News Column

Petroamerica announces 2014 second quarter results, a material increase in Suroco reserves and provides an operations and new business update

August 19, 2014

CALGARY, Aug. 19, 2014 /CNW/ - Petroamerica Oil Corp. (TSX-V: PTA) ("Petroamerica" or the "Company"), a Canadian oil and gas company operating in Colombia, is pleased to announce the financial and operating results for the three and six months ended June 30, 2014, provide an update on the Suroco Energy Inc. ("Suroco") acquisition, operations and new business developments.

Copies of the Company's Management Discussion and Analysis and Financial Statements have been filed with the Canadian Securities Regulatory Authorities and can be viewed or downloaded at the Company's website at www.petroamericaoilcorp.com or at www.sedar.com. The financial results for all periods presented are in United States dollars unless otherwise indicated.

Quarterly highlights include:

• Generated revenue of over $47.8 million, after royalties, leading to positive funds flow from operation of $18.2 million ($0.03 per share) with an operating netback of approximately $59 per barrel; • Achieved average daily production of 6,513 barrels of oil equivalent per day ("boepd"); • Closed the quarter with over $101 million in cash and short term investments, an increase of 52% from the close of 2013.



Other highlights:

• Closed the strategic corporate acquisition of Suroco in mid July 2014, thereby adding significant new acreage, reserves and production in the Putumayo basin of Colombia. • Received 5.9 million barrels of proved plus probable reserves from a mid-year update by external reserves auditors GLJ, representing an 87% increase from the 2013 year-end allocation. These reserves have a net present value (before tax, discounted at 10%) of approximately $186.8 million. • Signed a farmout agreement with Parex Resources Inc. ("Parex") for the exploration block LLA-10 where Parex will pay up to $2.5 million for civil works and 89% of the exploration well to earn a 44.5% working interest. • Successfully bid for the Putumayo exploration block, PUT-31, in the 2014 Colombia Bid Round in a consortium with Gran Tierra Energy Inc ("Gran Tierra").  Petroamerica will hold a 35% working interest in this block. • The Company continues to maintain a strong balance sheet with current cash balance of approximately $63 million after accounting for the Suroco acquisition costs. • Petroamerica will participate in the drilling of up to six exploration wells in the second half of 2014; two targeting high impact low-side fault closures in the Llanos, two conventional Llanos foreland fault traps, and two N-Sand prospects in the Putumayo Basin. • The Company will partner in approximately 8 development wells in the Quinde and Cohembi fields in the latter part of 2014 and the early part of 2015.



Financial and Operating Results

The following table presents the highlights of Petroamerica's financial and operating results.



(in $000 US except share, per share or

unless otherwise noted)
  Q2 2014   Q1 2014   6 mos 2014   Q2 2013
                         
Oil revenue - net of royalties   $   47,825   $  51,702   $   99,527   $   46,104
Funds flow from operations   $ 18,222   $  26,627   $   44,849   $   24,166
Funds flow per share- basic   $ 0.03   $  0.04   $   0.08   $   0.04
Funds flow per share- diluted   $  0.03   $  0.04   $   0.07   $ $ 0.04
                         
Income for period   $ 6,431   $   17,612   $   24,043   $   11,172
Total comprehensive income (loss)   $   8,562   $  13,430   $   21,992   $   11,389
Income per share -  basic    $ 0.01   $   0.03   $   0.04   $   0.02
Income per share -  diluted   $ 0.01   $   0.03   $   0.04   $   0.02
Total assets   $ 232,336   $  229,012   $   232,336   $   185,259
Total cash and short-term investments   $  101,325   $   103,484   $   101,325   $   47,352
Notes payable   $   31,981   $   30,638   $   31,981   $   31,482
Shareholders' equity   $   160,248   $   150,547   $   160,248   $   110,937
                         
Exploration costs   $  263   $   91   $   354   $  -
Capital expenditures   $ 6,257   $   11,316   $   17,573   $   25,130
                         
Common shares outstanding     601,061,593     595,148,260     601,061,593     580,798,260
Weighted average shares outstanding:                        
Basic     596,278,700     593,538,038     594,915,940     580,782,473
Diluted     615,692,294     614,623,454     614,329,534     600,776,919
                         
