Friday, May 09, 2008; Posted: 07:00 PM
UNITED STATES/
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 $9.53 per barrel of oil equivalent.
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The Company announces its operating and financial results for the quarter ended March 31, 2008. Copies of the Company's unaudited consolidated financial statements for the three months ended March 31, 2008, the related Management's Discussion and Analysis (MD&A) and the full interim report for the first quarter of 2008 have been filed with Canadian Securities Regulatory Authorities and will be made available under the Company's profile at www.sedar.com and on the Company's website at www.petroandina.com.
Conference Call & Webcast
Petro Andina will host a conference call and live webcast to discuss these results on Monday May 12, 2008 beginning at 10:30 a.m. Mountain Daylight Time (MDT) (12:30 p.m. Eastern Daylight Time). Media, analysts or any other interested parties wishing to participate in the call can access it by calling 403-537-9608 or 1-800-952-4972 (toll free in North America). No access codes are required.
The live audio webcast of the conference call will be available through Windows Media Player by following the link posted under the Investor Relations; Events section of the Company's website at www.petroandina.com. Following the conclusion of the call, a link to a replay of the webcast will also be posted on the Company's website.
Petro Andina cordially invites shareholders to attend the Company's Annual General Meeting, to be held on Thursday, May 22, 2008 at 10:30 a.m. MDT at the Metropolitan Centre Lecture Theatre, 333-4th Avenue S.W., Calgary, Alberta.
<< Financial Highlights (Unaudited) Three months ended March 31 2008 2007 ------------------------------------------------------------------------- Production Oil (bbls/d) 9,703 3,752 Natural gas (mcf/d) 96 146 Total (boe/d) 9,719 3,776 Realized oil price ($/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.
SOURCE: Petro Andina Resources Inc.
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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