PERTH, Western Australia, April 30, 2014 /CNW/ - Aurora Oil & Gas
Limited (TSX: AEF) (ASX: AUT) today released financial results for the
quarter ended March 31, 2014. All figures are reported in US dollars
unless otherwise noted.
Highlights for the first quarter of 2014, including non-IFRS measures,
compared to the corresponding quarter in 2013 are:
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Revenue US$182 million up 43%, 93% generated from liquids
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EBITDAX US$102 million up 36%
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Funds from operations US$91 million up 39%
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Average daily production up 54% to approximately 28,671 boe/d (pre
royalty)
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Three months ended
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Mar 31,
2014
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Mar 31,
2013
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% Change
Favourable /
(Unfavourable)
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Financial
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(US$ thousands unless otherwise stated)
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Production revenue - Pre royalty
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182,358
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127,539
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43%
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EBITDAX(1)
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102,483
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75,620
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36%
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Per boe - (US$/boe)
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39.72
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45.04
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(12%)
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Funds from operations(1)
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90,765
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65,498
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39%
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Per share - basic (US cents per share)
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20.22
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14.62
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38%
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Per boe - (US$/boe)
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35.17
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39.01
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(10%)
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Net profit before tax
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66,226
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45,368
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46%
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Net profit after tax(2)
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43,047
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29,611
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45%
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Per share - basic (US cents per share)
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9.59
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6.61
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45%
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Per boe - (US$/boe)
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16.68
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17.64
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(5%)
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Net capital expenditures (including acquisitions)
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139,507
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222,108
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37%
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Net capital expenditures (excluding acquisitions)
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139,507
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106,868
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(31%)
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As at
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As at
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% Change
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Mar 31,
2014
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Dec 31,
2013
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Favourable /
(Unfavourable)
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Weighted average common shares outstanding (million)
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Basic
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448.8
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448.2
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-
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Diluted
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458.1
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456.4
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(1)
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These financial measures are identified and defined below under
"Non-IFRS Financial Measures"
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(2)
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The income tax expense for the quarter ended March 31, 2014 of $23
million reflects the annualized accounting deferred income tax expense
for the year. No current income tax is due for payment for the 2014
year.
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Three months ended
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Mar 31,
2014
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Mar 31,
2013
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% Change
Favourable /
(Unfavourable)
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Operating
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Production - Pre royalties
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Natural gas (mscf/d)
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33,213
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22,267
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49%
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Light/medium oil (bbls/d)
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13,644
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6,385
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114%
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Condensate (bbls/d)
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5,047
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5,556
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(9%)
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NGL (bbls/d)
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4,445
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3,003
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48%
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Total oil equivalent (boe/d)
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28,671
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18,655
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54%
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Revenue derived commodity price
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Natural gas (US$/mscf)
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4.33
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3.43
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26%
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Light/medium oil (US$/bbl)
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93.31
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105.61
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(12%)
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Condensate (US$/bbl)
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91.15
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102.93
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(11%)
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NGL (US$/bbl)
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33.58
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27.88
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20%
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Netbacks
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US$/boe
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US$/boe
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Production revenue
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70.67
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75.96
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(7%)
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Royalties
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(18.55)
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(20.34)
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9%
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Production taxes
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(2.28)
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(2.52)
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10%
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Operating expenses
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(7.55)
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(5.79)
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(30%)
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Operating netback
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42.29
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47.31
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(11%)
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Depletion, depreciation and amortisation
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(8.55)
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(10.67)
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20%
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General and administrative expenses
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(2.57)
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(2.27)
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(13%)
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Finance costs
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(6.24)
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(6.36)
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2%
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Net profit before tax
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25.67
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27.02
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(5%)
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Net profit after tax
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16.68
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17.64
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(5%)
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(1)
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These financial measures are identified and defined below under
"Non-IFRS Financial Measures"
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(2)
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Boe conversion is on a 6:1 basis, as explained below under "Cautionary
and Forward-Looking Statements."
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Outlook
As previously advised, Aurora anticipates 2014 production of
10.6-11.7mmboe (gross) and 7.8-8.6mmboe (net), with an average daily
production range of 29,000-32,000boe/d (gross) or 21,500-23,500boe/d
(net). This represents a forecast 45% increase on a midpoint basis over
2013 production. To achieve this growth, the 2014 capital expenditure
program is expected to be US$465-495mm, which forecast represents a
modest decrease on 2013 capital expenditures for development
activities. The 2014 capital expenditure program includes budgeted
expenditure for 49-53 net wells to be spudded and expenditure for wells
under drilling and completion operations at the end of 2013. The 2014
capital expenditure program will be funded from existing cash,
operating cash flows and availability under Aurora's existing bank
credit facility.