                         
(in $000 US except share, per share or

unless otherwise noted)
    Q2 2014     Q1 2014     6 mos 2014     Q2 2013
                         
Average production - bopd     6,513     6,478     6,497     5,046
Selling price $/bbl   $   105.10   $  105.76   $   105.43   $   99.25
Royalty $/bbl   $   (23.96)   $  (19.71)   $   (21.81)   $   (7.86)
Average transportation costs $/bbl   $ (17.26)   $  (18.88)   $   (18.07)   $   (15.97)
Average production cost $/bbl   $   (5.00)   $  (3.40)   $   (4.19)   $   (4.83)
Operating netback $/bbl   $   58.88   $  63.77   $   61.36   $   70.59
Funds flow netback$/bbl   $   30.75   $   45.67   $   38.14       52.62
                         
Share trading                         
High   $ 0.38   $   0.38   $  0.38   $   0.36
Low   $  0.28   $   0.28   $  0.28   $   0.21
Close   $  0.37   $   0.30   $  0.37   $   0.26
Trading volume     86,907,900     61,197,100     148,105,000     46,649,300


 

Second Quarter Financial Summary

For the three months ended June 30, 2014, the Company reported $47.8 million in revenue, net of royalties, from the sale of 589 thousand barrels of oil equivalent ("boe").  The realized sales price was $105.10 per boe generating an operating netback of approximately $59 per barrel.

For the second quarter of 2014, the Company's net income was $6.4 million ($0.01 per share diluted), a result of strong production levels through the quarter and continued strong oil prices, offset by foreign exchange losses incurred due to the strengthening of the Canadian dollar and additional income tax charges due to reduced overall exploration costs expensed compared to the prior period.  The Company's capital expenditures for the second quarter were $6.3 million, all invested in Colombia. These capital expenditures were funded from available cash-on-hand.  As at June 30, 2014, the Company held 17 Mbbls of oil in inventory.

Suroco Acquisition

On July 15, 2014 the Company announced that it had closed the previously announced plan of arrangement under the provisions of the Business Corporations Act (Alberta) between the Company, Suroco and the shareholders of Suroco (the "Arrangement").

Under the Arrangement, holders of common shares of Suroco ("Suroco Shares") were able to elect to receive one of the following for each Suroco Share held:


(i)        2.2161 common shares ("Petroamerica Shares") of the Company;
(ii)       1.6401 Petroamerica Shares and a cash payment of C$0.2079; or
(iii)       C$0.80 in cash.



Immediately on completion of the Arrangement, trading in Suroco Shares ceased and Petroamerica paid approximately $16 million dollars and issued 253,795,411 Petroamerica Shares to former holders of Suroco Shares. The Company currently has approximately 858 million basic shares outstanding, and, when all warrants and options are considered, over 1.1 billion shares on a fully diluted basis.

This strategic acquisition provides added scale and diversity to the Petroamerica portfolio, material exposure to an exciting new play in the Putumayo basin, and a production and reserves base that complements Petroamerica's with the ability to add significant future growth.

The Company is currently working towards merging the two sets of operations and anticipates issuing to the market place revised production guidance and capital spending profiles by mid September, 2014.

2014 Suroco Mid-Year Reserve Update

Petroamerica is further pleased to announce the results of the independent reserves report effective June 30, 2014 and dated August 8, 2014 for Suroco (which became a wholly-owned subsidiary of Petroamerica upon closing of the Arrangement).  Suroco's reserves were evaluated by GLJ Petroleum Consultants of Calgary, Alberta ("GLJ") in compliance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and in accordance with the COGE (Canadian Oil and Gas Evaluation) Handbook (the "GLJ Report").

2014 Mid-Year Reserve Update Highlights

• Total proved reserves of approximately 3.1 million barrels of oil (Suroco company share before royalty), with a net present value (before tax and discounted at 10%) of approximately $93.1 million. • Total proved plus probable reserves of approximately 5.9 million barrels of oil (Suroco company share before royalty), with a net present value (before tax and discounted at 10%) of approximately $186.8 million. • Total proved, probable and possible reserves of approximately 10.0 million barrels of oil (company share before royalty), with a net present value (before tax and discounted at 10%) of $277.0 million. • Booked reserves increased as follows: • Suroco company gross proved reserves grew by 48% from year-end 2013 after accounting for first-half 2014 production; • Suroco company gross proved plus probable reserves grew by 87% from year-end 2013 after accounting for first-half 2014 production; • Suroco company gross proved plus probable plus possible reserves grew by 134% from year-end 2013 after accounting for first-half 2014 production. • The majority of the booking increases are attributed to successful exploration and development drilling and production activity in the Quinde field of Suroriente and recognition of undeveloped reserve potential in that area. • Suroco's proved plus probable reserve life index increases from 4.0 years to 5.4 years.

