Corcel Regulatory News (CRCL)

Caracal Announces 2013 Full Year Results A year of world-class success in Chad CALGARY, March 31, 2014 /CNW/ - Caracal Energy Inc. ("Caracal" or the"Company") (LSE:CRCL) is pleased to announce its 2013 year end results, itsfirst full year results as a listed company. A summary of the results follows,which should be read in conjunction with the full audited financial statements,related Management's Discussion & Analysis ("MD&A") and annual information form("AIF") which are available at www.caracalenergy.com and on the Caracal's SEDARprofile at www.sedar.com. Operational Highlights: · Commenced production in September and exited the year with grossproduction of 10,000 barrels of oil per day ("bopd"); · Commenced exploration drilling with first two successful wells: · Mangara-5 a discovery in the lower Cretaceous E sands tested at up to1,917 bopd1 and · Krim, a discovery in Cretaceous C, D and E sands tested at up to1,470 bopd, 702 bopd and 2,580 bopd maximum oil rate respectively2 · Closed the Farm-In Agreement with GlencoreXstrata plc ("Glencore" or"Joint Venture Partner") on June 17, 2013 whereby Glencore paid US$300 millionfor a 25% working interest in the Badila and Mangara EXAs; · Commenced trading on the premium list of the London Stock Exchange onJuly 9, 2013; · Closed a US$203 million firm placing and open offer in December 2013; Continued Success In 2014 · Oil production grew to 14,200 gross barrels of oil per day ("bopd"),as at March 5, 2014, from 12,000 bopd in January, 2014; · targeting gross average production in 2014 of 22,000 to 26,000 bopd · Revenue generation commenced on March 23, with Caracal's firstlifting of approximately 560,000 barrels of oil, net to the Company. Pricingfor the crude was in line with the Company's competent person's reportassumptions of Brent minus a differential of five per cent; · Badila-7 drilled and tested in March, and flowed naturally at a rateof 4,500 barrels of oil per day3. The well is expected to be tied-in duringApril; · Badila-9 spudded on March 20, 2014; · Mangara-4 has been successfully side-tracked and cased as aCretaceous E sands producer; · Mangara-6 has been completed and testing of the Cretaceous E sands isunderway. The comprehensive completion program will also include tests of theCretaceous D and C sands; · The first of the four new drilling rigs contracted in 2014 hasarrived at the port in Cameroon, on schedule, and should be on site in Q2; · The Company remains on track to mobilize six drilling and threecompletion rigs by the end of 2014 to support the active exploration, appraisaland development drilling program; · 2014 exploration programs in the Doba and Doseo basins have commencedto test one billion barrels of unrisked mean Prospective Resources with thefirst 8 to 10 wells in the program; · Finally, furthering its long term strategy, on March 15, 2014 Caracalentered into an arrangement agreement to merge with TransGlobe EnergyCorporation (TSX:TGL)(NASDAQ:TGA) ("TransGlobe") by way of an exchange ofshares pursuant to a plan of arrangement under the Business Corporations Act(Alberta) (the "Arrangement"). The Arrangement would create one of the largestindependent Africa focused oil producers, which together will be poised forstrong growth in oil production and reserves from development and explorationin Chad and Egypt. Gary Guidry, Chief Executive of Caracal, said: "2013 was a very significant year for Caracal. We commenced production, closeda major farm-in agreement with Glencore and listed on the London StockExchange. All of which enabled us to maintain our operational development withthe drilling of development and exploration wells. "Since the year end, we have become revenue generating with the first liftingearlier this month. Production is increasing inline with our expectations andwe are on track to hit our target of gross 2014 production of 22-26,000 bopd.The exploration programme has commenced and the first 8 to 10 exploration wellswill test one billion barrels of unrisked mean Prospective Resources. "Earlier this month we announced the agreement to merge with TransGlobe tocreate one of the largest independent Africa focused oil producers with focusedoperations in Chad and Egypt. Post-merger, we will continue to be entirelyfocused on onshore, conventional oil production, development and exploration.The combination will provide shareholders with significant organic productionand reserves growth." Selected Financial results for the three and twelve months ended