Calvalley announces financial results for the second quarter ended June 30, 2013

CALGARY, Aug. 12, 2013 /CNW/ - Calvalley Petroleum Inc., (TSX: CVI.A)

Highlights

• Earnings in the second quarter of 2013 were $0.07 per share ($5.2 million) compared to $0.09 per share ($8.1 million) in the second quarter of 2012. For the six month period ended June 30, 2013 earnings were $0.14 per share ($11.9 million) down from $0.16 per share ($15.1million) for the six month period in 2012. Inventory of crude oil at the end of June 30, 2013 was approximately 29,000 barrels and represents an increase of 16,000 barrels from June 30, 2012.
  
  
• The Company's working interest share of production volumes before royalties and taxes averaged 2,590 barrels per day in the first half of 2013 representing a 16 per cent increase over the 2,230 barrels per day for the first half of 2012. For the three month period ended June 30, 2013 production volumes were 2,495 barrels per day slightly below the 2,519 barrels per day in the prior period of 2012. During the first quarter of 2012 production volumes were impacted by both production curtailments and a two week production shut down. During the second quarter of 2013 production volumes were reduced by an average 220 bpd due to security related issues.
  
  
• During the second quarter of 2013 the Company sold an average of 2,351 barrels per day of crude oil compared to 2,773 barrels per day in the prior period of 2012. For the six month period to June 30, 2013 crude oil exports have averaged 2,339 barrels per day compared to 2,524 barrels per day in the comparable period of 2012. For the second quarter of 2013, the average sale price received was $103.12 per barrel which represents a premium of $0.69 to the Dated Brent Crude price of $102.43 for the quarter. The product netback for the second quarter of 2013 was $37.41 per barrel, and for the six month ended June 30, 2013, the netback of $41.97 per barrel represents a decrease of 9 per cent from $45.96 per barrel for the comparable six month period of 2012 reflecting lower realized prices for crude oil.
  
  
• Funds flow from operations ("Cash Flow") for the quarter ended June 30, 2013 was $0.09 per share ($7.3 million) compared to $0.11 per share ($10.5 million) in the prior year period. For the six month period to June 30, 2013 Cash Flow was $0.19 per share ($16.1 million) down slightly from $0.20 per share ($19.3 million) in the prior year period.
  
  
• Capital expenditures in the second quarter of $2.0 million include the costs of equipment and services for the drilling program and related activities and are up from $0.6 million in the second quarter of 2012 which was impacted by the availability of services to complete capital projects. Capital expenditures for the six months to June 30, 2013 of $4.0 million represent a 43 per cent increase from capital expenditures of $2.8 million for the six month period ending June 30, 2012. Work on facility projects including the water injection project at Hiswah are moving forward with completion of the projects now expected to be delayed until 2014.
  
  
• Calvalley has a strong balance sheet with approximately $79 million in working capital at June 30, 2013. The working capital balance increases to $81 million with inventory of crude oil valued at current market value rather than cost.
  
  
• Recent news about the increased security risks in Yemen is an on-going concern. The Company and the Government of Yemen have taken all necessary actions to protect staff and facilities in Yemen and to provide a safe working environment. The Company plans to complete the drilling of its prospect well at Sueda, which is at an advanced stage in the drilling program, and to work diligently with the Yemen Government, the Ministry of Oil, and Service Providers to ensure the oil resource in Block 9 can continue to be developed effectively and safely for the benefit of all stakeholders.

Financial information

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

FILING OF REPORTS ON SEDAR

Calvalley's Management's Discussion and Analysis and Unaudited Condensed Consolidated Financial Statements for the three and six months ended June 30, 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 an international oil and gas company, with offices in Calgary, Alberta, Canada, that operates its 50% working interest in Block 9 of the Masila Basin, in The Republic of Yemen.

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. In particular, statements relating to the drilling of the Sueda well and to the continuing development of the Block 9 resource contain forward looking information. 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, 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.