PetroNova announces 2014 year end results, 2015 outlook and appointment of Chief Financial Officer

CALGARY, April 23, 2015 /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, 2014.

"PetroNova made progress on each of our blocks in 2014, particularly in the Llanos Basin where our drilling activities added approximately 1.9 million barrels of net 2P reserves," said Antonio Vincentelli, President and Chief Executive Officer of PetroNova. "We will continue to interpret well results from the Pendare and El Tigre campaign, as well as the seismic data acquired in our CPO-7, CPO-13, and PUT-2 blocks to determine future exploration opportunities."

PetroNova's audited consolidated financial statements as at and for the years ended December 31, 2014 and 2013, 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, 2014 (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, 2014, the Company:           

  • Increased net 2P reserves (proved plus probable, net of production, dispositions and revisions) by 112% compared to 2013 as a result of the recently drilled wells in the CPO-13 block, as described in the following table*:

Block

Gross Reserves (Mbbl)

at December 31

Net Reserves (Mbbl)

at December 31

2013

2014

2013

2014

CPO-7

1,181

1,088

576

517

CPO-13

1,694

5,256

1,083

3,006

Total

2,875

6,344

1,659

3,523

Notes:

(1)

Certain columns may not add due to rounding.

(2)

The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

(3)

"Gross" means the Company's working interest before the deduction of royalties and without including any royalty interests of the Company.

(4)

"Net" means the Company's working interest after the deduction of royalty obligations, plus the Company's royalty interests.

(5)

See "Disclosure of Reserves Data" contained herein.

  • Reported net 2P reserves of 3,523 Mbbl at December 31, 2014, 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


139


68


86


53


2,920

Developed Non-Producing


-


-


183


112


2,633

Undeveloped


484


232


2,280


1,321


33,254

TOTAL PROVED


622


300


2,549


1,485


38,807

TOTAL PROBABLE


466


218


2,707


1,520


28,402

TOTAL PROVED PLUS PROBABLE


1,088


517


5,256


3,006


67,209

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. Estimates of future net revenue, whether discounted or not, do not represent fair market value.

(5)

See "Disclosure of Reserves Data" contained herein.

  • Completed the acquisition of 3D and 2D seismic data in CPO-7 and CPO-13 blocks, with the interpretation of the data ongoing

  • Drilled three wells in the Pendare evaluation area (Pendare-4, Pendare-6 and Pendare 3H) in the CPO-13 block, resulting in significant increases in the proved and probable reserves

  • Drilled two wells in the "El Tigre" area (Tillavá Este-1 and Tillavá Sur-1) of the CPO-13 block

  • Entered into an agreement with a wholly owned subsidiary of Pacific Rubiales Energy Corp. 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)

  • Obtained environmental licenses for the Tinigua Block, allowing PetroNova to drill a maximum of 20 exploratory wells from five different platforms, and continued the socialization process of its environmental license and an environmental management plan ("PMA")

  • Fulfilled the exploration phase 1 obligation in the PUT-2 block under its exploration and production contract with the Agencia Nacional de Hidrocarburos (the "ANH") by completing the evaluation of the Canelo Sur-2 well. The Company reprocessed 3D and 2D seismic data which is currently being re-interpreted, and initiated a new surface and communities survey of the unexplored central and southwestern areas of the PUT-2 block

  • Completed a non-brokered private placement for gross proceeds of Cdn$8 million, issuing 28,571,428 common shares of the Company

  • Reported gross 2014 production of 130,896 barrels from its extended production testing in the CPO-7 and CPO-13 blocks and sold 120,044 barrels in 2014. Sales of crude oil obtained during tests will be applied against exploration and evaluation assets until the commercialization phase is achieved

  • Appointed Mr. Marcel Apeloig to the Board of Directors

  • Significantly reduced its general and administration expenses

Outlook:

PetroNova is continuing with its scheduled exploration plans and commitments and anticipates the following activities to occur during the remainder of 2015:

  • Complete the extended testing of discoveries on the Llanos Blocks and the interpretation of seismic data to determine future evaluation and exploration activities in CPO-7 and CPO-13 blocks

  • Complete the surface and communities survey, and the re-evaluation of prospects and resource estimation on the PUT-2 block

  • Continue the socialization process, complete a PMA, and commence civil works on the Tinigua Block

  • Continue the reduction of its operational and general and administrative expenses to preserve its current financial resources under the current circumstances

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.

Appointment of New Chief Financial Officer:

The Company also announces that Stelvio Di Cecco, Chief Financial Officer, will retire from the Company effective April 30, 2015 and will remain as a Director of the Board. The Company thanks him for his dedicated and valuable services during his tenure.

