Dejour Announces $559K Operating Cash Flow for Q2 2010
Quarterly Production Increased by 89%
Vancouver, British Columbia, August 16, 2010 -- Dejour Enterprises Ltd. (NYSE-AMEX: DEJ / TSX: DEJ) ("Dejour"), an independent oil and natural gas company operating multiple exploration and production projects in Northeastern British Columbia and Western Colorado, today announced the release of its financial results for the second quarter period ended June 30, 2010.
During the second quarter, Dejour placed two new wells into production at the company operated Drake/Woodrush Field. The success of the first quarter drilling program at Drake/Woodrush was an important step towards meeting Dejour�s growth targets for 2010. Key to the Company�s 2010 strategy was expected improvement in the operating performance in the 2nd quarter (as referred to in the Company�s May 13, 2010 news release). In Q2, the production was almost double the production for the 1st quarter. This substantial production improvement provided the Company with the generation of positive operating cash flow for the quarter. In addition, according to the recently updated reserve evaluation report from an independent consultant, Dejour raised the net present value of Proved and Probable Reserves at Drake/Woodrush by 150% to $17 million at June 30, 2010. In view of its strong production growth and significant increase in reserve value at Drake/Woodrush, the Company will continue its focus on exploiting development opportunities in these properties.
Q2 2010 Key achievements
- Successfully brought two new wells into production, generating positive operating cash flow of $559,000.
- Increased Proved and Probable Producing Reserves at Drake/Woodrush to 534,000 Barrels of Oil Equivalent (58% oil), with a Present Value 10% (PV 10) at $15.7 million, an increase of 140% from December 31, 2009 PV 10 value of $6.5 million.
- Increased net production to 599 BOE/D (58% oil) in Q2 2010, an 89% increase over Q1 2010.
- Increased operating netback to $1.5 million in Q2 2010, a 416% improvement over Q1 2010.
- Increased EBTIDA by $1,575,000 delivering a positive EBITDA of $658,000, and yielded a positive Adjusted EBITDA of $808,000 in Q2.
Key corporate objectives for the remainder of 2010
- Generate operating profits by 2010 Q4;
- Increase oil production and reserves with the drilling of additional wells, in Q3 2010, at the Drake/Woodrush Field;
- Confirm the waterflood potential with Q3 drilling and begin project implementation in Q4;
- Complete the permitting/engineering for the Phase 1 drilling at Gibson Gulch; and
- Procure a commitment on a competitive non-equity project funding package for Phase 1 drilling at Gibson Gulch.
Summary of Selected Financial Highlights
|
|
|
Three months ended June 30, |
|
|
|
2010 |
2009 |
|
|
|
$ |
$ |
|
Revenue |
Note (1) |
2,768,000 |
1,682,000 |
|
Net loss |
Note (2) |
(344,000) |
(781,000) |
|
Net loss per share |
Note (3) |
(0.003) |
(0.011) |
|
Operating cash flow (1) |
Note (4) |
559,000 |
(243,000) |
|
Operating netback (1) |
Note (5) |
1,464,000 |
830,000 |
|
EBITDA (1) |
Note (6) |
658,000 |
490,000 |
|
Adjusted EBITDA (1) |
Note (6) |
808,000 |
560,000 |
<!--[if !supportLists]-->(1)Operating cash flow, Operating netback, EBITDA and Adjusted EBITDA are non-GAAP measures and are defined in details in the "Non-GAAP Measures" below.
Notes: <!--[if !supportLists]-->
(1)Revenue for Q2 2010 increased to $2,768,000 from $1,682,000 for Q2 2009. The increase was mainly attributable to the two new wells commenced production in May 2010.
(2)Net loss for Q2 2010 decreased to $344,000 from $781,000 for Q2 2009. The decrease was due to higher revenues and lower operating and transportation and depletion expenses, partially offset by higher royalties.
(3)Net loss per share for Q2 2010 was $0.003 compared to $0.011 for Q2 2009. The decrease was mainly the result of lower net loss for the current quarter.
(4)The Company generated a positive operating cash flow of $559,000 for Q2 2010 compared to a negative operating cash flow of $243,000 for Q2 2009. It was mainly the result of the two new wells commenced production in May 2010.
