CALGARY, ALBERTA--(Marketwired - May 13, 2014) -
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S.
Antrim Energy Inc. ("Antrim" or "the Company") (TSX:AEN)(AIM:AEY), an international oil and gas exploration company, today reported its financial and operational results for the three month period ended March 31, 2014.
All financial figures are unaudited and in US dollars unless otherwise noted.
- Agreement in February 2014 to sell UK subsidiary for $53 million plus assumption of certain liabilities (sale closed April 2014)
- Repayment in April 2014 of outstanding bank loan (Payment Swap) and oil hedge (Oil Swap) obligations
- Ongoing processing and interpretation of Skellig (Ireland) 3D seismic data
- Extension of period for submission of FDP for the Fyne Field
On February 7, 2014 the Company announced that it entered into an agreement to sell, subject to shareholder and regulatory approval, its Causeway, Kerloch and Cormorant East assets, structured as a sale of all of the issued and outstanding shares in the capital of Antrim Resources (N.I.) Limited ("ARNIL") for $53 million in cash, plus the assumption of certain liabilities and adjusted working capital, from which Antrim would settle on closing all outstanding obligations under its Payment and Oil Swap agreements. On April 24, 2014 the Company completed the sale of ARNIL and settled its outstanding obligations under its Payment and Oil Swap agreements.
Overview of Continuing Operations
P077 Block 21/28a - Fyne, Antrim 100%
In late March 2013 the Company announced that it would not proceed with development of the Fyne Field using an FPSO. This followed a significant escalation of expected future development costs. The Company subsequently signed a joint development agreement with Enegi Oil Plc ("Enegi") and Advanced Buoy Technology ("ABTechnology") to undertake engineering studies and preparation of a Field Development Plan ("FDP") using buoy technology. The terms of the agreement include that there will be no costs to the Company prior to FDP approval. During the second half of 2013 and into 2014 Enegi-ABTechnology has worked with contractors to engineer the production facility for Fyne and an environmental statement was submitted to the UK Department of Energy and Climate Change ("DECC") during March 2014. Engineering work is now expected to continue during the summer with FDP approval to be sought prior to August 31, 2014. Upon approval of the FDP by DECC, Enegi-ABTechnology will earn the right to acquire 50% working interest in the licence. Antrim will remain operator.
DECC has agreed to amend the terms of the Fyne Licence to allow for a FDP for the Fyne Field to be submitted no later than August 31, 2014. DECC's consent to the amendment includes conditions, amongst other things, that the FDP submission is in its final form, the environmental statement is cleared, the Company is approved as a production operator, there is satisfactory evidence of project financing, and first production is achieved prior to November 25, 2016. If these conditions are not met, or if extensions from DECC are not obtained, the Fyne Licence could expire in accordance with its terms.
P1875 Block 21/29d - Erne, Antrim 50%
The Erne Licence started in January 2011 and is a Promote Licence with a drill-or-drop commitment. The Erne wells drilled in late 2011 met all the commitments on the Licence. A discovery was made with the 21/29d-11 well and also in the up-dip side-track 21/29d-11z well. These discoveries are not commercial on their own, but may be economic to develop as tie-backs to an adjacent Fyne production facility if that transpires. The initial four year term of the Licence expires in January 2015 at which time there is a requirement to relinquish 50% of the Licence area.
Frontier Exploration Licence 1-13, Antrim 25%
Antrim acquired a Licensing Option in the 2011 Atlantic Margin Licensing Round which included Blocks 44/4, 44/5 (part), 44/9, 44/10, 44/14 and 44/15 covering an area of 1,409 km2 (the "Skellig Block"). Antrim licensed, reprocessed and interpreted 2D seismic data over the blocks and identified a Cretaceous deep sea fan complex similar in seismic character to many of the recent Cretaceous oil discoveries offshore West Africa.
In April 2013, the Company farmed out a 75% interest in, and operatorship, of the Licensing Option to Kosmos Energy Ltd. ("Kosmos") in exchange for Kosmos carrying the full costs of a planned 3D seismic program within the licence area and re-imbursement to Antrim of a portion of the exploration costs incurred on the blocks to date. Antrim retained a 25% interest. The transaction was approved by the Department of Communications, Energy and Natural Resources of Ireland ("DCENR").
On July 15, 2013, DCENR approved the conversion of the Licensing Option to a Frontier Exploration Licence ("FEL"). FEL 1-13 has a 15 year term, with an initial three-year term followed by three four- year terms, following a mandatory 25% relinquishment of the Licensing Option area. The remaining licence area is 1,051.75 km2.
The approved work programme for the initial three year term of the FEL involves acquisition of 3D seismic over the FEL area followed by seismic processing, interpretation and geological studies. Seismic acquisition commenced on July 10, 2013 and was completed by the end of September 2013. Processing and interpretation of the seismic data is in progress.
|Financial Discussion (unaudited)
||Three Months Ended
|Financial Results ($000's except per share amounts)
|Cash flow used in operations (1)
|Cash flow used in operations per share (1)
|Net loss - continuing operations
|Net loss per share - basic, continuing operations
|Net loss per share - basic
|Working capital (deficiency)
|Capital expenditures - continuing operations
|Common shares outstanding (000's)
|End of period
|Weighted average - basic
|Weighted average - diluted
|1 Cash flow from operations and cash flow from operations per share are Non-IFRS Measures. Refer to "Non-IFRS Measures" in Management's Discussion and Analysis.
Cash Flow and Net Loss
In the first quarter of 2014, Antrim generated a cash deficiency from continuing operations of $1.2 million compared to a cash deficiency from continuing operations of $3.4 million for the corresponding period in 2013. The cash flow deficiency decreased in 2014 due to lower general and administrative costs and E&E expenditures.
In the first quarter of 2014, Antrim had a net loss from continuing operations of $1.5 million compared to a net loss from continuing operations of $4.3 million for the corresponding period in 2013. Net loss decreased due to lower general and administrative costs and E&E expenditures.
In the first quarter of 2014, Antrim had a net loss from discontinued operations of $6.9 million compared to net income from discontinued operations of $1.5 million for the corresponding period in 2013. The net loss increased primarily due to higher finance costs and lower production and revenue from Causeway.
Financial Resources, Liquidity and Going Concern
Antrim had a working capital deficiency at March 31, 2014 of $5.1 million compared to a working capital surplus of $0.8 million as at December 31, 2013. Without the reclassification of assets and liabilities held for sale, Antrim had a working capital deficiency at March 31, 2014 of $35.3 million compared to a working capital deficiency at December 31, 2013 of $24.0 million, including bank debt (after discount) of $20.3 million and financial derivative (after discount) of $10.5 million.
The sale of ARNIL in April 2014 resulted in the repayment and settlement of all outstanding obligations under the Company's bank debt and financial derivative. After commission and the payment of any change of control payments triggered by the completion of the ARNIL sale, Antrim estimates it will have working capital of approximately $17.1 million.
Following completion of the ARNIL Sale Mr. Kerry Fulton and Mr. Terry Lederhouse resigned their positions as Vice-President, Operations and Vice-President, Commercial, respectively. The Company wishes to thank Mr. Fulton and Mr. Lederhouse for their contributions to the Company.
With the ARNIL sale completed, Antrim has no debt and will be able to continue to operate as a going concern, engaged in the oil and gas business, with greater financial resources and an opportunity to further develop Antrim's remaining assets as well as greater opportunities to raise capital or seek other strategic alternatives, including a possible business combination, to maximize shareholder value.
In addition to further development of its remaining properties, Antrim continues to consider various international exploration opportunities where Antrim believes such opportunities will create value for Antrim's shareholders.
The Company has made an application for its common shares to be listed on the TSX Venture Exchange ("TSXV") and anticipates moving the listing of its common shares from the Toronto Stock Exchange to the TSXV by the end of May 2014.
Antrim Energy Inc. is a Canadian, Calgary based junior oil and gas exploration company with assets in the UK North Sea and Ireland. Antrim is listed on the Toronto Stock Exchange (AEN) and on the London Stock Exchange's Alternative Investment Market (AEY). Antrim's first quarter 2014 interim financial report (including management's discussion and analysis and unaudited interim consolidated financial statements), is available on SEDAR and our website. Visit www.antrimenergy.com for more information.
Forward-Looking and Cautionary Statements
This press release and any documents incorporated by reference herein contain certain forward- looking statements and forward-looking information which are based on Antrim's internal reasonable expectations, estimates, projections, assumptions and beliefs as at the date of such statements or information. Forward-looking statements often, but not always, are identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", "targeting", "forecast", "achieve" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements and information. Antrim believes that the expectations reflected in those forward-looking statements and information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements and information included in this press release and any documents incorporated by reference herein should not be unduly relied upon. Such forward-looking statements and information speak only as of the date of this press release or the particular document
incorporated by reference herein and Antrim does not undertake any obligation to publicly update or revise any forward-looking statements or information, except as required by applicable laws.