The following table summarizes Suroco's oil and gas reserves as at December 31, 2013 and June 30, 2014.



Reserves Summary (in Mboe)      
Reserves CategoryDec. 31, 2013June 30, 2014Percentage

Change
Total Proved 2,067 3,057 48%
Total Proved plus Probable 3,136 5,852 87%
Total Proved plus Probable plus Possible 4,258 9,966 134%
Note: Company working interest reserves, before royalty.



The following table presents a summary of the Company's net present values of future cash flows as of December 31, 2013 and June 30, 2014.



Reserves Net Present Value Summary (in millions)  
       
  December 31, 2013June 30, 2014
Reserves CategoryPre Tax After TaxPre Tax After Tax
Total Proved $64.9$50.2$93.1$69.5
Total Proved plus Probable $89.1$66.4$186.8$133.5
Total Proved plus Probable plus Possible $115.5$83.8$277.0$194.2
Note: Net present values discounted at 10%.



The price forecast used in the variable dollar economics is available on the GLJ website at www.gljpc.com.

Reserve Advisory

Possible reserves are those additional reserves that are less certain to be discovered than probable reserves.  There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

Business Development Activity

Increased LLA-10 Working Interest and Farmout: Petroamerica increased its private equity share in the Llanos-10 block from 50% to 89% at no additional cost by assuming Canacol Energy Ltd.'s 39% working interest. The Company subsequently farmed out half of its working interest (44.5%) to Parex. Pursuant to the terms of the farmout agreement, Parex will pay up to $2.5 million for civil Works and 89% of the dry-hole cost of one exploration well to earn 44.5% working interest and operatorship, subject to the regulatory approval of the Colombian National Hydrocarbons Agency ("ANH").

Colombia 2014 Bid Round Award: Petroamerica, as part of a bid consortium (including Gran Tierra 65% working interest and Operator, and Petroamerica 35% working interest), was the successful bidder in the 2014 Colombia Bid Round for the PUT-31 Block in the Putumayo basin. This block is interpreted to lie in the sweet spot of the N-Sand play fairway in the Putumayo, and its award is subject to final confirmation by the ANH.

Operations Update

Company Production: Daily production for the second quarter averaged 6,513 boepd exiting the quarter with daily production of 6,013 boepd. June production averaged 6,465 boepd (Company working interest) compared to average production of 6,579 boepd for the previous month.

Las Maracas Field (Non-operated, Los Ocarros Block, 50% Working Interest): The Las Maracas-15 infill well was drilled targeting the Mirador, Gacheta and Une reservoirs. The well encountered unswept oil pay in all three reservoirs and was completed as a Mirador producer with an average oil rate of around 1,650 bopd. The Las Maracas-16 water disposal well was also drilled and completed and is currently being used to inject produced water. The water treatment and injection plant capacity is being expanded to 75,000 barrels of water per day and is scheduled for completion by the end of October, 2014.

La Casona Field (Non-operated, El Eden Block, 40% Working Interest): The gas compression plant is currently being expanded to handle 4.5 million cubic feet per day of gas and is expected to be completed before the end of August. Once commissioned this will enable the La Casona-2 well to be placed on production from the Mirador.

Curiara-1 Long-term Test (Non-operated, El Porton Block, 25% Working Interest): The Curiara-1 well has been on extended well test since early April, 2014, and has produced more than 43,000 barrels of light 42 degree API oil and 245 million cubic feet of gas from the Mirador. The well has performed better than expected and is currently producing at rates of more than 500 bopd.

Suroriente Block (Non-operated, 15.8% Working Interest): The recently drilled Quinde-7 well was placed on production with an electro-submersible pump and after seeing initial rates of 4,400 bopd the well is now producing at a rate of more than 3,500 bopd.  However, what was considered to be a temporary stoppage in production at the Cohembi and Pinuna fields has turned into a longer than expected shut-in. More specifically, the production in these fields has been off line since July 13, 2014 due to a local community blockade. The operator and other operators in the surrounding area are working closely with both the local and national governments and local communities to resolve this situation.

2014 Drilling Program Update

Following the acquisition of Suroco, and including wells already scheduled by Petroamerica, a number of high impact exploration prospects will be drilled in the near-term. A summary of exploration, appraisal and development drilling expected for the remainder of 2014 is outlined in the following table:



Prospect/WellActivity TypeBlockWorking

Interest
Timing/Status
Garza Roja-1 Exploration LLA-10 44.5% Q4 2014
ZampoÑa-1 Exploration Los Ocarros 50% Q4 2014
Crypto-1 Exploration El Porton 50% Q4 2014
Langur-1 Exploration LLA-19 50% Q3/Q4 2014
Trampa Mixta-1 Exploration Alea 1848A 50% Q4 2014/Q1 2015
Cohembi North-1 Exploration Suroriente 15.8% Q4 2014/Q1 2015


Quinde - 4 wells 

Development Suroriente 15.8% Q3/Q4 2014
Cohembi - 4 wells Development Suroriente 15.8% Q4 2014/Q1 2015



Petroamerica will participate in the drilling of up to six exploration wells in the second half of 2014; two targeting high impact low-side fault closures in the Llanos (Langur-1 and Garza Roja-1), two conventional Llanos foreland fault traps (Crypto-1 and Zampona-1), and two N-Sand prospects in the Putumayo Basin (Cohembi North-1 and Trampa Mixta-1). Additionally, the Company will partner in approximately 8 development wells in the Quinde and Cohembi fields in the latter part of 2014 and the early part of 2015.

Outlook

The new Petroamerica, since the acquisition of Suroco, holds interests in twelve exploration and production contracts in the Llanos and Putumayo Basins of Colombia, covering more than one million gross (over 500 thousand net) acres focused on high netback light and medium oil. This portfolio includes a substantial inventory of exploration prospects and leads that will be pursued to support future production and reserves growth for the Company.  Furthermore, the new Company will also have significant exposure to the prolific N-Sand play in the Putumayo Basin in addition to the current production operations, discoveries and exploration opportunities in the Llanos basin, enhancing the overall portfolio and diversifying the company's asset base.

The Company is currently merging the two sets of operations and anticipates releasing a revised production guidance and a combined capital spending program by mid-September, 2014. However, based on preliminary numbers, the Company expects to be able to fully fund internally its operations for the year through the combination of free cash flow and cash-on-hand.

The Company continues to pursue select new business opportunities that will enhance the existing portfolio and provide additional future growth in its two core areas.



       
PETROAMERICA OIL CORP.  
Condensed Consolidated Interim Statements of Financial Position
(Unaudited)            
    As at      As at   
    June 30,     December 31,  
(thousands of United States dollars)   2014     2013  
             
Assets             
Current assets            
  Cash and cash equivalents  $   68,441   $  63,737  
  Short-term investments   32,884     2,894  
  Trade and other receivables   26,198     42,754  
  Prepayments and deposits   1,646     508  
  Crude oil inventory   1,292     348  
    130,461     110,241  
             
Non-current assets            
  Restricted cash    5,659     5,170  
  Property, plant and equipment   69,270     72,889  
  Exploration and evaluation assets   26,946     24,871  
    101,875     102,930  
Total assets  $   232,336   $  213,171  
               
Liabilities             
Current liabilities             
  Current equity tax  $  202   $  377  
  Current income tax   9,436     19,546  
  Accounts payable and accrued liabilities   15,273     15,400  
  Notes payable   31,981     -  
    56,892     35,323  
               
Non-Current  liabilities             
  Stock appreciation rights liability   3,984     2,085  
  Notes payable   -     31,587  
  Deferred tax liability   4,705     2,818  
  Decommissioning liabilities   6,507     5,260  
Total liabilities    72,088     77,073  
               
Shareholders' equity            
  Share capital   141,326     138,936  
  Contributed surplus   23,847     24,079  
  Translation reserve   (3,223)     (1,172)  
  Deficit   (1,702)     (25,745)  
    160,248     136,098  
Total liabilities and shareholders' equity  $   232,336   $ 213,171  
             


 

PETROAMERICA OIL CORP.

