Note: All figures are quoted in U.S. dollars unless
otherwise noted.
CALGARY, Nov. 8, 2012 /PRNewswire/
- Ivanhoe Energy Inc. (TSX: IE; NASDAQ: IVAN) is reporting today
its financial results for the third quarter of 2012.
Third Quarter Financial Summary
Ivanhoe Energy filed its quarterly financial
report on Form 10-Q with the Securities and Exchange Commission and
its Interim Financial Statements with the Canadian Securities
Administrators for the period ended September 30, 2012.
|
|
|
(US$000s, except per share amounts)
(unaudited) |
Three months
ended Sept. 30, |
Nine months
ended Sept. 30, |
2012 |
2011 |
2012 |
2011 |
|
|
|
|
|
Oil revenue |
8,797 |
10,769 |
27,997 |
28,277 |
Net loss |
(34,547) |
(4,157) |
(49,912) |
(19,394) |
Net loss per share,
basic and diluted |
(0.10) |
(0.01) |
(0.15) |
(0.06) |
|
|
|
|
|
Net cash used in
operating activities |
(3,089) |
(5,214) |
(14,165) |
(18,678) |
Capital
investments |
9,827 |
16,843 |
43,371 |
48,078 |
|
|
|
|
|
Cash and cash equivalents (end of
period) |
16,882 |
58,168 |
16,882 |
58,168 |
Restricted cash |
20,500 |
- |
20,500 |
- |
In the third quarter of 2012, the Company had a net loss of
$34.5 million, as compared to a
$4.2 million net loss in the same
period of 2011. The increase in net loss was mainly due to
$22.6 million of capitalized
exploration and evaluation costs written-off and charged to
earnings. The costs included $19.7
million for drilling IP-17 in Ecuador and $2.9
million for the second Mongolian well drilled in 2011.
Revenue
Ivanhoe Energy's oil revenue in the three months ended September 30, 2012 decreased from the same period
in 2011. This was due to a combination of lower net volumes
and pricing. Oil production from the Dagang field in
China was relatively constant;
however, there was minimal capital activity. The terms
of the Production Sharing Contract with the Chinese National
Petroleum Corporation (CNPC) stipulate that capital expenditures
are to be funded 100% by Ivanhoe
Energy and CNPC's portion of the costs are reimbursed through the
receipt of additional oil sales. With less capital activity in the
third quarter, the result was less oil production allocated to the
Company.
Capital Expenditures, Operating Costs, General and
Administrative Expenses
Capital expenditures for the Company totalled $9.8 million in the third quarter of 2012. These
expenditures were primarily incurred in Ecuador, China and Canada.
- In Ecuador, expenditures of
$7.4 million were related to the
drilling of IP-17, the exploration well in the southern part of
Block 20.
- In China, the Company spent
$2.0 million primarily on the
continuation of a fracture stimulation program at Dagang.
- In Canada, the Company spent
$0.4 million on work to support the
regulatory approval process for Tamarack.
Operating costs in China were
lower in the third quarter of 2012, as compared to the same period
of 2011. This is mainly due to a lower Windfall Levy
resulting from lower realized prices. Third quarter operating costs
at the Heavy to Light (HTL) Feedstock Test Facility in
San Antonio, Texas were consistent
with the comparable period in 2011.
General and Administrative (G&A) expenses were $1.6 million lower in the third quarter of 2012,
as compared to the third quarter of 2011. This is primarily due to
the streamlining of operations in Latin
America and reduced contract labor and engineering costs
related to Ivanhoe Energy's HTL
technology. Additionally, G&A expenses were $5.9 million lower in the nine months ended
September 30, 2012 than in the same
period of 2011. This reduction is due to a combination of
streamlining activity in operations, reduced human resource related
costs, a reduction of non-cash stock based compensation and reduced
activity in the Company's Asia
segment.
Liquidity and Capital Resources
The divestiture of Sunwing's interest in the Production Sharing
Contract for the Zitong block in China's Sichuan Basin to Shell China Exploration
continues to advance. All partners have signed the definitive
Sale and Purchase Agreement and the Chinese National Petroleum
Corporation has submitted the transaction documents to the Ministry
of Commerce for its review and final approval. The transaction is
anticipated to close by the end of 2012, which would result in
Ivanhoe Energy receiving $105 million
in cash proceeds, in addition to the release of the $20 million performance bond associated with the
Supplementary Agreement's work program.
Once these funds are received, the Company is obligated to
retire the short-term $50 million
loan from UBS Securities.
In addition to the Zitong divestiture, management is focusing
the Company by seeking to divest other non-core assets and
completing partnership discussions that will help commercialize the
HTL process and secure financial support for the core properties in
Canada and Ecuador. Additional options are being
considered to strengthen the financial position of the Company.
Project Highlight
Canada - Tamarack
In the third quarter the Company continued to make progress on the
regulatory approval process, working with regulators to answer
technical questions and with local area stakeholders to gain their
support for the project. The Company received a third round
of Supplemental Information Requests on October 15, 2012, which is common in the
regulatory approval process and consistent with other projects
currently in review. Ivanhoe Energy expects to provide
responses to these questions before the end of November 2012. Due to the additional round of
questions, the Company anticipates receiving regulatory approval in
the first quarter of 2013.
Ivanhoe Energy is an independent international heavy oil
exploration and development company focused on pursuing long-term
growth in its reserves and production using advanced technologies,
including its proprietary heavy oil upgrading process
(HTLTM). Core operations are in Canada, United
States, Ecuador,
China and Mongolia, with business development
opportunities worldwide. Ivanhoe
Energy trades on the Toronto Stock Exchange with the ticker symbol
IE and on the NASDAQ Capital Market with the ticker symbol
IVAN.
For more information about Ivanhoe Energy Inc.
please visit www.ivanhoeenergy.com.
FORWARD-LOOKING STATEMENTS: This document includes
forward-looking statements, including forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include, but are not
limited to the potential for commercialization and future
application of the heavy oil upgrading technology and other
technologies, statements relating to the continued advancement of
Ivanhoe Energy's projects, statements relating to the timing and
amount of proceeds of agreed upon and contemplated disposition
transactions, statements relating to anticipated capital
expenditures, statements relating to the timing and success
of regulatory review applications, and other statements which are
not historical facts. When used in this document, the words such as
"could," "plan," "estimate," "expect," "intend," "may,"
"potential," "should," and similar expressions relating to matters
that are not historical facts are forward-looking statements.
Although Ivanhoe Energy believes that its expectations reflected in
these forward-looking statements are reasonable, such statements
involve risks and uncertainties and no assurance can be given that
actual results will be consistent with these forward-looking
statements. Important factors that could cause actual results
to differ from these forward-looking statements include the
potential that the Company's projects will experience technological
and mechanical problems, new product development will not proceed
as planned, the HTLTM technology to upgrade bitumen and
heavy oil may not be commercially viable, geological conditions in
reservoirs may not result in commercial levels of oil and gas
production, the availability of drilling rigs and other support
services, uncertainties about the estimates of reserves, the risk
associated with doing business in foreign countries, environmental
risks, changes in product prices, our ability to raise capital as
and when required, our ability to complete agreed upon and planned
asset dispositions, competition and other risks disclosed in
Ivanhoe Energy's 2011 Annual Report on Form 10-K filed with the
U.S. Securities and Exchange Commission on EDGAR and the Canadian
Securities Commissions on SEDAR.
SOURCE Ivanhoe Energy Inc.