"Mr. Di Cecco is moving-on pursuing his personal plan. It was a privilege to have collaborated with him since the inception of PetroNova," said Antonio Vincentelli, President and CEO of PetroNova. "He has served the Company with distinction and made valuable contributions during his tenure, including his participation in taking PetroNova from a private entity to a public company. We express our sincere appreciation for his involvement and we are pleased that he will continue to contribute his knowledge and experience to our Board of Directors."

Alexander Mora, a Certified Management Accountant (CMA) and PetroNova's Corporate Controller since August 2011, will be appointed as the Company's new Chief Financial Officer. Mr. Mora has been actively involved in several of PetroNova's financing transactions, process improvement projects and compliance activities. Mr. Mora was previously an Advisory Senior Manager for an accounting firm in Calgary, Alberta, and is also a Certified Public Accountant (CPA) in Venezuela with extensive experience auditing oil and gas companies in his native Venezuela.

Summary Financial Information:





SELECTED

FINANCIAL

INFORMATION

Year ended

December 31

Year ended

December 31

Three months ended

December 31

(US$, except shares

and data per share)

2014

2013**

2014

2013**

Revenues

136,192

165,583

33,148

38,621

Net loss

46,230,892

6,436,470

23,916,585

860,574

Loss per share

0.19

0.03

0.09

0.00

Weighted average

shares

238,495,739

216,943,437

254,542,705

225,971,277

Working Capital

1,711,118

4,623,746


Cash and

equivalents and

short-term

investments

7,747,310

13,195,300


Exploration and

evaluation assets

42,161,176

74,323,607


Block deposits

1,260,178

5,316,009


Total assets

61,835,795

102,214,285


Shareholders' equity

50,237,600

89,563,417


** Certain amounts have been restated upon the change in accounting policy described in note 2.3 of PetroNova's consolidated annual financial statements

PetroNova's auditor has raised an Emphasis of Matter in its independent auditor's report in relation to PetroNova's ability to continue as a going concern. Please refer to Note 1 of PetroNova's consolidated annual financial statements for more information.

* Disclosure of Reserves Data:

The 2014 reserves data contained herein is based upon an independent evaluation by Petrotech Engineering Ltd. ("Petrotech") with an effective date of December 31, 2014 (the "2014 Petrotech Report") and the 2013 reserves data contained herein is based upon an independent evaluation by Petrotech with an effective date of December 31, 2013 (the "2013 Petrotech Report"). The 2014 Petrotech Report and 2013 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, 2014, 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 2014 and 2013 reserves data are contained in the Company's Annual Information Forms for the years ended December 31, 2014 and December 31, 2013 dated April 22, 2015 and April 22, 2014, 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. Also, test results may not necessarily be indicative of long-term performance or of ultimate recovery. 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 the interpretation of well results and seismic data to determine future exploration opportunities; 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 completion of extended testing of discoveries in the Llanos blocks; the completion of seismic data interpretation for the CPO-7 and CPO-13 blocks; the completion of the surface and communities survey, and re-evaluation of prospects and resource estimation on the PUT-2 block; and the continuation of the socialization process, completion of a PMA, and commencement civil works 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: the ability of the Company to continue as a going concern; 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 and the timing thereof; the Company's future production levels; the sufficiency of budgeted capital expenditures to carry out planned expenditures; future sources of funding for the Company's exploration program; the Company's future debt levels; operating and general administrative costs; the geography of the areas in which the Company is exploring; success rates for future drilling; the performance of existing and future wells and well production rates; interest and inflation rates; currency exchange rates; adequate weather and environmental conditions; the impact of increasing competition on the Company; and the Company's ability to obtain financing on acceptable terms.

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; volatility in market prices for crude oil and natural gas and hedging activities related thereto; 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; risks inherent in the exploration, development and production of oil and natural gas which may create liabilities to the Company in excess of the Company's insurance coverage, if any; failure to accurately estimate and to establish adequate cash reserves for abandonment and reclamation costs; failure of third parties' reviews, reports and projections to be accurate; 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; uncertainties inherent in estimating quantities of oil and natural gas reserves and resources; potential losses which would stem from any disruptions in production, including work stoppages or other labour difficulties, or disruptions in the transportation network; failure to acquire or develop oil and natural gas resources and reserves; 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; current global financial conditions, including fluctuations in interest rates, foreign exchange rates and stock market volatility; 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; Abby Garfunkel, Investor Relations, 403-218-2887, agarfunkel@tmxequicom.com

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