Anterra Energy Inc.
TSX VENTURE : AE.A
OTCQX : ATERF

Anterra Energy Inc.

November 27, 2013 16:55 ET

Anterra Energy Announces Q3-2013 Results

CALGARY, ALBERTA--(Marketwired - Nov. 27, 2013) - Anterra Energy Inc. (TSX VENTURE:AE.A)(OTCQX:ATERF) ("Anterra" or the "Company") is pleased to announce financial and operating results for the three and nine months ended September 30, 2013. Selected information as outlined below should be read in conjunction with the Company's unaudited consolidated financial statements and related management discussion and analysis available on SEDAR at www.sedar.com or the Company's website at www.anterraenergy.com.

"Throughout 2013, we have made significant progress towards building our reserves and production base, as evidenced by the Terrex and recently announced Nipisi property acquisition," stated Gang Fang, President and CEO. "With expected improving cash flow, available bank lines, access to capital and technical support from our strategic industry partner, we believe the Company is positioned to pursue an aggressive and also prudent growth strategy into 2014."

Operations

Results for the third quarter of 2013 include the operations of Terrex Energy Inc. ("Terrex"), acquired on March 14, 2013. The inclusion of Terrex operating results is the major contributor to the increase in sales volumes and revenue over the third quarter of 2012. On a quarter over quarter basis, Q3 2013 production of 406 boe/d was relatively consistent with Q2 2013 production of 427 boe/d. Revenue for Q3 2013 increased approximately 10% over that of Q2 2013 as a result of higher realized oil prices.

Oil and gas operating expenses during the third quarter of 2013 also increased significantly over 2012 as a result of the Terrex acquisition. Q3 2013 operating costs totaled $1,566,638 or $41.97/boe compared to $588,044 or $32.84/boe in the same period last year. This per barrel increase is primarily due to the higher overall operating costs associated with the Terrex properties. As compared to Q2 2013, Q3 2013 operating costs, on a boe basis, decreased by 9.4% as a result of reduced remediation work at Strathmore and Two Creek during the quarter.

The Company reported losses of $584,159 and $818,613 respectively for the three and nine months ended September 30, 2013 as compared to losses of $46,189 and $386,668 for the comparable periods in 2012. Increased revenues in 2013, including the $1,192,666 gain recognized on the Terrex business combination, were more than offset by increased expenses. Higher than normal general and administrative and operating expenses, particularly during the second quarter, were largely the result of onetime costs associated with the Terrex acquisition. General and administrative and operating costs for the third quarter of 2013 decreased $421,967 from those in the second quarter of 2013.

Funds from operations for the three and nine months ended September 30 2013 were $226,689 and $142,590 respectively as compared to funds from operations of $366,600 and $976,328 for the comparable periods in 2012. Funds from operations for Q3 2013 were $226,689, an increase of $624,546 over Q2 2013 negative funds flow of ($397,857). The quarter over quarter improvement in funds from operations, reflects increased revenue and reduced operating and general and administrative expenses during the quarter.

Outlook

With the acquisition of Terrex during the first quarter of 2013, Anterra added two new development areas, Strathmore and Two Creek. These areas are in addition to the Company's Cardium project at Buck Lake and its Belly River development property at Bretton. Each of these four properties presents the Company with differing and unique opportunities and potential. The Company will add an additional development area with the closing of the Nipisi acquisition announced in the Company's News Release of November 26, 2013.

Anterra is currently preparing a comprehensive corporate development plan based upon a thorough technical and economic review and evaluation of each of these focus properties. The Company is working closely with, and has entered into a longer term technical support arrangement with LandOcean Energy Services Co., Ltd. ("LandOcean"), in conducting property evaluations and in preparing a comprehensive development plan which it expects will be completed by year-end. Plans for 2014 will be announced at that time. LandOcean is a Beijing headquartered, international service corporation that provides geological, geophysical, reservoir and other technical services to the oil and gas industry worldwide.

Financial and Operating Results

Three Months Ended September 30, Nine months ended September 30,
2013 2012 2013 2012
Production
Light crude oil (bbls/d) 283 133 260 162
Natural gas (mcf/d) 652 338 639 362
NGLs (bbls/d) 14 10 17 11
Total production (boe/d) 406 199 384 233
Total production (boe) 37,327 17,907 104,797 63,276
Revenue
Light crude oil ($) 2,469,024 994,222 6,147,499 3,680,272
Natural gas ($) 211,956 78,466 648,826 238,161
NGLs ($) 80,802 45,530 270,755 179,754
Gross revenue ($) 2,761,782 1,118,218 7,067,080 4,098,187
Royalties ($) 539,162 154,780 1,153,829 752,263
Operating expenses ($) 1,566,638 588,044 4,235,949 1,977,189
Net operating revenue ($) 655,982 375,394 1,677,302 1,368,735
Average Prices
Light crude oil ($/bbl) 94.83 83.06 86.61 83.83
Natural gas ($/mcf) 3.53 2.58 3.72 2.43
NGLs ($/bbl) 62.73 50.59 58.34 60.30
Netback
Combined realized prices ($/boe) 73.99 62.45 67.44 64.77
Royalty costs ($/boe) 14.44 8.64 11.01 11.89
Operating costs ($/boe) 41.97 32.84 40.42 31.25
Operating netback ($/boe) 17.57 20.96 16.01 21.63
Midstream Processing
Revenue ($) 766,095 719,561 2,189,194 2,006,399
Operating costs ($) 359,490 242,704 921,366 732,698
Operating netback ($) 406,605 476,857 1,267,828 1,276,668

Reader Advisories

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.

Forward-Looking Information

This News Release contains forward-looking statements or information (collectively referred to herein as "forward-looking statements") regarding Anterra's ability to improve cash flow, access capital and continue to build its asset base and increase production (including the completion of the Nipisi acquisition). This News Release also contains forward-looking statements regarding the completion of a comprehensive development plan by year end.

The forward-looking statements contained in this News Release are based on Anterra management's current beliefs as well as assumptions made by, and information currently available to, Anterra management concerning anticipated business conditions; the ability of the Company to implement its business strategy including exploration and development plans; and the availability and cost of financing.

Forward-looking statements are not guarantees of future performance and the reader should not place undue reliance on these forward-looking statements as there can be no assurances that the assumptions, plans, initiatives or expectations upon which they are based will occur. In addition, the forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Such factors include, among others: general economic and business conditions; the price of and demand for oil and natural gas and their effect on the economics of oil and gas exploration; actions by governmental authorities; and, changes in government regulations and the expenditures required to comply with them (including, but not limited to, the changes in taxes or the royalty or other share of production taken by governmental authorities). Should one or more of these risks or uncertainties materialize, or should any of the Company's assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. Readers are cautioned that the foregoing list of risks, uncertainties and other factors is not exhaustive. Unpredictable or unknown factors not discussed could also have material adverse effects on forward-looking statements. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are dependent on other factors, and the Company's course of action would depend on its assessment of the future considering all information then available. All forward-looking statements in this News Release are expressly qualified in their entirety by these cautionary statements. Except as required by law, the Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

BOE Conversion

Certain natural gas volumes have been converted to barrels of oil equivalent ("boe") using six thousand cubic feet ("mcf") of gas equal to one barrel ("bbl") of oil unless otherwise stated. This conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Such disclosure of boes may be misleading, particularly if used in isolation.

Non-IFRS Measures

This News Release includes the following non-IFRS financial measure: funds from operations and netback. Further information respecting the non-IFRS financial measures used by the Company is contained in the Company's management discussion and analysis available on SEDAR.

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