Greenfields Petroleum Corporation Announces First Quarter 2019 Financial and Operating Results and Extension of Senior Secured Debt Payments

Source Press Release
Company Greenfields Petroleum Corporation 
Tags Strategy - Corporate, Financial & Operating Data
Date May 29, 2019

Greenfields Petroleum Corporation (the “Company” or “Greenfields”) (TSX VENTURE: GNF), a production focused company with operating assets in Azerbaijan, announces its financial and operating results for the three months ended March 31, 2019 and the extension of senior secured debt payments.

Selected financial and operational information included below should be read in conjunction with the Company’s condensed consolidated financial statements for the three months ended March 31, 2019 and related management’s discussion and analysis (“MD&A”), which can be found at  and on SEDAR at  . Except as otherwise indicated, all dollar amounts referenced herein are expressed in United States dollars.

First Quarter 2019 Highlights

  • The Company's entitlement share of sales volumes (the “Sales Volumes”) from the offshore block known as the Bahar project (the “Bahar Project”) resulted in revenue of $6.3 million in Q1/19, a 10% decrease relative to revenue of $7.0 million in Q1/18.
  • Sales Volumes averaged 525 bbl/d for crude oil and 14,545 mcf/d for natural gas or 2,949 boe/d in Q1/19. As compared to Q1/18, Sales Volumes decreased 12% for crude oil, 2% for natural gas and 4% for boe/d.
  • Realized oil price averaged $58.72/bbl for Q1/19, a 7% decrease in comparison to an average price of $63.11/bbl in Q1/18.  The price of natural gas has been fixed at $2.69/mcf since April 1, 2017. 
  • Operating costs were $5.4 million for Q1/19, an 8% increase relative to costs of $5.0 million in Q1/18. 
  • Capital expenditures were $0.6 million for Q1/19, a 57% decrease as compared to expenditures of $1.4 million in Q1/18. 
  • After interest and depreciation expenses, the Company realized a net loss of $3.6 million for Q1/19, which represents a loss per share (basic and diluted) of $0.20.  The Company also realized a net loss of $2.6 million in Q1/18, with a loss per share (basic and diluted) of $0.14.

Operational Review

  • In Q1/19 Bahar Energy Operating Company continued its excellent safety and environmental record with no ‘Lost Time Incidents’, no ‘Reportable Incidents’ and no spills.  
  • Gross crude oil production in Q1/19 was 665 bbl/d, a decrease of 10% relative to Q4/18. Production in Q1/19 was impacted by downtime related to ongoing workovers. In the Gum Deniz Oil Field, four successful recompletions were conducted and seven well services performed for sand cleanouts and artificial lift optimization to partially offset the natural field decline.  
  • Gross gas production from the Bahar Gas Field in Q1/19 was 18,209 mcf/d, a 14% decrease relative to Q4/18. Production in Q1/19 was impacted by the temporary suspension of wells B-173 and B-182 due to low flowing pressure and liquid loading.  Workovers were also initiated for wells B-140 and B-205 after delays in crane vessel support for the movement of workover rigs.
  • Operating costs were $5.4 million for Q1/19, a 30% decrease relative to Q4/18 spending of $7.7 million. Operating costs in Q4/18 reflected the costs of capital workovers for two Bahar Gas Field wells charged to expense due to collapsed casing. The lower level of capital projects activity during Q1/19 also resulted in the expensing of operating costs which would otherwise be capitalized. Administrative expenses for Q1/19 were $0.6 million compared to $0.7 in Q4/18. 
  • Capital expenditures were $0.6 million for Q1/19, a 33% decrease relative to $0.9 million in Q4/18. Capitalexpenditures during Q1/19 were also impacted by delays in crane vessel support for the movement of workover rigs.

Selected Financial Information

US$000’s, except as noted  Three Months Ended 
  March 31, 
    2019      2018   
Crude oil and natural gas    6,348      7,046   
Net income (loss)    (3,556)      (2,591)   
Net income (loss) per share, basic and diluted  ($0.20)    ($0.14)   
Average Entitlement Sales Volumes (1)     
Crude Oil (bbl/d)    525      597   
Change compared to same period in 2018    (12%)     
Natural gas (mcf/d)    14,545      14,855   
Change compared to same period in 2018    (2%)     
Barrel oil equivalent (boe/d)    2,949      3,072   
Change compared to same period in 2018    (4%)     
Entitlement to gross sales volumes (2)    80%      88%   
Average oil price ($/bbl)    59.82      64.25   
Net realization price ($/bbl)    58.72      63.11   
  Change compared to same period in 2018    (7%)     
Brent oil price ($/bbl)    63.10      66.86   
Natural gas price ($/mcf)    2.69      2.69   
Net realization price ($/boe) (3)    23.92      25.48   
Operating cost ($/boe) (3)    (20.58)      (18.26)   
Operating netback ($/boe) (3)    3.34      7.22   
Capital Items     
Cash and cash equivalents    838      210   
Total Assets    193,638      199,689   
Working capital deficit    (21,765)      (6,666)   
Long term debt and shareholders’ equity    160,390      180,087   

(1) Sales Volumes represent the Company’s share of entitlement production marketed by State Oil Corporation of Azerbaijan (“SOCAR”) after in-kind production volumes delivered to SOCAR as compensatory petroleum and the government’s share of profit petroleum.  The Company’s share of entitlement production includes the allocation of the share of cost recovery production of  SOCAR Oil Affiliate (“SOA”) as stipulated by the Carry 1 recovery provisions in the Exploration, Rehabilitation, Development and Production Sharing Agreement (the “ERDPSA”). Compensatory petroleum represents 10% of gross production from the ERDPSA and continues to be delivered to  SOCAR, at no charge, until specific cumulative oil and natural gas production milestones are attained. 
(2) Represents the percentage of the entitlement production volume of Bahar Energy Limited (“BEL”) relative to gross volumes delivered by the ERDPSA.   
(3) Net realization price, operating cost and operating netback are Non-IFRS measures. For more information see “Non-IFRS Measures”.

Extension of senior secured debt payments

The Company has executed payment deferral letters with its senior debt lender, Vitol Energy (Bermuda) Ltd. (“Vitol”), to defer payments in the aggregate of $8.3 million until June 30, 2019. The Company anticipates the deferrals will give the Company sufficient time to comply with its obligations under the thirteenth amending agreement to the loan agreement between the Company and  Vitol.

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd