Greenfields Petroleum Corporation
TSX VENTURE : GNF

Greenfields Petroleum Corporation

April 30, 2012 22:00 ET

Greenfields Petroleum Corporation Announces Financial Results for the Year Ended December 31, 2011

HOUSTON, TEXAS--(Marketwire - April 30, 2012) -

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Greenfields Petroleum Corporation ("Greenfields" or the "Company") (TSX VENTURE:GNF), an independent exploration and production company with assets in Azerbaijan, announces financial results for the year ended December 31, 2011.

Annual and Fourth quarter 2011 operating highlights
  • The Corporation's entitlement sales volumes from production for its net interest in the Bahar ERDPSA averaged 360 bbl/d and 4,276 mcf/d or 1,072 boe/d in the quarter and 397 bbl/d and 4,121 mcf/d or 1,084 boe/d for the year.
  • Through its interest in Bahar Energy, the Corporation realized average oil and gas prices of $104.71 per barrel and $3.96 per mcf in the quarter and $103.53 per barrel and $3.96 per mcf for the year.
  • 4 limited recompletions undertaken in 2011 of which 3 were successful and added initial 375 bbl/d of new production.
Activity highlights and plans
  • Weather in the south Caspian area during the winter of 2011-2012 was, according to local reports, the worst in more than 100 years. Snow, ice and wind caused temporary production declines. Workover activity, field maintenance and seismic data acquisition programs were suspended due to the difficult weather conditions.
  • During the next twelve months Bahar Energy will continue work related to construction and upgrades of facilities. Areas of focus include platform design and construction, oil and gas processing facility upgrades, pipeline replacement, water disposal, electric power line installation, support infrastructure and safety monitoring. As of this date, the topsides on Platform 2 and 196 have been removed. Pile caps have been fabricated and delivered to site. Once they are installed, these platforms will be ready for rig mobilization. A design concept for new platform construction was completed and is pending soil bore analysis for pile and jacket design. Two 14,600 bbl oil storage tanks were contracted for construction. One is nearing completion and the other is about 60% complete.
  • During 2012 Bahar Energy expects to drill at least 6 wells in the Gum Deniz field and to recomplete approximately 16 wells in both Gum Deniz and Bahar fields. The drilling program will continue in 2013 and beyond, and includes a total of 83 new wells in the Gum Deniz field and 7 in the Bahar field. Total planned recompletions include 29 in the Gum Deniz field and 40 in the Bahar field.
  • Workover and rehabilitation operations continued through 2011. A total of 12 maintenance jobs and 4 workovers were performed using the older Soviet-era rigs contracted from SOCAR. This program was successful in performing basic well services, including tubing and gas lift repairs. Success in workovers and recompletions was slowed due to the limitations of the Soviet-era workover rigs. The rigs are limited in their capabilities to pull tubing, clean out sand and perform wireline work and are unable to rotate pipe, perform cementing work or do jobs fishing for downhole material. Only 4 limited workovers were undertaken with 3 of 4 being successful initially adding 375 bbl/d of new production.
  • Two new Western-style workover rigs arrived in Poti, Georgia on April 6, 2012 and their arrival in Baku is expected in late April and early May. These rigs are designed for the operational requirements of the Gum Deniz and Bahar fields and are under three-year contracts. After arrival, the rigs will undergo a thorough commissioning process, then be mobilized and installed on offshore platforms using a heavy-lift crane barge. The rigs will initially operate from Platform 2 in the Gum Deniz oil field and Platform 196 in the Bahar gas field. To accommodate drilling operations, significant modifications were made to these platforms. Except for pile caps, this work has been completed. Pile caps are expected to be installed prior to the rig mobilizations. Drilling operations are expected to start in June.

    The rig assigned to the Bahar field will work in recompleting gas wells that have, in most cases, been shut in due to operational difficulties. These wells have significant potential in untested zones behind pipe productive zones. Five recompletions are expected to be done in 2012.

