CALGARY, Alberta, Aug. 30, 2016 (GLOBE NEWSWIRE) — Quattro Exploration and Production Ltd. (TSX-V:QXP) (“Quattro” or the “Company“) announces its financial results for the quarter ended June 30th, 2016, reporting a loss of $0.02 per share for the 6 month period ended June 30, 2016. Despite these challenges Quattro is pleased to report that in the first half of 2016 production averaged 1,593 boe per day, representing a year-over-year increase of 15% from the average production of 1,390 boe per day recorded during the same per period in 2015.
In the second quarter oil and natural gas production at Quattro was limited to 1,540 boe/d due to a decision to limit capital investments to only oil production, during a period of extremely low commodity prices. Quattro continues to believe that a diversified production base of oil and natural gas is a fundamental requirement within the industry, and for the foreseeable future Quattro intends to increase oil production to where it will represent a sustainable 60% of its daily production, with this transformation being accelerated with the completion of its divestiture plan previously announced on August 2, 2016. Over the past 12 months the Company’s oil production continues to increasingly offset natural gas prices that in the 2nd quarter briefly reached lows of $0.60 per mcf. The Company’s decision in the 4th quarter of 2015 to more aggressively increase oil reserves and production through acquisitions has proven to be timely as natural gas prices are only now recovering to a more seasonally adjusted price range of $2.50 to $3.50 per mcf from prices not seen in over 20 years.
In the 2nd quarter of 2016, despite the low overall commodity prices, the Company’s focus on increasing oil production positioned the Company to increase quarter-over-quarter revenues to $19.55 per boe from the lows of $16.01 per boe reported in the 1st quarter of 2016, limiting losses, with the following results;
|Revenues – $19.55 per boe||$||2,740,199|
|Net income from operations – $ 1.19 per boe “Net Back”||$||163,213|
|Comprehensive net loss – 0.03 per share||$||1,151,987|
|Cash and equivalents||$||8,062,119|
|Working capital deficit (net of Long Term Debt)||$||178,241|
|Net debt (excluding decommissioning, non-cash liabilities & deferred taxes)||$||10,476,407|
The Company’s focus on increasing oil production in the 2nd quarter will continue for the next 12 months and is being accelerated with the divestiture and monetizing of a portion of its operations in the Western Canadian Sedimentary Basin in the second half of 2016.
“Commodity prices in the first half of 2016 continued to be a mixed bag of dramatic adjustments, while the overall industry continues to struggle with the determination of which sources of energy will be the driving force in the future. Despite this fact, Quattro continued to focus on improving its operational results, through the balancing of its portfolio of production through an increase in oil production,” said Leonard B. Van Betuw, President and CEO. “Quattro’s diversified and competitive low cost production strategy situated within low risk geo-political jurisdictions are what will ultimately be the foundation for the dramatic improvements in the Company’s financial strength.”
“The 6 months ending June 30, 2016 have been a series of contradictions for Quattro. The Company increased production and cash-flow from oil production, but unprecedented low natural gas prices due to the shut-in of operations in regions close to the fires in Northern Alberta, masked both the Company’s results and the overall recovery in oil prices that are related as much to adjustments around the world as they are to the regional challenges in Alberta. These challenges for Quattro are understandable but difficult to convey to the industry and its stakeholders over the short term. It is within this economic background that Quattro believes that difficult and rational decisions had to be made in order that the Company’s long term business plan will prevail, Therefore the Company’s hard work over the past years has put Quattro in an envious position of having options, as a result of having a number of economically viable projects in inventory, as such, the Company has determined that a non-core divestiture and monetization program, will allow for the acceleration of the Company’s adjustments to the current market conditions. Resulting in both near term and long term rewards for all stakeholders of the Company.”
“Quattro’s Board of Directors’ approval of the divestiture plan to sell 40% of Quattro’s year end 2015 reserves is a testament to what the size of the Company’s unrecognized potential has become and is a clear recognition and support for what Quattro’s Team is capable of in terms of producing results when they are given the opportunity,” said Leonard Van Betuw.
“At the time of the filing its financials, Quattro continues to refine its divestiture plan, while it evaluates its options for the funding and development of its long life oil and natural gas assets in Saskatchewan and NE British Columbia where it intends to collectively reach its first goal of a sustainable potential of more than 3,000 barrels per day,” said Mr. Van Betuw. “It is these reserves that will position the Company to grow for the next fifteen to twenty years through both exploration and production in Canada, Central and South America.”
About Quattro Exploration and Production Ltd.
Quattro Exploration and Production Ltd. (“QXP”) continues to focus on the conventional exploration and development of oil and natural gas reserves in Western Canada, with an expanding presence in Saskatchewan and British Columbia. Its core low risk production base will provide the Company the capacity to aggressively pursue a series of high impact exploration and development efforts in Central and South America. Quattro intends to balance this portfolio of activities to assure its shareholders that it achieves material growth in both reserves and production.