CALGARY, ALBERTA–(Marketwire – Nov. 28, 2012) –
THIS NEWS RELEASE IS NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES, TO UNITED STATES NEWS WIRE SERVICES OR TO UNITED STATES PERSONS.
Financial and Operations
Year to date petroleum and natural gas revenue was $8,514,700, which is a 19% increase over the same period in 2011. Production volume was up 30% year to date compared to the same period last year. The Corporation’s quarterly production was also up 22% compared to Q3 2011.
Replacement of the damaged tank farm at the Viewfield battery was completed September 15, 2012. The financial impact to Torquay is limited to insurance deductibles of approximately $136,000.
Year to date netbacks have averaged $48.69 per boe for the first nine months of 2012. Average year to date prices have declined $5.41 per boe as compared to the first nine months of 2011.
In addition, the Corporation had a $23,347,959 impairment charge in Q3 2012 to reflect the transaction value of the Corporation’s recently announced sale to a private company.
Capital activity was minimal during the third quarter as management sought to reduce debt levels.
Plan of Arrangement
On November 20, 2012, the Corporation announced that it has entered into an arrangement agreement with a private oil and gas company based in Calgary. Under the terms of the arrangement agreement, the purchaser will acquire all of the issued and outstanding Class A Shares and Class B Shares of Torquay for cash consideration of $0.16 per Class A Share and $1.60 per Class B Share, by way of a plan of arrangement under the Business Corporations Act (Alberta). A special meeting of the Torquay Shareholders will be held in the Cardium Room of the Calgary Petroleum Club, located at 319 – 5th Avenue S.W., Calgary, Alberta, at 9:00 a.m. (Calgary time) on December 21, 2012 to consider approval of the transaction. An Information Circular containing a complete description of the transaction, including Form of Proxy and letter of transmittal, has been mailed to shareholders of record as of November 21, 2012.
Selected Financial and Operational Information
Selected financial and operational information is outlined below and should be read in conjunction with Torquay’s unaudited condensed interim financial statements as at and for the three and nine months ended September 30, 2012.
Three months ended Nine months ended
September 30 September 30
($000’s except per share
amounts) 2012 2011 2012 2011
Petroleum & natural gas revenue $ 2,155 $ 2,047 $ 8,515 $ 7,151
Funds flow from operations 934 531 3,757 2,530
Funds flow per share (basic and
diluted) 0.02 0.01 0.08 0.06
Net loss (23,818) (1,425) (26,431) (4,715)
Net loss per share (basic and
diluted) (0.49) (0.03) (0.55) (0.12)
Capital expenditures (net) 656 17,853 3,931 37,765
Weighted common shares
outstanding (1) 48,659 48,568 48,401 40,783
Crude oil (bbls/d) 288 226 364 262
NGL’s (bbls/d) 16 30 23 37
Natural gas (mcf/d) 135 75 169 135
Total BOE/d 327 268 415 321
Crude oil ($/bbl) $ 78.45 $ 91.18 $ 81.98 $ 91.14
NGL’s ($/bbl) 39.52 45.01 43.39 45.15
Natural gas ($/mcf) 1.34 4.36 1.47 4.37
Average ($/BOE) $ 71.65 $ 83.03 $ 74.84 $ 81.28
Field netback ($/BOE)
Petroleum & natural gas
revenue $ 71.65 $ 83.03 $ 78.84 $ 81.28
Royalties (8.00) (9.33) (11.22) (10.09)
Operating costs (14.47) (22.59) (14.93) (17.09)
Netback $ 49.18 $ 51.11 $ 48.69 $ 54.10
(1) Basic per share amounts are calculated by dividing net income or loss by
the weighted average number of Class A outstanding during the period. In
addition, for the purpose of calculating diluted per share amounts the
effect of warrants, options and convertible Class B Shares are anti-
dilutive and consequently are not included in the determination of
diluted shares outstanding.
The Corporation’s Class A Shares and Class B Shares trade on the TSX Venture Exchange under the symbols TOC.A and TOC.B. The Corporation currently has 48,659,448 Class A Shares and 1,260,000 Class B Shares outstanding.
FORWARD LOOKING STATEMENTS:
This news release contains forward-looking statements and forward-looking information (collectively “forward looking information”) within the meaning of applicable securities laws. Forward-looking information typically use words such as “anticipate”, “believe”, “project”, “expect”, “goal”, “plan”, “intend” or similar words suggesting future outcomes, statements that actions, events or conditions “may”, “would”, “could” or “will” be taken or occur in the future. In particular, forward looking information in this news release includes, but is not limited to: statements with respect to, expected results from operations and expected completion of the plan of arrangement. The forward-looking information is based on certain key expectations and assumptions made by Torquay, including expectations and assumptions concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; future well production rates and estimates of operating costs; reserve and resource volumes; expected results of operating techniques; the state of the economy and the exploration and production business; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition; ability to market oil and natural gas successfully and the ability of the Corporation to access capital.
Although Torquay believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Torquay can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, results from operations will not meet with expectations and risks associated with the oil and gas industry generally. Additional information on the foregoing risks and other factors that could affect Torquay’ operations and financial results are included in Torquay’s annual information form and other reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (sedar.com). The forward-looking statements contained in this news release are made as of the date hereof and Torquay undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. The term “boe” may be misleading, particularly if used in isolation. A boe conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead. References to “funds flow from operations” (cash flow from operating activities before changes in non-cash working capital and decommissioning expenditures) and “operating netbacks” (oil and gas revenue less royalties and operating costs) which are not IFRS measures and do not have standardized meanings prescribed by IFRS and therefore may not be comparable with the calculation of similar measures from other entities.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Torquay Oil Corp.
Mr. Terry McCallum
President & Chief Executive Officer
403 233 2444 ext. 32
403 262 6991 (FAX)
Torquay Oil Corp.
Mr. Brent McKercher
Executive Vice President & Chief Operating Officer
403 233 2444 ext. 30
403 262 6991 (FAX)