Alvopetro Inc.
CALGARY, ALBERTA--(Marketwired - Aug. 29, 2013) -
THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES.
Alvopetro Inc. ("Alvopetro" or the "Company") today announces its financial and operating results for the three and six months ended June 30, 2013. The Company's financial statements and management's discussion and analysis for the three and six months ended June 30, 2013 are available on the Company's website (www.alvopetro.com) or SEDAR (www.sedar.com).
Financial and Operating Summary($000's except per share amounts)Funds from (used in) operations (1)Working capital (deficiency) (1)Operating netback (1) ($/Mcfe)The terms "funds from operations", "operating netback" and "working capital" are not recognized measures under IFRS. Management believes that in addition to net income, funds from operations and operating netback are useful supplemental measures as they provide an indication of the results generated by the Company's principal business activities before the consideration of how those activities are financed. Investors are cautioned, however, that these measures should not be construed as alternatives to net income determined in accordance with IFRS. The Company's method of calculating funds from operations may differ from that of other companies, and, accordingly it may not be comparable to measures used by other companies. The Company calculates funds from operations by taking cash flow from operating activities as determined under IFRS before changes in non-cash operating working capital and abandonment expenditures. Operating netback is calculated on a per Mcfe basis taking natural gas sales and deducting royalties, operating expenses and transportation expenses. Working capital is calculated as current assets less current liabilities.
Corporate Highlights
The following are the highlights for the quarter:
In June, the Company completed the first two tranches of a $5,000,000 non-brokered private placement, raising proceeds of $1,937,000 through the issuance of 7,746,000 common shares at a price of $0.25 per share. In addition, the Company issued $200,000 of convertible debentures in April. The proceeds will be used to augment the Company's unallocated working capital and finance its operations in Brazil.
In May, Alvopetro S.A. completed the farm-in agreements for blocks 170 and 183 in the Recôncavo Basin. Both blocks are contiguous with Alvopetro S.A.'s existing acreage and offer the same tight-oil potential on trend with the Gomo member of the Candeias Formation. The acquisitions are subject to approval by the Agencia Nacional do Petróleo, Gás Natural e Biocombustíveis of Brazil (the "ANP").
In May, Alvopetro S.A. participated in the Brazilian 11th Bid Round, administered by the ANP, and successfully bid and was awarded Block REC-T 107 in the Recôncavo Basin. The block is comprised of 7,561 acres located in the southern portion of the Recôncavo Basin, near Alvopetro S.A.'s Bom Lugar field and will be subject to an ANP contract which is expected to be finalized in August 2013. The first phase work commitment consists of drilling two wells.
Natural Gas, Crude Oil and Natural Gas Liquids (NGL) Conversions
Certain crude oil and NGL volumes have been converted to cubic feet equivalent (cfe) on the basis of one barrel (bbl) to six thousand cubic feet (Mcf). Cfe may be misleading, particularly if used in isolation. A conversion ratio of one bbl to six Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the well head.
Caution to Reader
This news release contains forward-looking information, including without limitation statements concerning the acquisition of the exploration blocks, the planned drilling program, and the ability to continue as a going concern. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by Alvopetro at the time of preparation, may prove to be incorrect. The actual results achieved in future periods will vary from the information provided herein and the variations may be material.
The common shares of Alvopetro have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The common shares of Alvopetro have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.
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