Greenfields Petroleum

Greenfields Petroleum Corporation Announces Finanical Results for the Year Ended December 31, 2012


HOUSTON, TEXAS--(Marketwired - May 3, 2013) -


Greenfields Petroleum Corporation ("Greenfields" or the "Company") (TSX VENTURE:GNF), an independent exploration and production company with assets in Azerbaijan, announces financial results for the year ended December 31, 2012.

2012 Annual and Fourth Quarter operating highlights

  • The Corporation's entitlement sales volumes from production for its net interest in the Bahar ERDPSA averaged 487 bbl/d and 3,928 mcf/d or 1,141 boe/d in the quarter and 430 bbl/d and 3,980 mcf/d or 1,093 boe/d for the year.
  • Through its interest in Bahar Energy, the Corporation realized average oil prices of $105.02 per barrel for the quarter and $104.35 per barrel year-to-date. Realized gas prices have remained constant during 2012 at $3.96 per thousand cubic feet.
  • In October Bahar Energy completed the Gum Deniz 601 well in the northern area of the field on Gum Island setting casing at 3,557 meters. Initial production rates after clean-up were approximately 90 bbl/d and 800 BWPD. In November the PSG 2 rig began workover operations on platform 196 in the Bahar gas field and in late December the first offshore well, GD 715, was spudded in the Gum Deniz field on platform 2 with the PSG 1 drilling rig.

Operating highlights and plans

  • During the year Bahar Energy completed rehabilitation work on platform 2 in the Gum Deniz field and platform 196 in the Bahar field in preparation to receive the PSG 1 drilling rig and PSG 2 workover rig for the respective platforms. These platform upgrades to the existing structures enabled BEOC to spud the Gum Deniz 715 well on platform 2 on December 14, 2012 and begin working over the Bahar 196 well on platform 196 on November 25, 2012. By year end the topsides on platform 208a in the Gum Deniz field had been removed, pile caps fabricated and installed and skid beams readied for installation to accept the PSG 3 drilling rig during 2013.
  • A land rig was brought in to drill the Gum Deniz 601 well on Gum Island, which was successfully completed and placed in service with initial production rates of 90 barrels of oil per day and current sustained production rates of 60 - 70 barrels of oil per day. This well appears to have additional potential and is being reviewed for possible recompletion work in late 2013. The offshore drilling program that began in Gum Deniz oil field in December 2012 on platform 2 will continue throughout 2013 and beyond following the success of the first well, Gum Deniz 715, which is currently producing 600 barrels of oil per day.
  • Two 14,600 barrel oil storage tanks were constructed and placed into service.
  • During 2012 two seismic data acquisition programs, the 140 line kilometer 2D survey in the Gum Deniz field and the 82 square kilometer 3D in the Bahar-2 exploration area, were completed. After delays related to vessel suitability and weather, the 2D project was completed in April 2012. The data is of good quality. This data has been processed and interpreted, and integration with the well control for mapping updates is ongoing. The mapping revisions have indicated the possible extension of the Gum Deniz oil field off the eastern boundary. Bahar Energy has made a request to SOCAR for an extension of the ERDPSA area to capture this possible field extension. The request is presently under SOCAR's review.

    The 3D acquisition survey over the Bahar-2 exploration area started in June 2011 and was completed in December 2012 after acquiring 82 square kilometers of 3D data. The data was in processing at year end. After the processing and interpretation are completed, if the interpretation confirms an attractive exploration prospect, Bahar Energy will develop an appropriate drilling strategy to evaluate the commerciality of the prospect.
  • Workover and well rehabilitation operations continued throughout 2012. A total of 27 well maintenance jobs and 9 well workovers were performed using the older Soviet-era rigs contracted from SOCAR. This program was successful in performing basic well services, including tubing and gas lift repairs.

