(1) Funds from operations, funds from operations per share and field netback are not terms prescribed by International Financial Reporting Standards (IFRS) or the previous Canadian generally accepted accounting principles (Canadian GAAP), and so are considered non-GAAP measures. Funds from operations represents cash generated from operating activities before changes in non-cash working capital and decommissioning expenditures. Rock considers funds from operations a key measure as it demonstrates the Company's ability to generate the cash necessary to fund future growth through capital investment. Funds from operations per share is calculated using the same share basis which is used in the determination of net income (loss) per share. Field netback is calculated as crude oil and natural gas revenues after deducting royalties, operating costs and transportation costs, resulting in an approximation of initial cash margin in the field on crude oil and natural gas production. Rock's use of these non-IFRS measurements may not be comparable with the calculation of similar measures for other companies.
I am pleased to report that in a year Rock has made real progress on many fronts - a remarkable turnaround from a year ago. Our total corporate production currently exceeds 3,000 boepd led by strong drilling results at our new discovery at Mantario. We have also developed a significant inventory of drill locations on our heavy oil properties.
Twelve months ago Rock completed the sale of its natural gas assets at Elmworth, was producing approximately 2,000 boe per day, and had no debt with $14 million of cash in the bank. The Company had RE-set the stage for its growth and future. We had a solid foundation of assets, cash flow and a strong balance sheet, but we needed to RE-focus and RE-start the Company. Our discovery well at Mantario was producing 80 barrels of oil per day but we had not yet completed the acquisition of the land or seismic needed to completely understand the extent of the pool. We were encouraged by the initial drilling results in the area, but many questions remained regarding the future of the pool. At Onward we were making good progress on a water flood scheme in our north pool and while we could identify the reserve additions, we realized it would take time for production rates to respond to the water injection. At Lloydminster we were focused on reducing operating costs and implementing the early stages of two high volume lift projects.
With our assets and balance sheet in place, we turned our attention to RE-energize the team. We made a number of staff changes and other key additions, brought on a new CFO, VP Exploration and a Manager of Engineering.
Operationally, we have an ambitious year ahead of us. At Mantario we have developed a producing property that is currently producing in excess of 1,800 boepd and has become our flagship property for reserve growth and production additions. At Onward, the water flood is in operation, we are optimizing production, capturing the reserves we identified, and continuing to explore in an area where we have infrastructure. At Lloydminster, we will be completing the installation of high volume lift facilities, and have expanded our drilling inventory to over 60 locations. All of this demonstrates our commitment to building a suite of assets that will provide our shareholders with a strong, predictable base of cash flow.
Rock's 2012 Operating Accomplishments
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