Welcome!

News Feed Item

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

CALGARY, ALBERTA -- (Marketwired) -- 08/12/14 -- 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.

Contacts:
Petrus Resources Ltd.
Kevin Adair, P.Eng.
President and CEO
403-930-0888
[email protected]
www.petrusresources.com

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
SYS-CON Events announced today that Interface Corporation will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Interface Corporation is a company developing, manufacturing and marketing high quality and wide variety of industrial computers and interface modules such as PCIs and PCI express. For more information, visit http://www.i...
SYS-CON Events announced today that Ryobi Systems will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Ryobi Systems Co., Ltd., as an information service company, specialized in business support for local governments and medical industry. We are challenging to achive the precision farming with AI. For more information, visit http:...
SYS-CON Events announced today that N3N will exhibit at SYS-CON's @ThingsExpo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. N3N’s solutions increase the effectiveness of operations and control centers, increase the value of IoT investments, and facilitate real-time operational decision making. N3N enables operations teams with a four dimensional digital “big board” that consolidates real-time live video feeds alongside IoT sensor data a...
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
Mobile device usage has increased exponentially during the past several years, as consumers rely on handhelds for everything from news and weather to banking and purchases. What can we expect in the next few years? The way in which we interact with our devices will fundamentally change, as businesses leverage Artificial Intelligence. We already see this taking shape as businesses leverage AI for cost savings and customer responsiveness. This trend will continue, as AI is used for more sophistica...
SYS-CON Events announced today that SourceForge has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. SourceForge is the largest, most trusted destination for Open Source Software development, collaboration, discovery and download on the web serving over 32 million viewers, 150 million downloads and over 460,000 active development projects each and every month.
Today most companies are adopting or evaluating container technology - Docker in particular - to speed up application deployment, drive down cost, ease management and make application delivery more flexible overall. As with most new architectures, this dream takes significant work to become a reality. Even when you do get your application componentized enough and packaged properly, there are still challenges for DevOps teams to making the shift to continuous delivery and achieving that reducti...
Today traditional IT approaches leverage well-architected compute/networking domains to control what applications can access what data, and how. DevOps includes rapid application development/deployment leveraging concepts like containerization, third-party sourced applications and databases. Such applications need access to production data for its test and iteration cycles. Data Security? That sounds like a roadblock to DevOps vs. protecting the crown jewels to those in IT.
SYS-CON Events announced today that mruby Forum will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. mruby is the lightweight implementation of the Ruby language. We introduce mruby and the mruby IoT framework that enhances development productivity. For more information, visit http://forum.mruby.org/.
DevOps at Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to w...
In his session at @ThingsExpo, Greg Gorman is the Director, IoT Developer Ecosystem, Watson IoT, will provide a short tutorial on Node-RED, a Node.js-based programming tool for wiring together hardware devices, APIs and online services in new and interesting ways. It provides a browser-based editor that makes it easy to wire together flows using a wide range of nodes in the palette that can be deployed to its runtime in a single-click. There is a large library of contributed nodes that help so...
What is the best strategy for selecting the right offshore company for your business? In his session at 21st Cloud Expo, Alan Winters, U.S. Head of Business Development at MobiDev, will discuss the things to look for - positive and negative - in evaluating your options. He will also discuss how to maximize productivity with your offshore developers. Before you start your search, clearly understand your business needs and how that impacts software choices.
IBM helps FinTechs and financial services companies build and monetize cognitive-enabled financial services apps quickly and at scale. Hosted on IBM Bluemix, IBM’s platform builds in customer insights, regulatory compliance analytics and security to help reduce development time and testing. In his session at 21st Cloud Expo, Lennart Frantzell, a Developer Advocate with IBM, will discuss how these tools simplify the time-consuming tasks of selection, mapping and data integration, allowing devel...
SYS-CON Events announced today that Cedexis will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Cedexis is the leader in data-driven enterprise global traffic management. Whether optimizing traffic through datacenters, clouds, CDNs, or any combination, Cedexis solutions drive quality and cost-effectiveness.
SYS-CON Events announced today that Mobile Create USA will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Mobile Create USA Inc. is an MVNO-based business model that uses portable communication devices and cellular-based infrastructure in the development, sales, operation and mobile communications systems incorporating GPS capabi...