Quattro Releases Financials for the 6 months ending June 30, 2016 and Increases Production Year over Year 15%
August 30 2016 - 7:19AM
Quattro Exploration and Production Ltd. (TSX-V:QXP)
("
Quattro" or the "
Company")
announces its financial results for the quarter ended June 30th,
2016, reporting a loss of $0.02 per share for the 6 month period
ended June 30, 2016. Despite these challenges Quattro is
pleased to report that in the first half of 2016 production
averaged 1,593 boe per day, representing a year-over-year increase
of 15% from the average production of 1,390 boe per day recorded
during the same per period in 2015.
In the second quarter oil and natural gas
production at Quattro was limited to 1,540 boe/d due to a decision
to limit capital investments to only oil production, during a
period of extremely low commodity prices. Quattro continues to
believe that a diversified production base of oil and natural gas
is a fundamental requirement within the industry, and for the
foreseeable future Quattro intends to increase oil production to
where it will represent a sustainable 60% of its daily production,
with this transformation being accelerated with the completion of
its divestiture plan previously announced on August 2, 2016.
Over the past 12 months the Company’s oil production continues to
increasingly offset natural gas prices that in the 2nd quarter
briefly reached lows of $0.60 per mcf. The Company’s decision
in the 4th quarter of 2015 to more aggressively increase oil
reserves and production through acquisitions has proven to be
timely as natural gas prices are only now recovering to a more
seasonally adjusted price range of $2.50 to $3.50 per mcf from
prices not seen in over 20 years.
In the 2nd quarter of 2016, despite the low
overall commodity prices, the Company’s focus on increasing oil
production positioned the Company to increase quarter-over-quarter
revenues to $19.55 per boe from the lows of $16.01 per boe reported
in the 1st quarter of 2016, limiting losses, with the following
results;
Revenues - $19.55 per
boe |
|
|
|
|
|
$ |
2,740,199 |
Net income from
operations - $ 1.19 per boe “Net Back” |
|
|
|
|
|
$ |
163,213 |
Comprehensive net loss
– 0.03 per share |
|
|
|
|
|
$ |
1,151,987 |
Cash and
equivalents |
|
|
|
|
|
$ |
8,062,119 |
Working capital deficit
(net of Long Term Debt) |
|
|
|
|
|
$ |
178,241 |
Net debt (excluding
decommissioning, non-cash liabilities & deferred taxes) |
|
|
|
|
|
$ |
10,476,407 |
|
|
|
|
|
|
|
|
The Company’s focus on increasing oil production
in the 2nd quarter will continue for the next 12 months and is
being accelerated with the divestiture and monetizing of a portion
of its operations in the Western Canadian Sedimentary Basin in the
second half of 2016.
“Commodity prices in the first half of 2016
continued to be a mixed bag of dramatic adjustments, while the
overall industry continues to struggle with the determination
of which sources of energy will be the driving force in the
future. Despite this fact, Quattro continued to focus on
improving its operational results, through the balancing of its
portfolio of production through an increase in oil production,”
said Leonard B. Van Betuw, President and CEO. “Quattro’s
diversified and competitive low cost production strategy situated
within low risk geo-political jurisdictions are what will
ultimately be the foundation for the dramatic improvements in the
Company’s financial strength.”
“The 6 months ending June 30, 2016 have been a
series of contradictions for Quattro. The Company increased
production and cash-flow from oil production, but unprecedented low
natural gas prices due to the shut-in of operations in regions
close to the fires in Northern Alberta, masked both the Company’s
results and the overall recovery in oil prices that are related as
much to adjustments around the world as they are to the regional
challenges in Alberta. These challenges for Quattro are
understandable but difficult to convey to the industry and its
stakeholders over the short term. It is within this economic
background that Quattro believes that difficult and rational
decisions had to be made in order that the Company’s long term
business plan will prevail, Therefore the Company’s hard work
over the past years has put Quattro in an envious position of
having options, as a result of having a number of economically
viable projects in inventory, as such, the Company has determined
that a non-core divestiture and monetization program, will allow
for the acceleration of the Company’s adjustments to the current
market conditions. Resulting in both near term and long term
rewards for all stakeholders of the Company.”
“Quattro’s Board of Directors’ approval of the
divestiture plan to sell 40% of Quattro’s year end 2015 reserves is
a testament to what the size of the Company’s unrecognized
potential has become and is a clear recognition and support for
what Quattro’s Team is capable of in terms of producing results
when they are given the opportunity,” said Leonard Van Betuw.
“At the time of the filing its financials,
Quattro continues to refine its divestiture plan, while it
evaluates its options for the funding and development of its long
life oil and natural gas assets in Saskatchewan and NE British
Columbia where it intends to collectively reach its first goal of a
sustainable potential of more than 3,000 barrels per day,” said Mr.
Van Betuw. “It is these reserves that will position the Company to
grow for the next fifteen to twenty years through both exploration
and production in Canada, Central and South America.”
About Quattro Exploration and Production
Ltd.
Quattro Exploration and Production Ltd. (“QXP”)
continues to focus on the conventional exploration and development
of oil and natural gas reserves in Western Canada, with an
expanding presence in Saskatchewan and British Columbia. Its
core low risk production base will provide the Company the capacity
to aggressively pursue a series of high impact exploration and
development efforts in Central and South America. Quattro
intends to balance this portfolio of activities to assure its
shareholders that it achieves material growth in both reserves and
production.
This release includes certain statements that
may be deemed “forward-looking statements”. All statements in this
release, other than statements of historical facts, that address
future production, reserve potential, exploration drilling,
exploitation activities and events or developments that the Company
expects are forward-looking statements. Although the Company
believes the expectations expressed in such forward looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and actual results or
developments may differ materially from those in the
forward-looking statements. Factors that could cause actual results
to differ materially from those in forward looking statements
include market prices, exploitation and exploration successes,
continued availability of capital and financing, and general
economic, market or business conditions. Investors are cautioned
that any such statements are not guarantees of future performance
and those actual results or developments may differ materially from
those projected in the forward-looking statements. For more
information on the Company, Investors should review the Company’s
registered filings which are available at www.sedar.com.
This news release shall not constitute an offer
to sell or the solicitation of any offer to buy, nor shall there be
any sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful. The securities
offered have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent registration or applicable exemption
from the registration requirements of the U.S. Securities Act and
applicable state securities laws.
BOE presentation:
Barrel ("bbl") of oil equivalent ("boe") amounts
may be misleading particularly if used in isolation. All boe
conversions in this report are calculated using a conversion of six
thousand cubic feet of natural gas to one equivalent barrel of oil
(6 mcf=1 bbl) and is based on an energy conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the well head.
Trading in the securities of Quattro Exploration
and Production Ltd. should be considered highly speculative.
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Leonard Van Betuw President and Chief Executive
Officer Office (403) 984-3917 Ext.102
Direct Line (587) 228-7070
leonard@qxp-petro.com
Or
Tianda Dranchuk
Business Development
tianda.d@qxp-petro.com
www.qxp-petro.com