    Workovers and recompletions performed with these Soviet-era workover rigs are limited to pulling tubing, cleaning out sand and performing wireline work. They are unable to rotate pipe, perform cementing work or do fishing jobs for downhole material. Thus only 9 limited workovers were undertaken during 2012 with 7 being successful, adding 150 barrels of oil per day of new production. These successful workovers have helped maintain field production levels after accounting for well downtimes due to operational and weather issues.
  • Bahar Energy plans to upgrade the capability of the Soviet-era workover rigs to allow for more efficient well workover operations by late 2013. Additional options for well service interventions, selected workovers and recompletions will be available once these highly mobile rigs have been upgraded. The upgraded workover rigs will continue to be used for planned workover operations in the Bahar gas field.
  • Bahar Energy will continue work in 2013 related to construction, upgrades and expansion of platforms 2, 208a, 209 in the Gum Deniz field and platform 168 in the Bahar field. Areas of focus include platform design and construction for extending platform 2, oil and gas processing facility upgrades, pipeline replacement, water disposal, electric power line installation, support infrastructure and safety monitoring.
  • Bahar Energy expects to drill at least 6 wells in the Gum Deniz field and to recomplete approximately 16 wells in Gum Deniz and Bahar fields during 2013. The multi-year drilling program is scheduled to drill 83 new wells in the Gum Deniz field and 7 new wells in the Bahar field. Total planned recompletions include 29 in the Gum Deniz field and 40 in the Bahar field.
  • Bahar Energy will focus greater effort in the development of the Gum Deniz oil field during 2013 and plans to have 3 drilling rigs operating in the field by year end. The PSG 2 workover rig currently assigned to the Bahar gas field may undergo modifications to allow it to begin drilling operations later in 2013. This would add a third drilling rig along with the PSG 3 rig presently in preparation to commence drilling and the actively drilling PSG 1 rig.
  • To date in 2013 Bahar Energy continues to have success with its workover programs and positive progress with new drilling in the Gum Deniz field. The Bahar 208 gas well on platform 196 was recompleted using the PSG 2 workover rig. The well was re-completed in 8 meters (26 feet) of pay in Zone 1 and has been flowing at an average rate of 1.24 million cubic feet per day. In Gum Deniz field, the 479 well has been recompleted in Zone 10 by perforating 9 meters (29 feet) of pay and is currently producing 220 barrels of oil per day. In addition, the PSG 1 drilling rig has set 13-3/8" surface casing at 450 meters on the Gum Deniz 716 well, the second new well in the field, and is currently drilling at 1,539 meters. A larger electrical submersible pump was installed on the Gum Deniz 473 well after a smaller pump failed which resulted in production increase of 90 barrels of oil per day.
  • Total field production for Q1 2013 averaged 3,275 barrels oil equivalent per day (net to Greenfields 1,037 boe/d) and including these recent results noted above, current production has increased to approximately 4,466 barrels oil equivalent per day (net to Greenfields 1,414 boe/d). Pursuant to the Production Sharing Agreement, the Contractor Parties are required to increase total field production to 6,944 barrels oil equivalent per day by June 22, 2014 and the license contract term will be extended to the full 25 years.

Selected Information

The selected information below is from the Greenfields' Management Discussion & Analysis. The Company's complete financial statements as of and for the years ended December 31, 2012 and 2011, with the notes thereto and the related Management's Discussion & Analysis can be found either on Greenfields' website at or on SEDAR at All amounts below are in thousands of US dollars unless otherwise noted.

Years Ended December 31,
2012 2011
Revenues 26,801 26,801
Net loss (16,075)
Per share, basic and diluted $ (1.04)
$ (1.66)
Average Entitlement Sales Volumes (1)
Oil and condensate (bbl/d) 430 397
Natural gas (mcf/d) 3,980 4,121
Barrel oil equivalent (boe/d) 1,093 1,084
Average Oil Price
Oil price ($/bbl) $ 104.35 $ 103.53
Net realization price ($/bbl) $ 102.23 $ 99.67
Brent oil price ($/bbl) $ 111.64 $ 111.26
Natural gas price ($/mcf) $ 3.96 $ 3.96
Capital Items
Cash and cash equivalents 15,419 25,289
Working capital (2) 13,377 29,674
Total Assets 90,315 53,087
Convertible debentures and shareholders' equity 38,327 28,481
(1) Daily volumes represent the Corporation's share of the Contractor Parties' entitlement volumes net of 5% compensatory petroleum and the government's share of profit petroleum.
(2) Working capital, presented here, is current assets net of current liabilities (excluding warrants).

The Financial Statements for the year ended December 31, 2011 have been adjusted to reflect an asset impairment of $8.0 million. For additional information, please see the Financial Statements and MD&A as filed on

About Greenfields Petroleum Corporation

Greenfields is a junior oil and natural gas corporation focused on the development and production of proven oil and gas reserves principally in the Republic of Azerbaijan. The Company plans to expand its oil and gas assets through further farm-ins and acquisitions of Production Sharing Agreements from foreign governments containing previously discovered but under-developed international oil and gas fields, also known as "greenfields". More information about the Company may be obtained on the Greenfields website at

Forward Looking Statements

The Company's press releases contain forward-looking information that involve substantial known and unknown risks and uncertainties, most of which are beyond the control of Greenfields, including, without limitation, those listed under the headings "Risk Factors" in Greenfield's Annual Information Form, its Management Information Circular and similar headings in the Company's Management's Discussion & Analysis which may be viewed on Forward-looking information in this press release may include, but is not limited to, information concerning its future operations.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information. Accordingly, prospective investors should not place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this press release and, other than as required by applicable securities laws, Greenfields does not assume any obligation to update or revise them to reflect new events or circumstances.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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