Petro Andina Resources Inc.

Petro Andina Resources Inc.

March 12, 2009 18:00 ET

Petro Andina Resources Inc. Announces Record Net Income and Funds Flow From Operations for Fiscal Year-End 2008 and the Fourth Quarter

CALGARY, ALBERTA--(Marketwire - March 12, 2009) -


Petro Andina Resources Inc. (Petro Andina or the Company) (TSX:PAR) announces its operating and financial results for the year ended December 31, 2008. Copies of the Company's consolidated financial statements for the year ended December 31, 2008 and the related Management's Discussion and Analysis (MD&A) for 2008 have been filed with Canadian Securities Regulatory Authorities and will be made available under the Company's profile at and on the Company's website at All amounts are in Canadian $'s unless otherwise stated.

Following the Company's announcements of record oil production on January 20, 2009 and record reserves growth on February 25, 2009, Petro Andina is pleased to announce record net income and funds flow from operations for the year ended December 31, 2008 and the fourth quarter of 2008.

The Company's net income for 2008 was $34.8 million ($0.82 per share fully diluted), compared to a net loss per fully diluted share of $0.18 for 2007. For the three months ended December 31 (fourth quarter) net income was $0.51 per fully diluted share, an increase of 168 percent from the previous quarter of 2008 and compared to $0.01 per fully diluted share in the comparative quarter of 2007.

Funds flow from operations per fully diluted share increased to $2.43 for 2008 compared to $1.01 per fully diluted share for 2007. Funds flow from operations per fully diluted share for the fourth quarter of 2008 was $0.97, for a quarter on quarter increase of 80 percent.

Sales volumes for 2008 averaged 12,089 barrels of oil equivalent per day (boe/d), a 100 percent increase from 2007. Sales volumes in the fourth quarter averaged 15,007 boe/d, for a quarter on quarter increase of 21 percent. Following commissioning of the atmospheric tank treatment facility, daily production volumes for the first quarter of 2009 have been consistent between 15,500 and 16,000 boe/d. Petro Andina is currently utilizing three drilling rigs of which two are working in the development core area and one is allocated to exploration. The water handling facility expansion is on schedule to be commissioned in the second quarter of 2009.

Operating netbacks increased to $30.10 per boe, compared to $25.24 per boe in 2007. The principal driver behind the increase in operating netbacks was the decrease in production expenses. Production expenses averaged $9.24 per boe (US$8.66 per boe) for 2008 and $8.26 per boe (US$6.80 per boe) in the three months ended December 31, 2008.

The Company increased its year-end December 31, 2008 proved reserves to 20.2 million boe (a 63 percent increase over 2007 reserves) and proved plus probable reserves to 32.3 million boe (a 40 percent increase over 2007 reserves). Petro Andina increased proved plus probable reserves volumes per basic share (using the number of basic shares outstanding at year-end) to 0.77 barrels per share at December 31, 2008 from 0.58 barrels per share at year-end 2007. Reserves value per fully diluted share (using the weighted average number of fully diluted shares outstanding during the year) is calculated at $9.49 reflecting proved plus probable reserves discounted at 10 percent after tax. This represents a 75 percent increase from year-end 2007 reserves values per fully diluted share.

Finding and development (F&D) costs for 2008 were $10.85 per boe, calculated using proved plus probable reserve additions and including future development capital. Cumulative F&D costs, since incorporation of the Company in 2003, calculated on the same basis were $11.05 per boe. The Company's recycle ratio calculated using the 2008 F&D costs per boe and the fourth quarter 2008 operating netback of $36.23 per boe is approximately 3.3 times.

Petro Andina expanded and diversified its opportunity base significantly in 2008. Subject to the final contract execution in Colombia and Trinidad & Tobago, Petro Andina will have a geographically and fiscally diverse exploration portfolio.

The Company exited 2008 in a strong financial position. Working capital was $41.1 million. Long-term debt of $37.0 million represents 0.2 times debt to annualized fourth quarter funds flow from operations. In addition to strong operating and financial results, Petro Andina bought back 814,900 shares at an average price of $5.03 per share pursuant to its normal course issuer bid program.

