RMP Energy Announces 2011 and Fourth Quarter Financial Results and Provides Waskahigan Operations Update

Marketwired

CALGARY, ALBERTA--(Marketwire - March 21, 2012) - RMP Energy Inc. ("RMP" or the "Company") (TSX:RMP.TO - News) today announced financial and operating results for the year ended December 31, 2011. RMP reported cash flow from operations of $24.4 million ($0.30 per fully-diluted share) on revenue of $49.5 million and average daily production of 3,472 barrels of oil equivalent. Detailed financial and operating highlights are as follows:





----------------------------------------------------------------------------

Financial Highlights                       Quarterly Summary                

----------------------------------------------------------------------------

(thousands except share and                                                 

 per boe data) (6:1 oil        Dec. 31,    Sept. 30,               Dec. 31, 

 equivalent conversion)            2011         2011  % change         2010 

----------------------------------------------------------------------------

Petroleum and natural gas                                                   

 revenue (1)                     18,474       12,233        51       11,940 

----------------------------------------------------------------------------

Cash flow from operations                                                   

 (2,3)                           11,558        4,847       138        7,134 

----------------------------------------------------------------------------

  Per share - basic                0.12         0.06       100         0.11 

----------------------------------------------------------------------------

  Per share - diluted              0.12         0.06       100         0.11 

----------------------------------------------------------------------------

Net income (loss) (3)           (70,980)      (4,111)    1,627       20,153 

----------------------------------------------------------------------------

  Per share - basic               (0.75)       (0.05)    1,400         0.31 

----------------------------------------------------------------------------

  Per share - diluted             (0.75)       (0.05)    1,400         0.31 

----------------------------------------------------------------------------

E&D capital expenditures         42,157       36,006        17      (25,546)

----------------------------------------------------------------------------

Total capital expenditures                                                  

 (3)                             42,688       36,212        18      (30,764)

----------------------------------------------------------------------------

Net debt (4) - period end        49,087       37,822        30        8,449 

----------------------------------------------------------------------------

Weighted average basic                                                      

 shares                      95,233,832   84,287,173        13   65,774,455 

----------------------------------------------------------------------------

Weighted average diluted                                                    

 shares                      95,233,832   84,287,173        13   65,853,471 

----------------------------------------------------------------------------

Issued and outstanding                                                      

 shares (5)                  96,647,655   86,882,547        11   65,784,310 

----------------------------------------------------------------------------

Operating Highlights                                                        

----------------------------------------------------------------------------

Average daily production:                                                   

----------------------------------------------------------------------------

 Natural gas (Mcf/d)             19,337       15,236        27       15,278 

----------------------------------------------------------------------------

 Liquids (Oil and                                                           

  NGLs)(Bbls/d)                   1,496          861        74          856 

----------------------------------------------------------------------------

 Oil equivalent (boe/d)           4,719        3,400        39        3,402 

----------------------------------------------------------------------------

Average sales price:                                                        

----------------------------------------------------------------------------

 Natural gas ($/Mcf)               3.41         4.04       (16)        4.70 

----------------------------------------------------------------------------

 Liquids (Oil & NGLs)                                                       

  ($/Bbl)                         90.11        82.87         9        67.71 

----------------------------------------------------------------------------

 Oil equivalent ($/boe)           42.56        39.10         9        38.15 

----------------------------------------------------------------------------

Operating expenses ($/boe)         8.21        10.46       (22)        8.74 

----------------------------------------------------------------------------

Operating netback (6)                                                       

 ($/boe)                          31.35        19.37        62        26.88 

----------------------------------------------------------------------------

Wells drilled: gross (net)       7 (5.8)      5 (4.4)       40       1 (1.0)

----------------------------------------------------------------------------



----------------------------------------------------------------------------

Financial Highlights                        Annual Summary                  

----------------------------------------------------------------------------

(thousands except share and                                                 

 per boe data) (6:1 oil                                                     

 equivalent conversion)                    Year 2011    Year 2010  % change 

----------------------------------------------------------------------------

Petroleum and natural gas                                                   

 revenue (1)                                  49,511       47,770         4 

----------------------------------------------------------------------------

Cash flow from operations                                                   

 (2,3)                                        24,406       26,918        (9)

----------------------------------------------------------------------------

  Per share - basic                             0.30         0.41       (27)

----------------------------------------------------------------------------

  Per share - diluted                           0.30         0.41       (27)

----------------------------------------------------------------------------

Net income (loss) (3)                        (74,974)      20,001      (475)

----------------------------------------------------------------------------

  Per share - basic                            (0.93)        0.31      (400)

----------------------------------------------------------------------------

  Per share - diluted                          (0.93)        0.30      (410)

----------------------------------------------------------------------------

E&D capital expenditures                      99,964       15,874       530 

----------------------------------------------------------------------------

Total capital expenditures                                                  

 (3)                                         134,897       11,351     1,088 

----------------------------------------------------------------------------

Net debt (4) - period end                     49,087        8,449       481 

----------------------------------------------------------------------------

Weighted average basic                                                      

 shares                                   80,455,353   65,352,705        23 

----------------------------------------------------------------------------

Weighted average diluted                                                    

 shares                                   80,455,353   65,644,996        23 

----------------------------------------------------------------------------

Issued and outstanding                                                      

 shares (5)                               96,647,655   65,784,310        47 

----------------------------------------------------------------------------

Operating Highlights                                                        

----------------------------------------------------------------------------

Average daily production:                                                   

----------------------------------------------------------------------------

 Natural gas (Mcf/d)                          15,568       18,321       (15)

----------------------------------------------------------------------------

 Liquids (Oil and                                                           

  NGLs)(Bbls/d)                                  877          681        29 

----------------------------------------------------------------------------

 Oil equivalent (boe/d)                        3,472        3,734        (7)

----------------------------------------------------------------------------

Average sales price:                                                        

----------------------------------------------------------------------------

 Natural gas ($/Mcf)                            3.86         4.75       (19)

----------------------------------------------------------------------------

 Liquids (Oil & NGLs)                                                       

  ($/Bbl)                                      86.22        64.42        34 

----------------------------------------------------------------------------

 Oil equivalent ($/boe)                        39.07        35.05        11 

----------------------------------------------------------------------------

Operating expenses ($/boe)                      9.56         8.18        17 

----------------------------------------------------------------------------

Operating netback (6)                                                       

 ($/boe)                                       23.66        23.32         1 

----------------------------------------------------------------------------

Wells drilled: gross (net)                  18 (15.0)      8 (7.1)      125 

----------------------------------------------------------------------------



Notes:





1.  Petroleum and natural gas revenue and pricing includes any realized

    hedging gains or losses from commodity contract settlements. 

2.  Cash flow from operations or operating cash flow does not have any

    standardized meaning prescribed by International Financial Reporting

    Standards ("IFRS"). Please refer to the Reader Advisories per below. 

3.  Comparative net loss, cash flow from operations and total capital

    expenditures for the year ended December 31, 2010 have been restated for

    the effect of adopting IFRS.  

4.  Net debt is not a recognized measure under IFRS. Please refer to the

    Reader Advisories per below. 

5.  As of March 21, 2012, common shares outstanding were 96.6 million. 

6.  Operating netback is not a recognized measure under IFRS. Please refer

    to the Reader Advisories per below. 



Financial Highlights





--  Fourth quarter production averaged 4,719 boe/d, weighted 68% natural gas

    and 32% light oil and NGLs, a 39% increase over the third quarter of

    2011 production of 3,400 boe/d. Light oil production from RMP's

    Waskahigan operations increased 111% from the prior quarter, averaging

    1,161 bbls/d of light crude oil (1,973 boe/d including solution gas) in

    the fourth quarter. 



--  In the fourth quarter, the Company incurred exploration and development

    capital expenditures of $42.2 million, including $28.3 million for

    drilling and completion of seven (5.8 net) horizontal wells, $3.4

    million on undeveloped land acquisitions and $10.5 million on field

    facilities, including the completion of the Company's oil battery at

    Waskahigan. 



--  The Company was drawn $36.2 million as at December 31, 2011 on its bank

    lines and had negative working capital of $12.9 million for a total

    year-end net debt of $49.1 million. As at March 20, 2012, the Company

    was drawn $42.4 million on the $80 million borrowing base associated

    with the Company's committed, extendible revolving bank facility. 



--  RMP reported cash flow from operations of $11.6 million ($0.12 per

    share) for the three months ended December 31, 2011, up 138% (100% per

    share) from the cash flow from operations for the third quarter of 2011.

    Total cash flow from operations for 2011 was $24.4 million for the year

    ended December 31, 2011. 



--  For the year ended December 31, 2011, RMP reported a net loss of $75.0

    million. The net loss is primarily a result of a non-cash impairment

    charge of $88.7 million due to the weak natural gas prices and the

    related write down of the Company's natural gas reserves at year-end

    2011. 



Waskahigan Operations Update

In the first quarter of 2012, the Company has successfully drilled five 100% owned Montney light oil infill horizontal wells at Waskahigan. Four of the horizontal wells have been completed to-date with the fifth well scheduled to be completed post spring break-up. The production flow test results for completed wells are as follows:





----------------------------------------------------------------------------

                                            Well Completion Information     

----------------------------------------------------------------------------

                   Total                                Sand -              

                Measured   HZ Section                    Total   Total Frac 

Well            Depth (m)          (m)    # Stages      Tonnes    Oil (bbls)

----------------------------------------------------------------------------

1-2-64-23W5        3,818        1,354           18         277        3,773 

----------------------------------------------------------------------------

13-25-63-23W5      3,688        1,321           18         265        3.598 

----------------------------------------------------------------------------

9-36-63-23W5       3,709        1,415           18         270        3,337 

----------------------------------------------------------------------------

12-25-63-23W5      3,881        1,442           18         268        3,903 

----------------------------------------------------------------------------



----------------------------------------------------------------------------

                                          Flow Test Data (1)                

----------------------------------------------------------------------------

Well                      Oil (bbls/d)      Gas (mmcf/d)         BOE (boe/d)

----------------------------------------------------------------------------

1-2-64-23W5                       942               4.7               1,725 

----------------------------------------------------------------------------

13-25-63-23W5                   2,422               3.0               2,923 

----------------------------------------------------------------------------

9-36-63-23W5                    1,077               2.1               1,420 

----------------------------------------------------------------------------

12-25-63-23W5                   2,342               2.0               2,682 

----------------------------------------------------------------------------



Note:





1.  Flow Test Data based on first twenty-four hours (10 hours in respect of

    the 1-2 well) of production flow test following clean-up and after 100%

    recovery of frac fluid. The 1-2 well was shut-in once the maximum

    volumes under the flare permit were reached.  



As a result of its ongoing drilling success with the Montney light oil resource at Waskahigan, the Company is proceeding with the expansion of the oil processing capability of its 100% company-owned Waskahigan oil battery. Expansion is anticipated to be completed in the fourth quarter of 2012 at an estimated project cost of approximately $4 million. This expansion will facilitate the oil handling and processing of RMP's expanded production base, provide for the handling of third-party volumes and will allow the Company to deliver oil from Ante Creek to the facility. Upon expansion, the Company's Waskahigan infrastructure is expected to be capable of processing 6,000 Bbls/d of light oil and the natural gas processing capability will remain unchanged at approximately 10 MMcf/d.

Funding of this expansion capital project will be provided from the $6.5 million net proceeds of the Company's previously disclosed undeveloped land disposition at Resthaven/Bilbo ($15 million) and its undeveloped land purchase at Waskahigan ($8.5 million). The Company's 2012 capital expenditures budget of approximately $75 million remains unchanged. First quarter 2012 production is expected to approximate 5,000 boe/d, weighted 40% light oil and NGLs.

The Company's audited consolidated financial statements and associated Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2011 is available on RMP's website at www.rmpenergyinc.com within "Investors" under "Financials". Additionally, these documents will be filed by the close of business today, on the System for Electronic Document Analysis and Retrieval ("SEDAR"). These documents can be retrieved electronically from the SEDAR system by accessing RMP's public filings under "Search for Public Company Documents" within the "Search Database" module at www.sedar.com.

Abbreviations





----------------------------------------------------------------------------

Crude Oil and Natural Gas Liquids        Natural Gas and Natural Gas Liquids

----------------------------------------------------------------------------

bbl      barrel                          Mcf/d    thousand cubic feet per   

                                                  day                       

----------------------------------------------------------------------------

Mbbl     thousand barrels                NGLs     natural gas liquids       

----------------------------------------------------------------------------

bbls/d   barrels per day                 MMcf/d   million cubic feet per day

----------------------------------------------------------------------------

boe      barrels of oil equivalent       Bcf      billion cubic feet        

----------------------------------------------------------------------------

Mboe     thousand barrels of oil         psi      pounds per square inch    

         equivalent                                                         

----------------------------------------------------------------------------

boe/d    barrels of oil equivalent       kPa      kilopascals               

         per day                                                            

----------------------------------------------------------------------------



Reader Advisories

Any references in this news release to initial and/or final raw test or production rates and/or "flush" production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will commence production and decline thereafter. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company.

The information in this news release contains certain forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions. More particularly and without limitation, this new release contains forward looking information relating to: average production for first quarter 2012, expected capital expenditures for 2012, including estimated capital for the Waskahigan oil battery expansion, the completion date for the Waskahigan oil battery expansion and the volume of light oil that such facility will be capable of processing and the timing of drilling operations at Waskahigan. These statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control, including: the impact of general economic conditions; industry conditions; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are, interpreted and enforced; fluctuations in commodity prices and foreign exchange and interest rates; stock market volatility and market valuations; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry ; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves; and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits that the Company will derive from them. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements.

In this news release RMP has adopted a standard for converting thousands of cubic feet ("mcf") of natural gas to barrels of oil equivalent ("boe") of 6 mcf:1 boe. Use of boes may be misleading, particularly if used in isolation. The boe rate is based on an energy equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of the 6:1 conversion ratio, utilizing the 6:1 conversion ratio may be misleading as an indication of value.

As an indicator of the Company's performance, the term cash flow from operations or operating cash flow contained within this news release should not be considered as an alternative to, or more meaningful than, cash flow from operating, financing or investing activities, as determined in accordance with International Financial Reporting Standards ("IFRS"). This term is not a recoqnized measure, does not have a standardized meaning nor is it a financial measure under IFRS. Cash flow from operations is widely accepted as a financial indicator of an exploration and production company's ability to generate cash which is used to internally fund exploration and development activities and to service debt. This measure is widely used by shareholders and investors in the valuation, comparison and investment recommendations of companies within the natural gas and crude oil exploration and production industry. Cash flow from operations, as disclosed within this news release, represents cash flow from operating activities before: expensed corporate acquisition-related costs, decommissioning obligation cash expenditures and changes in non-cash working capital from operating activities. The Company presents cash flow from operations per share whereby per share amounts are calculated consistent with the calculation of earnings per share.

Net debt refers to outstanding bank debt plus working capital deficit (excludes current unrealized amounts pertaining to risk management commodity contracts) plus long-term accounts receivables. Net debt is not a recognized measure under IFRS and does not have a standardized meaning.

Operating netbacks refers to realized wellhead revenue less royalties, operating expenses and transportation costs per barrel of oil equivalent ("boe"). Operating netback is not a recognized measure under IFRS.

Contact:
John Ferguson
RMP Energy Inc.
President and Chief Executive Officer
(403) 930-6303
john.ferguson@rmpenergyinc.com

Dean Bernhard
RMP Energy Inc.
Vice President, Finance and Chief Financial Officer
(403) 930-6304
dean.bernhard@rmpenergyinc.com
www.rmpenergyinc.com

View Comments (0)