Greenfields Petroleum

Greenfields Petroleum Corporation Announces First Quarter Finanicial Results and Operations Update


Greenfields Petroleum Corporation Announces Financial Results for the Quarter Ended March 31, 2013 and Financial and Operations Update

HOUSTON, TEXAS--(Marketwired - May 30, 2013) -


Greenfields Petroleum Corporation (the "Company" or "Greenfields") (TSX VENTURE:GNF)(TSX VENTURE:GNF.DB), an independent exploration and production company with producing assets in Azerbaijan, announces its financial results and operating highlights for the first quarter of 2013.

First quarter 2013 financial results and operating highlights

  • The Company's 33.33% share in Bahar Energy entitlement sales volumes from production for its 33.33% net interest in Bahar Energy Limited averaged 443 bbl/d and 3,405 mcf/d or 1,011 boe/d in the first quarter 2013.
  • Through its interest in Bahar Energy, the Company realized average oil and gas prices of $103.73 per barrel and $3.96 per mcf in the quarter.
  • The first offshore oil well, GD 715, was drilled in the Gum Deniz field on platform 2 with the PSG 1 drilling rig. The initial unrestricted production from the 715 well was over 700 barrels of oil per day and is now producing over 470 barrels of oil per day.
  • The Company recorded revenues of $0.7 million and had a net loss of $3.8 million and EPS loss of $0.24.

Operating highlights and plans

  • Subsequent to the end of the first quarter, Bahar Energy has completed several successful workovers in the Gum Deniz and Bahar fields. Gross field production for May to date has averaged 1,945 bbl/d for oil and 13,425 mcf/d for natural gas or approximately 4,361 boe/d, an increase of 31% over first quarter production. In the Gum Deniz oil field, workovers and recompletions on several wells have added approximately 340 bbl/d in gross field production. In the Bahar gas field, recompletions on wells 196, 208 and 238 have added approximately 10,500 mcf/d in gross field production. Most notably, the Bahar 196 gas well is flowing at 8,800 mcf/d.
  • As of May 27, 2013, field production levels were approximately 1,876 bbl/d for oil and 22,874 mcf/d for natural gas, or approximately 5,993 boe/d. This puts Bahar Energy ahead of schedule in reaching the 1.5 times 2008 production target of 6,944 boe/d to attain full 25 year contract terms for the Exploration, Rehabilitation and Development Production Sharing Agreement ("ERDPSA"). With additional oil and gas workovers scheduled and new production from 2013 new well drilling in the Gum Deniz field, Bahar Energy anticipates reaching the 1.5 production target as early as late fourth quarter 2013, possibly three months ahead of prior estimates.
  • During the first quarter Bahar Energy completed rehabilitation work on platform 208a in the Gum Deniz field. The platform upgrades will allow for a second rig to begin drilling in the third quarter.
  • Bahar Energy has requested the State Oil Company of Azerbaijan ("SOCAR") to extend the eastern boundaries of the ERDPSA area to capture a possible field development prospect identified in 2012 from the 2011 2D seismic survey. The request for extension is presently under review by SOCAR.
  • Bahar Energy tendered and awarded a contract for a 200 square kilometer 3D seismic survey to cover the Gum Deniz field area. PGS was winning bidder and is presently preparing to begin acquisition during Q3 2013. Site survey and environmental work will begin in late Q2 2013 in preparation for acquisition work. The acquisition is expected to take approximately 5 months after which the data will be processed for interpretation. The integration of the new 3D seismic and well control data will allow for the optimization of the location and producing rates of wells to be drilled to develop the Gum Deniz oil field.
  • The 3D acquisition survey over the Bahar-2 exploration area was completed in December 2012 after acquiring 82 square kilometers of 3D data. The data has now been processed and is being interpreted. After the completion of the interpretation, if an attractive exploration prospect is determined, Bahar Energy will develop an appropriate drilling strategy to evaluate the commerciality of the prospects located in the Bahar-2 area which is located immediately south of the Bahar gas field in the ERDPSA.

Selected Information

On January 1, 2013 the Company changed accounting for its interest in Bahar Energy Limited, a joint venture, from proportionately consolidated to the equity method of accounting. This was required under IFRS 11, "Joint Arrangements", issued on May 12, 2011, which replaces IAS 31, "Interest in Joint Ventures". The standard is effective for annual periods beginning on or after January 1, 2013. See Note 3 - "Changes in Accounting Policies" and Note 8 - "Investment in Joint Ventures" in the Company's condensed consolidated financial statements for the three months ended March 31, 2013 for more information.

The selected information below is from the Greenfields' Management Discussion & Analysis for the three months ended March 31, 2013. The Company's complete financial statements as of and for the three months ended March 31, 2013 and 2012 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.

Greenfields Petroleum Corporation

(US$000's,except as noted)
Three months ended March 31,
2013 2012
Financial Restated
Revenues (1) 687 662
Net (loss) income (3,803) (4,504)
Per share, basic and diluted ($0.24) ($0.30)
Capital Items
Cash and cash equivalents 2,837 12,913
Total Assets 36,458 29,858
Working capital (2) 3,316 16,696
Convertible debt and shareholders' equity (3) 34,009 27,519
(1) Revenues for the three months ended March 31, 2013 and 2012 reflect change from proportionate consolidation to equity method of accounting for the Company's investment in Bahar Energy Limited. 2012 financial results have been restated to reflect the change in accounting policy effective January 1, 2013.
(2) The March 31, 2012 working capital balance has been restated to exclude the Company's share of Bahar Energy Limited working capital due the change to equity method accounting noted above.
(3) Convertible debt is combined with shareholders' for March 31, 2013 due to the Company's right to settle this debt by issuing shares.

Bahar Energy Limited (a Joint Venture)

Total Joint Venture Net to Company
(US$000's,except as noted) Three months ended March 31,
2013 2012 2013 2012
Revenues 17,750 16,007 5,916 5,335
Net (loss) income (6,170) (7,906) (2,057) (2,635)
Average Entitlement Sales Volumes (1)
Oil and condensate (bbl/d) 1,330 1,006 443 335
Natural gas (mcf/d) 10,216 11,699 3,405 3,899
Barrel oil equivalent (boe/d) 3,032 2,956 1,011 985
Average Oil Price
Oil price ($/bbl) $105.80 $111.01 $105.80 $111.01
Net realization price ($/bbl) $103.73 $108.97 $103.73 $108.97
Brent oil price ($/bbl) 112.44 $118.71 112.44 $118.71
Natural gas price ($/mcf) $3.96 $3.96 $3.96 $3.96
Capital Items
Total Assets 113,561 52,583 37,850 17,526
Total Liabilities 32,502 18,974 10,833 6,324
Net Assets 81,059 33,609 27,017 11,202

(1) The Company's 33.33% share of Bahar Energy daily entitlement volumes are net of 5% compensatory petroleum and the government's share of profit petroleum.

About Greenfields Petroleum Corporation

Greenfields is a junior oil and natural gas Company 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 forward-looking statements contained in this press release are based on certain key expectations and assumptions made by Greenfields. Although Greenfields believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Greenfields can give no assurance that they will prove to be correct.

Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties most of which are beyond the control of Greenfields. 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. These risks include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety, political and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Additional risk factors can be found under the heading "Risk Factors" in Greenfields' Annual Information Form and similar headings in Greenfields' Management's Discussion & Analysis which may be viewed on

The forward-looking statements contained in this press release are made as of the date hereof and Greenfields undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. The Company's forward-looking information is expressly qualified in its entirety by this cautionary statement.

Notes to oil and gas disclosures

BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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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