As a result of this capital program Aurora expects to deliver another
year of disciplined growth and consistent returns from its Sugarkane
assets. The 2014 non-operated program will be the largest development
program to date which together with the operational efficiencies that
are being delivered by Marathon Oil EF LLC, Aurora's operating partner,
is expected to result in more net wells at a lower net cost per lateral
foot per well. As a result of this large program Aurora's operated
activity is expected to be scaled back during 2014 to maintain a strong
balance sheet and financial flexibility whilst achieving significant
growth in production.
Aurora expects this strong growth to continue through 2015 and beyond
through the development of the significant remaining well inventory.
The selected financial and operational information outlined above should
be read in conjunction with Aurora's unaudited interim financial report
and related Management's Discussion and Analysis for the three months
ended March 31, 2014, which will be filed on SEDAR and will be
available for review at www.sedar.com and on our website at www.auroraoag.com.au. Unless otherwise indicated, Aurora's unaudited interim financial
report and the financial information contained in this announcement has
been prepared in accordance with Australian Accounting Standards
("AAS") and in compliance with International Financial Reporting
Standards (IFRS).
Presentation PDF File
Aurora has filed a presentation to accompany the quarterly results.
Please access the presentation from the Corporate Presentations page of
Aurora's website using the link below.
http://www.auroraoag.com.au/irm/content/corporate-presentations.aspx?RID=201
About Aurora
Aurora is an Australian and Toronto listed oil and gas company active in
the over pressured liquids rich region of the Eagle Ford shale in
Texas, United States. Aurora is engaged in the development and
production of oil, condensate and natural gas in Karnes, Live Oak and
Atascosa counties in South Texas. Aurora participates in approximately
80,200 highly contiguous gross acres in the heart of the trend,
including approximately 22,200 net acres within the liquids rich zones
of the Eagle Ford.
Cautionary and Forward-Looking Statements
Statements in this press release reflect management's expectations
relating to, among other things, target dates, Aurora's expected
drilling program and the ability to fund development are
forward-looking statements, and can generally be identified by words
such as "will", "expects", "intends", "believes", "estimates",
"anticipates" or similar expressions. In addition, any statements that
refer to expectations, projections or other characterizations of future
events or circumstances are forward-looking statements. Statements
relating to "reserves" are deemed to be forward-looking statements as
they involve the implied assessment, based on certain estimates and
assumptions that some or all of the reserves described can be
profitably produced in the future. These statements are not historical
facts but instead represent management's expectations, estimates and
projections regarding future events.
References herein to "Sugarkane" or the "Sugarkane Field" are references
to the Sugarkane natural gas and condensate field within the Eagle Ford
and includes the two contiguous fields designated by the Texas Railroad
Commission as the Sugarkane and Eagleville Fields.
Although management believes the expectations reflected in such
forward-looking statements are reasonable, forward-looking statements
are based on the opinions, assumptions and estimates of management at
the date the statements are made, and are subject to a variety of risks
and uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. These factors include risks related to:
exploration, development and production; oil and gas prices, markets
and marketing; acquisitions and dispositions; competition; additional
funding requirements; reserve estimates being inherently uncertain;
changes in the rate and/or location of future drilling programs on our
acreage by our operator(s), incorrect assessments of the value of
acquisitions and exploration and development programs; environmental
concerns; availability of, and access to, drilling equipment; reliance
on key personnel; title to assets; expiration of licences and leases;
credit risk; hedging activities; litigation; government policy and
legislative changes; unforeseen expenses; negative operating cash flow;
contractual risk; and management of growth. In addition, if any of the
assumptions or estimates made by management prove to be incorrect,
actual results and developments are likely to differ, and may differ
materially, from those expressed or implied by the forward-looking
statements contained in this document. Such assumptions include, but
are not limited to, general economic, market and business conditions
and corporate strategy. Accordingly, investors are cautioned not to
place undue reliance on such statements.
All of the forward-looking information in this press release is
expressly qualified by these cautionary statements. Forward-looking
information contained herein is made as of the date of this document
and Aurora disclaims any obligation to update any forward-looking
information, whether as a result of new information, future events or
results or otherwise, except as required by law.
