(All dollar figures are expressed in
United States Dollars)
CALGARY, May 30, 2017 /CNW/ - Madalena Energy Inc.
("Madalena" or the "Company") (TSXV: MVN and OTCQX: MDLNF) is
pleased to provide its operating and financial results for the
three months ended March 31,
2017. Selected information is outlined below and should be
read in conjunction with Madalena's unaudited condensed interim
consolidated financial statements for the three months ended
March 31, 2017 and the associated
management's discussion and analysis, which are available for
review under the Company's profile at www.sedar.com and on the
Company's website at www.madalenaenergy.com.
Outlook
Madalena has successfully completed the strategic alternatives
process which it initiated in June
2016. On May 8, 2017, Madalena
entered into a series of agreements with Hispania Petroleum S.A.,
("Hispania") a private, family-owned Spanish energy company which
has operated in multiple countries, including Argentina, for three generations. The
agreements provide for a package of debt and mezzanine financing
which, once completed, are expected to alleviate Madalena's
liquidity challenges (the "Working Capital Loan") and provide the
Company access to growth capital for drilling and investment
activities (the "Capex Loan"). These agreements are subject to
certain regulatory and shareholder approvals. The Company expects
to hold its annual and special meeting of shareholders in
July 2017 to, among other things,
approve the Capex Loan.
Jose David Penafiel, Hispania's
CEO, was appointed CEO of Madalena effective May 8, 2017 and he and Alejandro Augusto Penafiel have joined
Madalena's Board of Directors. Effective May
31, 2017, Alejandro Penafiel
will assume the Interim CFO role as the Company conducts a search
for a permanent CFO.
In order for new management to successfully transition and
streamline operations, the companies have entered into a services
agreement (the "Services Agreement") whereby Hispania's personnel,
in Argentina and elsewhere, will
be made available to Madalena.
As a result of transferring the executive management functions
to Argentina, the Interim
President and Chief Executive Officer and the Vice President,
Exploration and New Ventures departed the Company on May 8, 2017 and the Vice President, Finance and
Chief Financial Officer will depart on May
31, 2017.
Recent Highlights in 2017
- Madalena closed the previously announced Coirón Amargo Sur Este ("CASE") transaction in
January 2017, providing the Company
with cash payments of $10 million,
$3 million of which was received in
December 2016 and the balance in
January 2017;
- The 2017 work program at CASE has commenced. A Vaca
Muerta horizontal trajectory of approximately 1,000 meters has been
drilled and a liner has been run at CAS.x-15(r)(h);
- Madalena repaid and closed its $1.6 million Argentine debt facility in
February 2017;
- Argentine oil prices are expected to converge with
international Brent pricing over the coming months;
- Madalena sold 1.5 million free-trading shares of Point Loma
Resources Ltd. ("Point Loma") in January
2017 for net proceeds of $0.5
million; and
- The Company sold 4.7 million escrowed common shares in Point
Loma in April 2017 for gross cash
proceeds of $0.8 million.
SUMMARY FINANCIAL AND OPERATIONAL RESULTS
|
|
|
Three months
ended
March
31
|
|
2017
|
2016
|
|
|
|
Financial – US
Dollars ($000s, except per share amounts)
|
|
|
Oil and gas
revenue
|
10,336
|
14,811
|
Funds flow from (used
in) operations(1)
|
(2,998)
|
3,159
|
Per share - basic
& diluted(1)
|
(0.01)
|
0.01
|
Net income
(loss)
|
320
|
(6,491)
|
Per share – basic and
diluted
|
0.00
|
(0.01)
|
Capital
expenditures
|
665
|
4,861
|
Working
capital
|
5,232
|
(4,413)
|
Common shares
outstanding - 000s
|
543,780
|
542,100
|
|
|
|
Operating
|
|
|
Average Daily
Sales
|
|
|
Crude oil and Ngls –
Bbls/d
|
1,899
|
2,409
|
Natural gas –
Mcf/d
|
2,005
|
2,976
|
Total - Boe
/d
|
2,233
|
2,905
|
|
|
|
Average Sales
Prices
|
|
|
Crude oil and Ngls -
$/Bbl
|
55.70
|
62.19
|
Natural gas -
$/Mcf
|
4.53
|
4.35
|
Total -
$/Boe
|
51.43
|
56.03
|
|
|
|
Operating
Netbacks(2) - $/Boe
|
15.87
|
24.82
|
|
|
(1)
|
This table
contains the term "funds flow from (used in) continuing
operations", which is a non-GAAP measure and should not be
considered an alternative to, or more meaningful than "cash flow
from (used in) operating activities " as determined in accordance
with International Financial Reporting Standards ("IFRS") as an
indicator of the Company's performance. Funds flow from (used in)
operations and funds flow from (used in) operations per share
(basic and diluted) do not have any standardized meanings
prescribed by IFRS and may not be comparable with the calculation
of similar measures for other entities. Management uses funds flow
from (used in) continuing operations to analyze operating
performance and considers funds flow from (used in) continuing
operations to be a key measure as it demonstrates the Company's
ability to generate the cash necessary to fund future capital
investment. The reconciliation between funds flow from (used in)
continuing operations and cash flow from (used in) operating
activities can be found in the MD&A. Funds flow from (used in)
continuing operations per share is calculated using the basic and
diluted weighted average number of shares for the period,
consistent with the calculations of earnings (loss) per
share.
