The realized foreign exchange losses arise primarily because of the difference between the Indian rupee and U.S. dollar exchange rate at the time of recording individual accounts receivable and accounts payable compared to the exchange rate at the time of receipt of funds to settle recorded accounts receivable and payment to settle recorded accounts payable.
The unrealized foreign exchange gain in the year to date period arose primarily on the revaluing of the Indian-rupee denominated income tax receivable and site restoration deposit to U.S. dollars and the weakening of the Indian-rupee versus the U.S. dollar. There was an unrealized foreign exchange loss during the current quarter as the Indian-Rupee strengthened slightly versus the U.S. dollar when comparing the quarterly average for the current quarter to the quarter ended September 30, 2012.
There were additional foreign exchange gains in the period on U.S. dollar cash held by the parent whose functional currency is the Canadian dollar. An offsetting entry increases the accumulated other comprehensive income but does not flow through the income statement.
Short-Term Investments
The loss on short-term investments for the year was a result of marking the short-term investments to market value.
Deferred Tax Recovery
As a result of the issuance of convertible notes in December 2012, the Company recognized a deferred tax recovery as an unrecognized deferred tax asset was recognized to offset the deferred tax liability associated with the convertible notes.
Netbacks
The following tables outline operating, funds from operations and earnings netbacks (all of which are non-IFRS measures):
---------------------------------------------------------------------------- Three months ended Three months ended Dec 31, 2012 Dec 31, 2011($/Mcfe) India Bangladesh Total India Bangladesh Total----------------------------------------------------------------------------Oil and natural gas revenue 4.79 2.61 4.02 4.82 2.63 4.23Royalties (0.24) - (0.16) (0.25) - (0.18)Profit petroleum (0.09) (0.88) (0.37) (0.13) (0.89) (0.34)Production and operating expense (0.63) (0.38) (0.55) (0.52) (0.34) (0.48)----------------------------------------------------------------------------Operating netback 3.83 1.35 2.94 3.92 1.40 3.23----------------------------------------------------------------------------General and administrative (0.05) (0.08)Other income - 0.33Net finance expense (0.63) (0.22)Current income tax expense (0.06) 0.06Minimum alternate tax (0.14) (0.31)----------------------------------------------------------------------------Funds from operations netback 2.06 3.01----------------------------------------------------------------------------Share-based operating expense (0.05) -Depletion and depreciation expense (2.33) (1.34)Exploration and evaluation costs (4.65) (2.84)Other expenses (2.25) (0.29)Gain (loss) on short- term investment (0.02) 0.12Net finance expense (0.20) (0.32)Deferred income tax reduction (expense) 0.42 (0.34)----------------------------------------------------------------------------Earnings netback (7.02) (2.00)----------------------------------------------------------------------------
