Rooster Energy Ltd.
TSX VENTURE : COQ

Rooster Energy Ltd.

April 28, 2014 10:51 ET

Rooster Energy Announces Fourth Quarter and Full Year 2013 Financial, Operating and Reserve Report Results

CALGARY, ALBERTA--(Marketwired - April 28, 2014) - ROOSTER ENERGY LTD. (the "Company") (www.roosterenergyltd.com) (TSX VENTURE:COQ) is pleased to announce it has filed on SEDAR (www.sedar.com) its audited financial statements, related management discussion and analysis ("MD&A") for the three months and twelve months ended December 31, 2013 ("Q4 2013"). The Company has also filed its Form 51-101F1 containing reserves data and other oil and gas information for 2013 on SEDAR. Selected financial and operational information for Q4 2013, Full Year 2013 and events subsequent thereto is outlined below and should be read in conjunction with the financial statements and related Management Discussion & Analysis.

HIGHLIGHTS IN 2013 INCLUDED:

  • EBITDAX Grew 42% In 2013 To $23.7 Million
  • Production Averaged 2,190 Boe/Day, 40% Liquids
  • Proved + Probable Reserves Totaled 9.8 MMBoe With NPV-10% Of $266 Million

Robert P. Murphy, President & Chief Executive Officer, comments "with overall production volumes flat to 2012, on a barrels of oil equivalent basis, the Company's oil production in 2013 increased 33% resulting in a 42% increase in EBITDAX over last year. Year-end 2013 proved and probable reserves declined 11% principally due to production and a limited drilling program. Our 2013 drilling program consisted of one well at our lease on High Island A-494. The apparent geologic success at this location has been overshadowed by mechanical difficulties that have resulted in production problems that we expect to resolve in 2014. With resolution to these difficulties, we expect the full potential of this project to become more visible to the Company and its shareholders.

We are very excited about our pending acquisitions, announced on March 7, 2014, of Cochon Properties, LLC ("Cochon"), and Morrison Well Services, LLC ("Well Services"), for consideration valued at $125 million. The acquisition of Cochon's oil and gas producing properties along with Well Services, an established leader for well abandonment services in the Gulf of Mexico, will create an industry leading, truly integrated company with the ability to maximize well economics from "Cradle to Grave."

Closing of the acquisitions is expected to occur in the second quarter of 2014, subject to, among other conditions, receipt of required regulatory and shareholder approvals. The acquisitions enable Rooster to continue its strategy of near infrastructure exploration and development with the ability to dismantle the infrastructure in a timely and efficient manner."

SUMMARY OF NI 51-101 RESERVE REPORT
Net Reserves Future Cash Flow (Pre-Tax)
Crude Oil Cond/NGLs Natural Gas Total Discounted @
Bbls Bbls Mcfg BOE Undiscounted 10%
Proved Developed Producing 1,105,551 117,885 1,255,657 1,432,712 $ 58,862,400 $ 51,235,700
Proved Developed Non-Producing 121,421 74,569 3,682,946 809,814 $ 16,433,000 $ 14,003,400
Proved Undeveloped 516,706 4,410 389,497 586,032 $ 16,638,100 $ 12,146,200
Total Proved 1,743,678 196,864 5,328,100 2,828,559 $ 91,933,500 $ 77,385,300
Probable 2,376,572 348,238 25,504,302 6,975,527 $ 252,505,000 $ 188,497,300
Total Proved + Probable 4,120,250 545,102 30,832,402 9,804,086 $ 344,438,500 $ 265,882,600
SUMMARY FINANCIAL RESULTS
For the three months ended For the twelve months ended
December 31, December 31,
2013 2012 2013 2012
Sales
Oil (Bbl) 63,260 78,242 289,419 218,408
NGL (Bbl) 9,193 19,592 33,874 57,586
Natural gas (Mcf) 462,735 969,198 2,856,270 3,272,161
Total (BOE/day) (a) 1,626 2,819 2,190 2,244
Revenue $ 8,128,381 $ 12,061,865 $ 41,048,401 $ 34,221,262
Total costs and expenses 12,294,375 12,551,855 37,809,028 31,772,397
Operating income (loss) (4,165,994 ) (489,990 ) 3,239,373 2,448,865
Unrealized loss on financing warrants 518,000 1,317,000 (25,000 ) 1,317,000
Finance expenses (b) (1,535,153 ) (1,331,847 ) (5,961,224 ) (2,165,534 )
Income (loss) before tax expense (5,183,147 ) (504,837 ) (2,746,851 ) 1,600,331
Deferred tax expense (recovery) (1,789,000 ) 5,288,000 (713,000 ) 5,288,000
Income (loss) (3,394,147 ) (5,792,837 ) (2,033,851 ) (3,687,669 )
Income (loss) per share
Basic (0.03 ) (0.05 ) (0.02 ) (0.04 )
Diluted (0.03 ) (0.05 ) (0.02 ) (0.04 )
Capital expenditures $ 10,072,146 $ 5,466,310 $ 36,361,558 $ 32,208,705
EBITDAX (c) $ 3,944,969 $ 7,349,497 $ 23,711,324 $ 16,721,070
(a) Gas volumes are converted to BOE on the basis of 6 Mcfe per 1 barrel.
(b) Finance expense includes accretion for asset retirement obligations.
(c) EBITDAX is a non-IFRS measure commonly used in the oil and gas industry. Such measures do not conform to IFRS and may not be comparable to those reported by other companies nor should they be viewed as an alternative to other measures of financial performance calculated in accordance with IFRS. The company defines EBITDAX as net income before finance expense, taxes, depreciation, amortization, accretion, exploration and evaluation, bad debt, impairments, stock-based compensation, and the non-cash portion of plug and abandonment expense.

ABOUT ROOSTER ENERGY LTD.

The Company is a Houston, Texas, based independent oil and natural gas exploration and production company focused on the development of resources in the shallow waters of the Gulf of Mexico adjacent to the states of Louisiana and Texas. At December 31, 2013, our primary assets consist of interests in nineteen producing oil and/or natural gas wells located on fourteen oil and gas leases. The Company is the operator of the majority of its properties and daily oil and gas production.

Investors are welcome to visit our website at www.roosterenergyltd.com.

Forward Looking Information and Statements

Certain statements and information in this press release may constitute "forward-looking information" or statements as such terms are used in applicable Canadian securities laws. Any statement that expresses, involves or includes expectations of future operations (including drill rig commitments and use of proceeds), commerciality of any hydrocarbon discovered, production rates, operating costs, commodity prices, administrative costs, commodity price risk and other components of cash flow and earnings, management activity, acquisitions and dispositions, capital spending, access to credit facilities taxes, regulatory changes, projections, objective, assumptions or future events that are not statements of historical fact should be viewed as "forward-looking statements". 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 Company. These risks include, but are not limited to, the risks associated with the oil and gas industry, commodity prices, and exchange rate changes. Industry related risks could include, but are not limited to, operational risks in exploration, development and production, delays or changes in plans, risks associated with the uncertainty of reserve estimates, or reservoir performance, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on any forward-looking statement in this press release. The Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Financial outlook information contained in this press release about the Company's prospective cash flows and financial position is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available. Readers are cautioned that any such financial outlook information contained herein should not be used for purposes other than for which it is disclosed herein.

Note Regarding Boe

The term barrel of oil equivalent ("boe") may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICE PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.

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