Petroflow Reports Second Quarter 2009 Results
Petroflow Energy has filed with Canadian and US securities regulatory authorities its unaudited consolidated financial statements for the three and six months ended June 30, 2009.
OVERVIEW AND HIGHLIGHTS
- Petroflow's average sales production rate grew to 4,250 boe per day, a 75% increase over the second quarter of 2008 average sales production of 2,426 per day, and a 22% increase over the first quarter of 2009 average sales production of 3,462 boe per day.
- Funds from operations increased by 76% in the second quarter of 2009 to $4.6 million from $2.6 million in the second quarter of 2008.
- Funds from operations for the second quarter were positively impacted as a result of the realized gain on the monetization of derivative instruments, which helped offset the impact of declining commodity prices.
- During the second quarter of 2009, Petroflow's average operating net back per boe (defined as revenue including commodity derivatives, less royalties, operating costs and transportation costs) was $25.25 per boe.
- The realized gain on its commodity contracts increased by 921% in the second quarter of 2009 to $7.7 million from a realized loss of $0.9 million during the second quarter of 2008. The increase was a result of the monetization of derivative instruments in the second quarter of 2009.
- The Company recorded $0.29 loss per share for the second quarter of 2009 compared to a loss of $0.30 in the same period of 2008. Net loss was $8.6 million for the second quarter of 2009, a decrease of 4% from a net loss of $8.9 million for the same period in 2008.
- Operating costs increased 7% to $12.53 per boe in the second quarter of 2009 as compared to $11.73 per boe in the second quarter of 2008 and $11.48 per boe in the first quarter of 2009. The Company performed extensive workovers on six wells during the second quarter. The workovers were designed to enhance long term production and ultimately lower operating expenses. The cost of this program was $0.55 per boe.
- During the second quarter of 2009 and shortly thereafter, significant changes in the management of the Company occurred with the resignations of the Chairman of the Board of Directors, Mr. Richard Clark; followed by the CEO of the Company, Mr. John Melton. Mr. David Elgie, a professional engineer with considerable public company experience has replaced Mr. Clark. The remainder of the Company's management team, headed by Mr. Sandy Andrew as President has remained in place.
- The global economic and financial crisis has continued to reduce liquidity in financial markets, restrict access to financing and cause significant demand destruction for commodities and lower pricing. These factors have continued to affect the economy in the second quarter of 2009 and continue to impact the performance of the economy going forward. The Company will continue to be flexible in its capital spending in order to respond to changes in commodity prices, costs and capital markets.
Oklahoma's average sales production grew to 4,166 boe per day for the second quarter of 2009, a 101% increase over the second quarter of 2008 average sales production of 2,074 boe per day. There were no new capital expenditures during the second quarter of 2009. The Company drilled nine wells and put eight wells on production for the same period in 2008.
Oklahoma's average sales production rate grew to 3,787 boe per day for the first half of 2009, a 105% increase over the first half of 2008 average sales production of 1,848 per day. The Company drilled two wells in the first half of 2009, one being a salt water disposal well compared to seventeen wells in the same period of 2008. The Company put seven wells on production in the first half of 2009 compared to sixteen wells in the same period for 2008.
There was no drilling on this property during 2009. This property currently produces on average 77 boes per day.
There were no capital expenditures on the Company's properties in Canada.