December 31,2012 and 2013 Three months ended Year ended December 31 December 31 2013 2012 2013 2012 Tariff Revenue 80 - 80 - Oil Revenue - - - - Change in Oil Inventory 27,159 - 27,159 - 27,239 - 27,239 - Expenses Operating expenses 4,249 - 4,249 - Transportation expenses 2,527 - 2,527 - Depreciation and depletion 4,508 328 5,823 1,082 Salaries and benefits 8,175 4,072 21,108 13,122 Share-based compensation 3,589 2,076 11,044 8,564 General and administrative 3,949 5,523 27,996 30,493 Travel 2,590 3,167 8,586 7,821 Finance expense 7,290 7,246 28,872 8,083 Foreign exchange loss (gain) (140) 474 1,573 228 36,737 22,886 111,778 69,393 Net loss before tax 9,498 - 84,539 69,393 Deferred tax reduction (329) (5,381) (329) (5,381) Net and comprehensive loss 9,169 17,505 84,210 64,012 Oil Production and Inventory The Company commenced production from the Badila field on September 30, 2013,and net entitlement share of production for the period to December 31, 2013 was264,575 barrels. All production for the period to December 31, 2013 wasdirected towards the Company's portion of the required line fill. As such,there was no sale of crude oil in 2013. The Company completed its share of linefill inventory, on February 6, 2014 following which production accumulated as"lifting entitlement" for cargo sales for the lifting on March 25, 2014.Pursuant to industry standard, the Company can draw on its share of line fillinventory if required to meet the standard cargo size and replace the drawduring the next production inventory build period. Hence, the Company's netentitlement share of production for the period ended December 31, 2013 has beenrecognised as crude oil inventory and valued at the estimated net realisablevalue. As per the Joint Marketing Agreement with its joint venture partner,Glencore Energy UK Ltd. (the "JMA") in place for the sale of the Company'scrude oil, the price formula uses a dated Brent average and certainadjustments, including a discount or premium to Brent for the difference incrude oil quality. In computing the estimated net realisable value the forwardMarch 2014 Brent price as at December 31, 2013 has been used and reduced forestimated adjustments under the JMA price formula. The estimated net realizablevalue as at December 31, 2013 has been adjusted for the transit fees that willbe due and paid once the volumes are loaded on a tanker. The estimated net realisable value of crude oil for the period has beenrecorded in the statement of operations as an increase in the value of crudeoil inventory and the value of the inventory is shown in the current assetswithin the Company's statement of financial position. The following tabledepicts the Company's crude oil inventory position as at December 31, 2013: Volumes Net Realizable (BBLS) Value US$ '000 Opening crude oil inventory as at January - -1, 2013 Entitlement production 264,575 27,159 Cargo lifting - - Re-valuation - - Ending crude oil Inventory as at December 264,575 27,15931, 2013 Inland Transportation Pipeline 2013 2012 Tariff revenue 80 - During the year ended December 31, 2013, the Company also earned revenuerelated to the tariff charged for the use of the Company's inlandtransportation pipeline operated by, its subsidiary PetroChad TransportationCompany. Oil inventory comprises production volumes accumulated in pipeline and storagefacilities that have not yet been offloaded and transported to market. Thefirst off load of oil production occurred on March 21, 2014 which resulted inthe sale of approximately 560,000 barrels of oil net to the Company. Operating and Transportation Costs, and Depreciation and Depletion Operating and transportation costs for the Company's inaugural quarter ofproduction were $4.2 million and $2.5 million, respectively. The unit costs of$17.43 and $9.55 per barrel for operating and transportation relate to the264,575 barrels of oil produced in 2013 and held as oil inventory. The unitcosts are expected to decrease as production increases. Production commenced inlate 2013 and as such there was no operating or transportation expense recordedin the comparative periods. Depreciation and depletion expense increased by $4.2 million and $4.7 million,respectively, for the three and twelve months ended December 31, 2013. Theincrease is the result of the recognition of depletion in the net book value ofthe Badila EXA which commenced production in September 2013. Prior there to,depreciation related primarily to corporate assets. General and Administrative Costs Salaries and benefits - Increased $8.0 million for the year ended December 31,2013. The increase is a result of the Company progressing from planning,development, engineering, and procurement to staffing for operating twodrilling rigs, one service rig, constructing a variety of facilities andinfrastructure, and operating production facilities. With the a high level ofactivity throughout 2013 and beyond, the Company undertook the requiredrecruiting campaign to attract and retain needed professionals, scaling itsheadcount from approximately 113 employees at the end of December 31, 2012 toapproximately 287 employees at the end of December 31, 2013. Share-based compensation - Increased for the three and twelve months endedDecember 31, 2013 by $1.5 million and $2.5 million respectively. The increaserelates to stock options granted to employees as well as the establishment ofthe Long Term Incentive Plan for officers and other key executives of theCompany aimed at retaining, attracting and motivating key executivesresponsible for executing the Company's long term business strategy. General and administrative costs - General and administrative costs decreasedby $1.6 million for the three months ended December 31, 2013 and $2.5 millionfor the year ended December 31, 2013. During the year ended December 31, 2012,the Company accrued $10.5 million to provide for potential penalties and finesfor an issue that was resolved in the first quarter of 2013. During the thirdquarter of 2013, Caracal paid $9.8 million in listing fees relating to legal,financial and accounting advisory services in conjunction with listing thecommon shares of Caracal on the London Stock Exchange. As Caracal did not raiseany capital, at that time all fees were expensed. Travel - The increase in travel during year ended December 31, 2013 isprimarily due to increased personnel traveling to Chad supervising andexecuting capital and operating programs. The Company's share of travel for thethree months ended December 31, 2013 compared to the three months endedDecember 31, 2012 has decreased due to the change in the carrying interest ofthe Company. Finance expense On September 13, 2012, Caracal completed a financing through the issuance of$173.6 million unsecured convertible bonds with a maturity date of September30, 2017, and can be called in September 2015 at par. The interest rate wassubject to increases unless a qualifying public offering occurred. Thequalifying public offering occurred in 2013 and the interest rate is fixed at12.5% until maturity. In December 30, 2013, upon completion of the qualifyingpublic offering, $28.7 million of accrued and unpaid interest was paid out incash and shares. Outlook With production from Badila coming on-stream during the fourth quarter of 2013and Mangara production targeted for the third quarter of 2014, Caracal'sfinancial strategy for 2014 will focus its cash flow from operating activitiesto fund the Company's 8-10 high-impact exploration drilling prospects. About Caracal Energy Inc. Caracal Energy Inc. is an international exploration and development companyfocused on oil and gas exploration, development and production activities inthe Republic of Chad, Africa. In 2011, the Company entered into threeproduction sharing contracts ("PSCs") with the government of the Republic ofChad. These PSCs provide exclusive rights, along with its partners, to exploreand develop reserves and resources over a combined area of 26,103 km2 insouthern Chad. The PSCs cover two world-class oil basins with oil discoveries,and numerous exploration prospects. The Company's shares trade on the London Stock Exchange under the symbol CRCL. 1 Interval Maximum Oil Flowing Choke Total Gas-Oil Gravity Productivity (mKB) Rate WHP Size Flow Ratio (Deg Index (bopd) (psig) (in.) Duration (scf/stb) API) (bopd/psi) (hr) E (2,474 - 1,917 160 64/64 53 100 35 - 39 1.7 2,669) C (1,896 - 3,200 200 80/64 45.3 540 35 - 37 2.2 2,103.5) 2 Interval Maximum Oil Flowing Choke Total Flow Gas-Oil Gravity (mKB) Rate WHP Size Duration (hr) Ratio (Deg API) (bopd) (psig) (in.) (scf/stb) C (2,012-2,166) 1,470* 140 96/64 38 519 36 D (2,219-2,520) 702** 120 1/2 38 - 35 E (2,582 -2,630) 2,580*** 120 64/64 29 100 34 - 37 * - A total of 1,600 bbls of oil and < 1 bbl of water/completion fluid recovered ** - A total of 557 bbls of oil and 1 bbl of water/completion fluid were recovered.