ArPetrol Ltd. (RPT.V) today provided the following update.
Strategic Review Process
ArPetrol has initiated a process to identify, examine and
consider a broad range of strategic alternatives, and has retained
Raymond James Ltd. as its financial advisor.
The Company has obtained an independent audit of the natural gas
and natural gas liquid reserves attributable to ArPetrol's interest
in the Faro Virgenes concession as prepared by Gaffney, Cline &
Associates Inc. effective December 31, 2012 (the GCA Report).
The GCA Report presented a 3% decrease in proved plus probable
natural gas reserves (gross) from 43,369 million cubic feet (MMcf)
as of December 31, 2011 to 42,210 MMcf as of December 31, 2012.
This decrease was due to volumes produced in 2012 and an adjustment
to gas shrinkage. The GCA Report also presented a 28% increase to
the net present value of future net revenue of proved plus probable
reserves (before deducting income tax; discounted at 10%) from
US$96 million as of December 31, 2011 to US$123 million as of
December 31, 2012. This increase was due to a combination of higher
realized natural gas pricing (US$4 per million British thermal
units (MMBtu)) available under the Argentine Gas Plus program and
an assumed increase in third-party gas plant revenues to reflect
current market rates.
Production volumes for the fourth quarter of 2012 were 252
barrels of oil equivalent per day ("boe/d"). This exceeded the
total year average production volume of 247 boe/d. Average prices
for natural gas and natural gas liquids for the fourth quarter were
$2.80 per MMcf and $65.49 per barrel, respectively, compared to
total year average prices of $2.83 per MMcf for natural gas and
$68.95 per barrel for natural gas liquids.
Third-party processing volumes for the fourth-quarter of 2012
averaged 74 MMcf per day. This is an increase from the total year
average third-party processing volumes of 68 MMcf per day.
Financial Condition and Outlook
ArPetrol is meeting with service providers regarding outstanding
costs associated with its drilling program on the Faro Virgenes
concession. It expects a working capital deficiency as of December
31, 2012. "There is uncertainty regarding the Company's ability to
continue to operate as a going concern," the company said in a
ArPetrol is now trading at 1.5 cents, on volume 3.6 million,
making it the most actively traded on the TSXV.