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Attention Business/Financial Editors
Petro Andina announces continued revenue and production growth
/NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES/
CALGARY, May 9 /CNW/ - Petro Andina Resources Inc. (Petro Andina or the
Company) is pleased to report that it continued along its solid production
growth track from 2007 by increasing production in the first quarter of 2008
to an average of 9,719 barrels of oil equivalent per day net, an increase of
157 percent from 3,776 barrels of oil equivalent per day net in the same
period of 2007, and an increase of 20 percent from 8,079 barrels of oil
equivalent per day net in the fourth quarter of 2007. Production growth
continues with production averaging greater than 11,200 barrels of oil
equivalent per day net during the month of April.
Revenues from production totaled $34.3 million for the first quarter of
2008, an increase of 142 percent from the equivalent period in 2007 and
14 percent from the fourth quarter of 2007. Funds generated from operations
rose to $15.3 million for the first quarter of 2008, up 140 percent from the
equivalent period in 2007 and 84 percent from the fourth quarter of 2007.
Operating costs per barrel of oil equivalent for the first quarter were $8.86
compared to fourth quarter 2007 operating costs of $10.03 per barrel of oil
equivalent and the 2007 average of $9.53 per barrel of oil equivalent.
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The Company announces its operating and financial results for the quarter
ended March 31, 2008. Copies of the Company's unaudited consolidated financial
statements for the three months ended March 31, 2008, the related Management's
Discussion and Analysis (MD&A) and the full interim report for the first
quarter of 2008 have been filed with Canadian Securities Regulatory
Authorities and will be made available under the Company's profile at
www.sedar.com and on the Company's website at www.petroandina.com.
Conference Call & Webcast
Petro Andina will host a conference call and live webcast to discuss
these results on Monday May 12, 2008 beginning at 10:30 a.m. Mountain Daylight
Time (MDT) (12:30 p.m. Eastern Daylight Time). Media, analysts or any other
interested parties wishing to participate in the call can access it by calling
403-537-9608 or 1-800-952-4972 (toll free in North America). No access codes
are required.
The live audio webcast of the conference call will be available through
Windows Media Player by following the link posted under the Investor
Relations; Events section of the Company's website at www.petroandina.com.
Following the conclusion of the call, a link to a replay of the webcast will
also be posted on the Company's website.
Petro Andina cordially invites shareholders to attend the Company's
Annual General Meeting, to be held on Thursday, May 22, 2008 at 10:30 a.m. MDT
at the Metropolitan Centre Lecture Theatre, 333-4th Avenue S.W., Calgary,
Alberta.
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Financial Highlights (Unaudited)
Three months ended March 31
2008 2007
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Production
Oil (bbls/d) 9,703 3,752
Natural gas (mcf/d) 96 146
Total (boe/d) 9,719 3,776
Realized oil price ($/bbl) $ 38.74 $ 41.65
Financial (C$000s except per share amounts)
Oil and natural gas revenue 34,267 14,156
Net income (loss) 1,956 (1,371)
Per share - basic $ 0.05 $ (0.04)
Per share - diluted $ 0.05 $ (0.04)
Funds flow from operations 15,264 6,358
Per share - basic $ 0.38 $ 0.20
Per share - diluted $ 0.37 $ 0.19
Total assets (end of period) 227,849 102,288
Working capital (end of period) 49,736 16,266
Long-term debt (end of period) 22,633 -
Weighted average shares outstanding (000s)
Basic 40,588 32,116
Diluted 41,575 35,300
Outstanding shares (000s)
Basic 42,725 32,568
Diluted 45,755 35,859
Operational Highlights
- Drilled 35.2 net (69 gross) wells with an overall success rate of
95 percent;
- Drilled 4.8 net (8 gross) exploration and appraisal wells with a
63 percent success rate;
- Drilling of structural targets commenced, with successful wells at La
Pista x-1 and Rio Colorado x-1, south of the established production
trend;
- Completed acquisition of 224 square kilometres of three-dimensional
(3D) seismic on the CNQ-7 Concession, bringing total seismic coverage
to more than 68 percent of the Company's 297,000 net acre land
position; and
- Completed the second steam injection cycle into two of the pilot
wells at the Cerro Huanul Sur (CoHS) thermal recovery pilot project.
>>
Operational Update
Waterflood
During the first quarter the Company continued to expand its waterflood
development by both extending the waterflood area through delineation drilling
and activating additional waterflood patterns at ECN. As of March 31, 2008, a
total of 28 patterns were active injecting a total of 16,700 barrels of water
per day compared to 11 active patterns injecting a total of 7,550 barrels of
water per day at year-end 2007. Water injection in the ECN field now
effectively replaces all of the fluid production from the developed waterflood
area. Waterflood response to date has been confirmed in many of the patterns
more rapidly than initially anticipated, with time to initial response two to
four months ahead of original Company estimates. This favourable trend will be
further monitored and analyzed as the majority of the injection patterns at
ECN have been on injection for less than six months.