<!--[if !supportLists]-->(5)<!--[endif]-->Operating netback for Q2 2010 increased to $1,464,000 from $830,000 for Q2 2009. The increase was due to the two new wells commenced production in May 2010.
(6)EBITDA for Q2 2010 increased to $658,000 from $490,000 for Q2 2009. Adjusted EBITDA for Q2 2010 increased to $808,000 from $560,000 for Q2 2009. The increase was mainly attributable to lower net loss. <!--[if !supportLists]--><!--[if !supportLists]-->
<!--[if !supportLists]-->
Summary of Selected Operational Highlights
|
DEAL Production and Netback Summary |
|
|
|
Three Months Ended June 30, |
|
|
|
2010 |
2009 |
|
Production Volumes: |
|
|
|
|
Oil and natural gas liquids (bbls) |
|
31,753 |
15,777 |
|
Gas (mcf) |
|
136,538 |
207,748 |
|
Total (BOE) |
Note (1) |
54,509 |
50,402 |
|
|
|
|
|
|
Average Price Received: |
|
|
|
|
Oil and natural gas liquids ($/bbls) |
|
65.79 |
59.43 |
|
Gas ($/mcf) |
|
4.29 |
3.88 |
|
Total ($/BOE) |
|
49.08 |
34.61 |
|
|
|
|
|
|
Royalties ($/BOE) |
Note (2) |
10.11 |
(0.45) |
|
|
|
|
|
|
Operating Expenses ($/BOE) |
Note (3) |
12.11 |
18.60 |
|
|
|
|
|
|
Netbacks ($/BOE) |
Note (4) |
26.87 |
16.45 |
Notes:
<!--[if !supportLists]-->(1)The increase in production was mainly due to the two new wells commenced production in May 2010.
<!--[if !supportLists]-->(2)Royalties of $10.11 per BOE for Q2 2010 were substantially higher than the prior year�s quarter of $(0.45) per BOE. The increase was consistent with higher revenues generated. In Q2 2009, the British Columbia government approved a royalty holiday for the first 72,000 barrels of oil production on one of the Company�s oil wells. The Company received a royalty credit of $280,000 from the BC provincial government, resulting in a net royalty recovery for the quarter. This 72,000 barrels royalty holiday was used up in 2009 and the Company is subject to regular royalty rates in 2010.
<!--[if !supportLists]-->(3)Operating and transportation expenses for Q2 2010 decreased to $12.11 per BOE compared to $18.60 per BOE for Q2 2009 despite higher revenues. The installation of the compressor in January 2010 resulted in minimal compression costs, which accounted for the reduction in operating and transportation expenses for the current quarter.
<!--[if !supportLists]-->(4)<!--[endif]-->Operating netbacks for the current quarter increased to $26.87 per BOE from $16.45 per BOE for Q2 2009. The increase was mainly due to higher revenues and lower operating and transportation expenses. This was partially offset by increased royalties for Q2 2010.
Liquidity and Capital Resources
Cash Flow The Company had cash and cash equivalents of $3 million as of June 30, 2010. In addition to the cash balance, the Company also had accounts receivable of $1.4 million, most of which was related to June 2010 oil and gas sales and had been received subsequent to June 30, 2010.
Loan and Bridge Loan Financing In March 2010, the Company completely paid off its line of credit with a Canadian Bank.
Additionally, in March 2010, the Company acquired a new credit facility for up to $5,000,000. The first $2,000,000 of the facility was available. The remaining $3 million is subject to lenders� engineering review. In June 2010, the Company received lender�s approval for the availability of an additional $1,500,000 of the facility. As of June 30, 2010, a total of $3,500,000 of this facility was utilized. Dejour is in discussions with this bridge loan lender to extend and increase this credit facility.
For more information and for Dejour�s detailed quarterly report, please visit SEDAR or the Company�s website at http://www.dejour.com. All amounts above are in CAD$, unless otherwise noted. 1 US$ = 1.0646 CAD$.