*** - A total of 921 bbls of oil and 8 bbls of water/completion fluid recovered 3 Max Flowing Choke Total Oil WHP Size Flow Zones Interval Rate Duration GOR Gravity PI (mKB) (bopd) (psig) (in.) (hrs) (scf/ (Deg (bopd/ bbl) API) psi) D2, D3, D4, D5, 1758.0 - 4986 580 56/64 20.0 D6, D8, D9 1932.0 273.00 33.6 9.90 A total of 1,774 bbls of oil and 68 barrels of completion fluid recovered CAUTIONARY STATEMENTS: This announcement contains certain forward-looking information and statements.Forward-looking information typically contains statements with words such as"intend", "target", "anticipate", "plan", "estimate", "expect", "potential","could", "will", or similar words suggesting future outcomes. Informationrelating to reserves and resources is deemed to be forward-looking information,as it involves the implied assessment, based on certain estimates andassumptions, that the reserves and resources described exist in the quantitiespredicted or estimated, and can be profitably produced in the future. TheCompany cautions readers not to place undue reliance on forward-lookinginformation which by its nature is based on current expectations regardingfuture events that involve a number of assumptions, inherent risks anduncertainties, which could cause actual results to differ materially from thoseanticipated by the Company. In addition, any forward-looking information ismade as of the date hereof, and each of the Company and its affiliatesexpressly disclaim any obligation or undertaking to update, review or revisesuch forward-looking information contained in this announcement to reflect anychange in its expectations or any change in events, conditions or circumstanceson which such information is based unless required to do so by applicable law. Forward-looking information is not based on historical facts but rather oncurrent expectations and assumptions regarding, among other things, the timingand scope of certain of the Company's operations and the timing and level ofproduction from the Company's properties, plans for and results of drillingactivity and testing programs, future capital and other expenditures (includingthe amount, nature and sources of funding thereof), continued politicalstability, and timely receipt of any necessary government or regulatoryapprovals. Although the Company believes the expectations and assumptionsreflected in such forward-looking information are reasonable, they may prove tobe incorrect. Forward-looking information involves significant known andunknown risks and uncertainties. A number of factors could cause actual resultsto differ materially from those anticipated by the Company including, but notlimited to, risks associated with the oil and gas industry (e.g. operationalrisks in exploration and production; inherent uncertainties in interpretinggeological data; changes in plans with respect to exploration or capitalexpenditures; interruptions in operations together with any associatedinsurance proceedings; reductions in production capacity, the uncertainty ofestimates and projections in relation to costs and expenses and health, safetyand environmental risks), the risk of commodity price and foreign exchange ratefluctuations, the uncertainty associated with negotiating with foreigngovernments, risk associated with international activity, including the risk ofpolitical instability, the risk of adverse economic market conditions, theactual results of marketing activities and the risk of regulatory changes.Forward-looking information cannot be relied upon as a guide to futureperformance. Well-test results are not necessarily indicative of long-termperformance or ultimate recovery. Financial outlook information contained inthis report about the Company's prospective cash flows and financial positionis based on assumptions about future events, including economic conditions andproposed courses of action, based on management's assessment of the relevantinformation currently available. Readers are cautioned that any such financialoutlook information contained herein should not be used for purposes other thanfor which it is disclosed herein. The Company does not assume responsibilityfor the accuracy and completeness of the forward-looking information orstatements and such information and statements should not be taken asguarantees of future outcomes. Subject to applicable securities laws, theCompany does not undertake any obligation to revise this forward-lookinginformation or these forward-looking statements to reflect subsequent events orcircumstances. This cautionary statement expressly qualifies theforward-looking information and statements contained in this press release. Terms related to reserves and resources