News Column

Petronova Announces Second Quarter 2014 Results

August 21, 2014

CALGARY, Aug. 21, 2014 /CNW/ - PetroNova Inc. ("PetroNova" or the "Company") (TSX-V: PNA), a company engaged in the exploration and development of oil and natural gas resources in Colombia, today announced its operational and financial results for the quarter ended June 30, 2014.

"PetroNova continues to progress our exploration and development plans, and has advanced to phase 2 of our exploration programs in the CPO-13 and PUT-2 Blocks," said Antonio Vincentelli, President and CEO of PetroNova. "The proceeds from the recently completed $8 million private placement will support a drilling campaign on the CPO-13 Block, where we plan to drill at least four wells to delineate the Pendare discovery and appraise the extension of the Quifa SW oil field onto the Block."

PetroNova's consolidated interim financial statements as at and for the three and six months ended June 30, 2014 and 2013, together with the notes thereto, and the related management's discussion and analysis for the periods then ended, will be available under the Company's profile on SEDAR at www.sedar.com.

Since April 1, 2014, the Company:   

•Obtained its December 31, 2013 reserves report, which shows a 74 percent increase in its net 2P (proved plus probable) reserves compared to 2012 (for details, please refer to the Company's press release dated April 24, 2014).



•Completed the acquisition of additional 2D and 3D seismic data in the CPO-7 and CPO-13 Blocks.



•Successfully completed a non-brokered private placement for gross proceeds of $8 million, issuing 28,571,428 common shares of the Company, to fund a step out and exploratory drilling campaign in the Pendare discovery and its trend, based on the 3D seismic recently acquired.



•Entered into phase 2 of the exploration program on the CPO-13 Block, which includes commitments to drill three exploratory wells within the next three years. PetroNova drilled one of these wells during phase 1, which the Agencia Nacional de Hidrocarburos (the "ANH") recognizes as fulfillment of part of PetroNova's phase 2 commitments.



•For the three months ended June 30, 2014, produced 34,784 barrels (gross) of oil from its extended production testing in CPO-7 and CPO-13 and sold 25,865 barrels.



•In the Tinigua Block, the ANH temporarily suspended the duration of the phase 2 exploration program until military support is secured, allowing PetroNova the time required to resolve issues in the area.



•Fulfilled the phase 1 obligations under its exploration and production contract with the ANH by resuming and completing the evaluation of the Canelo Sur-2 well on the PUT-2 Block. The Canelo Sur-2 well was abandoned and an impairment provision of $18.9 million has been recorded.



•Entered into phase 2 of the exploration program on the PUT-2 Block, which includes commitments to drill two exploratory wells and acquire, process and interpret 10 km2 of 3D seismic within the next three years. PetroNova completed the seismic acquisition during phase 1, which the ANH recognizes as fulfillment of part of PetroNova's phase 2 commitments.



•Pursuant to the Company's 10% rolling stock options plan, the Board of Directors has approved the grant of 280,000 stock options to Marcel Apeloig who was recently appointed to serve on the Company's Board. One half of the options will vest in one year and the other half will vest in two years from the date of grant. The options will expire in five years from date of grant and will be priced at the common share's market value at the end of the current blackout period.

Summary Financial Information:



Year ended

Three months ended June

(US$, except shares and data per share)

2013

2014

2013

Revenues

165,583

39,527

40,729

Net Loss

4,750,465

20,422,935

2,307,222

Loss per share

0.02

0.09

0.01

Weighted average shares(1)

216,943,437

225,971,277

211,455,147

Working Capital

4,623,746

2,740,993

12,852,582

Cash and equivalents and short-term investments

13,195,300

9,754,378

21,368,023

Exploration and evaluation assets

79,398,125

63,679,233

69,296,716

Block deposits (short- and long-term)

5,316,009

5,314,844

5,157,993

Total assets

107,288,803

88,520,711

103,066,559

Shareholders' equity

94,637,935

73,744,449

92,102,922



(1) Total outstanding common shares as at August 20, 2014 is 254,542,705

Outlook:

PetroNova is continuing with its scheduled exploration plans and commitments and anticipates the following activities to occur in the remainder of 2014:

•Continue the extended testing of discoveries on the CPO-7 and CPO-13 Blocks.



•Complete the interpretation of the 3D seismic at Pendare on the CPO-13 Block. Based on encouraging preliminary results of the seismic data, PetroNova is initiating a four-well drilling campaign to delineate the Pendare discovery and explore its trend.