Consolidated Condensed Balance Sheets
|
|
|
As at June 30, 2010 |
|
As at December 31, 2009 |
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
3,020,000 |
$ |
2,733,000 |
|
Other current assets |
|
1,909,000 |
|
1,280,000 |
|
Equipment |
|
102,000 |
|
115,000 |
|
Other non-current assets |
|
43,510,000 |
|
41,758,000 |
|
Total assets |
$ |
48,541,000 |
$ |
45,886,000 |
|
|
|
|
|
|
|
Liabilities and shareholders� equity: |
|
|
|
|
|
|
|
|
|
|
|
Bank line of credit and bridge loan |
$ |
3,500,000 |
$ |
850,000 |
|
Current liabilities |
|
3,674,000 |
|
2,753,000 |
|
Loans from related parties |
|
2,402,000 |
|
2,346,000 |
|
Other long-term liabilities |
|
313,000 |
|
248,000 |
|
Shareholders� equity |
|
38,652,000 |
|
39,689,000 |
|
Total liabilities and shareholders� equity |
$ |
48,541,000 |
$ |
45,886,000 |
Consolidated Statements of Operations
|
|
|
For the three months ended June 30, |
|
For the six months ended June 30, |
|
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Oil and natural gas revenue |
$ |
2,676,000 |
$ |
1,682,000 |
$ |
4,023,000 |
$ |
4,095,000 |
|
Realized financial instrument gain (loss) |
|
93,000 |
|
- |
|
51,000 |
|
289,000 |
|
|
|
2,769,000 |
|
1,682,000 |
|
4,074,000 |
|
4,384,000 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
Royalties |
|
551,000 |
|
(23,000) |
|
772,000 |
|
504,000 |
|
Operating and transportation |
|
660,000 |
|
875,000 |
|
1,502,000 |
|
1,873,000 |
|
Amortization, depletion and accretion |
|
727,000 |
|
1,264,000 |
|
1,473,000 |
|
3,975,000 |
|
Interest expense and finance fee |
|
275,000 |
|
306,000 |
|
528,000 |
|
506,000 |
|
General and administrative |
|
769,000 |
|
852,000 |
|
1,756,000 |
|
1,789,000 |
|
Non-cash stock-based compensation |
|
151,000 |
|
107,000 |
|
315,000 |
|
317,000 |
|
|
|
3,133,000 |
|
3,381,000 |
|
6,346,000 |
|
8,964,000 |
|
|
|
|
|
|
|
|
|
|
|
Loss before the following and income taxes |
|
(364,000) |
|
(1,699,000) |
|
(2,272,000) |
|
(4,580,000) |
|
Interest and other income |
|
8,000 |
|
105,000 |
|
17,000 |
|
363,000 |
|
Gain (loss) on disposition of investment |
|
- |
|
37,000 |
|
- |
|
(274,000) |
|
Equity loss from Titan |
|
- |
|
- |
|
- |
|
(142,000) |
|
Foreign exchange gain (loss) |
|
12,000 |
|
477,000 |
|
(3,000) |
|
325,000 |
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
(344,000) |
|
(1,080,000) |
|
(2,258,000) |
|
(4,308,000) |
|
Future income taxes recovery |
|
- |
|
299,000 |
|
- |
|
1,078,000 |
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
$ |
(344,000) |
$ |
(781,000) |
$ |
(2,258,000) |
$ |
(3,230,000) |
|
|
|
|
|
|
|
|
|
|
|
Net loss per share � basic and diluted |
$ |
0.003 |
$ |
0.011 |
$ |
0.023 |
$ |
0.044 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding � basic and diluted |
|
98,698,372 |
|
74,343,228 |
|
98,220,180 |
|
74,034,042 |
Consolidated Condensed Statements of Cash Flows
|
|
|
For the three months ended March 31, |
|
For the six months ended June 30, |
|
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
Cash, beginning of period |
$ |
1,336,000 |
$ |
1,679,000 |
$ |
2,733,000 |
$ |
744,000 |
|
|
|
|
|
|
|
|
|
|
|
Cash from (used in) operating activities |
|
553,000 |
|
(1,148,000) |
|
- |
|
(1,044,000) |
|
|
|
|
|
|
|
|
|
|
|
Cash from (used in) investing activities: |
|
|
|
|
|
|
|
|
|
Purchase of equipment |
|
(2,000) |
|
- |
|
(2,000) |
|
(5,000) |
|
Proceeds on disposal of investment |
|
- |
|
118,000 |
|
- |
|
2,306,000 |
|
Proceeds from sales of oil and gas properties |
|
- |
|
4,282,000 |
|
- |
|
4,282,000 |
|
Resource properties expenditures |
|
(883,000) |
|
(301,000) |
|
(3,141,000) |
|
(795,000) |
|
Total cash from (used in) investing activities |
|
(885,000) |
|
4,099,000 |
|
(3,143,000) |
|
5,788,000 |
|
|
|
|
|
|
|
|
|
|
|
Cash from (used) in financing activities |
|
2,016,000 |
|
(3,572,000) |
|
3,430,000 |
|
(4,430,000) |
|
|
|
|
|
|
|
|
|
|
|
Cash, end of period |
$ |
3,020,000 |
$ |
1,058,000 |
$ |
3,020,000 |
$ |
1,058,000 |
|
|
|
|
|
|
|
|
|
|
About Dejour
Dejour Enterprises Ltd. is an independent oil and natural gas company operating multiple exploration and production projects in North America�s Piceance / Uinta Basin (109,000 net acres) and Peace River Arch regions (20,000 net acres). Dejour�s veteran management team has consistently been among early identifiers of premium energy assets, repeatedly timing investments and transactions to realize their value to shareholders' best advantage.Dejour, maintains offices in Denver, USA, Calgary and Vancouver, Canada. The company is publicly traded on the New York Stock Exchange Amex (NYSE - Amex: DEJ) and Toronto Stock Exchange (TSX: DEJ).
