Petroamerica Announces Third Quarter 2013 Results and Operating Results for the Three and Nine Months Ended September 30, 2013

CALGARY, Nov. 25, 2013 /CNW/ - Petroamerica Oil Corp. (TSXV: PTA) ("Petroamerica" or the "Company"), a Canadian oil  company operating in Colombia, is pleased to announce the financial and operating results for the three and nine months ended September 30, 2013. Copies of the Company's Management Discussion and Analysis and Financial Statements have been filed with the Canadian Securities Regulatory Authorities and can be viewed or downloaded at the Company's website at www.petroamericaoilcorp.com or at www.sedar.com. The financial results for all periods presented are in United States dollars unless otherwise indicated.

Quarterly highlights include:

• Generated net income of $18.2 million ($0.03 per share basic), funds flow from operations of $35.3 million ($0.06 per share basic) and positive cash flow from operations of $34.1 million ($0.06 per share basic), resulting in cash on hand at September 30 of over $64 million (current cash on hand: $77.9 million);
• Realized a Brent referenced sales price of $108 per barrel ("/bbl") and an operating netback of approximately $78/bbl;
• Achieved quarter-over-quarter production growth with total Company average production for the third quarter of 5,951 barrels of oil per day ("bopd"), compared to 5,046 bopd in the second quarter. Production average for the month of October was 6,312 bopd (total Company working interest, a new production high;
• Participated in the drilling of four development and appraisal wells - Las Maracas-10, Las Maracas-11, Las Maracas-12 and Las Maracas-14, resulting in four oil producers;
• Drilled La Casona-2 well. The La Casona-2 ST2 has been cased and is currently awaiting the arrival of a workover rig to begin testing the Mirador Formation;
• Long-term test production facility for the La Casona-1 well commissioned;
• Increased working interest from 25% to 100% in the exploration area of the El Porton Block with the objective of drilling the Crypto-1 well early in 2014.

The following table presents the highlights of Petroamerica's financial and operating results.

Third Quarter Financial Summary
For the three months ended September 30, 2013, the Company reported $54.8 million in oil revenue, net of royalties, from the sale of 558,524 barrels of oil.  The realized sales price was $108.00/bbl generating an operating netback of $77.57/bbl.

For the third quarter of 2013, the Company's net income was $18.2 million ($0.03 per share diluted). The Company's capital expenditures for the third quarter were $17.6 million, all invested in Colombia, and primarily for facilities construction, development drilling on the Las Maracas Field, and exploration drilling at Curiara-1 and La Casona-2. These capital expenditures were funded from available cash on hand.

At the end of the third quarter, the Company's cash position was $64.9 million, and the Company holds Canadian $35 million of debt in Senior Notes payable by April 19, 2015.

Operations Update:

• Total Company production for the month of October averaged 6,312 bopd (Company working interest);
• Production from the Maracas field averaged 12,450 bopd (gross) for the month of October;
• Drilling on the Rumi-1 well on the El Eden Block is continuing.  The well is currently drilling at a depth of over 12,000 feet in the Carbonera formation.  Results for this well are expected for mid-December;
• A workover rig is expected on site to test the La Casona-2 well soon and test production on the La Casona-1 well is expected to start shortly;
• With an electro-submersible pump installed, the La Guira-1 well produced at high water cuts until the well watered out.

Activity Schedule
A summary of the expected drilling and testing activity, for the remainder of 2013 and the early part of 2014, is provided below:

Outlook

As of October 31, 2013, the average total Company working interest production for the year was 5,255 bopd and the Company is on target to exceed its production guidance for 2013 of 5,000 bopd average. Production guidance for 2014 is expected to be released in December 2013.

The Company has revised the projection for its capital spending program for 2013 to approximately $80.0 million, a 14% increase from the original spending estimate of $70.0 million for the year but a 9% decrease from the projection released in August of 2013.  With strong oil prices expected throughout the rest of this year and a current cash position of approximately $77.9 million, the Company expects to be self-funding for the rest of 2013 and 2014. The Company expects to release its 2014 capital budget and work program in December 2013.

PETROAMERICA OIL CORP.
Condensed Consolidated Interim Statements of Financial Position 
(Expressed in United States dollars)

PETROAMERICA OIL CORP.
Condensed Consolidated Interim Statements of Net Income (Loss) and Comprehensive Income (Loss)
(Expressed in United States dollars)

PETROAMERICA OIL CORP.
Condensed Consolidated Interim Statements of Changes in Equity
(Expressed in United States dollars)

PETROAMERICA OIL CORP.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in United States dollars)

Forward Looking Statements:

This news release includes information that constitutes "forward-looking information" or "forward-looking statements". More particularly, this news release contains statements concerning expectations regarding,regulatory and partner approvals on the Company's development plan, drilling and operational opportunities and the timing associated therewith, test results and the timing thereof, the use of available cash on hand in addition to potential exploration and development opportunities and expectations regarding regulatory approval and the overall strategic direction of the Company.  The forward-looking statements contained in this document, including expectations and assumptions concerning the obtaining of the necessary regulatory approvals, including ANH approval, and the assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are uncertain and subject to risks. A multitude of factors can cause actual events to differ significantly from any anticipated developments and although the Company believes that the expectations represented by such forward-looking statements are reasonable, undue reliance should not be placed on the forward-looking statements because there can be no assurance that such expectations will be realized. Material risk factors include, but are not limited to: the inability to obtain regulatory approval, including ANH approval, for the transfer of participating interests and/or operatorship for the Company's properties, the risks of the oil and gas industry in general, such as operational risks in exploring for, developing and producing crude oil and natural gas, market demand and unpredictable shortages of equipment and/or labour; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; fluctuations in oil and gas prices, foreign currency exchange rates and interest rates, and reliance on industry partners. 

Data obtained from the initial testing results at the referenced wells, which may include barrels of oil produced and levels of water-cut, should be considered to be preliminary until a further and detailed analysis or interpretation has been done on such data. The test results disclosed in this press release are not necessarily indicative of long-term performance or of ultimate recovery. The reader is cautioned not to unduly rely on such results as such results may not be indicative of future performance of the well or of expected production results for the Company in the future.

Neither the Company nor any of its subsidiaries nor any of its officers, directors or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments.

The forward-looking statements contained in this document are made as of the date hereof and the Company 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.

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.

SOURCE Petroamerica Oil Corp.