    The modern rig assigned to the Gum Deniz field will be engaged in drilling development wells in the under-developed northern area of the Gum Deniz field. It is being upgraded for drilling by adding a topdrive, larger mud tanks and 1300 horsepower ("HP") drilling mud pumps. At least four wells are expected to be drilled in 2012. The field development plans include a total of 23 wells in north Gum Deniz field, which will be drilled from existing platforms, and a total of 60 wells which will be drilled in the south Gum Deniz field on new platforms presently in the design stage.
  • Two seismic data acquisition programs, the 2D in the Gum Deniz field and the 3D in the Bahar-2 exploration area, are expected to be completed in 2012. After delays related to vessel suitability and weather, the 140-km 2D project was completed in April 2012. The data quality appears good and is being processed and interpreted.

    The 3D project started in June 2011 and after acquiring 45 km2 of 3D data, was delayed further when the work was suspended due to bad weather. Acquisition is expected to restart in May, when an additional 43 km2 of 3D will be shot. After acquisition, processing and interpretation will be conducted. If the interpretation confirms an attractive exploration prospect in the Bahar-2 exploration area, Bahar Energy will develop an appropriate drilling strategy to evaluate the prospect. Drilling could occur in late 2013 or early 2014 in the Bahar-2 area.

Selected Information

The selected information below is from the Greenfields' Management Discussion & Analysis. The Company's complete financial statements as of and for the years ended December 31, 2011 and 2010, with the notes thereto and the related Management's Discussion & Analysis can be found either on Greenfields' website at www.Greenfields-Petroleum.com or on SEDAR at www.sedar.com. All amounts below are in thousands of US dollars unless otherwise noted.

Years Ended December 31,
2011 2010
Financial
Revenues 26,801 8,091
Net loss (16,538 ) (4,869 )
Per share, basic and diluted ($1.11 ) ($0.54 )
Operating
Average Entitlement Sales Volumes 1
Oil and condensate (bbl/d) 397 452
Natural gas (mcf/d) 4,121 4,455
Barrel oil equivalent (boe/d) 1,084 1,194
Average Oil Price
Oil price ($/bbl) $103.53 $83.06
Net realization price ($/bbl) $99.67 $79.38
Brent oil price ($/bbl) $111.26 $86.54
Natural gas price ($/mcf) $3.96 $3.96
Capital Items
Cash and cash equivalents 25,289 47,977
Working capital 2 29,674 49,710
Total Assets 61,127 57,316
Shareholders' equity 36,521 50,457
1 Daily volumes represent the Corporation's share of the Contractor Parties' entitlement volumes net of 5% compensatory petroleum and the government's share of profit petroleum.
2 Working capital, presented here, is current assets net of current liabilities (excluding warrants).

About Greenfields Petroleum Corporation

Greenfields is a junior oil and natural gas corporation focused on the development and production of proven oil and gas reserves principally in the Republic of Azerbaijan. The Company plans to expand its oil and gas assets through further farm-ins and acquisitions of Production Sharing Agreements from foreign governments containing previously discovered but under-developed international oil and gas fields, also known as "greenfields". More information about the Company may be obtained on the Greenfields website at www.greenfields-petroleum.com.

Forward Looking Statements

The Company's press releases contain forward-looking information that involve substantial known and unknown risks and uncertainties, most of which are beyond the control of Greenfields, including, without limitation, those listed under the headings "Risk Factors" in Greenfield's Annual Information Form, its Management Information Circular and similar headings in the Company's Management's Discussion & Analysis which may be viewed on www.sedar.com. Forward-looking information in this press release may include, but is not limited to, information concerning its future operations.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information. Accordingly, prospective investors should not place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this press release and, other than as required by applicable securities laws, Greenfields does not assume any obligation to update or revise them to reflect new events or circumstances.

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.

Contact Information

  • Greenfields Petroleum Corporation
    John W. Harkins
    Chief Executive Officer
    (832) 234-0836

    Greenfields Petroleum Corporation
    David G. Gullickson
    Chief Financial Officer
    (832) 234-0837

    Greenfields Petroleum Corporation
    Robin Cook
    CHF Senior Account Manager
    (416) 868-1079 x 228
    info@greenfieldspetroleum.com
    www.greenfields-petroleum.com