classifications referred to in thisannouncement are based on definitions and guidelines in the Canadian Oil andGas Evaluation Handbook which are as follows. "Proved reserves" are those reserves that can be estimated with a high degreeof certainty to be recoverable. It is likely that the actual remainingquantities recovered will exceed the estimated proved reserves. "Probable reserves" are those additional reserves that are less certain to berecovered than proved reserves. It is equally likely that the actual remainingquantities recovered will be greater or less than the sum of the estimatedproved plus probable reserves. The qualitative certainty levels referred to in the definitions above areapplicable to individual reserves entities (which refers to the lowest level atwhich reserves calculations are performed) and to reported reserves (whichrefers to the highest-level sum of individual entity estimates for whichreserves estimates are presented). Reported reserves should target thefollowing levels of certainty under a specific set of economic conditions: · at least a 90 percent probability that the quantities actuallyrecovered will equal or exceed the estimated proved reserves. This category ofreserves can also be denoted as 1P; · at least a 50 percent probability that the quantities actuallyrecovered will equal or exceed the sum of the estimated proved plus probablereserves. This category of reserves can also be denoted as 2P; and · at least a 10 percent probability that the quantities actuallyrecovered will equal or exceed the sum of the estimated proved plus probableplus possible reserves. This category of reserves can also be denoted as 3P. Additional clarification of certainty levels associated with reserves estimatesand the effect of aggregation is provided in the COGE Handbook. The estimatesof reserves and future net revenue for individual properties may not reflectthe same confidence level as estimates of reserves and future net revenue forall properties, due to the effects of aggregation. "Prospective resources" are those quantities of petroleum estimated, as of agiven date, to be potentially recoverable from undiscovered accumulations byapplication of future development projects. Prospective resources have both anassociated chance of discovery (geological chance of success or "COS") and achance of development (economic, regulatory, market, facility, corporatecommitment or political risks). The chance of commerciality is the product ofthese two risk components. The prospective resource estimates referred toherein have not been risked for either the chance of discovery or the chance ofdevelopment. There is no certainty that any portion of the prospective resources will bediscovered. If a discovery is made, there is no certainty that it will bedeveloped or, if it is developed, there is no certainty as to the timing ofsuch development or that it will be commercially viable to produce any portionof the prospective resources. Figures related to the Company's reserves and resources are derived from theDecember 31, 2013 McDaniel Report and the June 30, 2013 McDaniel Report. A description of the uncertainties and significant positive and negativefactors associated with the estimates of reserves and resources in respect ofthe December 31, 2013 McDaniel Report is contained in the Company's AnnualInformation Form dated March 31, 2014 and a description of the uncertaintiesand significant positive and negative factors associated with the estimates ofresources in respect of the June 30, 2013 McDaniel Report is contained in theCompany's July 25, 2013 material change report. Copies of these documents areavailable on the internet under the Company's profile at www.sedar.com. Information relating to reserves and resources is deemed to be forward-lookinginformation, as it involves the implied assessment, based on certain estimatesand assumptions, that the reserves and resources described exist in thequantities predicted or estimated, and can be profitably produced in thefuture. Well-test results are not necessarily indicative of long-termperformance or ultimate recovery. SOURCE: Caracal Energy Inc. For further information: Caracal Energy Inc.Gary Guidry, President and Chief Executive OfficerTrevor Peters, Chief Financial Officer+1 403-724-7200 Longview Communications - Canadian Media EnquiriesAlan Bayless +1 604-694-6035Joel Shaffer +1 416-649-8006 FTI Consulting - UK Media EnquiriesBen Brewerton / Ed Westropp+ 44 (0) 207 8313 3113caracalenergy.sc@fticonsulting.com

(CRCL)