CALGARY, ALBERTA--(Marketwire - March 13, 2013) -
NOT FOR DISTRIBUTION OR FOR DISSEMINATION IN THE UNITED STATES
Parex Resources Inc. ("Parex" or the "Company") (TSX:PXT), a company focused on oil exploration and production in Colombia and Trinidad, is pleased to announce financial and operating results for the three months ("fourth quarter" or "Q4") and year ended December 31, 2012. An update on current field activities and the Company's drilling schedule for the first half of 2013 are also provided below.
Copies of the Company's consolidated financial statements and the related Management's Discussion and Analysis ("MD&A") have been filed with Canadian securities regulatory authorities and will be made available under the Company's profile at www.sedar.com and on the Company's website at www.parexresources.com. All amounts herein are in United States dollars unless otherwise stated.
Three months ended December 31, 2012 Highlights
|Three Months ended December 31, 2012||Year ended
December 31, 2012
|Average daily production|
|Average daily sales|
|Oil Inventory - end of period (barrels)||98,800||281,500||98,800||281,500|
|Operating netback ($/bbl)|
|Financial ($000s except per share amounts)(1)|
|Oil and natural gas revenue||149,614||96,169||523,514||171,170|
|Per share - basic||(0.15||)||0.04||0.37||0.17|
|Adjusted Net income (2)||(13,450||)||6,470||32,628||10,545|
|Per share - basic||(0.12||)||0.06||0.30||0.11|
|Funds flow from operations||54,446||63,135||241,569||97,916|
|Per share - basic||0.50||0.58||2.23||1.05|
|Working capital (deficit) surplus||(12,640||)||92,893||(12,640||)||92,893|
|Long-term debt (4)||9,100||-||9,100||-|
|Outstanding shares (end of period) (000s)|
|(1)||The table above contains Non-GAAP measures. See "Non-GAAP Terms" for further discussion.|
|(2)||Net income has been adjusted for the International Financial Reporting Standards ("IFRS") accounting effects of changes in the derivative financial liability related to the convertible debenture. Management considers adjusted net income a better measure of the Company's financial performance.|
|(3)||Face value of the convertible debenture is Cdn$85 million with a conversion price of Cdn$10.15 per share.|
|(4)||Borrowing limit currently set at $75 million.|
|(5)||Diluted shares include the effects of common shares and in-the-money stock options outstanding at the period-end. The December 31, 2012 closing stock price was Cdn$5.80 per share. Diluted shares outstanding at December 31, 2012 per the MD&A of 126.5 million shares include all potentially dilutive out-of-money instruments.|
Fourth Quarter and Fiscal 2012 Financial Summary
For the fourth quarter of 2012, sales volumes averaged 12,592 bopd (net working interest before royalty) and the average realized sales price in Colombia was $105.75 per barrel, generating an operating netback of $68.94 per barrel.
The Company's adjusted net income for the year was $32.6 million ($0.30 per share basic), which included a $23.5 million impairment of the Company's Trinidad Moruga Block exploration and evaluation assets. Adjusted net income for 2011 was $10.5 million ($0.11 per share basic). Funds flow from operations in the fourth quarter of 2012 of $54.4 million ($0.50 per share basic) included a $17.0 million current tax provision for the fourth quarter of 2012.
The Company's capital expenditures were $64.9 million in the fourth quarter, of which $60.9 million was related to Colombia and the remainder in Trinidad. Capital expenditures for 2012, excluding a corporate acquisition, were $267.7 million of which $227.6 million was in Colombia and $39.9 million was on exploration in Trinidad. Capital expenditures were largely funded from funds flow of $241.6 million with the balance and the corporate acquisition funded from the Company's year opening cash position. Total Colombian capital expenditure in 2012 was $227.6 million, of which $170.8 million related to the drilling and completion of 23.0 net wells and the balance to facilities and undeveloped land acquisition.
Working capital deficiency at period end was $12.6 million and does not include the undrawn $65.9 million available from the credit facility and reflects the Company's crude oil inventory valued at cost. The Company had a cash balance of $31.9 million at December 31, 2012.
First Half of 2013 Drilling Schedule
A summary of the near-term drilling and testing program is provided below:
|#||Prospect||Block||Timing / Status|
|1||Maragogi Norte||LLA-16||Cased - to be tested|
|2||La Casona||El Eden||Testing|
|3||Rumi (Chiriguaro Este)||El Eden||Spud Q3 2013|
|4||Viviana Este||LLA-30||Service rig testing|
|5||Adalia Norte||LLA-30||Cased - to be tested|
|7||Bandola||LLA-32||Cased & ready to test|
|8||Llanita||LLA-32||Mobilizing drilling rig|
|9||Akira-2||Cabrestero||Spud Q2 2013|
|10||Cumbre Sur||LLA-20||Spud Q2 2013|
|11||Las Maracas-8||Los Ocarros||Spud Q2 2013|
|12||Las Maracas-9||Los Ocarros||Spud Q2 2013|
|13||Max-2||LLA-34||Tested and producing|
|14||Tua-5||LLA-34||Cased - testing|
|15||Tua-4||LLA-34||Spud Q2 2013|
|16||Taro Taro||LLA-34||Spud Q2 2013|
Conference Call Information
Parex will host a conference call to discuss these results on Thursday, March 14, 2013 at 9:30 am MT (12:30 pm ET). Media, analysts and investors wishing to participate can access it by calling 1-866-696-5910, pass code: 1520456.
