CALGARY, ALBERTA--(Marketwired - April 6, 2016) - Alvopetro Energy Ltd. (TSX VENTURE:ALV) is pleased to announce our 2016 capital plan, fourth quarter 2015 and year-end 2015 financial results and the filing of our annual information form.
2016 Capital Plan
In 2016, we are primarily focused on building a natural gas business from our 197(2) discovery by securing a gas sales contract and finalizing the field commercialization plan. Concurrently, we continue our disciplined capital program in light of low commodity prices, focusing on high potential exploration prospects without impairing our ability to grow when commodity prices recover.
In the coming months, we plan to drill our 256(A1) well, which is a multi-zone prospect located on Block 256 and our largest natural gas exploration prospect to-date. Block 256 is located near existing State gas transmission infrastructure and the drilling of 256(A1) will fulfil our exploration work commitments on the Block.
Our $9.0 million 2016 capital plan is expected to be funded with existing cash balances on hand and includes:
2015 Year Highlights
Financial Resources
Our cash, restricted cash and working capital resources total $29.4 million, including $28.7 million of cash and cash equivalents and $2.3 million of current restricted cash.
Financial and Operating Highlights - Fourth Quarter 2015
Financial and Operating Highlights - Year-End 2015
Summary of Q4 2015 and Year-End 2015 Results
The following table provides a summary of Alvopetro's financial and operating results for the periods noted. The audited consolidated financial statements with the Management's Discussion and Analysis ("MD&A") are available on our website at www.alvopetro.com and will be available on the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com. The summary of annual and quarterly results contained in this news release represents a comparison of the respective periods ended December 31, 2015 and the year ended December 31, 2014.
SELECTED QUARTERLY AND ANNUAL RESULTS
Three months ended December 31, |
Year ended December 31, |
||||||||
2015 | 2014 | 2015 | 2014 | ||||||
Financial | |||||||||
($000s, except where noted) | |||||||||
Oil sales | 116 | 212 | 535 | 1,106 | |||||
Funds flow from operations (1) | (1,017 | ) | (1,482 | ) | (4,966 | ) | (7,722 | ) | |
Per share - basic and diluted ($)(2) | (0.01 | ) | (0.02 | ) | (0.06 | ) | (0.09 | ) | |
Net loss | (9,797 | ) | (24,662 | ) | (12,424 | ) | (31,709 | ) | |
Per share - basic and diluted ($)(2) | (0.12 | ) | (0.29 | ) | (0.15 | ) | (0.37 | ) | |
Capital and other asset expenditures | 1,610 | 16,239 | 12,202 | 44,366 | |||||
Total assets | 84,284 | 124,557 | 84,284 | 124,557 | |||||
Debt | - | - | - | - | |||||
Net working capital surplus (1) (3) | 29,405 | 35,844 | 29,405 | 35,844 | |||||
Common shares outstanding, end of year (000s) | |||||||||
Basic | 85,167 | 85,167 | 85,167 | 85,167 | |||||
Diluted (2) | 92,010 | 89,734 | 92,010 | 89,734 | |||||
Operations | |||||||||
Operating netback ($/bbl) (1) | |||||||||
Brent benchmark price | 44.71 | 76.98 | 53.64 | 99.51 | |||||
Discount | (8.41 | ) | (14.63 | ) | (10.39 | ) | (8.85 | ) | |
Sales price | 36.30 | 62.35 | 43.25 | 90.66 | |||||
Transportation expenses | (2.50 | ) | (2.65 | ) | (2.99 | ) | (3.61 | ) | |
Realized sales price | 33.80 | 59.70 | 40.26 | 87.05 | |||||
Royalties and production taxes | (3.13 | ) | (4.71 | ) | (3.07 | ) | (8.77 | ) | |
Production expenses | (56.32 | ) | (141.18 | ) | (70.49 | ) | (117.47 | ) | |
Operating netback | (25.65 | ) | (86.19 | ) | (33.30 | ) | (39.19 | ) | |
Average daily crude oil production (bopd) | 35 | 37 | 34 | 33 |
Notes:
(1) | Non-GAAP measure. See "Non-GAAP Measures" section within this news release. |
(2) | Consists of outstanding common shares and stock options of the Company as at December 31, 2015. |
(3) | Includes current restricted cash of $2.3 million (December 31, 2014 - $3.4 million) but excludes non-current restricted cash of $nil (December 31, 2014 - $9.7 million). |
Annual General Meeting
Alvopetro's Annual General Meeting is scheduled to be held on Thursday, May 19, 2016 at 9:00 a.m. at the Centrium Place Conference Centre, 2nd Floor (+15 level), 332 - 6th Avenue S.W. Calgary, Alberta, Canada.
