash provided by financing activities     389,546       17,471       793,784       33,439,150
                               
Increase in cash and cash equivalents during the period
    17,511,559       1,045,878       38,089,541       14,369,499
Cash and cash equivalents, beginning of period     47,352,396       32,295,956       26,774,414       18,972,335
                               
                               
Cash and cash equivalents, end of period     64,863,955       33,341,834     $   64,863,955       33,341,834
                               



Forward Looking Statements:

This news release includes information that constitutes "forward-looking information" or "forward-looking statements". More particularly, this news release contains statements concerning expectations regarding,regulatory and partner approvals on the Company's development plan, drilling and operational opportunities and the timing associated therewith, test results and the timing thereof, the use of available cash on hand in addition to potential exploration and development opportunities and expectations regarding regulatory approval and the overall strategic direction of the Company.  The forward-looking statements contained in this document, including expectations and assumptions concerning the obtaining of the necessary regulatory approvals, including ANH approval, and the assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are uncertain and subject to risks. A multitude of factors can cause actual events to differ significantly from any anticipated developments and although the Company believes that the expectations represented by such forward-looking statements are reasonable, undue reliance should not be placed on the forward-looking statements because there can be no assurance that such expectations will be realized. Material risk factors include, but are not limited to: the inability to obtain regulatory approval, including ANH approval, for the transfer of participating interests and/or operatorship for the Company's properties, the risks of the oil and gas industry in general, such as operational risks in exploring for, developing and producing crude oil and natural gas, market demand and unpredictable shortages of equipment and/or labour; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; fluctuations in oil and gas prices, foreign currency exchange rates and interest rates, and reliance on industry partners. 

Data obtained from the initial testing results at the referenced wells, which may include barrels of oil produced and levels of water-cut, should be considered to be preliminary until a further and detailed analysis or interpretation has been done on such data. The test results disclosed in this press release are not necessarily indicative of long-term performance or of ultimate recovery. The reader is cautioned not to unduly rely on such results as such results may not be indicative of future performance of the well or of expected production results for the Company in the future.

Neither the Company nor any of its subsidiaries nor any of its officers, directors or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments.

The forward-looking statements contained in this document are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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.

 

 

SOURCE: Petroamerica Oil Corp.

For further information:

Nelson Navarrete
President and CEO

Colin Wagner
CFO

Ralph Gillcrist
COO and Executive Vice President Exploration & Business Development

Tel Bogota, Colombia: +57-1-744-0644
Tel Calgary, Canada: +1-403-237-8300
Email: investorrelations@pta-oil.com
Web Page: www.PetroamericaOilCorp.com

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Petroamerica Oil Corp.

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