Financial Highlights

For the three months For the year
ended December 31 ended December 31
2008 2007 2008 2007
Average daily sales
Oil (bbls/d) 14,996 8,063 12,076 6,026
Natural gas (mcf/d) 66 93 80 116
Total (boe/d) 15,007 8,079 12,089 6,045

Realized sales price ($/boe) $ 52.68 $ 40.54 $ 47.20 $ 41.35

Financial ($000s except per
share amounts)
Oil and natural gas revenue 72,730 30,130 208,863 91,232
Net income (loss) 21,501 529 34,794 (6,432)
Per share - basic $ 0.51 $ 0.01 $ 0.83 $ (0.18)
Per share - diluted $ 0.51 $ 0.01 $ 0.82 $ (0.18)
Funds flow from operations 41,146 8,278 102,585 38,703
Per share - basic $ 0.97 $ 0.21 $ 2.44 $ 1.05
Per share - diluted $ 0.97 $ 0.20 $ 2.43 $ 1.01
Total assets (end of period) 342,043 176,888 342,043 176,888
Working capital (end of period) 41,129 28,774 41,129 28,774
Long-term debt (end of period) 36,993 15,562 36,993 15,562

Weighted average shares
outstanding (000s)
Basic 42,275 39,713 42,093 36,730
Diluted 41,182 41,063 42,246 38,201
Outstanding shares
(end of period) (000s)
Basic 41,961 39,732 41,961 39,732
Diluted 45,922 42,198 45,922 42,198

Conference Call and Webcast

Petro Andina will host a conference call and live webcast to discuss these results on Friday March 13, 2009 beginning at 10:30 am Mountain Standard Time (12:30 pm Eastern Standard Time (EST)). Media, analysts or any other interested parties wishing to participate in the call can access it by calling 403-537-9608 or 1-800-952-4972 (toll free in North America). No access codes are required.

The live audio webcast of the conference call will be available through Windows Media Player by following the link posted under the Investor Relations, Events section of the Company's website at Following the conclusion of the call, a link to a replay of the webcast will also be posted on the Company's website.

Presentation at the FirstEnergy/Societe Generale Canadian Energy Conference

Mr. Wayne Foo, President and CEO, will be speaking at the FirstEnergy/Societe Generale Canadian Energy Conference in New York, New York on Friday, March 13, 2009 at 7:50 am MST (9:50 am EST).

To listen and view this online event, please visit

The presentation will be available in an archived version at this link for 30 days following the live presentation.

For more information on the webcast please visit or contact the Company directly.

About Petro Andina

Petro Andina is engaged in the exploration for and development and production of oil and natural gas in South America and the Caribbean. Petro Andina is headquartered in Calgary, Canada.

This news release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction. All sales will be made through registered securities dealers in jurisdictions where the offering has been qualified for distribution. The securities offered are not, and will not be, registered under the securities laws of the United States of America, nor any state thereof and may not be sold in the United States of America absent registration in the United States or the availability of an exemption from such registration.

Forward-Looking Statements

Certain statements regarding Petro Andina Resources Inc., including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties, most of which are beyond Petro Andina's control. These risks may cause actual financial and operating results, performance, levels of activity and achievements to differ materially from those expressed in, or implied by, such forward-looking statements.

Such risks and uncertainties include, but are not limited to: the impact of general economic conditions in Canada, Argentina, Colombia and Trinidad & Tobago, industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced, in Canada, Argentina, Colombia and Trinidad & Tobago, competition, the lack of availability of qualified personnel, fluctuations in commodity prices, the results of exploration and development drilling and related activities, imprecision in reserve estimates, the production and growth potential of Petro Andina's assets, fluctuations in foreign exchange or interest rates, the ability to access sufficient capital from internal and external sources, and obtaining required approvals of regulatory authorities, in Canada, Argentina, Colombia and Trinidad & Tobago. Many of these risk factors are discussed in further detail in the Company's Annual Information Form dated March 28, 2008 on file with Canadian securities commissions. Readers are also referred to the risk factors described in other documents that Petro Andina files from time to time with securities regulatory authorities.

Accordingly, Petro Andina gives no assurance nor makes any representations or warranty that the expectations conveyed by the forward-looking statements will prove to be correct and actual results may differ materially from those anticipated in the forward-looking statements. Petro Andina undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law.

Non-GAAP Terms

Funds flow from operations and operating netback per barrel are used in this document, but do not have any standardized meaning under GAAP and may not be comparable to similar measures presented by other companies. Funds flow from operations includes all cash from operating activities and is calculated before changes in non-cash working capital. Funds flow from operations is reconciled with net earnings in the Consolidated Statements of Cash Flows. Funds flow per share is calculated by dividing funds flow from operations by the weighted average number of shares outstanding. Operating netback per barrel equals sales revenue, less royalties, production expenses and transportation expenses, divided by total equivalent sales volumes. Management uses these non-GAAP measures for its own performance measurement and to provide its shareholders and investors with additional measurement of the Company's efficiency and its ability to fund a portion of its future growth expenditures.

The Toronto Stock Exchange has not received and does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Petro Andina Resources Inc.
    Melesia Kasha
    Investor Relations
    (403) 237-1700
    (403) 265-8216 (FAX)
    Petro Andina Resources Inc.
    Kenneth G. Pinsky
    Vice President, Finance and Chief Financial Officer
    (403) 517-1729
    (403) 265-8216 (FAX)