The live audio will be carried at:
Parex, through its direct and indirect subsidiaries, is engaged in oil and natural gas exploration, development and production in South America and the Caribbean region. Parex is conducting exploration activities on its 1,349,000 gross acre holdings primarily in the Llanos Basin of Colombia and 219,000 gross acre holdings onshore Trinidad. Parex is headquartered in Calgary, Canada.
This news release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction.
"Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
"Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
"Possible" reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves.
All evaluations and reviews of future net cash flow are stated prior to any provision for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. It should not be assumed that the estimated future net cash flow shown below is representative of the fair market value of the Company's properties. There is no assurance that such price and cost assumptions will be attained, and variances could be material. The recovery and reserve estimates of crude oil reserves provided are estimates only, and there is no guarantee that the estimated reserves will be recovered. Actual crude oil reserves may be greater than or less than the estimates provided.
Funds flow used in, or from operations, working capital, adjusted net income, operating netback per barrel and net debt may from time to time be used by the Company, but do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. Funds flow used in, or from operations includes all cash generated from operating activities and is calculated before changes in non-cash working capital. Funds flow used in, or from operations is reconciled with net earnings in the consolidated statements of cash flows. Funds flow per share is calculated by dividing funds flow used in, or from operations by the weighted average number of shares outstanding. Working capital includes current assets less current liabilities but may not include the change in non-cash working capital from one period to the next. Adjusted net income is determined by adding back any losses or deducting any gains associated with the Company's derivative financial liability. Operating netback per barrel equals sales revenue, less royalties, production expense and transportation expense, divided by total equivalent sales volume. Total net debt is a non-GAAP measure defined as the sum of working capital less the convertible debentures (excluding the derivative financial liability associated with the convertible debentures). Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future growth expenditures.
Advisory on Forward Looking Statements
Certain information regarding Parex set forth in this document contains forward-looking statements that involve substantial known and unknown risks and uncertainties. The use of any of the words "plan", "expect", "prospective", "project", "intend", "believe", "should", "anticipate", "estimate" or other similar words, or statements that certain events or conditions "may" or "will" occur are intended to identify forward-looking statements. Such statements represent Parex's internal projections, estimates or beliefs concerning, among other things, future growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, plans for and results of drilling activity, environmental matters, business prospects and opportunities. These statements are only predictions and actual events or results may differ materially. Although the Company's management believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Parex' actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Parex.
In particular, forward-looking statements contained in this document include, but are not limited to, statements with respect to the performance characteristics of the Company's oil properties; supply and demand for oil; financial and business prospects and financial outlook; results of drilling and testing, results of operations; drilling plans; activities to be undertaken in various areas; capital plans in Colombia and annual production rates; plans to acquire and process 3-D seismic; timing of drilling and completion; and planned capital expenditures and the timing thereof. In addition, statements relating to "reserves" or "resources" are by their nature forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves described can be profitably produced in the future. The recovery and reserve estimates of Parex' reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered.
These forward-looking statements are subject to numerous risks and uncertainties, including but not limited to, the impact of general economic conditions in Canada, Colombia and Trinidad & Tobago; industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced, in Canada, Colombia and Trinidad & Tobago; competition; lack of availability of qualified personnel; the results of exploration and development drilling and related activities; obtaining required approvals of regulatory authorities and partners, in Canada, Colombia and Trinidad & Tobago; risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities; volatility in market prices for oil; fluctuations in foreign exchange or interest rates; environmental risks; changes in income tax laws or changes in tax laws and incentive programs relating to the oil industry; ability to access sufficient capital from internal and external sources; the risks that any estimate of potential net oil pay is not based upon an estimate prepared or audited by an independent reserves evaluator; that there is no certainty that any portion of the hydrocarbon resources will be discovered, or if discovered that it will be commercially viable to produce any portion thereof; and other factors, many of which are beyond the control of the Company. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could effect Parex'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).
Although the forward-looking statements contained in this document are based upon assumptions which Management believes to be reasonable, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this document, Parex has made assumptions regarding: current commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; receipt of all required approvals for the Acquisition; royalty rates, future operating costs, and other matters. Management has included the above summary of assumptions and risks related to forward-looking information provided in this document in order to provide shareholders with a more complete perspective on Parex's current and future operations and such information may not be appropriate for other purposes. Parex's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits Parex will derive. These forward-looking statements are made as of the date of this document and Parex disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
Any references in this press release to test production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will commence production and decline thereafter. These test results are not necessarily indicative of long-term performance or ultimate recovery. Readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company.
The TSX has not received and does not accept responsibility for the adequacy or accuracy of this news release.
Wed, 13 Mar 2013 21:22 GMTPrint