PetroKamchatka Plc (TSXV: PKP) Provides Financial Results for the First Quarter Ended August 31, 2011

ST. HELIER, Jersey, Nov. 30, 2011 /CNW/ - PetroKamchatka Plc ("PetroKamchatka" or the "Corporation") a Jersey company, reports its unaudited interim financial results for the three month period ended August 31, 2011 and an operations update. PetroKamchatka has filed its unaudited interim Condensed Consolidated Financial Statements for the period ended August 31, 2011 and related Management's Discussion and Analysis ("MD&A") on SEDAR at www.sedar.com and on its website at www.petrokamchatka.com. Certain selected financial information as at August 31, 2011 and August 31, 2010 is set out below and should be read in conjunction with PetroKamchatka's unaudited interim Condensed Consolidated Financial Statements and MD&A. All amounts referred to in this press release are in USD, unless otherwise indicated.

           
For the three month period ended   August 31, 2011     August 31, 2010
Net loss $ 1,425,253   $ 1,157,836
Net comprehensive loss (income) $ 224,170   $ (24,893)
Total comprehensive loss $ 1,649,423   $ 1,132,943
Net loss per share - basic and diluted $ (0.00)   $ (0.00)
Cash provided by (used in) operations $ (1,047,945)   $ (224,946)
Weighted average number of common shares outstanding   490,396,137     489,475,067
           
As at   August 31, 2011        May 31, 2011
Cash and cash equivalents $ 2,981,169   $ 4,045,212
Working capital - note 1 $ 5,395,676   $ 1,991,870
Total assets $ 12,396,398   $ 13,892,358
Total liabilities $ 2,463,143   $ 2,333,080
Equity attributable to owners of the Corporation $ 11,944,753   $ 13,520,151
Number of common shares outstanding   490,396,137     490,396,137
Note 1 - August 31, 2011 amount includes $4,434,210 relating to the reclassification of the Corporation's investment in a drilling rig to current assets as it is available for immediate sale.

First Quarter Update

The Corporation is reporting its financial results for the first time under International Financial Reporting Standards ("IFRS"). For the three months ended August 31, 2011, the Corporation incurred a total comprehensive loss of $1,649,423 compared to a total comprehensive loss of $1,132,943 for the three months ended August 31, 2010. The results for the first quarter of fiscal 2012 includes 'net comprehensive loss' of $224,170 compared to 'net comprehensive income' in the first quarter of fiscal 2011 of $24,893. These amounts relate to unrealized foreign exchange differences on translation of foreign operations. The Corporation carries on business in Jersey, Cyprus, Russia and Canada where its functional currencies have been determined as being: USD in Jersey and Cyprus; RUR in Russia; and CAD in Canada.

In the three months ended August 31, 2011, the Corporation incurred equipment operating costs and other expense of $51,764 compared to $163,440 in the three months ended August 31, 2010. These expenses include amounts relating to the Corporation's 46.25% investment in the HighKelly drilling rig and to a mobile drilling rig and other equipment located in Kamchatka, Russia. The investment in the HighKelly drilling rig is considered a current financial asset available for immediate sale. The rig is presently in bonded storage in Shanghai and the Corporation and its joint venture partner in the drilling rig are actively seeking a sale of this asset. The equipment in Russia is presently in storage but available for use in future exploration projects, and should support the Corporation's efforts to attract a farm-in partner for its Kamchatka acreage.

Under IFRS, depreciation expense is recorded on property, plant and equipment even when it is idle. In the first quarter of fiscal 2012, depreciation expense was $394,669 compared to $223,876 in the first quarter of fiscal 2011. Under IFRS, depreciation is calculated on a more explicitly determined component basis than previous calculations under Canadian GAAP; and are also based on revised estimates of estimated useful lives, depreciation rates and residual values.

General and administrative expenses in the three months ended August 31, 2011 were $826,192 compared to $597,055 in the three months ended August 31, 2010. This reflects lower recoveries to the Corporation as Operator of joint ventures in Russia. Recoveries netted against expenses are based on capital expenditures by the joint venture with KKPL. These expenditures were materially lower in the current reporting period than in the first three months of fiscal 2011.

In the three months ended August 31, 2011, stock based compensation amounted to $23,400 compared to $175,890 in the three months ended August 31, 2010. This decline reflects lower fair values at each measurement date and increased forfeiture rates which impact the calculation of these expenses under IFRS. In addition, the amount in the first quarter of fiscal 2011 included $31,875 in share compensation to directors in exchange for services.

Under IFRS, the Corporation recognized a provision of $137,640 or other expense at August 31, 2011 relating to a provision for an onerous office lease liability in Canada. There was no comparable expense in the prior year's first quarter.   The Corporation has no debt.

The Corporation had no capital expenditures on property and equipment in the three months ended August 31, 2011 compared to capital expenditures in the three months ended August 31, 2010 of $755,612. In the first quarter of the prior fiscal year, the Corporation incurred capital costs relating to an exploration license in Kamchatka that was subsequently surrendered in March 2011.   The carrying costs were fully impaired in the third quarter of fiscal 2011.

As previously announced, PetroKamchatka continues to review opportunities to enter other oil-producing basins in Russia, typically involving privately-held acreage with post-exploration risk hydrocarbons that require access to the capital markets to be further developed. In this context, the Corporation has, to date, been unable to conclude a definitive agreement with Advastor for the proposed transaction that was first announced on May 18, 2011.

About PetroKamchatka
PetroKamchatka is an international junior oil exploration company incorporated in the Bailiwick of Jersey with its core properties located in the Kamchatka Peninsula of the Russian Federation. For further information, please visit the PetroKamchatka Plc website at www.petrokamchatka.com.

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.

Advisory Regarding Forward-Looking Statements

This press release together with the interim financial statements and interim MD&A referred to therein contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements"). Forward-looking statements are based on the PetroKamchatka's current beliefs as well as assumptions made by, and information currently available to, PetroKamchatka concerning business prospects, strategies, regulatory developments, the ability to obtain equipment in a timely manner to carry out development activities, the ability to get oil to market, and the ability to obtain financing on acceptable terms   Although management of PetroKamchatka considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.   Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur.   There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized.   Actual results will differ, and the difference may be material and adverse to either PetroKamchatka and/or its security holders.   The forward-looking statements contained in this press release are made as of the date hereof and PetroKamchatka does not undertakes any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law.   The forward-looking statements contained herein are expressly qualified by this cautionary statement.

 

 

SOURCE PetroKamchatka Plc

For further information:

PetroKamchatka Plc 
Graeme Phipps
President and Chief Executive Officer
9 Esplanade
St. Helier, Jersey
Tel: +44 7733 363 016 or +1 403 630 2367
 
PetroKamchatka Services Inc.
Calvin Brackman
Vice President, Corporate Planning
c/o 1000, 505 - 3rd Street S.W.
Calgary, Alberta, Canada, T2P 3E6
Tel: +1 403 984 5132
Cell: +1 403 690 6230

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PetroKamchatka Plc

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