ArPetrol Engages Advisor for Strategic Review Process, Provides Operations Update; Reaffirms Financial Uncertainty
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 statement.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.