|
(2)
|
Operating netback
is a non-GAAP measure calculated as the average per boe of the
Company's oil and gas sales, less royalties and operating
costs.
|
As at March 31, 2017, the Company
reported net income from continuing operations of $0.3 million, had working capital of
approximately $5.2 million and
significant future capital commitments to develop its properties.
It is anticipated that currently available resources in addition to
forecasted cash flow from operating activities will not be
sufficient to resolve the anticipated capital commitments through
2017 and 2018.
As a result, for the three months ended March 31, 2017, the Company continues to include
a note of going concern uncertainty in the condensed interim
consolidated financial statements.
About Madalena Energy
Madalena is an independent, Canadian headquartered, Argentine
focused upstream oil and gas company with operations in four
provinces of Argentina where it is
primarily focused on the delineation of unconventional oil and gas
resources. The Company is implementing horizontal drilling and
completions technology to develop both its conventional and
resource plays.
Madalena trades on the TSX Venture Exchange under the symbol MVN
and on the OTCQX under the symbol MDLNF.
Reader Advisories
Forward Looking Information
The information in this news release contains certain
forward-looking statements. These statements relate to future
events or our future performance, in particular, but not limited
to, with respect to matters related to addressing the Company's
liquidity challenges, the Company's future plans and the timing of
certain matters. All statements other than statements of historical
fact may be forward-looking statements. Forward-looking statements
are often, but not always, identified by the use of words such as
"seek", "anticipate", "plan", "continue", "estimate",
"approximate", "expect", "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should",
"believe", "would" and similar expressions. These statements
involve substantial known and unknown risks and uncertainties,
certain of which are beyond the Company's control, including: the
impact of general economic conditions; industry conditions; changes
in laws and regulations including the adoption of new environmental
laws and regulations and changes in how they are interpreted and
enforced; fluctuations in commodity prices and foreign exchange and
interest rates; stock market volatility and market valuations;
volatility in market prices for oil and natural gas; liabilities
inherent in oil and natural gas operations; uncertainties
associated with estimating oil and natural gas reserves;
competition for, among other things, capital, acquisitions, of
reserves, undeveloped lands and skilled personnel; incorrect
assessments of the value of acquisitions; changes in income tax
laws or changes in tax laws and incentive programs relating to the
oil and gas industry; geological, technical, drilling and
processing problems and other difficulties in producing petroleum
reserves; and obtaining required approvals of regulatory
authorities. The Company's actual results, performance or
achievement could differ materially from those expressed in, or
implied by, such forward-looking statements and, accordingly, no
assurances can be given that any of the events anticipated by the
forward-looking statements will transpire or occur or, if any of
them do, what benefits the Company will derive from them. These
statements are subject to certain risks and uncertainties and may
be based on assumptions that could cause actual results to differ
materially from those anticipated or implied in the forward-looking
statements. The forward-looking statements in this news release are
expressly qualified in their entirety by this cautionary statement.
Except as required by law, the Company undertakes no obligation to
publicly update or revise any forward-looking statements. Investors
are encouraged to review and consider the additional risk factors
set forth in the Company's Annual Information Form, which is
available on SEDAR at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Madalena Energy Inc.