HOUSTON, TEXAS--(Marketwired - Aug. 26, 2016) - Greenfields Petroleum Corporation (the "Company" or "Greenfields") (TSX VENTURE:GNF), an independent exploration and production company with producing assets in Azerbaijan, announces its financial results and operating highlights for the second quarter of 2016. Except as otherwise indicated, all dollar amounts referenced herein are expressed in United States dollars.
Second Quarter and Year-to-Date 2016 Financial Results and Operating Highlights
Operating Highlights and Plans
Debenture Conversion and Restructuring Transactions
In connection with the Fifth Amending Agreement, the Company agreed to: (i) obtain the approval of holders ("Debentureholders") of the 9.00% convertible unsecured subordinated debentures due May 31, 2017 (the "Debentures") for the conversion (the "Debenture Conversion") of the CAD$23,725,000 aggregate principal amount of Debentures into an aggregate of approximately 33.1 million common shares in the capital of the Company ("Common Shares"); (ii) issue, in connection with the completion of the restructuring, up to an aggregate of 2,394,000 Common Shares for every $1,000,000 of principal due to the Lenders under the Loan Agreement; and (iii) issue, in connection with the completion of the restructuring, an equivalent number of Common Share purchase warrants ("Warrants") to the Lenders (collectively, the "Restructuring Transaction"). As of June 30, 2016, the aggregate principal amount and interest due to the Lenders was $40.3 million.
On August 18, 2016, the Debenture Conversion was approved by the Debentureholders. The Debentures were delisted from the TSX Venture Exchange (the "TSXV") on August 25, 2016 and the Debenture Conversion was completed on August 26, 2016 with an aggregate of 33,143,825 Common Shares issued to former Debentureholders.
On April 12, 2016, the Company entered into a definitive agreement ("Definitive Agreement") with Heaney Assets Corporation ("Heaney") to settle all amounts outstanding under the Subordinated Revolving Loan Agreement dated June 27, 2014, as amended, with an original maturity date of June 30, 2018. Under the terms of the Definitive Agreement, Greenfields agreed to issue 11,500,000 Common Shares to Heaney in full satisfaction of all amounts outstanding under the loan agreement with Heaney, including principal in the amount of $20,834,705 and accrued interest.
In addition to the Common Shares to be issued to Heaney, Greenfields agreed to pay an agent a success fee for negotiating the terms of the Definitive Agreement. The success fee is comprised of a cash payment of $1,000,000 and the issuance of 500,000 Common Shares to the agent upon the successful closing of the transactions contemplated by the Definitive Agreement. The Company anticipates that the issuance of 12,000,000 common shares to Heaney and the agent will take place in September 2016.
John Harkins, President and CEO of Greenfields, stated that "the Acquisition of the remaining portion of the Bahar Project allowed Greenfields to triple our reserves, and the corporate restructuring has reduced the Company's debt obligations by almost half. Going forward, with control of the project and aligned government partners, we hope to focus on growing the gas production to re-establish immediate cash flows and to develop the remaining oil and gas opportunities with the use of the recently acquired 3D seismic and drilling."
Selected Information
The selected information below is from the Greenfields' Management Discussion & Analysis for the three and six months ended June 30, 2016. The Company's complete financial statements as of and for the three and six months ended June 30, 2016 and 2015 with the notes thereto and the related Management's Discussion & Analysis can be found on Greenfields' website at www.Greenfields-Petroleum.com and on SEDAR at www.sedar.com. All amounts below are in thousands of US dollars unless otherwise noted.
