RPT earns $2.4 million in Q2
rpetrol earns $2.44-million in Q2
2014-08-27 07:19 ET - News Release
Mr. Ian Habke reports
ARPETROL LTD. ANNOUNCES SECOND-QUARTER 2014 FINANCIAL AND OPERATING RESULTS AND REPORTS POSITIVE WORKING CAPITAL OF $1.4 MILLION
Arpetrol Ltd. has released its financial and operating results for the six months ended June 30, 2014, and has provided an operational update on activities to date this year as well as an outlook for the remainder of 2014. The company's interim condensed consolidated financial statements and management's discussion and analysis (MD&A) for the reporting period have been filed on SEDAR and posted on the company's website.
Summary for the second quarter 2014
Operating and financial
Arpetrol's working capital position is $1.4-million at the end of the second quarter of 2014, unchanged from the first quarter of the year. This is a significant improvement compared with a deficit of $800,000 at the end of 2013. The company had drawn $1.7-million on its short-term loan at the end of the second quarter 2014. Subsequent to the quarter-end the company made a $300,000 loan repayment reducing the balance of the short-term loan to $1.4-million.
During the second quarter of 2014 the company processed 77 million cubic feet of third party gas generating $2.1-million of revenue. This revenue is consistent with the first quarter of 2014 and double the $1.0-million earned in the second quarter of 2013. Increased revenues are a result of higher processing volumes compared with the second quarter of 2013 and high prices from its new gas processing contracts negotiated in 2013.
Arpetrol's second quarter production averaged 218 barrels of oil equivalent per day (boe/d). This is a decrease of 24 boe/d from the first quarter of 2014. First quarter 2014 production was affected by equipment issues early in the quarter and natural declines. Third quarter 2014 production to date is averaging over 240 boe/d. The second quarter 2014 average realized natural gas price was $4.37 per 1,000 cubic feet, 16 cents per 1,000 cubic feet higher than the price realized in the first quarter of 2014 and 82 cents per 1,000 cubic feet higher than the second quarter of 2013. This higher price during 2014 reflects the company's new gas sales contract and changing exchange rates. The average price realized for natural gas liquids (NGL) in the quarter was $82.18 per barrel (bbl), an increase of 81 cents per bbl over the first quarter of 2014. Capital expenditures were $141,914 during the quarter. Net income for the quarter was $2,445,603 compared with $1,643,581 for the first quarter of 2014.
On June 2, 2014, the company completed a consolidation of its issued and outstanding common shares on the basis of 25 preconsolidation common shares for each one postconsolidation common share. Since the consolidation the company has maintained a relatively consistent share price and market capital.
SUMMARY OF RESULTS Three months ended June 30, Six months ended June 30, 2014 2013 2014 2013 Financial Production sales $632,204 $571,770 $1,282,355 $1,049,314 Processing sales 2,055,225 1,042,011 4,302,135 2,169,518 Funds flow from operations (loss) 599,774 (506,803) 1,126,494 1,287,194 Cash from (used in) operating activities (1,111,452) (573,644) (208,240) 1,747,257 Comprehensive (loss) income (2,665,846) (1,196,228) (200,906) 1,008,807 Fixed asset expenditures 141,914 1,745,554 141,914 1,980,360 Operations Third party processing -- mmcf per day 77.3 65.1 76.3 68.5 Production Natural gas -- mcf per day 1,176 1,294 1,252 1,251 Natural gas liquids -- bbl per day 22 25 21 27 Total -- boe per day 218 241 230 235 Average sales price Natural gas -- $ per mcf 4.37 3.55 4.29 3.19 Natural gas liquids -- $ per bbl 82.18 67.72 81.78 67.08 Operating netback Production -- $ per boe 8.73 4.30 6.08 0.53 Processing -- $ per mcf processed 0.16 0.05 0.18 0.05
Operational update and outlook
During the second quarter of 2014, Arpetrol continued its progress toward a stable revenue generating company with a balance sheet that supports its operations. The new gas processing contracts have provided Arpetrol with a significant increase in processing revenue and this is expected to continue during 2014. In April, 2014, the company concluded a deposit transfer agreement with its final remaining third party contractor from its 2012 drilling program. Under the terms of the agreement the company agreed to transfer $3-million (U.S.) of deposits currently held by the contractor in the United States to Argentina to pay the contractor for services performed during the drilling program. This process was completed in July, 2014. There is still an an outstanding balance to be settled with this remaining vendor. The company's 2014 outlook includes estimated production of 200 to 240 boe/d, estimated processing volumes of 70 million to 80 million cubic feet per day and estimated capital expenditures for maintenance and improvements of $800,000 to $1.2-million. In 2014, the company is forecast to be self-financing through projected cash flows, covering its capital expenditures and, barring any unforeseen circumstances, the repayment of its short-term loan by the year-end. Arpetrol continues to look at all strategic opportunities available to the company. These include growing its production and processing asset base in Argentina, considering merger opportunities to grow the company in new basins or considering the possible sale of assets for a value which delivers significant returns for shareholders.
We seek Safe Harbor.
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