/This news release is not for dissemination in the United States or to any United States news services./
CALGARY, April 30, 2012 /CNW/ - 3MV Energy Corp. ("3MV" or the "Company") (TSXV: TMV) is pleased to report its financial and operating results for year ended December 31, 2011. 3MV's audited financial statements and related management's discussion and analysis for two months and year ended December 31, 2011 have been filed and are available on the SEDAR website at www.sedar.com and on the Company's website at www.3mvenergy.com.
3MV announces the following highlights as follows:
- Production increased by 33% to 260 boe/d in the two months ended December 31, 2011 from 196 boe/d in the fourth quarter of fiscal 2011.
- Production increased 17% to 208 boe/d in the eight months ended December 31, 2011 form the fiscal year ended April 30, 2011.
| Two months
| Three months
| Eight months
|Dec. 31, 2011||Apr. 30. 2011||Dec. 31, 2011||Apr. 30. 2011|
|Average Daily Production|
|Crude oil & NGL (bbl/d)||214.6||150.7||159.4||133.0|
|Natural gas (Mcf/d)||281.9||272.1||292.1||269.1|
|Average sales prices|
|Crude oil & NGL ($/bbl)||95.03||88.88||92.62||77.89|
|Natural gas ($/Mcf)||2.84||3.58||3.13||3.35|
|Operating Netbacks ($/boe)|
|Average realized sales price||80.94||74.41||74.70||63.31|
|Operating & transportation expense||29.07||26.58||26.84||17.48|
|Operating netback (1)||36.52||39.01||37.75||38.78|
|($000s, except per share numbers)|
|Petroleum & natural gas revenues, before royalties||1,284||1,300||3,687||4,106|
|Funds flow from operations (2)||(555)||(86)||(625)||1,382|
|Per share - basic and diluted||(0.08)||(0.09)||(0.10)||1.49|
|Net earnings (loss)||(12,677)||(53)||(13,944)||119|
|Per share - basic and diluted (3)||(2.70)||(0.02)||(2.97)||0.04|
|Net debt (working capital) (4)||6,055||3,088||6,055||3,088|
|Basic and diluted||6,554||929||6,554||929|
|1)|| Operating netbacks (calculated on a per unit basis as oil, gas and natural gas liquids revenues, less royalties,
transportation and operating costs) is not a recognized measure under IFRS.
|2)|| Funds flow from operations is not a prescribed IFRS or GAAP measure and is calculated as cash flow from
operating activities before the change in non-cash working capital, transaction costs and decommissioning
provision expenditures incurred.
|3)||Net earnings (loss) per share number is calculated using weighted average shares outstanding.|
|4)|| Net debt (working capital) is an industry term, and is calculated as current assets less current liabilities, and is
not a recognized measure under IFRS.
An impairment of $14.1 million was recognized in the year ended December 31, 2011. Under IFRS, impairment testing is conducted at a cash generating unit ("CGU") level, rather than on a company wide basis. The impairment was relating to the Dodsland area CGU as a result of reduced reserve values of certain properties due to capital expenditures being shifted to the Company's Fiske discovery and to poorer than expected production rates from some of the areas' wells. Of the total amount recognized, $0.33 million related to an impairment loss on a well recently drilled and completed. The reserve value at the Company's Fiske CGU is significantly larger than its capitalized costs in the area to date. In an effort to realize and increase the full fair value of the Fiske property, the Company plans to expend the majority of its 2012 and 2013 capital budget in the development of the play.
As previously stated in 3MV's report on reserves data for the year ended December 31, 2011, the Company's Fiske area has an assigned Net Present Value or Future Net Revenue (before tax, discounted at 10%) ("NPV") of $17.7 million as assigned by its external reserve evaluators. The increased NPV at Fiske offsets the majority of the impairment incurred on the Company's Dodsland area assets. As a result of the positive reserve value, and high well productivity 3MV Energy's focus for the remainder of 2012 and into 2013 will continue to be its discovery at Fiske. With 37 net sections of land under its control, and a recent 19.9 km² 3D seismic program, 3MV has identified and licensed 20 future drilling locations, eight of which the Company considers to be infill locations. 3MV's recent success in the play, with three wells producing over 100 boe/d during the first 30 days of production, has led to significant reserves additions in the area and 3MV intends to build off that momentum as quickly as is practicable.
Neither 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.
The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.
Certain statements in this news release constitute forward-looking statements. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by 3MV. Although 3MV believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because 3MV can give no assurance that they will prove to be correct.
Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect 3MV's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
The forward-looking statements contained in this document are made as of the date hereof and 3MV 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.
Oil and Gas Disclosure
For the purpose of calculating unit costs, natural gas volumes have been converted to a barrel of oil equivalent ("BOE") using six thousand cubic feet equal to one barrel unless otherwise stated. A BOE conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. BOEs may be misleading, particularly if used in isolation.
Net present value of future net revenue does not represent fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material.
For further information:
President & CEO
VP, Corporate Development