Greenfields Petroleum

Greenfields Announces Third Quarter Results


Greenfields Petroleum Corporation announces financial results for the third quarter ended September 30, 2011 and its 2012 budget of $43.3 million for capital expenditures and seismic programs to further develop its oil and gas fields in the South Caspian Sea.


Calgary, Alberta -- (Marketwire – November 29, 2011) – Greenfields Petroleum Corporation (the "Company" or "Greenfields") (TSX-V: GNF), an independent exploration and production company with assets in Azerbaijan, announces financial results for the third quarter ended September 30, 2011. Greenfields’ functional and reporting currency is the United States dollar.

Activity Highlights and Plans

Ø Workover and rehabilitation operations continue to be attempted with limited progress due to the condition of the two older-style rigs initially provided by SOCAR.

Ø A coiled tubing unit arrived in late November and is working on workover and rehabilitation operations. The unit is under a one-year contract.

Ø Facility refurbishment and upgrades on six offshore platforms continues.

Ø Two western-style workover rigs are expected to arrive in January 2012. The first is expected to begin work in the first quarter and the second is expected to follow in early 2012. These rigs have been purpose-built for conditions expected under the Bahar ERDPSA. The deployment of these rigs will enable Greenfields to more quickly and effectively recomplete and workover 23 wells during 2012. The 2012 wells are a part of an overall 82-well program (Phase I and II) to develop behind pipe reserves in existing wellbores. These two rigs are under three-year contracts.

Ø Greenfields continues its efforts to execute contracts on two drilling rigs for a multi-year drilling program. It anticipates the arrival and deployment of one or two drilling rigs in late 2012. Once available, Greenfields plans to drill nine new development wells of an overall 83-well drilling program (Phase I and II) of development wells in the approved ERDPSA development program.

Ø Technical work continues with 2D and 3D seismic programs. The 2D is currently being shot and the 3D seismic program is expected to be completed in the third quarter of 2012.

Ø Greenfields expects to spend over $43.3 million (net to its own interest) in workover, drilling, facility upgrades and seismic work in 2012. Funds raised through its IPO in November 2010 plus cash flows from existing production are expected to be sufficient to fund the Company’s net share of costs for the proposed work programs, about half of the necessary funds are expected to be generated by cash from operations and the balance is expected from cash raised in the IPO.

Third Quarter 2011 Operating Highlights

Ø The Company’s entitlement sales volumes from production for its net interest in the Bahar ERDPSA averaged 388 bbl/d and 4,000 mcf/d or 1,055 boe/d in the quarter and 410 bbl/d and 4,069 mcf/d or 1,088 boe/d year to date.

Ø Through its interest in Bahar Energy, the Company realized average oil and gas prices of $103.93 per barrel and $3.96 per mcf in the quarter and $103.18 per barrel and $3.96 per mcf year to date.

Operational Activities

In the third quarter, workover operations began on well 209 in the Bahar gas field and well 464 in the Gum Deniz oil field using two locally-sourced Azerbaijan (Soviet era) drilling rigs from SOCAR. Arrival of two new western style workover rigs is scheduled for early next year. Once these rigs are in service they will improve the operational effectiveness of the workover program in both Bahar and Gum Deniz fields. Platform modifications and upgrades are currently underway on platforms in the Gum Deniz oil field in anticipation of both workover and drilling rigs arriving in 2012.

Bahar Energy has undertaken several facility upgrades and has started a refurbishing program on six offshore platforms located in the Bahar ERPDSA. The upgrades and refurbishments are to prepare for both the workover and drilling programs. A procurement program is underway to acquire associated equipment and workover materials to support two western style workover rigs and eventually the drilling rigs. The initial Phase I and II of the Plan of Development (“POD”) includes the drilling of 83 new development wells and completing 82 workovers in existing wells located in the Gum Deniz oil field and the Bahar gas field. SOCAR approved the POD for the Contract Rehabilitation and Development Area in June 2011. The approval enables Bahar Energy to proceed with the Phase I program.

The Company, through its 33.33% affiliate Bahar Energy, has contracted the acquisition of 140 kilometers of 2D seismic. Approximately 70% of the 2D program has been shot. It is anticipated that processing and shooting of this 2D seismic program over the Bahar gas field and the Gum Deniz oil field will be completed by year end.

In the Bahar 2 (“BE-2”) exploration area of the ERDPSA a 3D seismic program is expected to start early in 2012. A contract for the 3D seismic program is being finalized with SOCAR Geofizika. Acquisition and processing in the BE-2 area of a 109 square kilometer program is expected to be completed in the third quarter of 2012. If 3D seismic results confirm an attractive exploration target in the BE-2 exploration area, Bahar Energy expects to move one of the drilling rigs temporarily off the development drilling program in the Gum Deniz oil field to drill in the BE-2 area in 2013.

Selected Information

The selected information below is from the Greenfields’ Management Discussion & Analysis. The Company's complete financial statements as of and for the three and nine months ended September 30, 2011 and 2010, 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.

($ Thousands, except as noted)

Three months ended
September 30,

Nine months ended
September 30,











Net loss





Per share, basic and diluted






Average Entitlement Volumes Sold (1)

Oil and condensate (bbl/d)





Natural gas (mcf/d)





Barrel oil equivalent (boe/d)





Average Prices

Oil price ($/bbl)





Net realization price ($/bbl)





Brent oil price ($/bbl)




(1) Daily volumes represent the Company’s proportionate share of the Contractor Parties entitlement volumes which are net of the 5% compensatory petroleum and the government’s share of profit petroleum.

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 underdeveloped 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

This press release contains forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Greenfields, including, without limitation, those listed under the headings "Notice to Investors – Special Note Regarding Forward-Looking Statements" and "Risk Factors" in Greenfields final prospectus and in the Company’s Management’s Discussion & Analysis which may be viewed on Forward-looking information in this press release includes, but is not limited to, information concerning future development plans of the Company.

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.

The term “boe” can be misleading, particularly if used in isolation. A barrel of oil equivalent (“boe”) conversion ratio of 6 thousand cubic feet (“mcf”) of gas to 1 barrel (“bbl”) of crude oil is based on an energy content 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.

For more information, please contact

Greenfields Petroleum Corporation
John W. Harkins                                    David G. Gullickson
Chief Executive Officer                           Chief Financial Officer
(832) 234-0836                                      (832) 234-0837
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