Quattro Exploration and Production Ltd.

Quattro Exploration and Production Ltd.

August 26, 2014 06:15 ET

Quattro Announces Record 2nd Quarter Financial and Operating Results, Reporting Net Earnings of $0.11 per Share in the 1st Half of 2014

CALGARY, ALBERTA--(Marketwired - Aug. 26, 2014) - Quattro Exploration and Production Ltd. (TSX VENTURE:QXP) ("Quattro" or the "Company") is pleased to announce the filing of its operating and financial results for the 3 and 6 months ending June 30, 2014, reporting record earnings and operating Results;


  • Revenues for the 6 months ending June 30th, 2014 were $8,832,600

  • Income from operations in the first half of 2014 was $4,588,200, a netback of $18.36 per BOE

  • Earnings from operations for the six month period was $0.07 per share

  • Low decline stabilized production averaging 1,525 boe/d for the 3 months ending June 30, 2014

  • $50 million capital budget starting with 1(net) exploration well and 4(net) development wells in H2

Financial Update

In the 1st half of 2014, EBITDA of $0.13 per share or $4,636,500
6 month net and comprehensive income of $0.11 per share or $3,801,300
Current assets (net of assets held for sale) of $7,806,500
Working capital of $5,325,900
Net debt (excluding decommissioning liabilities) of $2,554,100

The Company's diversified production portfolio showed its strengths in the second Quarter ending June 30th, 2014. Despite 3 to 9 days of facilities maintenance and periodic reductions in service for pipeline inspections by TranCanada Pipelines Ltd. in Alberta. Quattro's average production, although a record for the company, was restricted to 1,525 boe/d for the 3 months ending June 30, 2014.

The Company's Donalda acquisition was closed on June 9th, 2014 with closing including the request by the seller to have more time for the completion of the transfer and tie-in of production to Quattro's facilities. The operational logistics, upon the request being made, were re-scheduled with the tie-in being rescheduled to be completed on September 1st. The Company is now operating the properties but remediation plans and consolidation activities have been limited in this area until the tie-in process has been completed, a part of Quattro's plan to reach the next milestone of 2,000 boe/d.

During the 3 months ended June 30 2014, Quattro's cash-flow from operations was $1,576,819 and the Company's EBITDA (earnings before interest, taxes, depreciation and amortization) was $2,671,200. Although a non IFRS accounting term, the Company believes EBITDA provides further guidance of funds flowing from operations for Quattro and provides investors an opportunity to understand the Company's growing capacity to fund its consolidation activities, operations, production growth and exploration activities. Each effort being a part of its yearend target of 2,500 boe/d.

President and CEO Leonard Van Betuw commented, "The second quarter illustrates a number of Quattro's inherent strengths; including our capacity to be operationally conservative within the context of an aggressive growth plan. As the Company continues to advance its business plan, with an envious portfolio of opportunities within over 600,000 (net) acres of producing and exploratory lands, control and balance is and will remain ingrained in our corporate culture. This approach insures that we will be able to monetize our high impact growth for many years to come, beyond what has already been a record year."

"As of June 30th the Company has grown shareholder equity by over 500% in 12 months to $20.2 million or $0.58/share and production growth in the past six months by over 400% to 1,525 boe/d, all while maintaining $5.3 million in working capital and a net debt to cash-flow ratio of less than 0.25:1. This positions Quattro to further enhance our growth through the commencement of our $50 million, 3 year capital program through a combination of development and exploratory drilling."

Quattro commenced operations in July for our first exploration well which will be operated by Quattro. The 100% well in southern Saskatchewan at Wood Mountain was surveyed in July with the license being issued in early August. Located within the Company's contiguous 110,000 acre parcel, 55,000 acres (net) in the Williston Basin, the well is targeted to evaluate a number of well-known producing formations, the Shaunavon, Madison, Bakken, Birdbear and Duperow. The Birdbear and Duperow have been deemed exploratory in nature by the Company, while the Shaunavon, Madison and Bakken horizons are being evaluated to further support ongoing development plans that are based on logged oil shows from 2 wells within the Company's lands drilled in the 1950s, as well as current seismic and gravity data collected by Quattro.

The Company is balancing our efforts in Saskatchewan with 4 initial wells that are scheduled to be drilled at McMullen Alberta on a 100% basis, completed and on production by December of 2014. Quattro, based on these initial results, will be scheduling 10 to 12 (net) additional development wells within its core properties in the following 6 months, with all of them scheduled to be on production by June 30th, 2015.

About Quattro Exploration and Production Ltd.

Quattro Exploration and Production Ltd. ("QXP") continues to focus on the conventional exploration and development of oil and natural gas reserves in Western Canada, with an expanding presence in Alberta and British Columbia. Its core low risk production base will provide the Company the capacity to aggressively pursue a series of high impact exploration and development efforts in Central and South America. Quattro intends to balance this portfolio of activities to assure its shareholders that it achieves material growth in both reserves and production.

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings which are available at www.sedar.com.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

BOE presentation:

Barrel ("bbl") of oil equivalent ("boe") amounts may be misleading particularly if used in isolation. All boe conversions in this report are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.

Trading in the securities of Quattro Exploration and Production Ltd. should be considered highly speculative. 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.

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