Welcome!

News Feed Item

Petrus Resources Ltd. Announces Second Quarter 2014 Results and Provides Operations Update

CALGARY, ALBERTA -- (Marketwired) -- 08/13/14 -- Petrus Resources Ltd. ("Petrus" or the "Company") is pleased to report its operating and financial results for the second quarter of 2014. Highlights include:


--  Production averaged 4,959 boe per day in the quarter, up from 2,990 boe
    per day in the second quarter of 2013, an increase of 71% per debt-
    adjusted share. The operating netback was $32.55 per boe in the second
    quarter of 2014, compared to $31.94 per boe in the same period a year
    earlier. 

--  Production growth and strong netbacks drove growth in funds flow from
    operations per share. Petrus generated $13.3 million in funds flow from
    operations during the second quarter, more than one-and-a-half times the
    $8.1 million generated in the same period a year ago. On a debt-adjusted
    per share basis, second quarter year-over-year funds flow growth was
    67%. 

--  Operating expenses decreased from $10.12 per boe to $9.29 per boe year
    over year. The decrease can partly be attributed to significant
    production growth in the Montney oil plays of Tangent and Berwyn and the
    activation of new water disposal facilities which reduced trucking
    costs.  

--  Over the three month period ended June 30, 2014, Petrus invested $9.3
    million in exploration and acquisition activity, down from $13.7 million
    in the same period of 2013. At quarter end, Petrus had 169,646 net acres
    of undeveloped land, with a large inventory of oil and gas drilling
    locations in each of its core operating areas. 

--  During the quarter, Petrus closed a private placement of common shares
    in which 9,240,000 common shares were issued by way of a brokered
    private placement and 6,016,000 common shares and 115,000 flow-through
    shares were issued by way of a concurrent non-brokered private
    placement. Aggregate gross proceeds of $50,030,500 from the Offering
    were initially used to temporarily repay bank indebtedness and will
    subsequently be used to fund a portion of the Company's ongoing capital
    expenditures and for general corporate purposes. 

--  Petrus had 101.7 million common shares outstanding at June 30, 2014 and
    access to an undrawn $90.0 million credit facility. The Company ended
    the quarter with positive working capital. Subsequent to June 30, 2014
    Petrus syndicated its credit facility and increased the total facility
    to $100 million. 

--  On July 21, 2014 Petrus entered into a pre-acquisition agreement
    pursuant to which Petrus will make an all-cash offer to acquire 100% of
    the issued and outstanding common shares of Arriva Energy Inc.
    Concurrent with the closing of the acquisition of Arriva, the Company's
    total credit facility, inclusive of the $20 million operating facility,
    will increase to $140 million. Petrus expects to close the Arriva
    acquisition in September at which time further transaction details will
    be provided. 

--  On July 31, 2014 Petrus entered into an agreement with an industry
    partner to acquire petroleum and natural gas assets in the
    Ferrier/Strachan area of Alberta. Petrus expects to close the
    acquisition in September at which time further transaction details will
    be provided. 