In particular, this press release and any documents incorporated by reference herein, contain specific forward-looking statements and information pertaining to the quantity of and future net revenues from Antrim's reserves of oil, natural gas liquids ("NGL") and natural gas production levels. This press release may also contain specific forward-looking statements and information pertaining to Antrim's plans for exploring and developing its licences, including exploration of the Skellig block, the financial effect of the ARNIL Sale upon Antrim, commodity prices, foreign currency exchange rates and interest rates, capital expenditure programs and other expenditures, Antrim's financing arrangements, supply and demand for oil, NGLs and natural gas, expectations regarding Antrim's ability to raise capital, to continually add to reserves through acquisitions and development, the anticipated listing of the Company's common shares on the TSXV, the schedules and timing of certain projects, Antrim's strategy for growth, Antrim's future operating and financial results, treatment under governmental and other regulatory regimes and tax, environmental and other laws.
With respect to forward-looking statements contained in this press release and any documents incorporated by reference herein, Antrim has made assumptions regarding: Antrim's ability to obtain additional drilling rigs and other equipment in a timely manner, obtain regulatory and TSXV approvals, future oil and natural gas production levels from Antrim's properties and the price obtained from the sales of such production, the consideration received in the ARNIL Sale will not change materially as a result of post-closing adjustments, the level of future capital expenditure required to exploit and develop reserves, the ability of Antrim's partners to meet their commitments as they relate to the Company and Antrim's reliance on industry partners for the development of some of its properties, the general stability of the economic and political environment in which Antrim operates and the future of oil and natural gas pricing. In respect to these assumptions, the reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect.
Antrim's actual results could differ materially from those anticipated in these forward-looking statements and information as a result of assumptions proving inaccurate and of both known and unknown risks, including risks associated with the exploration for and development of oil and natural gas reserves such as the risk that drilling operations may not be successful, unanticipated delays with respect to the development of Antrim's properties, operational risks and liabilities that are not covered by insurance, volatility in market prices for oil, NGLs and natural gas, changes or fluctuations in oil, NGLs and natural gas production levels, changes in foreign currency exchange rates and interest rates, the ability of Antrim to fund its capital requirements, Antrim's reliance on industry partners for the development of some of its properties, risks associated with ensuring title to the Company's properties, liabilities and unexpected events inherent in oil and gas operations, including geological, technical, drilling and processing problems, the risk that the consideration from the ARNIL Sale is reduced as a result of post-closing adjustments, the risk that additional change of control payments to employees of Antrim become payable as a result of the ARNIL Sale, the risk that the listing of the Company's common shares on the TSXV is delayed for any reason, the risk of adverse results from litigation, the accuracy of oil and gas reserve estimates and estimated production levels as they are affected by the Antrim's exploration and development drilling. Additional risks include the ability to effectively compete for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel, incorrect assessments of the value of acquisitions, Antrim's success at acquisition, exploitation and development of reserves, changes in general economic, market and business
conditions in Canada, North America, the United Kingdom, Europe and worldwide, actions by governmental or regulatory authorities including changes in income tax laws or changes in tax laws, royalty rates and incentive programs relating to the oil and gas industry and more specifically, changes in environmental or other legislation applicable to Antrim's operations, and Antrim's ability to comply with current and future environmental and other laws, adverse regulatory rulings, order and decisions and risks associated with the nature of the Common Shares.
Many of these risk factors, other specific risks, uncertainties and material assumptions are discussed in further detail throughout this press release and in Antrim's Annual Information Form for the year ended December 31, 2013. Readers are specifically referred to the risk factors described in this press release under "Risk Factors" and in other documents Antrim files from time to time with securities regulatory authorities. Copies of these documents are available without charge from Antrim or electronically on the internet on Antrim's SEDAR profile at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The calculation of barrels of oil equivalent ("boe") is based on a conversion rate of six thousand cubic feet of natural gas ("mcf") to one barrel of crude oil ("bbl"). Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
In accordance with AIM guidelines, Mr. Murray Chancellor, C. Eng., MICE and Managing Director, United Kingdom for Antrim, is the qualified person that has reviewed the technical information contained in this press release. Mr. Chancellor has over 25 years operating experience in the upstream oil and gas industry.