Exploration & Production | Deals - Joint Ventures | Quarterly / Earnings Reports | First Quarter (1Q) Update

ArPetrol Looking for Farm-in at Faro Virgenes

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ArPetrol Ltd. has announced its financial and operating results for the three months ended March 31, 2015 and provides an operational update on activities to date this year as well as an outlook for the remainder of 2015.

Outlook

• ArPetrol has made significant progress towards a stable revenue generating company with a balance sheet that supports its operations and is expected to provide funds to pursue new initiatives.
• The Company's 2015 outlook includes estimated processing volumes of 70 to 80 million cubic feet per day (MMcf/d) and production of 190 to 240 boe/d.
• The Company continues to look for farm-in partners to allow it to accelerate the development of the defined reserves at Faro Virgenes.
• Finally, ArPetrol continues to evaluate at all strategic opportunities available to the Company. YPF S.A. and Enap SiPetrol Argentina S.A., the third-party providers of natural gas processed at the Company's Faro Virgenes plant, recently announced a significant multi-year expansion to their Magallanes field. The Company sees this increase in activity in southern Santa Cruz as a positive sign for its business development activities in the region. Additionally, the Company is actively pursuing new mid-stream opportunities through-out the region. 

Summary of the First Quarter 2015

Operating and Financial

• The Company continues to generate strong operating results. During the first-quarter of 2015 our funds flow from operations was $683,553 driven by strong gas processing results. During the first-quarter of 2015 gas processing revenues were $2.5 million generating an operating netback of $1.2 million . This is an improvement of over $800,000 from the fourth-quarter of 2014 which was affected by an maintenance shut-down.
• Production during the first quarter of 2015 averaged 187 barrels of oil equivalent per day (boe/d), an increase of 1 boe/d from the fourth quarter of 2014 and down 55 boe/d from the first quarter of 2014. The decrease from the first quarter of 2014 was due to a maintenance shut-down at the beginning of December 2014 and a slow return to full production.
• The first quarter 2015 average realized natural gas price was $4.89 per thousand cubic feet (Mcf), $0.46 per Mcf higher than the price realized in the fourth quarter of 2014 and $0.68 per Mcf higher than the first quarter of 2014. The Company's natural gas prices are set in $US and the changes in the realized prices are primarily driven by the strengthening $US against the $Cdn.
• The average price realized for natural gas liquids (NGL) in the quarter was $86.14 per barrel, a decrease of $2.89 per barrel over the fourth quarter 2014 and a $4.84 per barrel increase over the first quarter of 2014. The Company sells its natural gas liquids in the spot market with the prices denominated in $US. The changes to the realized price reflect the declining price in the Argentine market offset by the effect of a strengthening $US against the $Cdn.
• ArPetrol had working capital of $2.6 million at March 31, 2015 , an improvement of almost $1 million from December 31 , 2014.
• The Company's net income for the first quarter was $218,605 , compared to net income of $1,643,581 for the first quarter of 2014.
• In January 2015 the Company received approval to commence a normal course issuer bid permitting the Company to repurchase, for cancellation, up to 1,822,521 common shares in the capital of the Company. The normal course issuer bid commenced on January 6, 2015 and is approved for one year. As of May 15, 2015 the Company has purchased 197,500 common shares of the Company. ArPetrol plans to continue to purchase shares of the Company under the normal course issuer bid.