Calvalley announces financial results for the first quarter ended March 31, 2014

Calvalley Petroleum Inc., (TSX: CVI.A)

CALGARY, May 6, 2014 /CNW/ -

Highlights

• The Company has been successful in maintaining production levels from three producing fields Hiswah, Ras Nowmah and Ras Nowmah South. Gross production in April, 2014 was approximately 4,000 barrels per day with the Hiswah field contributing approximately 2,600 barrels per day, Ras Nowmah approximately 1,200 barrels per day and Ras Nowmah South approximately 200 barrels per day. Production from the Ras Nowmah South field includes volumes from the newly completed Ras Nowmah South 2 well which was brought on production April 13, 2014 at approximately 200 barrels per day. Production from the Al Roidhat field remains shut-in due to marketing and local constraints.
• The Company's first lift of crude oil in 2014 occurred on April 1, 2014 and as a result no sales of crude oil have been recorded in the first quarter. The Company's share of crude oil inventory at the end of the quarter increased to approximately 68,000 barrels. Due to the timing of the crude oil lift occurring one day after the quarter end, certain financial measures are not directly comparable with prior period measures. One key measure that provides a direct comparison is production volumes. Gross production volumes in the first quarter averaged 1,550 barrels per day compared to 5,370 barrels per day in the first quarter of 2013. During two-thirds of the first quarter period the Company had significant production shut-in due to crude oil storage capacity being full and local blockades restricting the transportation of crude oil to marketing outlets.

The Company continues to truck its volumes to Block 18 since the preferred route to Block 51 is still not available for crude oil trucking.

• Earnings (($0.02) per share) and funds flow from operations (($0.02) per share) for the three months ended March 31, 2014 were negative due to no sales being recorded. Earnings in the first quarter 2013 were $0.08 cents per share ($6.7 million) and funds flow from operations were $0.10 per share ($8.8 million) for the same period of 2013. As a result of no sales being recorded there is no average netback to be calculated in the first quarter, the netback in the first quarter of 2013 was $46.64. 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.
• Capital expenditures in the first quarter of $2.2 million compare to $2.0 million incurred in the first quarter of 2013 and represent planned expenditures on equipment and services for the 2014 drilling program.
• The Company has received regulatory approvals for the Hiswah water filtration and injection project and plans are currently being made to award the project for commissioning later this year.
• During the first quarter the Company purchased for cancellation 108,000 shares under its approved Normal Course Issuer Bid at an average cost of Cdn$1.72 per share.
• Calvalley has a healthy balance sheet with approximately $83.7 million in working capital at March 31, 2014 compared to $74.3 million at March 31, 2013. The working capital balance increases to over $86 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, 2014 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, 2014 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 Information
This press release may contain forward-looking information. Words such as "may", "will", "should", "could", "anticipate", "believe", "expect", "intend", "plan", "potential", "continue", and similar expressions may have been used to identify this forward-looking information. These statements reflect management's current beliefs and are based on information currently available to management. In particular, information relating to maintaining production of crude oil, access to crude oil markets through crude oil transfer facilities, shut-in production and the award and commissioning of facility projects contain forward looking information. Forward-looking information can involve significant risk and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information including, but not limited to, operational risks, availability of supplies and services, delays and interruptions in drilling and completion activities for undetermined periods, changes in general economic and market conditions, labour issues and strikes, security and other risk factors. Although the forward-looking information contained herein is based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with this forward-looking information. Investors should not place undue reliance on forward-looking information. The forward-looking information contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking information included in this press release is made as of the date of this press release and Calvalley assumes no obligation to update or revise it to reflect new events or circumstances except as expressly required by applicable securities law.

SOURCE Calvalley Petroleum Inc.