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Press release from Marketwire

Antrim Energy Inc. Announces 2012 Third Quarter Financial and Operational Results

Wednesday, November 14, 2012

Antrim Energy Inc. Announces 2012 Third Quarter Financial and Operational Results02:00 EST Wednesday, November 14, 2012CALGARY, ALBERTA--(Marketwire - Nov. 14, 2012) -NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S.Antrim Energy Inc. ("Antrim" or "the Company")(TSX:AEN) (AIM:AEY), an international oil and gas exploration and production company, today reported its financial and operational results for the three and nine month periods ended September 30, 2012.All financial figures are unaudited and in US dollars unless otherwise notedHIGHLIGHTS:Causeway first production commenced with initial gross production of approximately 4,500 bopdOil discovery on Contender exploration well in October 2012 Antrim signs Heads of Terms agreement with Teekay to lease an FPSO; Fyne development plans proceeding with targeted submission of an FDP in January 2013Cyclone exploration well expected to commence drilling in the fourth quarter of 2012Fionn Field development on track; first production anticipated for the middle of 2013Completed sale of Antrim Argentina to Crown Point Ventures Ltd.Overview of Continuing OperationsCauseway Licences On November 12, 2012, Antrim announced that first oil production from Causeway had commenced with initial gross production of approximately 4,500 barrels of oil per day ("bopd") on a 53% choke. Initial production rates are currently being impacted by longer than anticipated clean-up and commissioning due to the long horizontal nature of the well. The installed electric submersible pumps are anticipated to contribute to increased production rates in the first half of 2013. The Causeway Field includes one production well with a planned water injection well to be completed in early 2013. Oil is transported by pipeline to and processed at the North Cormorant production platform operated by TAQA Britani Limited ("TAQA") before being exported to the Sullom Voe terminal via the Brent Pipeline System for sale to BP Oil International Limited ("BP"). Antrim's remaining development costs for its 35.5% working interest are estimated at $19.1 million in 2012 and $13.8 million in 2013. As part of the sale of the 30% working interest in the Causeway Licences to Valiant Petroleum plc ("Valiant") in October 2011, Antrim entered into a DLA giving Valiant the right to produce and sell 6.25% of Antrim's share of oil produced, without liability for operating costs and expenses. Antrim's share of oil produced will be reduced to 29.25% until a cumulative value of $8.9 million of oil is received by Valiant. Fionn Field first production is anticipated for the middle of 2013. Valiant has completed the early installation of subsea infrastructure for the development of the Fionn Field. A field development plan ("FDP") for the Fionn Field was approved by the Department of Energy and Climate Change ("DECC") in August 2012. Fionn Field production will be combined with the Causeway Field production and transported for processing to the North Cormorant platform. Antrim's share of the development costs for the Fionn Field, including the pre-investment costs, is estimated to be approximately $22 million. Contender Licence On October 22, 2012, Antrim announced the discovery of oil at well 211/21-N94 (the "Contender Well") in UK Northern North Sea Licence P201 Block 211/22a Contender Area (the "Contender Block", Antrim interest 8.4%). The Contender Well was drilled to a total drilling depth of 16,903 feet (11,550 feet true vertical depth). Revised estimates indicate a net oil pay of 73 feet (true vertical), with greater than expected porosity and hydrocarbon saturation. TAQA is in the process of filing an FDP with DECC under the name 'Cormorant East.' Production would be processed through the North Cormorant platform with an anticipated start date of late 2012. Under the terms of the farm-out agreement with TAQA, 100% of the drilling, completion and tie in costs will be completely funded by TAQA. Antrim's working interest share of the completion costs and tie in will be recovered from production revenue.Kerloch LicenceWith the successful drilling of the Contender exploration well, TAQA also earned a 35% working interest in the adjacent Licence P201 Block 211/22a Kerloch Area, reducing Antrim's working interest from 21% to 13.65%.Fyne LicenceOn November 12, 2012, Antrim signed a Heads of Terms agreement with Hummingbird Production Limited, a subsidiary of Teekay Corporation ("Teekay") to lease the "Hummingbird Spirit" Floating Production, Storage and Offloading vessel ("FPSO") for the development of the Fyne Field. Based on the Heads of Terms, fully termed agreements will be developed, which will be subject to approval of an FDP by DECC. Antrim expects to submit the Fyne FDP to DECC for approval in January 2013. First oil would be anticipated in the fourth quarter of 2014, contingent on the timing of the redeployment of the Hummingbird Spirit from its current location. A reserves estimate for the Fyne Field was recently updated by McDaniel and Associates Consultants Ltd. ("McDaniel"), incorporating the results of well 21/28a-11 drilled earlier this year in the East Fyne area. Proved plus Probable reserves in the Fyne Field are estimated by McDaniel as at September 30, 2012 to be 11.7 million barrels of oil. Antrim continues to seek financing and/or joint venture partners to participate in the development of Fyne and the other Greater Fyne Area licences.In June 2012, Antrim received approval from DECC to acquire a 39.9% working interest, associated reserves, and operatorship from Premier and an additional 25% working interest and associated reserves from First Oil at no cost. This follows notice from both Premier and First Oil of their intention to withdraw from the Fyne Licence. Antrim's increased ownership in Fyne of 100%, on execution by all parties of the final completion documents, will allow Antrim sole control over development; however, increased ownership could increase the risk that the development of Fyne will not proceed as expected. If Antrim is to continue with the Fyne Licence, an FDP for the Fyne Field will need to be submitted ready for approval by the January 11, 2013 extended deadline. Approval of the FDP by DECC is required for Antrim to proceed with the development and first oil production by November 2014. If an FDP is not submitted ready for approval by January 11, 2013, the Fyne Licence could be revoked. Greater Fyne Area LicencesOn October 2, 2012, DECC agreed to waive the seismic and contingent well obligations on Licence P1563 Blocks 21/28b & 21/29c which allows the Company to relinquish the licence in its entirety. Accordingly, the Company plans to relinquish the Licence in its entirety in the fourth quarter of 2012. The Licence was a 25th round licence issued February 12, 2009 and is scheduled to expire February 12, 2013.Cyclone ProspectLicence P1784 Block 21/7b (Antrim 30%) is located in the Central North Sea, north of the Greater Fyne Area. The block contains the "Cyclone" and the "Typhoon" Tertiary Cromarty prospects at approximately 5,000 and 5,600 feet respectively. The licence was acquired jointly with Premier (70%, operator) with a firm well commitment. The joint venture partners have approved an exploration well on the Cyclone prospect and signed a contract for use of a semi-submersible drilling rig to drill the well. Drilling is anticipated to start in the fourth quarter of 2012. IrelandIn 2011, Antrim was awarded a Frontier Licence Option by the Department of Communications, Energy and Natural Resources of Ireland, under the Irish 2011 Atlantic Margin Licensing Round. The Licence option area covers Blocks 44/4, 44/5 (part), 44/9, 44/10, 44/14, 44/15, an area of approximately 1,409 square km located in the Porcupine Basin approximately 110 km off the southwest coast of Ireland. The option allows Antrim two years to qualify the blocks for a full Exploration Licence. Antrim has licenced 2D seismic and is currently reprocessing and interpreting the data which will continue into early 2013.TanzaniaAntrim holds an option to acquire a 20% interest in the production sharing agreement for the Pemba-Zanzibar exploration licence offshore and onshore Tanzania (the "P-Z PSA") following the pre-drilling (seismic) phase and an additional 10% interest to be exercised up to 180 days following receipt of the initial drilling results. Should Antrim exercise the initial option, costs for the seismic phase associated with Antrim's acquired interests would be repaid from future production. RAK Gas, the operator, has submitted a proposal for a revised work programme to the federal government of Tanzania. Environmental impact assessment work has commenced, with seismic operations expected to proceed in the near future.On October 29, 2012, an announcement was made of an agreement between the federal government of Tanzania and the government of Zanzibar on the sharing of any future hydrocarbon revenues, potentially ending a moratorium which has long-delayed exploration projects. The agreement has still to be ratified by cabinet and final details are still to be agreed. It is not yet known what, if any, impact this agreement will have on the P-Z PSA.Financial and Operating Results from Continuing Operations (unaudited)Three Months Ended September 30Nine Months Ended September 302012201120122011 Financial Results ($000's except per share amounts) Cash deficiency from operations (1) - continuing operations4728945,2512,914Cash deficiency from operations per share (1)0.000.000.030.02Net loss - continuing operations5,24036,80067,70439,749Net loss5,39636,28167,38938,178Net loss per share - basic, continuing operations0.030.200.370.23Total assets148,338247,259148,338247,259Working capital21,01352,67421,01352,674Capital expenditures21,5262,09336,2634,483Bank debt---- Common shares outstanding (000's) End of period184,731184,103184,731184,103Weighted average - basic184,433184,100184,273170,590Weighted average - diluted185,450185,419185,519172,004(1)Cash flow from operations and cash flow from operations per share are Non-IFRS Measures. Refer to "Non-IFRS Measures" in Management's Discussion and Analysis. Outlook Production from Causeway has started with initial gross production of approximately 4,500 bopd. The installed electronic submersible pumps are anticipated to contribute to increased production rates in the first half of 2013. A planned water injection well is to be completed in early 2013. Development of the Fionn Field is proceeding with production startup expected in the middle of 2013. On October 22, 2012, Antrim announced the successful oil discovery at Contender. TAQA is in the process of filing an FDP with DECC under the name 'Cormorant East.' Production would be processed through the North Cormorant platform with an anticipated start date of late 2012.A well is expected to be drilled in the fourth quarter of 2012 to test the Cyclone prospect in Block 21/7b. Antrim is actively pursuing a development plan for the Fyne Licence. The review includes an evaluation of the costs and time requirements for the engineering design process, fabrication, deployment and hook up, the ability to attract additional partners into the licence including a recognized production operator, the availability of third party financing to fund the company's share of the project costs, and the probability of delivering first production before the November 2014 extension deadline. Antrim will continue studies on the blocks covered by the Frontier Licence Options awarded to the Company in the Irish 2011 Atlantic Margin Licensing Round. Antrim has licenced 2D seismic and is currently reprocessing and interpreting the data.About AntrimAntrim Energy Inc. is a Canadian, Calgary based high-growth junior oil and gas exploration and production company with assets in the UK North Sea and Ireland. Antrim is listed on the Toronto Stock Exchange (AEN) and on the London Stock Exchange's Alternative Investment Market (AEY). Visit www.antrimenergy.com for more information. Forward-Looking and Cautionary Statements This MD&A and any documents incorporated by reference herein contain certain forward-looking statements and forward-looking information which are based on Antrim's internal reasonable expectations, estimates, projections, assumptions and beliefs as at the date of such statements or information. Forward-looking statements often, but not always, are identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", "targeting", "forecast", "achieve" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements and information. Antrim believes that the expectations reflected in those forward-looking statements and information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements and information included in this MD&A and any documents incorporated by reference herein should not be unduly relied upon. Such forward-looking statements and information speak only as of the date of this MD&A or the particular document incorporated by reference herein and Antrim does not undertake any obligation to publicly update or revise any forward-looking statements or information, except as required by applicable laws.In particular, this MD&A and any documents incorporated by reference herein, contain specific forward-looking statements and information pertaining to the quality of and future net revenues from Antrim's reserves of oil, natural gas liquids ("NGL") and natural gas production levels. This MD&A may also contain specific forward-looking statements and information pertaining to Antrim's plans for the developing of its Fyne property, including anticipated timing thereof, future drilling plans with respect to Contender and Cyclone, expected production rates for Causeway, anticipated first production date and development plans for Fionn, commodity prices, foreign currency exchange rates and interest rates, capital expenditure programs and other expenditures, supply and demand for oil, NGL's and natural gas, expectations regarding Antrim's ability to raise capital, to continually add to reserves through acquisitions and development, the schedules and timing of certain projects, Antrim's strategy for growth, Antrim's future operating and financial results, treatment under governmental and other regulatory regimes and tax, environmental and other laws. With respect to forward-looking statements contained in this MD&A and any documents incorporated by reference herein, Antrim has made assumptions regarding Antrim's ability to obtain additional drilling rigs and other equipment in a timely manner, obtain regulatory approvals (including in respect of the Fyne FDP), future oil and natural gas production levels from Antrim's properties and the price obtained from the sales of such production, the level of future capital expenditure required to exploit and develop reserves, the ability of Antrim's partners to meet their commitments as they relate to the Company and Antrim's reliance on industry partners for the development of some of its properties, Antrim's ability to obtain financing on acceptable terms, the general stability of the economic and political environment in which Antrim operates and the future of oil and natural gas pricing. In respect to these assumptions, the reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Antrim's actual results could differ materially from those anticipated in these forward-looking statements and information as a result of assumptions proving inaccurate and of both known and unknown risks, including risks associated with the exploration for and development of oil and natural gas reserves such as the risk that drilling operations may not be successful, unanticipated delays with respect to the development of Antrim's properties, operational risks and liabilities that are not covered by insurance, volatility in market prices for oil, NGLs and natural gas, changes or fluctuations in oil, NGLs and natural gas production levels, changes in foreign currency exchange rates and interest rates, the ability of Antrim to fund its substantial capital requirements and operations (including the development of its Fyne property), Antrim's reliance on industry partners for the development of some of its properties, risks associated with ensuring title to the Company's properties, liabilities and unexpected events inherent in oil and gas operations, including geological, technical, drilling and processing problems, the accuracy of oil and gas reserve estimates and estimated production levels as they are affected by the Antrim's exploration and development drilling and estimated decline rates, in particular the future production rates at the Causeway, Fionn and Fyne Fields in the UK North Sea. Additional risks include the ability to effectively compete for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel, incorrect assessments of the value of acquisitions, Antrim's success at acquisition, exploitation and development of reserves, changes in general economic, market and business conditions in Canada, North America, the United Kingdom, Europe and worldwide, actions by governmental or regulatory authorities including changes in income tax laws or changes in tax laws, royalty rates and incentive programs relating to the oil and gas industry and more specifically, changes in environmental or other legislation applicable to Antrim's operations, and Antrim's ability to comply with current and future environmental and other laws, adverse regulatory rulings, order and decisions and risks associated with the nature of the Common Shares.Many of these risk factors, other specific risks, uncertainties and material assumptions are discussed in further detail throughout the MD&A and in Antrim's management discussion and analysis for the year ended December 31, 2011. Readers are specifically referred to the risk factors described in this MD&A under "Risk Factors" and in other documents Antrim files from time to time with securities regulatory authorities. Copies of these documents are available without charge from Antrim or electronically on the internet on Antrim's SEDAR profile at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.The calculation of barrels of oil equivalent ("boe") is based on a conversion rate of six thousand cubic feet of natural gas ("mcf") to one barrel of crude oil ("bbl"). Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In accordance with AIM guidelines, Mr. Kerry Fulton, P. Eng and Vice President, Operations for Antrim, is the qualified person that has reviewed the technical information contained in this MD&A. Mr. Fulton has over 30 years operating experience in the upstream oil and gas industry. Antrim Energy Inc.Consolidated Balance SheetAs at September 30, 2012 and December 31, 2011 (unaudited)(Amounts in US$ thousands)September 30 2012December 31 2011AssetsCurrent assetsCash and cash equivalents25,37247,105Restricted cash40417,249Accounts receivable4255,294Prepaid expenses1,091240Assets held for sale-31,65127,292101,539Property, plant and equipment51,90315,207Exploration and evaluation assets69,143122,431148,338239,177LiabilitiesCurrent liabilitiesAccounts payable and accrued liabilities6,27917,214Liabilities held for sale-4,1806,27921,394Asset retirement obligations8,5343,595Contingent consideration-7,00014,81331,989Commitments and contingenciesSubsequent eventShareholders' equityShare capital361,922361,587Contributed surplus20,15719,579Accumulated other comprehensive income (loss)4,499(5,971)Deficit(253,053)(168,007)133,525207,188148,338239,177Antrim Energy Inc.Consolidated Statement of Comprehensive LossFor the three and nine months ended September 30, 2012 and 2011 (unaudited)(Amounts in US$ thousands, except per share data)Three Months Ended September 30Nine Months Ended September 302012201120122011Revenue----ExpensesGeneral and administrative expenses1,2251,2434,2503,462Depreciation245570138Share-based compensation430187613697Exploration and evaluation expenditures1,185261,312247Impairment2,30435,60557,00435,605Reduction in the fair value of financial assets--10,040-Gain on disposal of Argentina assets--(5,894)-5,16837,11667,39540,149Finance income(94)(238)(302)(614)Finance costs40174182392Foreign exchange loss (gain)126(252)429(178)Loss from continuing operations before income taxes5,24036,80067,70439,749Income tax expense----Loss from continuing operations after income taxes5,24036,80067,70439,749Loss (income) from discontinued operations156(519)(315)(1,571)Net loss for the period5,39636,28167,38938,178Other comprehensive loss (income)Foreign currency translation adjustment5,193(8,796)13,683(2,651)Foreign currency translation adjustment - disposal of assets--(3,213)-Other comprehensive loss (income) for the period5,193(8,796)10,470(2,651)Comprehensive loss for the period10,58927,48577,85935,527Net loss (income) per common shareBasic & diluted - continuing operations0.030.200.370.23Basic & diluted - discontinued operations0.00(0.00)(0.00)(0.01)Antrim Energy Inc.Consolidated Statement of Cash FlowsFor the three and nine months ended September 30, 2012 and 2011 (unaudited)(Amounts in US$ thousands)Three Months Ended September 30Nine Months Ended September 302012201120122011Operating ActivitiesLoss from continuing operations after income taxes5,24036,80067,70439,749Items not involving cash:Depreciation245570138Share-based compensation430187613697Accretion of asset retirement obligations226196181Foreign exchange loss (gain)1,988(2)524214Impairment2,30435,60557,00435,605Reduction in the fair value of financial assets--10,040-Gain on disposal of Argentina assets--(5,894)-(472)(894)(5,251)(2,914)Changes in non-cash working capital items - continuing operations(1,140)1,277(6,916)1,012Cash (used in) provided by operating activities - continuing operations(1,612)383(12,167)(1,902)Cash (used in) provided by operating activities - discontinued operations(156)233(365)4,378Cash (used in) provided by operating activities(1,768)616(12,532)2,476Financing ActivitiesIssue of common shares1163118652,421Share issue expenses---(2,999)Cash provided by financing activities1163118649,422Investing ActivitiesCapital expenditures(21,526)(2,093)(36,263)(4,483)Restricted cash(404)(20,266)16,845(20,266)Cash proceeds from the disposal of Argentina assets--9,976-Cash used in investing activities - continuing operations(21,930)(22,359)(9,442)(24,749)Cash used in investing activities - discontinued operations-(280)(1,121)(2,076)Cash used in investing activities(21,930)(22,639)(10,563)(26,825)Effects of foreign exchange on cash and cash equivalents1,380(3,091)1,176(2,384)Net (decrease) increase in cash and cash equivalents(22,202)(25,083)(21,733)22,689Cash and cash equivalents - beginning of period47,57473,42247,10525,650Cash and cash equivalents - end of period25,37248,33925,37248,339Interest received94238302614Interest paid10106098Antrim Energy Inc.Consolidated Statement of Changes in EquityFor the nine months ended September 30, 2012 and 2011 (unaudited)(Amounts in US$ thousands)Number of common sharesShare capitalContributed surplusAccumulated other comprehensive incomeDeficitTotalBalance, December 31, 2010135,571,542312,06218,377(4,119)(115,037)211,283Net loss for the period----(38,178)(38,178)Other comprehensive income---(2,651)-(2,651)Issuance of common shares48,191,70052,297---52,297Share issuance costs-(2,999)---(2,999)Share-based compensation--1,021--1,021Stock options exercised339,503208(84)--124Balance, September 30, 2011184,102,745361,56819,314(6,770)(153,215)220,897Balance, December 31, 2011184,116,078361,58719,579(5,971)(168,007)207,188Net loss for the period----(67,389)(67,389)Capital distribution----(17,657)(17,657)Other comprehensive income---10,470-10,470Share-based compensation--727--727Stock options exercised614,998335(149)--186Balance, September 30, 2012184,731,076361,92220,1574,499(253,053)133,525FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: Antrim Energy Inc.Stephen GreerPresident & CEO(403) 264-5111(403) 264-5113 (FAX)greer@antrimenergy.comAntrim Energy Inc.Douglas OlsonChief Financial Officer(403) 264-5111(403) 264-5113 (FAX)olson@antrimenergy.comwww.antrimenergy.com