Condensed Consolidated Interim Statements of Net Income and Comprehensive Income

(Unaudited)


         
    Three months ended June 30   Six months ended June 30
(thousands of United States dollars, except per share amounts)   2014   2013   2014   2013
                 
Revenue                
                 
  Oil revenue - net of royalties $   47,825  $   46,104 $   99,527 $   91,772
    47,825   46,104   99,527   91,772
                 
Expenses                
                   
  Production   (2,948)   (2,444)   (4,992)   (3,755)
  Transportation   (10,172)   (8,090)   (21,513)   (16,179)
  Purchased oil   -   (2,624)   (1,625)   (2,624)
  Exploration and evaluation   (263)   -   (354)   (325)
  Depletion and depreciation   (9,417)   (7,186)   (18,950)   (14,357)
  General and administration   (3,738)   (2,168)   (6,473)   (4,571)
  Transaction costs   (1,229)   -   (1,229)   -
  Share-based payments   (1,793)   (233)   (1,992)   (485)
                 
    (29,560)   (22,745)   (57,128)   (42,296)
  Finance and other   (1,209)   (1,226)   (2,501)   (2,498)
  Foreign exchange gain (loss)    (3,849)   485   1,843   (74)
    (5,058)   (741)   (658)   (2,572)
Income before income taxes  13,207   22,618   41,741   46,904
Current income tax expense   (9,296)   (5,365)   (15,810)   (13,890)
Deferred tax recovery (expense)   2,520   (6,081)   (1,888)   (7,730)
Net income for the year  6,431   11,172   24,043   25,284
                 
Other comprehensive (loss) income                 
Items that will be reclassified subsequently to income or (loss):              
  Reserve on translation of foreign operations    2,131   217   (2,051)   990
Total comprehensive income  $   8,562 $   11,389  $   21,992  $   26,274
Basic income per share $   0.01 $   0.02  $   0.04 $   0.04
Diluted income per share $   0.01 $   0.02  $   0.04  $   0.04
                 
Weighted average number of basic                 
  common shares outstanding    596,278,700     580,782,473     594,915,940     580,357,760
Weighted average number of diluted                 
  common shares outstanding    615,692,294     600,776,919     614,329,534     606,397,533


 


PETROAMERICA OIL CORP.

Condensed Consolidated Interim Statements of Changes in Equity

(Unaudited)


                     
(thousands of United States dollars)   Share Capital   Contributed

surplus
  Translation

reserve
  Retained

earnings (Deficit)
  Total  equity
                     
Balance at January 1, 2014 $   138,936  $   24,079  $   (1,172) $   (25,745)  $    136,098
                    
Net income for the year   -   -   -   24,043   24,043
Other comprehensive loss   -   -   (2,051)   -   (2,051)
Total comprehensive income (loss)   -   -  (2,051) 24,043  21,992
Warrants exercised   2,333   (346)   -   -   1,987
Stock options exercised   57   (22)   -   -   35
Share-based payments   -   136   -   -   136
Balance at June 30, 2014 $  141,326  $  23,847 $  (3,223)$  (1,702)$   160,248
           
                    
(thousands of United States dollars)   Share Capital   Contributed

surplus
  Translation

reserve
  Retained

earnings (Deficit)
  Total  equity 
                     
Balance at January 1, 2013 $   136,417  $   23,630   3,348  $   (79,622)   83,773
                    
Net income for the year   -   -   -   25,284   25,284
Other comprehensive loss   -   -   990   -   990
                     
Total comprehensive income    -   -  990  25,284  26,274
             
Warrants exercised   423   (64)   -   -   359
Stock options exercised   72   (27)   -   -   45
Share-based payments   -   485   -   -   485
                     
Balance at June 30, 2013 $  136,912 $  24,024   4,338   (54,338)$   110,936


 


PETROAMERICA OIL CORP.

