Canoel International Energy Ltd. (TSX VENTURE:CIL) announce the results of Petrolera Patagonia Srl, its main producing subsidiary located in Argentina and operator and 100% owner of the Don Alberto and Don Ernesto fields in Patagonia, Province of Chubut.
For the calendar year ended December 31, 2012, the Company's production decline in Argentina has been reversed as production has increased to 41,400 barrels up from 39,800 for the year ending December 31, 2011, representing a 4% increase.
Crude oil prices in Argentina and specifically the price of the oil we produce, the Escalante type, have remained approximately stable around US $60 per barrel, even with a small reduction from a peak of US $62/63 per barrel.
The Company's main achievement has been to contain costs, taking account of inflation, weakening of Argentinean pesos and proportionally to the increase of revenues. Costs have increased only up to Argentinean pesos ARS ("ARS") $9,813,338 in 2012, from pesos ARS $7,236,365 in 2011.
Revenues of the Company's Argentina operations have increased from pesos ARS $7,337,278 in 2011, to pesos ARS $10,746,445 for calendar 2012, an increase of 46.46%, which is in part due to the weakening of the Argentinean peso against the US Dollar, reference currency for the sale of crude oil in Argentina. Revenues measured in ARS $ have increased at a faster rate than costs measured in ARS $, hence creating in Argentina a surplus of just above ARS$ 900,000 (Nine Hundred Thousands Argentinean Pesos).
We wish to alert the readers that on a consolidated basis, Canoel is expected to show a loss for the period of 12 months ending the 31st day of March 2013.
Mr. Andrea Cattaneo, CEO of Canoel states: "This comforting data confirms that we are successfully managing overseas energy-producing companies in a variety of environments. We have been able to reverse the natural decline of the Argentinean operation and we anticipate being able to perform even better in Argentina during the year ending 31 December 2013. This reinforces our confidence in our ability to make successful additional acquisitions of producing properties overseas; and indeed we continue to steadily develop negotiations in Libya and Nigeria in this sense (as communicated to shareholders by way of press releases and MDA). We are confident to achieve results in this task before December 2013."