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Argent Energy Trust Sees Production Fall After Manvel Sale

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Argent Energy Trust has provided its financial and operating results for the quarter ended June 30, 2015.

Operations

• strong>Production decreased to 4,942 boe/d (64% Oil & NGL) in Q2 2015 from 5,819 boe/d (67% Oil & NGL) in Q1 2015, primarily due to the disposal of the Manvel property during the quarter and the natural decline of Eagle Ford and South Escobas wells. The capital drilling incurred in the first half of 2015 is expected to be reflected in production in the second half of 2015.
• Oil & gas revenue was $22.1 million in Q2 2015 compared to $22.0 million in Q1 2015. This reflects the lower production volumes offset by an increase in realized prices from an average of $40.02 per boe in Q1, 2015 to $46.26 per boe in Q2, 2015.
• The operating results for the quarter reflect the impacts of the sale of the Manvel Field, natural declines in the Eagle Ford oil wells and South Texas gas wells drilled in 2014, slightly improved oil prices over Q1, 2015 (while significantly lower than Q2, 2014), and a reduction in operating expenses (excluding workovers) from US$16.19 per boe in Q2, 2014 and US$15.57 per boe in Q1, 2015 to US$13.27 per boe in Q2, 2015. These factors cumulatively represent the main drivers of the change in revenue, netbacks and funds flow from operations from the prior quarter and the comparative quarter of 2014.
• As at June 30, 2015, the Trust had a net working capital surplus of $3.8 million and undrawn availability under its committed credit facility of approximately $14.4 million (US$11.5 million) providing sufficient liquidity to fund its obligations.

Outlook

With the sales of the Manvel Field, Texas (Manvel) and its interest in Kansas & Oklahoma (the "Mid-Continent Assets") completed, Argent is focused on reducing operating costs for its base assets. Argent will continue to monitor its borrowing requirements and balance sheet to maintain liquidity in the low commodity price environment. Argent's credit facility has a US$80 million limit upon which US$68.5 million is drawn.

Capital expenditures for the balance of the year are expected to be approximately US$6 million, to be incurred on participation in the drilling of Parkman oil wells in Wyoming and maintenance capital. This level of capital expenditure is expected to be funded by cashflow from operations. Argent has approximately 11,800 net acres with significant Parkman potential including 29 drilling locations currently identified. Drilling results from the initial wells Argent has participated in, operated by Devon Energy, indicate results in line with expected type curves.