Condensed Consolidated Interim Statements of Cash Flows

(Unaudited)


                 
    Three months ended June 30   Six months ended June 30
(thousands of United States dollars)   2014   2013   2014   2013
                 
Operating activities                 
Net income for the year  $   6,431   11,172 $   24,043   25,284
Items not involving cash:                
  Share-based payments   1,793   233   1,992   485
  Depletion and depreciation   9,417   7,186   18,950   14,357
  Unrealized foreign exchange gain   2,807   (800)   (2,601)   (1,023)
  Deferred tax (recovery) expense    (2,520)   6,118   1,888   7,766
  Accretion and amortization   294   257   577   545
    18,222   24,166   44,849   47,414
  Net changes in non-cash working capital   (16,341)   (2,862)   4,229   10,045
Cash provided by operating activities   1,881   21,304   49,078   57,459
                 
Investing activities                 
Short-term investments   (30,099)   -   (29,990)   -
Exploration and evaluation expenditures   (717)   (14,555)   (2,075)   (15,783)
Property, plant and equipment expenditures   (4,394)   (12,999)   (14,331)   (21,502)
Cash used in investing activities   (35,210)   (27,554)   (46,396)   (37,285)
                 
Financing activities                   
Stock options exercised   35   7   35   45
Warrants exercised   1,036   1   1,987   359
Cash provided by financing activities   1,071   8   2,022   404
                 
(Decrease) Increase in cash and cash equivalents during the period   (32,258)   (6,242)   4,704   20,578
Cash and cash equivalents, beginning of year 100,699   53,594   63,737   26,774
Cash and cash equivalents, end of year   68,441  $   47,352  $   68,441   47,352


 

Definitions of Reserve Categories:

"Proved" reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual quantities recovered will exceed the estimated proved reserves.

"Probable" reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater than or less than the sum of the estimated proved plus probable reserves.

"Possible' reserves are those additional reserves that are less certain to be recovered than probable reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves.

Forward Looking Statements:

This news release includes information that constitutes "forward-looking information" or "forward-looking statements". Statements relating to "reserves" or "resources" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future. More particularly, this news release contains statements concerning expectations regarding regulatory and partner approvals on the Company's development plan, drilling and operational opportunities and the timing associated therewith, test results and the timing thereof, anticipated reserve life of the combined Company's assets, potential future acquisitions and other statements, expectactions beliefs, goals, objectives, assumptions and information about possible future conditions, results of operations or performance, the use of available cash on hand in addition to the potential exploration and development opportunities and expectations regarding regulatory approval and the overall strategic direction of the Company.  The forward-looking statements contained in this document, including expectations and assumptions concerning the obtaining of the necessary regulatory approvals, including ANH approval, and the assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are uncertain and subject to risks.

A multitude of factors can cause actual events to differ significantly from any anticipated developments and although the Company believes that the expectations represented by such forward-looking statements are reasonable, undue reliance should not be placed on the forward-looking statements because there can be no assurance that such expectations will be realized. Material risk factors include, but are not limited to: the inability to obtain regulatory approval, including ANH approval, for the transfer of participating interests and/or operatorship for the Company's properties, the risks of the oil and gas industry in general, such as operational risks in exploring for, developing and producing crude oil and natural gas, market demand and unpredictable shortages of equipment and/or labour, changes or fluctuations in production levels, the size of oil and natural gas reserves or resources; incorrect assessments of the value of acquisitions and exploration and development programs; geological, technical, drilling, production and processing problems; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; fluctuations in oil and gas prices, foreign currency exchange rates and interest rates, and reliance on industry partners. 

Data obtained from the initial testing results at the referenced wells, which may include barrels of oil produced and levels of water-cut, should be considered to be preliminary until a further and detailed analysis or interpretation has been done on such data. The test results disclosed in this press release are not necessarily indicative of long-term performance or of ultimate recovery. The reader is cautioned not to unduly rely on such results as such results may not be indicative of future performance of the well or of expected production results for the Company in the future.

Readers should also note that even if the drilling program as proposed by the Company is successful, there are many factors that could result in production levels being less than anticipated or targeted, including without limitation, greater than anticipated declines in existing production due to poor reservoir performance, mechanical failures or inability to access production facilities, among other factors.

Neither the Company nor any of its subsidiaries nor any of its officers, directors or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments.

The forward-looking statements contained in this document are made as of the date hereof and the Company 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.

Use of "boe"

'boe' may be misleading if used in isolation.  Throughout this press release the calculation of barrels of oil equivalent ("boe") is at a conversion rate of 6,000 cubic feet ("cf") of natural gas for one barrel of oil and is based on an energy conversion method at the burner tip and does not represent a value equivalence at the wellhead.

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. 

 

SOURCE Petroamerica Oil Corp.


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