•Initiate an exploratory drilling campaign in Q4 2014 of up to four exploratory wells at the El Tigre area to appraise the Quifa SW extension onto the CPO-13 Block.



•Complete the interpretation of the 3D seismic at Atarraya on the CPO-7 Block and identify step out opportunities to appraise the Atarraya accumulation in Q1 2015.



•Commence civil works to drill the first exploratory well on the Tinigua Block.



•Conduct an updated surface and community survey of unexplored central and southwestern areas of the PUT-2 Block to initiate permitting processes.

In Colombia, extractive industries are experiencing delays in the process of acquiring drilling permits. While the Company continues to progress its exploration drilling program, part of this progress is dependent upon receipt of such government approvals or permits.

About PetroNova:

The Company, through its subsidiaries, is engaged in the exploration for, and the acquisition and development of, oil and natural gas resources in South America, specifically in Colombia. The Company's assets currently include the Company's interests in the PUT-2 and Tinigua Blocks located in the Caguan-Putumayo Basin in Colombia, both of which are operated by the Company, and the non-operated Llanos Blocks located in the Llanos Basin in Colombia. The common shares of the Company trade on the TSX Venture Exchange under the stock symbol "PNA".

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.

Caution Regarding Forward-Looking Statements and Information:

Certain statements and information contained in this press release constitute forward-looking statements and information (collectively "forward-looking statements") within the meaning of applicable securities laws. These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "intend", "plan", "continue", "estimate", "budget", "targeting", "project", "expect", "may", "will", "might", "should", "could", "believe", "predict" and "potential" and similar expressions are intended to identify forward-looking statements. Such statements represent the Company's internal projections, estimates, expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Management believes the expectations reflected in these forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon.

In particular, this press release contains forward-looking statements pertaining to the Company's future exploration and development activities and the timing thereof, including the extended testing of discoveries on the Llanos Blocks; the interpretation of the 3D seismic campaign at Atarraya and Pendare and the initiation of a drilling campaign on the CPO-7 and CPO-13 Blocks, respectively; the drilling of eight wells in the Llanos Blocks; the commencement of civil works to drill a first exploratory well on the Tinigua Block; and the initiation of permitting processes on the PUT-2 Block. With respect to forward-looking statements contained in this press release, assumptions have been made regarding, among other things: general economic, market and business conditions in Colombia and globally; future crude oil and natural gas prices; the continued availability of capital, undeveloped lands and skilled personnel; the ability to obtain equipment in a timely manner to carry out exploration and development activities; the regulatory framework governing royalties, taxes and environmental matters in Colombia and any other jurisdictions in which the Company may conduct its business in the future; the ability of the Company to obtain the necessary approvals, permits and licences to conduct its operations; the applicability of technologies for recovery and production of the Company's oil and natural gas resources and reserves; the recoverability of the Company's oil and gas resources and reserves; future capital and exploration expenditures to be made by the Company; future sources of funding for the Company's exploration program; the geography of the areas in which the Company is exploring; and adequate weather and environmental conditions.

Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain risk factors, including, but not limited to: general economic, market and business conditions; risks related to the exploration, development and production of oil and natural gas; risks inherent in the Company's international operations, including security and legal risks in Colombia; risks related to the timing of completion of the Company's projects; competition for, among other things, capital, the acquisition of resources and skilled personnel; actions by governmental authorities, including changes in government regulation and taxation; the failure of the Company to obtain the necessary approvals, permits and licences to conduct its operations; environmental risks and hazards; the availability of capital on acceptable terms; the failure of the Company or the holder of certain licenses or leases to meet specific requirements of such licenses or leases; adverse claims made in respect of the Company's properties or assets; failure to engage or retain key personnel; geological, technical, drilling and processing problems, including the availability of equipment and access to properties; failure by counterparties to make payments or perform their operational or other obligations to the Company in compliance with the terms of contractual arrangements between the Company and such counterparties; and the other factors discussed under the heading "Risk Factors" in the Annual Information Form and the Company's other continuous disclosure documents filed from time to time with applicable securities regulatory authorities in Canada and which may be accessed on PetroNova's SEDAR profile at www.sedar.com.  

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements included in this press release are expressly qualified by this cautionary statement and are made as of the date of this press release. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.

SOURCE PetroNova Inc.


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