Non - IFRS Financial Measures
Within this Report references are made to certain financial measures
that do not have any standardized meanings prescribed by IFRS. Such
measures are neither required by, nor calculated in accordance with
IFRS, and therefore are considered Non-IFRS financial measures.
Non-IFRS financial measures may not be comparable with the calculation
of similar measures by other companies. Funds from operations, EBITDAX,
net operating income, operating netback and adjusted net profit after
tax are commonly used in the oil and gas industry.
EBITDAX
EBITDAX represents net income (loss) for the period before income tax
expense or benefit, gains and losses attributable to the disposal of
projects, finance costs, depletion, depreciation and amortization
expense, other non-cash charges, expenses or income, one-off or
non-recurring fees, expenses and charges and exploration and evaluation
expenses.
The following table reconciles net profit after tax to EBITDAX:
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Mar-14
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Mar-13
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US$'000
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US$'000
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Net profit after tax
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43,047
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29,611
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Adjustments:
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Share based payment expense
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1,200
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1,274
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Depletion, depreciation and amortisation expense
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22,070
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17,915
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Interest income
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(6)
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(10)
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Finance costs
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16,093
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10,677
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Net foreign exchange loss / (gain)
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(2)
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44
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Other income
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(3,134)
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(30)
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Income tax expense
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23,179
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15,757
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Exploration and evaluation costs
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36
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282
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EBITDAX
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102,483
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75,620
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Funds from Operations
Funds from operations represent funds provided by operating activities
before changes in non-cash working capital.
The following table reconciles net profit after tax to funds from
operations:
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Mar-14
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Mar-13
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US$'000
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US$'000
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Net profit after tax
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43,047
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29,611
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Add/(less) non-cash items
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Depletion, depreciation and amortisation expense
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22,070
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17,915
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Amortisation of borrowing costs and discount / premium on financial
instruments
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1,150
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777
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Share based payment expense
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1,200
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1,374
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Income tax expense
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23,179
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15,757
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Net foreign exchange loss / (gain)
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(2)
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44
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Employee benefit provision
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121
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20
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Funds from operations
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90,765
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65,498
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The Company considers funds from operations and EBITDAX as key measures
as both assist in demonstrating the ability of the business to generate
the cash flow necessary to fund future growth through capital
investment. Neither should be considered as an alternative to, or more
meaningful than net income or cash provided by operating activities (or
any other IFRS financial measure) as an indicator of the Company's
performance. Because EBITDAX excludes some, but not all, items that
affect net income, the EBITDAX presented by the Company may not be
comparable to similarly titled measures of other companies.
Adjusted Net Profit After Tax
Adjusted net profit after tax represents net profit after tax before
non-recurring items. During the quarters ended March 31, 2014 and 2013
there were no one off or non-recurring items included in net profit
after tax.
Management also uses certain industry benchmarks such as net operating
income and operating netback to analyse financial and operating
performance.
Net Operating Income
Net operating income represents net oil and gas revenue attributable to
Aurora after distribution of royalty payments.
Operating Netback
Operating netback as presented, represents revenue from production less
royalties, state taxes, transportation and operating expenses
calculated on a boe basis. Management considers operating netback an
important measure to evaluate its operational performance as it
demonstrates its field level profitability relative to current
commodity prices.
Defined Reserves and Resource Terms
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"bbls" means barrels.
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"boe" means barrels of oil equivalent and have been calculated using
liquid volumes of oil, condensate and NGLs and treated volumes of gas
converted using a ratio of 6 mscf to 1 bbl of liquid equivalent unless
otherwise stated.
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"scf" means standard cubic feet.
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"m" or "M" prefix means thousand.
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"mm" or "MM" prefix means million.
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"NGLs" means natural gas liquids
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"b" or "B" prefix means billion.
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"/d" suffix means per day.
Boe may be misleading, particularly if used in isolation. A boe
conversion ratio of 6 mscf:1 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. Given 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 mscf:1 bbl,
utilising a conversion ratio of 6 mscf:1 bbl may be misleading. Unless
stated otherwise, all per boe references are a reference to Aurora's
per boe production on a working interest basis before deduction of
royalties.
SOURCE Aurora Oil & Gas Limited
Douglas E. Brooks
Chief Executive Officer
Tel: +1 713 402 1920