TRAFINA Energy Ltd.
TSX VENTURE : TFA.A

TRAFINA Energy Ltd.

April 25, 2012 22:53 ET

Trafina Energy Announces 2011 Annual Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - April 25, 2012) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Trafina Energy Ltd. ("Trafina" or the "Company") (TSX VENTURE:TFA.A) announces its financial and operating results for the year ended December 31, 2011. Trafina's 2011 financial statements, management's discussion and analysis and the annual information form will be available on the Company's website at www.trafinaenergy.com and on SEDAR at www.sedar.com.

2011 HIGHLIGHTS

  • In late 2010 and the first quarter of 2011, the Company acquired a 100 percent interest in 33 sections of undeveloped land in the McMullen area of northeast Alberta.
  • In the first three months of 2011 the Company commenced development of its McMullen land by building an all-weather access road and constructing several drilling locations and raised approximately $9 million (net $8 million).
  • During 2011 the Company sold various non-core assets for net proceeds of approximately $2.2 million.
  • Beginning in the summer of 2011, the Company drilled, completed and placed on production four bitumen oil wells at McMullen with average production for the three months ended December 31, 2011 of 70 barrels per day (bbl/day).
  • Average total production for the full year of 358 barrels of oil equivalent per day (boe/day) was slightly lower than the previous year average total production of 400 boe/day.
  • Oil production increased to 35 percent of total production.

SELECT FINANCIAL AND OPERATING RESULTS

For the year ended December 31,
2011 2010 % Change
Total petroleum and natural gas revenue ($) 5,303,481 5,166,961 +3
Royalties ($) 533,200 611,567 -13
Operating, processing, and transportation expenses ($) 3,996,547 3,956,057 +1
Funds flow used-in operations(1) ($) (960,129 ) (890,327 ) +8
Per basic and diluted common share ($) (0.02 ) (0.06 )
Weighted average basic shares outstanding 47,860,046 19,694,604 +143
Net loss ($) (8,154,695 ) (6,618,156 ) +23
Per basic and diluted common share ($) (0.17 ) (0.34 )
Net capital expenditures - cash ($) 5,603,841 5,247,176 +7
Total assets ($) 15,299,771 17,887,801 -14
Net debt and working capital deficiency(2) ($) 3,331,798 6,228,982 -47
Production:
Heavy oil (McMullen) (bbls/day) 21 --- ---
Conventional oil and natural gas liquids (bbls/day) 103 102 1
Natural gas (mcf/day) 1,406 1,785 -21
Total production (boe/day) 358 400 -11
(1) Funds flow used in operations is a Non-IFRS Measure. See "Non-IFRS Measures" in this news release.
(2) Net debt and working capital deficiency consists of current assets minus current liabilities less effects of commodity contracts.

Outlook

Severely depressed natural gas prices, wide heavy oil differentials and the cost of diluents necessary to transportation have added pressure to operating efficiencies and cash generation. As a result, management and the board of directors continue to explore all strategic alternatives available to the Company in an attempt to determine a successful course of action. This may include the sale of producing assets, the issuance of equity and/or possible mergers or acquisitions. In addition, the Company has taken further steps to reduce overhead on a go forward basis. As a result, effective April 30, 2012, Mr. Ben VanRootselaar has resigned his position as Vice President, Engineering and Mr. Edward Marcinew has resigned his position as Vice President, Exploration of the Company. Mr. Marcinew will remain with the Company on a consulting basis. The Company would like to thank both Messers VanRootselaar and Marcinew for their contribution.

About Trafina

Trafina is a junior oil and gas company based in Calgary, Alberta. The Company's core areas of operations are in the McMullen area of Alberta with other operated and non-operated production in Wetaskiwin. Trafina's shares trade on the TSX Venture Exchange under the stock symbol TFA.A and warrants trade under the stock symbol TFA.WT.A.

Basis of Presentation and Cautionary Statement: Information in this press release expressed in boes is derived by converting natural gas to oil in the ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Non-IFRS Measures: This news release uses the term funds flow used-in operations, which is not defined under IFRS and should not be considered an alternative to, or more meaningful than, cash flow from (used in) operating activities as determined in accordance with IFRS as an indicator of the Company's performance. The Company's determination of funds flow may not be comparable to that reported by other companies. The Company also presents funds flow used-in operations per share whereby per share amounts are calculated using weighted average shares outstanding consistent with the calculation of earnings per share. Management believes that in addition to cash flow, funds flow is a useful supplemental measure as it demonstrates the Company's ability to generate cash necessary to repay debt or fund future growth through capital investment before changes in non-cash working capital balances and decommissioning expenditures. Investors are cautioned, however, that the measure should not be construed as an alternative to cash flow from (used in) operating activities determined in accordance with IFRS as an indication of the Company's performance. See Trafina's MD&A available on SEDAR at www.sedar.com for a reconciliation of cash flow used-in operating activities to funds flow used-in operations.

Forward Looking Statements: This news release contains forward looking statements and forward looking information based on management's views regarding the results of its strategic review. There can be no assurance that the Company will identify viable alternatives or sell various producing assets on terms acceptable to the Company or at all. Readers are cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Forward looking statements involves significant known and unknown risks and uncertainties. Reference is made to Trafina's annual information form for the year ended December 31, 2011 dated April 23, 2012 and management's discussion and analysis for the year ended December 31, 2011 for a description of some of the risks that could affect the Company's future results and could cause results to differ materially from those expressed in the Company's forward looking statements. The forward looking statements contained in this news release are made as at the date hereof and, except as required by applicable securities laws, Trafina does not undertake any obligation to update publicly or otherwise any such statements.

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

  • Trafina Energy Ltd.
    Kelly J. Ogle
    President and Chief Executive Officer
    (403) 263-0800
    (403) 263-0811 (FAX)
    info@trafinaenergy.com

    Trafina Energy Ltd.
    Robert W. Lamond
    Chairman
    (403) 269-9889
    (403) 269-9890 (FAX)
    www.trafinaenergy.com