Steamflood
A second steam injection cycle has been completed on wells CoHS-14 and
CoHS-15. Information gathered from the first steam injection cycle allowed
Petro Andina to optimize both the steam generator performance and wellbore
injection operations to ensure that higher quality steam, and therefore more
energy, entered the reservoir. Injection behaviour on both wells during the
second steam cycle remained as expected and no operational issues related to
either injection or formation damage have been identified through two steam
injection cycles. CoHS-14 is in the early phases of flow back and the well is
reacting as predicted by technical modeling. The production phase of CoHS-15
commenced on March 12th and the oil production from the well has been
gradually rising to a rate exceeding 350 bopd at a 10 percent water cut. The
"hot oil" production rate is approximately two times the initial production
rate of similar conventional producing wells and approximately three times the
rate of stabilized conventional producing wells. Steam injection into the
third steamflood well, CoHS-16 has commenced and it is expected that a 30-day
injection cycle will be completed on this well. A fourth well has been added
to the pilot phase so that, after steam injection at CoHS-16 is completed,
steam injection will commence into CoHS-4. The Company is currently evaluating
the results from the pilot and it is expected that a decision regarding
expansion of the pilot project will be made sometime in mid-year 2008.
Pipeline
Pipeline installation operations are now substantially complete. Plans
for a drilled crossing were replaced in favour of using a suspended crossing
on an existing bridge. Options exist to use or replace an existing line within
the current structure as part of the maintenance program or to add an
additional deck that would provide for future expansion of the structure.
Pre-commissioning work is underway. In parallel with work on the bridge,
contractors are finishing modifications to the receiving facility at
Repsol-YPF's Puesto Hernandez complex. The 50 percent working interest
pipeline will have initial gross capacity of 40,000 bbls/d, enabling it to
transport all of Petro Andina's current production, as well as accommodate
anticipated production additions.
About Petro Andina Resources Inc.
Petro Andina is engaged in the exploration for and development and
production of oil and natural gas in South America and the Caribbean. The
Corporation recently announced the execution of a Joint Venture Agreement
allowing Petro Andina to explore blocks in Trinidad and Tobago. The
Corporation is continuing to develop its existing reserves and to conduct
appraisal and exploration drilling on its 529,000 acre (297,000 acre net) land
position in the Neuquén basin of Argentina. Petro Andina 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. All
sales will be made through registered securities dealers in jurisdictions
where the offering has been qualified for distribution. The securities offered
are not, and will not be, registered under the securities laws of the United
States of America, nor any state thereof and may not be sold in the United
States of America absent registration in the United States or the availability
of an exemption from such registration.
The Toronto Stock Exchange has not received and does not accept
responsibility for the adequacy or accuracy of this news release.
Forward-Looking Statements
Certain statements regarding Petro Andina Resources Inc. including
management's assessment of future plans and operations, may constitute
forward-looking statements under applicable securities laws and necessarily
involve known and unknown risks and uncertainties, most of which are beyond
Petro Andina's control. These risks may cause actual financial and operating
results, performance, levels of activity and achievements to differ materially
from those expressed in, or implied by, such forward-looking statements.
Such risks and uncertainties include, but are not limited to: the impact
of general economic conditions in Canada and Argentina, 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, both in Canada and Argentina, competition, the lack of
availability of qualified personnel, fluctuations in commodity prices, the
results of exploration and development drilling and related activities,
imprecision in reserve estimates, the production and growth potential of Petro
Andina's assets, fluctuations in foreign exchange or interest rates, the
ability to access sufficient capital from internal and external sources, and
obtaining required approvals of regulatory authorities, both in Canada and
Argentina. Many of these risk factors are discussed in further detail in the
Corporation's Annual Information Form dated March 28, 2008 on file with
Canadian securities commissions. Readers are also referred to the risk factors
described in other documents that Petro Andina files from time to time with
securities regulatory authorities.
Accordingly, Petro Andina gives no assurance nor makes any
representations or warranty that the expectations conveyed by the
forward-looking statements will prove to be correct and actual results may
differ materially from those anticipated in the forward looking statements.
Petro Andina undertakes no obligation to publicly update or revise any
forward-looking statements.
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/For further information: Melesia Kasha, Investor Relations, Petro Andina
Resources Inc., Phone: (403) 237-1700, Fax: (403) 265-8216; Kenneth G. Pinsky,
Vice President, Finance and Chief Financial Officer, Petro Andina Resources
Inc., Phone: (403) 517-1729, Fax: (403) 265-8216/
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