Primera Energy Resources Ltd.
TSX VENTURE : PTT

August 30, 2011 18:49 ET

Primera Energy Resources Ltd. (TSX-V:PTT) Releases Q2 Financial Results- Record Second Quarter

PORT OF SPAIN, TRINIDAD & TOBAGO and CALGARY, ALBERTA--(Marketwire - Aug. 30, 2011) - Primera Energy Resources Ltd. (TSX VENTURE:PTT) ("Primera" or the "Company") is pleased to announce a 9% increase in oil production to 338 barrels of oil per day in the second quarter of 2011 compared to Q2 last year. Also revenue was 40% higher in the second quarter increasing to $2,801,326 as oil prices also saw an increase of 28% to $91.13 per barrel in the period.

Operating costs per barrel decreased to $6.36 per barrel compared to $8.12 per barrel in the comparable period last year. The overall operating costs dropped to $195,356 from $228,626 reflecting increased field efficiencies in spite of higher volumes being produced.

General and administrative (G&A) costs per barrel increased marginally to $11.66 per barrel compared to $10.93. This reflects higher costs for executive salaries incurred in the second quarter as well as increased legal costs and accounting costs associated with the conversion to the new IFRS standards.

The provision for Depletion, depreciation and amortization (DD&A) decreased to $198,583 or $6.44 per barrel compared to $206,592 or $7.35 per barrel in the second quarter last year. As the Company has now converted to the International Financial Reporting Standard this quarter the DD&A provision will now be calculated using prove and probable reserves versus just the proved reserves in the past as the depleteable base the DD&A provision should continue to be lower than in the past under Canadian Generally Accounting Principles (Canadian GAAP).

The Company in Q2 had earnings before income taxes of $837,806 versus earnings before income taxes in the second quarter last year of $164,684 reflecting the higher revenues and lower royalties after giving effect to the receipt of a drilling credit which reduced the Supplementary Petroleum Tax in the quarter as well as reduced operating costs and depletion charges in Q2 this year compared to last year.

The Company had a working capital surplus at the end of the second quarter of $1,876,980 which included cash of $3,202,784 compared to working capital and cash of $3,620,499 and $4,326,626 respectively for the second quarter end last year.

The Company spent $1,200,402 on capital during the three month period ended June 30, 2011. Cost for Cory Moruga drilling and completions were $43,268 and drilling and completion costs for the WD4 development was $1,156,774 for the two well drilling program.

WD4 2011 drilling program

The 2011 drilling program which commenced late in Q1 has shown very encouraging results. The first of these was put on pump in late May 2011 at 84 barrels of oil per day and at present is still producing 79 barrels of oil per day. The second well in the 2011 program came on stream in early June 2011 and tested over 200 barrels of oil per day and was put on pump in late July 2011 at 75 barrels of oil per day with virtually no water associated with this production.

Oil production volumes for the month of June was over 425 barrels of oil per day which greatly contributed to the successful second quarter which the Company enjoyed.

Cory Moruga

The exploration program in Cory Moruga which commenced in early 2010 with the drilling and completions of the Firecrown 1 and Snowcap 1 wells is expected to continue in late 2011 or early 2102 with the planned drilling of the Green Hermit exploration test, Snowcap appraisal well and side tracking of Firecrown 1. These wells will further define the Cory Moruga potential and a development and appraisal well program will follow looking toward commercializing these three early stage projects.

Primera's Q2-2011 financial statements and the management discussion and analysis (md&a) have been filed on SEDAR, Which is accessed electronically from www.sedar.com.

Statements in this press release may contain forward looking-information including expectations of future operations and plans. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the issuer. These risks include, but are not limited to, the risks associated with the oil and gas industry, commodity prices and exchange rates changes. Industry related risks could include, but are not limited to, operational risks in the development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates or reservoir performance, health and safety risks and the uncertainty of undue reliance on the forward-looking information.

Neither the TSX or the TSX-Venture Exchange or its Regulation Services Provider (as that term is defined in the Policies of the TSX and TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this release.

Contact Information

  • Primera Energy Resources Ltd.
    Geoffrey Leid
    Chief Executive Officer
    (868) 378-5343

    Primera Energy Resources Ltd.
    Stephen Austin
    Chief Financial Officer
    (403) 532-5900