SELECTED FINANCIAL INFORMATION


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                              Three     Three     Three     Three     Three 
                             months    months    months    months    months 
                              ended     ended     ended     ended     ended 
(000s) except per boe      Jun. 30,  Jun. 30,  Mar. 31,  Dec. 31,  Sep. 30, 
 amounts                       2014      2013      2014      2013      2013 
----------------------------------------------------------------------------
OPERATIONS                                                                  
----------------------------------------------------------------------------
Average Production                                                          
  Natural gas (mcf/d)        16,800     9,681    12,864    10,848    10,405 
  Oil (bbl/d)                 2,012     1,300     2,134     1,778     1,373 
  NGLs (bbl/d)                  147        76        95        72        54 
----------------------------------------------------------------------------
  Total (boe/d)               4,959     2,990     4,373     3,658     3,162 
  Total (boe)               451,269   272,090   393,601   336,539   290,877 
----------------------------------------------------------------------------
Natural gas sales                                                           
 weighting                       56%       54%       49%       49%       55%
----------------------------------------------------------------------------
Exit production (boe/d)       4,836     3,065     4,641     4,052     3,235 
Exit natural gas sales                                                      
 weighting                       55%       53%       57%       54%       53%
----------------------------------------------------------------------------
Realized Sales Prices                                                       
  Natural gas ($/mcf)          5.21      3.60      6.03      3.78      2.54 
  Oil ($/bbl)                100.20     88.13     94.13     77.83     93.93 
  NGLs ($/bbl)                37.60     45.37     60.91     65.17     67.20 
  Total ($/boe)               59.42     51.14     64.99     50.33     50.31 
  Hedging gain (loss)                                                       
   ($/boe)                    (3.32)    (0.55)    (3.64)    (1.21)    (1.46)
----------------------------------------------------------------------------
Operating Netback ($/boe)                                                   
  Effective price             56.10     50.59     61.35     49.12     48.85 
  Royalty revenue (1)          0.67      0.57      0.73      0.46      0.56 
  Royalty expense (1)        (12.76)    (7.39)   (13.69)    (7.05)    (8.02)
  Operating expense           (9.29)   (10.12)    (9.47)    (9.88)    (8.46)
  Transportation expense      (2.17)    (1.71)    (2.21)    (1.61)    (2.19)
----------------------------------------------------------------------------
Operating netback                                                           
 (3)($/boe)                   32.55     31.94     36.71     31.04     30.74 
----------------------------------------------------------------------------
  G & A expense               (1.77)    (1.57)    (1.61)    (1.73)    (1.96)
  Net interest expense (2)    (1.36)    (0.79)    (0.85)    (0.75)    (0.74)
----------------------------------------------------------------------------
Corporate netback                                                           
 (3)($/boe)                   29.42     29.58     34.25     28.56     28.04 
----------------------------------------------------------------------------
FINANCIAL ($000s except                                                     
 per share)                                                                 
  Oil and natural gas                                                       
   revenue (1)               26,815    14,093    25,581    17,094    14,741 
  Funds flow from                                                           
   operations (3)            13,278     8,048    13,482     9,320     8,157 
  Funds flow from                                                           
   operations per share                                                     
   (3)                         0.15      0.09      0.16      0.11      0.09 
  Net income                  5,505     4,010     2,208     2,086     2,171 
  Net income per share         0.06      0.05      0.03      0.02      0.03 
  Capital expenditures        9,275    15,416    23,930     9,736    14,166 
  Net acquisitions                                                          
   (dispositions)                 -    (1,701)   19,113         -         - 
  Common shares                                                             
   outstanding              101,748    86,362    86,377    86,377    86,377 
  Weighted average shares    91,106    86,349    86,377    86,377    86,369 
As at quarter end ($000s)                                                   
  Working capital                                                           
   (deficit)                    415   (15,756)  (51,638)  (22,288)  (21,558)
  Bank debt outstanding           -    20,968    51,901    23,380    17,966 
  Bank debt available(4)     90,000    39,032    38,099    36,620    42,034 
  Shareholder's equity      213,508   151,034   158,655   156,002   153,857 
  Total assets              259,110   199,508   257,245   211,952   201,208 
----------------------------------------------------------------------------
----------------------------------------------------------------------------


(1)   The Company re-classified gross overriding royalty expense from oil   
      and natural gas revenue to royalty expenses in the Statement of Net   
      Income and Comprehensive Income. The comparative information has been 
      re-classified to conform to current presentation.                     
(2)   Interest expense is presented net of interest income.                 
(3)   Non-IFRS measures defined on pages 4 and 5 of the MD&A for the period 
      ended June 30, 2014.                                                  
(4)   Subsequent to June 30, 2014 the Company's bank debt available         
      increased to $100 million.                                            

OPERATIONS UPDATE

Foothills

In the Company's foothills operating area, second quarter production was lower than expected as a result of spring weather conditions and facility turnaround activities. In Cordel, certain production facilities were down one week for facility maintenance and in Tower Creek, a significant third party facility was down for the month of June in order to conduct plant turnaround operations. The shut in production is currently back on stream and no further operational restrictions are anticipated.