Non-GAAP Measures: This news release contains references to non-GAAP measures as follows: Operating Cash Flow is a non-GAAP measure defined as net cash provided by operating activities before changes in assets and liabilities. Operating Netback is a non-GAAP measure defined as revenues less royalties and operating and transportation expenses. EBITDA is a non-GAAP measure defined as net income (loss) before income tax expense, interest expense and finance fee, and amortization, depletion and accretion.Adjusted EBITDA excludes certain items that management believes affect the comparability of operating results. Items excluded generally are non-cash items, one-time items or items whose timing or amount cannot be reasonably estimated. Certain measures in this document do not have any standardized meaning as prescribed by Canadian GAAP such as Operating Cash Flow, Operating Netback, EBITDA and Adjusted EBITDA and therefore are considered non-GAAP measures. These measures may not be comparable to similar measures presented by other issuers. These measures have been described and presented in this document in order to provide shareholders and potential investors with additional information regarding our liquidity and our ability to generate funds to finance our operations.
BOE Presentation: Barrel of oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of gas to one barrel of oil. The term "BOE" may be misleading if used in isolation. A BOE conversion ratio of one barrel of oil to six mcf of gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head. Total BOEs are calculated by multiplying the daily production by the number of days in the period.
Statements Regarding Forward-Looking Information: This news release contains statements that may constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities legislation as they involve the assessment that the reserves and resources described can be profitably produced in the future, based on certain estimates and assumptions, these forward-looking statements include but are not limited to, the availability of funding for future projects, anticipated recovery per well for Gibson Gulch, the, risks related prospective resource best estimate being inaccurate or incomplete or based upon errors in assumptions, adverse general economic conditions, operating hazards, drilling risks, inherent uncertainties in interpreting engineering and geologic data, fluctuations in oil and gas prices and prices for drilling and other well services, government regulation and foreign political risks, as other risks commonly associated with the exploration and development of oil and gas properties. Additional information on these and other factors, which could affect Dejour's operations or financial results, are included in Dejour's reports on file with Canadian and United States securities regulatory authorities. We assume no obligation to update forward-looking statements should circumstances or management's estimates or opinions change unless otherwise required under securities law.
The TSX does not accept responsibility for the adequacy or accuracy of this news release.
Robert L. Hodgkinson, Co-Chairman & CEO Investor Relations � New York
598 � 999 Canada Place Craig Allison
Vancouver, BC Canada V6C 3E1 Phone: 914.882.0960
Phone: 604.638.5050 Facsimile: 604.638.5051 Email: callison@dejour.com
Email: investor@dejour.com
Disclaimer: We seek safe harbor. The third-party link provided on this e-mail is provided solely for convenience of the reader. Dejour assumes no responsibility for the accuracy or completeness of information accessed through the link. We seek safe harbor. Confidentiality Warning: The content of this transmission is confidential information intended only for the recipient. All other recipients are prohibited from disclosing, copying, distributing or taking any action in reliance on the contents. If you are not the intended recipient, please notify the sender immediately. Thank you. |