Greenfields Petroleum Corporation | ||||||||
(US$000's,except as noted) | Three months ended June 30 |
Six months ended June 30 |
||||||
2016 | 2015 | 2016 | 2015 | |||||
Financial | ||||||||
Revenues | 275 | 470 | 609 | 807 | ||||
Net (loss) income | (2,551 | ) | (2,995 | ) | (6,153 | ) | (4,346 | ) |
Per share, basic and diluted | ($0.12 | ) | ($0.14 | ) | ($0.28 | ) | ($0.21 | ) |
Capital Items | ||||||||
Cash and cash equivalents | 428 | 710 | ||||||
Total Assets | 97,778 | 87,683 | ||||||
Working capital | (10,351 | ) | (2,016 | ) | ||||
Convertible debt and Shareholders' equity | 52,377 | 58,488 |
Bahar Energy Limited (a Joint Venture) (2) | |||||
Total Joint Venture | Company's share | ||||
(US$000's,except as noted) | Three months ended June 30 | ||||
2016 | 2015 | 2016 | 2015 | ||
Financial | |||||
Revenues | 8,095 | 10,756 | 2,698 | 3,585 | |
Net (loss) income | 1,183 | (588 | ) | 394 | 481 |
Operating | |||||
Average Entitlement Sales Volumes (1) | |||||
Oil and condensate (bbl/d) | 779 | 1,040 | 260 | 347 | |
Natural gas (mcf/d) | 14,503 | 14,382 | 4,834 | 4,793 | |
Barrel oil equivalent (boe/d) | 3,196 | 3,437 | 1,065 | 1,145 | |
Average Oil Price | |||||
Oil price ($/bbl) | $40.52 | $54.92 | $40.52 | $54.92 | |
Net realization price ($/bbl) | $39.56 | $53.58 | $39.56 | $53.58 | |
Brent oil price ($/bbl) | $45.57 | $62.13 | $45.57 | $62.13 | |
Natural gas price ($/mcf) | $3.96 | $3.96 | $3.96 | $3.96 | |
Capital Items | |||||
Total Assets | 199,703 | 203,072 | 66,561 | 67,684 | |
Total Liabilities | 36,514 | 41,018 | 12,170 | 13,671 | |
Net Assets | 163,189 | 162,054 | 54,391 | 54,013 |
Total Joint Venture | Company's share | |||
(US$000's,except as noted) | Six months ended June 30 | |||
2016 | 2015 | 2016 | 2015 | |
Financial | ||||
Revenues | 15,494 | 20,186 | 5,164 | 6,728 |
Net (loss) income | 1,954 | 2,187 | 651 | 729 |
Operating | ||||
Average Entitlement Sales Volumes(1) | ||||
Oil and condensate (bbl/d) | 933 | 933 | 311 | 311 |
Natural gas (mcf/d) | 14,391 | 14,391 | 4,796 | 4,796 |
Barrel oil equivalent (boe/d) | 3,332 | 3,332 | 1,110 | 1,110 |
Average Oil Price | ||||
Oil price ($/bbl) | $35.18 | $51.67 | $35.18 | $51.67 |
Net realization price ($/bbl) | $34.28 | $50.31 | $34.28 | $50.31 |
Brent oil price ($/bbl) | $39.80 | $58.08 | $39.80 | $58.08 |
Natural gas price ($/mcf) | $3.96 | $3.96 | $3.96 | $3.96 |
Capital Items | ||||
Total Assets | 199,703 | 203,072 | 66,561 | 67,684 |
Total Liabilities | 36,514 | 41,018 | 12,170 | 13,671 |
Net Assets | 163,189 | 162,052 | 54,391 | 54,013 |
(1) | Daily volumes represent the Company's share of the Contractor Parties entitlement volumes net of compensatory petroleum and the government's share of profit petroleum. Effective October 1, 2013, the compensatory petroleum increased from 5% to 10% where it will remain until specific cumulative oil and gas production milestones are attained. |
(2) | The Company's 33.33% interest in BEL is disclosed in the Unaudited Condensed Consolidated Financial Statements as a Joint Venture and accounted for using the equity method. |
About Greenfields Petroleum Corporation
Greenfields is a junior oil and natural gas company focused on the development and production of proven oil and gas reserves principally in the Republic of Azerbaijan. The Company plans to expand its oil and gas assets through further farm-ins, and acquisitions of Production Sharing Agreements from foreign governments containing previously discovered but under-developed international oil and gas fields, also known as "greenfields". More information about the Company may be obtained on the Greenfields website at www.greenfields-petroleum.com.
Forward-Looking Statements
This press release contains forward-looking statements. More particularly, this press release may include, but is not limited to, statements concerning: production, drilling and/or workover plans and the expected timing thereof, operating plans and the settlement of the transactions contemplated by the Definitive Agreement. In addition, the use of any of the words "initial, "scheduled", "can", "will", "prior to", "estimate", "anticipate", "believe", "should", "forecast", "future", "continue", "may", "expect", and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained herein are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the success of optimization and efficiency improvement projects, the availability of capital, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of existing wells, the performance of new wells, general economic conditions, availability of required equipment and services, weather conditions and prevailing commodity prices. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct.
Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties most of which are beyond the control of Greenfields. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information. These risks include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety, political and environmental risks), commodity price and exchange rate fluctuations, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Additional risk factors can be found under the heading "Risk Factors" in Greenfields' Annual Information Form and similar headings in Greenfields' Management's Discussion & Analysis which may be viewed on www.sedar.com.
The forward-looking statements contained in this press release are made as of the date hereof and Greenfields undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. The Company's forward-looking information is expressly qualified in its entirety by this cautionary statement.
Notes to Oil and Gas Disclosures
Barrels Oil Equivalent or "boe" may be misleading, particularly if used in isolation. All volumes disclosed in this press release use a 6mcf: 1boe, as such is typically used in oil and gas reporting and is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The Company uses a 6mcf: 1boe ratio to calculate its share of entitlement sales from the Bahar Project for its financial reporting and reserves disclosure.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Greenfields Petroleum Corporation
John W. Harkins
Chief Executive Officer
(832) 234-0800
Greenfields Petroleum Corporation
A. Wayne Curzadd
Chief Financial Officer
(832) 234-0800
[email protected]
www.greenfields-petroleum.com