Three wells (0.7 net) were drilled in the Cordel area during the second quarter of 2014. Each well had test production rates in line with expectations. The first well drilled during the second quarter (28% working interest) targeted Cardium oil and tested at a three week stabilized flow of approximately 70 bbl per day of light oil, which will be tied into production facilities in the third quarter. The second well drilled during the quarter (20% working interest) is the first of a multi-well pad and targeted Cardium oil. Initial flow rates over a 48 hour period exceeded 600 boe per day (99% light oil); the well is awaiting pipeline construction which will commence once drilling on the multi-well pad is complete. The third well drilled during the second quarter (18% working interest) was a horizontal natural gas well targeting the Mannville channel. It flow tested over a 48 hour period at a rate of 12 mmcf per day with 190 bbl per day of condensate and came on production in late June at 1,000 boe per day (90% natural gas) due to facility constraints.

The Mannville project was considered a highly successful demonstration of concept. Petrus operates and is a majority working interest owner in a similar Mannville structure throughout its entire Foothills acreage and is encouraged by the information obtained from this result. In addition, Petrus recently committed to a farm in opportunity on adjoining acreage to further add to its upside potential in this prospective play.

Petrus is currently participating in two Cardium oil drilling locations (0.3 net) in Cordel. The results will be determined later in the third quarter.

In Brown Creek Petrus has initiated drilling of the first Cardium oil well of a two well farm-in with an industry partner. A summer drilling program operated by Petrus will drill a total of two to three wells in Brown Creek and two to five wells on other foothills land owned by Petrus. The program will target Cardium oil as well as Cardium, Notikewin, Belly River and Mannville gas zones.

Peace River

In the Company's Peace River operating area, one of the Company's unitized facilities underwent a plant turnaround which resulted in production downtime for one week. Certain Tangent production was shut in during the quarter as a result of flooded road conditions which restricted access.

Two oil batteries with water disposal capabilities are now fully operational at Tangent and Berwyn contributing to reduced operating costs and increased runtime. Petrus is evaluating the economics of a pilot waterflood in each of Tangent and Berwyn and has commenced water injection operations in Berwyn. The Company believes the waterflood will ultimately improve Montney oil recoveries, based on offset pools in the area.

Petrus has kicked off a seven to ten well summer drilling program in Peace River targeting Montney oil. Initial test rates for the first three wells have exceeded expectation and Petrus expects to tie in the incremental production during the third quarter.

ABOUT PETRUS

Petrus is a private Canadian oil and gas company focused on property exploitation, strategic acquisitions and risk-managed exploration in Alberta. Petrus is a return-driven company that is focused on delivering per share growth.

READER ADVISORIES

This press release contains forward-looking statements. More particularly, this press release contains statements concerning Petrus' commodity weighting, plans related to drilling and other operations, commodity focus, commodity pricing, drilling locations, production rates, the expected ability of Petrus to execute on its exploration and development program and Petrus' anticipated production (both in terms of quantity and raw attributes) cash flow, operating netbacks, planned operations and the timing thereof, evaluation of completed operations, capital budget and capital expenditure program, the availability of opportunities and other similar matters. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Petrus, including: (i) with respect to capital expenditures, generally, and at particular locations, the availability of adequate and secure sources of funding for Petrus' proposed capital expenditure program and the availability of appropriate opportunities to deploy capital; (ii) with respect to drilling plans, the availability of drilling rigs, expectations and assumptions concerning the success of future drilling and development activities and prevailing commodity prices; (iii) with respect to Petrus' ability to execute on its exploration and development program, the performance of Petrus' personnel, the availability of capital and prevailing commodity prices; and (iv) with respect to anticipated production, the ability to drill and operate wells on an economic basis, the performance of new and existing wells and accounting risks typically associated with oil and gas exploration and production; (v) oil and gas prices; (vi) currency exchange rates; (vii) royalty rates; (viii) operating costs; (ix) transportation costs; and (x) the availability of opportunities to deploy capital effectively.

Although Petrus 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 Petrus 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; 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 is not exhaustive of all possible risks and uncertainties.

The forward-looking statements contained in this document are made as of the date hereof and Petrus 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.

Any references in this news release to initial, early and/or test or production/performance rates or data related thereto are useful in confirming the presence of hydrocarbons, however, such rates or data are not determinative of the rates at which such wells will continue production and decline thereafter. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company. Such rates may be estimated based on other third party estimates or limited data available at this time. In all cases in this press release such rates not necessarily indicative of long-term performance of the relevant well or fields or of ultimate recovery of hydrocarbons.

