Calvalley announces financial results for the first quarter ended March 31, 2013

CALGARY, May 13, 2013 /CNW/ - Calvalley Petroleum Inc., (TSX: CVI.A)

Highlights

• Earnings in the first quarter of 2013 were $0.08 per share ($6.7 million), no change from the $0.08 per share ($7.1 million) in the first quarter of 2012 on a per share basis.
• The Company's working interest share of production volumes before royalties and taxes averaged 2,686 barrels per day in the first quarter 2013 up 38 per cent from 1,942 barrels per day for the first quarter of 2012. The prior year period experienced production curtailments and a two week production shut-down due to local transportation blockades and export facility disruptions. Total Block 9 production in the quarter comprised Hiswah - 2,600bopd, Ras Nowmah - 2,000 bopd and Al Roidhat - 800bpd. Production volumes were affected by transportation restrictions due to road damage caused by rainstorms and limited well optimization activity in the period.
• Funds flow from operations for the three months ended March 31, 2013 of $0.10 per share ($8.8 million) was up on a per share basis from $0.09 per share ($8.9 million) for the same period of 2012.
• The Company sold 209,339 barrels of oil and realized revenue of $23.7 million at an average price of $113.17 per barrel in the first quarter of 2013 compared to revenue of $23.4 million and a price of $112.85 per barrel in the first quarter of 2012.
• The average netback in the first quarter of 2013 was $46.64, slightly lower than the netback of $47.54 in 2012, reflecting slightly higher average realized prices offset by 7 per cent increase in operating costs over the prior period.
• Capital expenditures in the first quarter of 2013 of $2.0 million compare to $2.2 million incurred in the first quarter of 2012 and represent planned expenditures for the 2013 drilling program.
• Subsequent to the end of the quarter, the Company completed the drilling of its Ras Nowmah South prospect as a new discovery and has equipped the well for production. The Company is planning to drill several new prospects on the plateau, targeting similar structures to the existing Ras Nowmah field, and appraisal wells in the Ras Nowmah South and the Ras Nowmah fields to delineate the existing pools.
• The Company is currently pursuing regulatory approvals for three major facility projects. The first project is to increase water injection capacity at the Hiswah field as part of the pressure maintenance project, the second to install water separation at the Ras Nowmah field and the third to construct a pipeline to transport production from the plateau fields to the CPF at Hiswah.
• Other management priorities include an active well optimization and work-over program to increase production from existing shut-in wells at Al Roidhat and Hiswah and plans, subject to safety and security issues, for a work-over at the Qarn Qaymah 3 well targeting crude oil in the fractured basement.
• During the first quarter the Company completed the purchase and cancellation of 15 million of its outstanding Class A common voting shares, at a purchase price of $2.45 per share, under an Offer to Purchase and Issuer Bid Circular dated January 22, 2013.  In the comparative period of 2012 the Company purchased 285,190 shares under its approved Normal Course Issuer Bid at an average cost of Cdn$1.75 per share.
• Calvalley has a healthy balance sheet with approximately $74.3 million in working capital at March 31, 2013. The working capital balance increases to over $76 million with inventory of crude oil valued at current market value rather than cost.

Financial information

Significant financial information is included in the table below and is discussed further in the Company's Management Discussion and Analysis.

⁽²⁾ See "Non-IFRS Measures" disclosure in March 31, 2013 MD&A filed on www.sedar.com

FILING OF REPORTS ON SEDAR

Calvalley's Management's Discussion and Analysis and Unaudited Condensed Consolidated Financial Statements for the three months ended March 31, 2013 can be found for viewing by electronic means on The System for Electronic Document Analysis and Retrieval at www.sedar.com. They can also be found on the Company's website at www.calvalleypetroleum.com.

Calvalley is listed on the Toronto Stock Exchange, trading under the symbol "CVI.A".

Forward-looking Statements
This press release may contain forward-looking statements. Words such as "may", "will", "should", "could", "anticipate", "believe", "expect", "intend", "plan", "potential", "continue", and similar expressions may have been used to identify these forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve significant risk and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including, but not limited to, estimates of reserves and production, operational risks, availability of supplies and services, potential delays or changes in plans with respect to exploration or development projects or capital expenditures, delays and interruptions in drilling and completion activities for undetermined periods, success in drilling activities, changes in general economic and market conditions and other risk factors. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with these forward-looking statements. Investors should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this press release are made as of the date of this press release and Calvalley assumes no obligation to update or revise them to reflect new events or circumstances except as expressly required by applicable securities law.

SOURCE Calvalley Petroleum Inc.