During the year ended December 31, 2012, the Company produced 162,444 barrels of oil (2011: 11,623) and sold 162,077 barrels (2011: 9,567) for total oil sales of $17,295,853 (2011: $1,022,009), or $106.71 per barrel (2011: $106.83). Total recorded revenue was $16,475,971 (2011: $974,517), which is accounted for net of royalties of $819,882 (2011: $47,792), or $5.06 per barrel sold (2011: $4.96).
Expenses and Other Items
Production costs during the year ended December 31, 2012 totalled $5,116,059 (2011: 224,219), or $31.57 per barrel (2011: $23.44). Included in production costs are all site-related expenditures, including applicable equipment rental fees, site services, overheads and labour; transportation and storage costs including trucking, testing, tank storage, processing and handling; and port dues as incurred prior to the sale of oil. During the year ended December 31, 2012, fixed operating costs represented approximately 77% of total production costs, giving rise to lower field netbacks in light of reduced oil production. However, the Company is in the process of establishing permanent facilities at several of its wells, some of which will be unmanned, which are expected to reduce the level of fixed operating costs in the longer term.
Depreciation and accretion costs recorded during the year ended December 31, 2012 totalled $4,103,405 (2011: $246,540), or $25.32 per barrel of oil sold (2011: $25.77). Depreciation is calculated using the unit-of-production method by reference to the ratio of production in the period to the related total proved and probable reserves of oil and natural gas, taking into account estimated future development costs necessary to access those reserves.
Stock-based compensation for the year ended December 31, 2012 totalled $1,594,780 compared to $2,203,548 during the same period in 2011. The decrease in stock-based compensation corresponds to fewer stock options granted during the year.
General and administrative expenses for the year ended December 31, 2012 totalled $5,896,949 compared to $2,583,530 incurred in the same period in fiscal 2011. The increase in general and administrative costs corresponds to increases in salaries related to new hires, professional fees and travel and administrative expenses, as the Company prepares for expansion of operations following the Acquisition. The Company also incurred costs pertaining to consulting fees in its ongoing refinement of corporate strategies and goals.
Transaction costs for the year ended December 31, 2012 totalled $1,161,657 compared to $Nil incurred in the same period in fiscal 2011. The transaction costs incurred during the period included legal and professional fees incurred for the Origin Agreement, which are expensed as they are incurred in relation to the anticipated business combination.
Finance income for the year ended December 31, 2012 totalled $211,551 compared to $119,583 in the same period in fiscal 2011. Finance income relates to interest earned on the Company's cash and cash-equivalent balances held in treasury.
Foreign exchange loss for the year ended December 31, 2012 amounted to $1,895,845 compared to a $134,934 gain realized in the same period of fiscal 2011. The foreign exchange losses incurred in the current year is a result of the strengthening of the Canadian dollar against the US dollar, during a period that the Company held significant US dollar cash balances and deposits in anticipation of completion of the Origin Agreement.
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