To view Alvopetro's audited consolidated financial statements, the related MD&A and the annual information form ("AIF") for the years ended December 31, 2015 and December 31, 2014 please visit our website at www.alvopetro.com or www.sedar.com. To the extent investors do not have access to the internet, copies of the audited consolidated financial statements, the related MD&A and the AIF can be obtained on request without charge by contacting Alvopetro at 587.794.4224 or at 1175, 332-6th Avenue SW, Calgary, Alberta, T2P 0B2.
Updated Corporate Presentation
Alvopetro's updated corporate presentation is available at: http://www.alvopetro.com/corporate-presentation.
Annual Information Form
Alvopetro has filed its annual information form (AIF) with the Canadian securities regulators on SEDAR. The AIF includes the disclosure and reports relating to oil and gas reserves data and other disclosures for oil and gas activities required pursuant to National Instrument 51-101 of the Canadian Securities Administrators. The AIF may be accessed electronically from at www.sedar.com.
Alvopetro Energy Ltd.'s vision is to be the premier independent exploration and production company in Brazil, maximizing shareholder value by applying innovation to underexploited opportunities. Our strategy is to focus on three core opportunities including lower risk development drilling on our mature fields, shallow conventional exploration, and the development of the significant hydrocarbon potential present in our deep Gomo resource play.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
All amounts contained in this news release are in United States dollars, unless otherwise noted.
Forward-Looking Statements and Cautionary Language. This news release contains "forward-looking information" within the meaning of applicable securities laws. The use of any of the words "will", "plan", "intend" and other similar words or expressions are intended to identify forward-looking information. More particularly and without limitation, this news release contains forward-looking information concerning financial results and operating results, reserves and potential hydrocarbons in our assets, exploration and development prospects of Alvopetro and the expected timing of certain of Alvopetro's testing and operational activities. The forward‐looking statements are based on certain key expectations and assumptions made by Alvopetro, including expectations and assumptions concerning testing results, the timing of regulatory licenses and approvals, availability of capital, the success of future drilling and development activities, prevailing commodity prices and economic conditions, the availability of labour and services, the ability to transport and market our production, timing of completion of infrastructure and transportation projects, weather and access to drilling locations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed through the SEDAR website at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Abbreviations: | ||
Mcfpd | = | thousand cubic feet per day |
MMcf | = | million cubic feet |
MMcfpd | = | million cubic feet per day |
Mstb | = | thousand stock tank barrels |
Boepd | = | barrels of oil equivalent per day |
BOE Disclosure. The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence 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 news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.
Test Results. Any references in this news release to test results, production from testing and performance rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such well will continue production and decline thereafter. Test results are not necessarily indicative of long-term performance of the relevant well or fields or of ultimate recovery of hydrocarbons.
Supplementary Information of Oil and Natural Gas Resources and Reserves. The disclosure in this news release summarizes certain information contained in the independent resource report of DeGoyler and MacNaughton ("D&M Report") dated effective June 30, 2015 and is supplemental to the disclosure required under NI 51-101. The D&M report estimates the discovered petroleum initially-in-place and the contingent resources associated with Alvopetro's Blocks 197 and 198, and there are no reserves, prospective resources, unrecoverable or recoverable undiscovered petroleum initially-in-place associated, nor any unrecoverable discovered petroleum initially-in-place, with these blocks. Full disclosure with respect to the Company's resources and reserves as at December 31, 2015 is contained in the Company's annual information form for the year ended December 31, 2015 filed on SEDAR (www.sedar.com).
Non-GAAP Measures. This news release contains financial terms that are not considered measures under Canadian generally accepted accounting principles ("GAAP"), such as funds flow from operations, funds flow per share, net working capital surplus and operating netback. These measures are commonly utilized in the oil and gas industry and are considered informative for management and shareholders. Specifically, funds flow from operations and funds flow per share reflect cash generated from operating activities before changes in non-cash working capital. Management considers funds flow from operations and funds flow per share important as they help evaluate performance and demonstrate the Company's ability to generate sufficient cash to fund future growth opportunities. Net working capital surplus includes current assets (including current restricted cash) less current liabilities (excluding the current portion of decommissioning obligations) and is used to evaluate the Company's financial leverage. Operating netback is determined by dividing oil sales less royalties and production taxes, transportation and operating expenses by sales volume of produced oil. Management considers operating netback important as it is a measure of profitability per barrel sold and reflects the economic quality of production. Funds flow from operations, funds flow per share, net working capital surplus and operating netbacks may not be comparable to those reported by other companies nor should they be viewed as an alternative to cash flow from operations, net income or other measures of financial performance calculated in accordance with GAAP.
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