Pacific Exploration & Production Corporation (TSX: PEN) ("Pacific" or the "Company") announced today the release of its consolidated financial statements for the year and quarter ended December 31, 2016, together with its management discussion and analysis ("MD&A"), Annual Information Form ("AIF") and Form 51-101 F1 - Statement of Reserves Data and Other Oil and Gas Information for the Company (the "F1 Report") in respect of the year ended December 31, 2016. These documents, among others, will be posted on the Company's website at www.pacific.energy and SEDAR at www.sedar.com. All values in this news release and the Company's financial disclosures are in United States dollars unless otherwise stated.
Gabriel de Alba, Chairman of the Board of Directors, commented:
"The past year was one of significant change for Pacific, financially, operationally and culturally. The Company emerged from its restructuring with a new Board of Directors and management team and a plan focused on capital discipline and value maximization. We were able to deliver stable results through the end of 2016 and are now starting to see positive momentum in our core E&P efforts during the first two months of 2017. Combined with an ongoing review of assets and a targeted cost reduction program, we believe that we can continue to expand on this positive performance."
Barry Larson, Chief Executive Officer of the Company, commented:
"While 2016 results were primarily impacted by the expiration of the Rubiales and Piriri fields mid-year and lower drilling activity as a result of reduced capital expenditures during the Company's significant and successful restructuring process, I am very pleased with the amount of progress made on our plan to reduce costs, rationalize our portfolio and allow for a dedicated focus on high return opportunities on our core E&P assets in Colombia and Peru. We have a significant opportunity to create future growth and with capital discipline and operational rigor, we will take every step to create long-term value for our shareholders."
Full Year and Fourth Quarter 2016 Results
During 2016, net production after royalties and internal consumption totaled 103,532 boe/d, representing a decrease of 51,120 boe/d (33%) from the average net production of 154,472 boe/d reported in the previous year. This reduction is mainly attributable to the expiration of the Rubiales and Piriri fields, both of which were returned to Ecopetrol on June 30, 2016. Additionally, heavy oil production from Quifa SW and other fields decreased by 16% in comparison to 2015, mainly due to lower drilling activity and operational issues with water disposal capacity mainly due to temporary pump failures.
Light and medium net oil production in Colombia and Peru totaled 42,713 bbl/d, decreasing by 25% compared with 2015. The overall decrease was primarily due to lower drilling activity as a result of reduced capital expenditures during the Company's restructuring process in 2016. Light and medium oil and heavy oil production (excluding production at the Rubiales field) now represent 41% and 27%, respectively, of total net oil and gas production. Additionally, gas production decreased by 5% compared with the year 2015 due to reservoir water encroachment issues, and as of December 31, 2016 represented 8% of the total production.
For the year ended December 31, 2016, the Company received independent certified reserves evaluation reports for all of its assets with total net 2P reserves of 170.7 MMboe. Compared with 290.8 MMboe certified for the year ended 2015, the year-over-year decline is mainly due to production for the year, the lower oil price forecasts resulting in economic revisions and the impact of technical revisions as assessed by the Company's independent reserves evaluators. Proved net reserves of 117.3 MMboe now represent 69% of the total 2P reserves compared with 68% of the total 2P reserves in 2015.
Fourth Quarter and Year End 2016 Conference Call Details:
As previously disclosed, a conference call for investors and analysts is scheduled for Thursday, March 16, 2017 at 8:30 a.m. (Bogotá time) and 9:30 a.m. (Toronto time). Participants will include Gabriel de Alba, Chairman of the Board of Directors, Barry Larson, Chief Executive Officer, Camilo McAllister, Chief Financial Officer and select members of the senior management team.
A presentation will be available on the Company's website prior to the call, which can be accessed at www.pacific.energy.
Analysts and interested investors are invited to participate using the following dial-in numbers:
Participant Number (International/Local): (647) 427-7450
Participant Number (Toll free Colombia): 01-800-518-0661
Participant Number (Toll free North America): (888) 231-8191
Conference ID: 85651976
A replay of the conference call will be available until 10:59 p.m. (Bogotá time) and 11:59 p.m. (Toronto time), Thursday, March 30, 2017 and can be accessed using the following dial-in numbers:
Encore Toll Free Dial-in Number: 1-855-859-2056
Local Dial-in-Number: (416)-849-0833
Encore ID: 85651976
Pacific is a Canadian public company and a leading explorer and producer of natural gas and crude oil, with operations focused in Latin America. The Company has a diversified portfolio of assets with interests in more than 45 exploration and production blocks in various countries including Colombia, Peru and Belize. The Company's strategy is focused on sustainable growth in production & reserves and cash generation. Pacific is committed to conducting business safely, in a socially and environmentally responsible manner.
The Company's common shares trade on the Toronto Stock Exchange under the ticker symbol PEN.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.