The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one boe (6 mcf/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. All boe conversions in this report are derived from converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. The forward-looking statements contained in this document are made as of the date hereof and Petrus 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.

"Funds from operations" should not be considered an alternative to, or more meaningful than, cash flow from operating activities as determined in accordance with International Financial Reporting Standards as an indicator of Petrus' performance. "Funds from operations" represents cash flow from operating activities prior to changes in non-cash working capital, transaction costs and decommissioning provision expenditures incurred. Petrus also presents funds from operations per share whereby per share amounts are calculated using weighted average shares outstanding consistent with the calculation of earnings per share.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Deep learning has been very successful in social sciences and specially areas where there is a lot of data. Trading is another field that can be viewed as social science with a lot of data. With the advent of Deep Learning and Big Data technologies for efficient computation, we are finally able to use the same methods in investment management as we would in face recognition or in making chat-bots. In his session at 20th Cloud Expo, Gaurav Chakravorty, co-founder and Head of Strategy Development ...
What sort of WebRTC based applications can we expect to see over the next year and beyond? One way to predict development trends is to see what sorts of applications startups are building. In his session at @ThingsExpo, Arin Sime, founder of WebRTC.ventures, will discuss the current and likely future trends in WebRTC application development based on real requests for custom applications from real customers, as well as other public sources of information,
Virtualization over the past years has become a key strategy for IT to acquire multi-tenancy, increase utilization, develop elasticity and improve security. And virtual machines (VMs) are quickly becoming a main vehicle for developing and deploying applications. The introduction of containers seems to be bringing another and perhaps overlapped solution for achieving the same above-mentioned benefits. Are a container and a virtual machine fundamentally the same or different? And how? Is one techn...
SYS-CON Events announced today that Infranics will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Since 2000, Infranics has developed SysMaster Suite, which is required for the stable and efficient management of ICT infrastructure. The ICT management solution developed and provided by Infranics continues to add intelligence to the ICT infrastructure through the IMC (Infra Management Cycle) based on mathemat...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
Now that the world has connected “things,” we need to build these devices as truly intelligent in order to create instantaneous and precise results. This means you have to do as much of the processing at the point of entry as you can: at the edge. The killer use cases for IoT are becoming manifest through AI engines on edge devices. An autonomous car has this dual edge/cloud analytics model, producing precise, real-time results. In his session at @ThingsExpo, John Crupi, Vice President and Eng...
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...
In the enterprise today, connected IoT devices are everywhere – both inside and outside corporate environments. The need to identify, manage, control and secure a quickly growing web of connections and outside devices is making the already challenging task of security even more important, and onerous. In his session at @ThingsExpo, Rich Boyer, CISO and Chief Architect for Security at NTT i3, will discuss new ways of thinking and the approaches needed to address the emerging challenges of securit...
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, will posit that disruption is inevitable for c...
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...
There are 66 million network cameras capturing terabytes of data. How did factories in Japan improve physical security at the facilities and improve employee productivity? Edge Computing reduces possible kilobytes of data collected per second to only a few kilobytes of data transmitted to the public cloud every day. Data is aggregated and analyzed close to sensors so only intelligent results need to be transmitted to the cloud. Non-essential data is recycled to optimize storage.
In his General Session at 16th Cloud Expo, David Shacochis, host of The Hybrid IT Files podcast and Vice President at CenturyLink, investigated three key trends of the “gigabit economy" though the story of a Fortune 500 communications company in transformation. Narrating how multi-modal hybrid IT, service automation, and agile delivery all intersect, he will cover the role of storytelling and empathy in achieving strategic alignment between the enterprise and its information technology.
"I think that everyone recognizes that for IoT to really realize its full potential and value that it is about creating ecosystems and marketplaces and that no single vendor is able to support what is required," explained Esmeralda Swartz, VP, Marketing Enterprise and Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held June 7-9, 2016, at the Javits Center in New York City, NY.
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, will present an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He will expound on the industry issues he frequently came up against as an analyst, and...