Calvalley announces results for the third quarter ended September 30, 2012

Calvalley announces results for the third quarter ended September 30, 2012 
CALGARY, Nov. 6, 2012 /CNW/ - Calvalley Petroleum Inc., (TSX: CVI.A) 

    --  The Company's working interest share of production volumes
        before royalties and taxes of 2,378 barrels per day in the
        third quarter of 2012 was 10 per cent higher than 2,156 barrels
        per day for the third quarter of 2011. Average gross production
        volumes for the month of October are estimated to be
        approximately 5,500 barrels per day, a 16 per cent increase
        over average third quarter 2012 gross production volumes and
        current gross crude oil production capability is in the 5,800 -
        6,200 barrels per day range which amounts to a working interest
        share of 2,900 - 3,100 barrels per day to the Company.
    --  During the quarter, two appraisal wells were drilled offsetting
        the discovery well Ras Nowmah 2, drilled in 2010. The Ras
        Nowmah 4 well was completed in early October and is currently
        on production test. The well is currently producing between 300
        and 500 barrels per day of crude oil with limited drawdown. The
        Company plans to continue restricting production at this well
        pending the installation of facilities which will allow
        production volumes to be optimized. The Ras Nowmah 5 well has
        recently been completed and is currently undergoing its initial
        production test. The well was brought on production on October
        30, 2012 and is currently producing between 400 and 600 barrels
        per day of crude oil with limited drawdown. The Company is
        currently developing the required production and transportation
        facilities which will allow the Ras Nowmah field production to
        be optimized. It is anticipated that the current crude oil
        production rates from Ras Nowmah can be increased when
        facilities are installed in 2013.
    --  Earnings of $0.05 per share ($4.2 million) in the third quarter
        of 2012 were down from the $0.10 per share ($9.4 million) in
        the third quarter of 2011 due to timing of product shipments.
        For the nine month period ended September 30, 2012, earnings
        increased to $0.21 per share ($19.6 million) up 81 per cent
        from the $0.11 per share ($10.9 million) for the nine month
        period in 2011. Earnings during the quarter reflect the lower
        level of export shipments in the quarter, with production
        levels contributing to higher crude oil inventories which
        increased by almost 30,000 barrels during the quarter.
    --  Funds flow from operations ("Cash Flow") for the three months
        ended September 30, 2012 of $0.06 per share ($5.9 million) is
        lower than the $0.12 per share ($11.6 million) for the same
        period of 2011 due to the impact of crude oil export sales and
        changes in inventory levels. For the nine months ended
        September 30, 2012, Cash Flow was $0.27 per share ($25.2
        million), an increase of 66 per cent from $0.16 per share
        ($15.2 million) in the prior year period.
    --  Capital expenditures in the current quarter of $2.1 million are
        similar to spending of $1.8 million in the comparable quarter
        of 2011 including the net cost for drilling two wells at Ras
        Nowmah. Year to date capital expenditures of $4.9 million are
        lower than the $12.8 million in the prior period which included
        expenditures on the truck off loading facilities at Block 51.
        The Company is currently drilling a water injection well at
        Hiswah and will then move the rig to the plateau to drill other
    --  Calvalley has a healthy balance sheet with approximately $95
        million in working capital at September 30, 2012 up from $68
        million at September 30, 2011. The working capital balance
        increases to over $98 million with inventory of crude oil
        valued at current market value rather than cost. As the Company
        expands its production base in Yemen, cash flow from operating
        activities will continue to support increased investment

Financial information

Significant financial information is included in the table below and is 
discussed further in the Company's Management Discussion and Analysis.

                         Three months ended      Nine months ended
(in thousands of US           September 30((1))      September 30((1))
dollars except per share
amounts)                       2012         2011       2012        2011 
Revenue (Gross)              17,511       29,453     69,187      43,865 


Revenue from crude oil       10,979       18,331     43,372      21,189
sales (net of royalties)

EBITDA((2))                   6,850       13,299     29,169      17,553

Operating income((2))         5,646       11,653     24,577      15,149

Comprehensive income          4,518        9,405     19,645      10,866

  Per share                    0.05         0.10       0.21        0.11

Capital expenditures          2,100        1,759      4,861      12,838

Funds flow from                                     
operations((2))               5,880       11,581     25,192      15,194

  Per share                    0.06         0.12       0.27        0.16

Cash flow from (used in)     10,819      (3,041)     27,089       1,645
operating activities

((1) ) On January 1, 2011, the Company adopted International Financial
       Reporting Standards ("IFRS") for financial
       reporting purposes, using a transition date of January 1, 2010.
       The financial statements for the three and nine
       months ended September 30, 2012, including required comparative
       information, have been prepared in
       accordance with International Financial Reporting Standards.
       Unless otherwise noted, 2011 comparative information has been
       prepared in accordance with IFRS. The
       adoption of IFRS has not had an impact on the Company's
       operations, cash flows or strategic decisions. The
       most significant area of impact was the adoption of the IFRS
       upstream accounting principles.

((2) ) See "Non-IFRS Measures" disclosure in Q3 2012 Interim MD&A filed


Calvalley's Management's Discussion and Analysis and Unaudited Condensed 
Consolidated Financial Statements for the three and nine months ended 
September 30, 2012 can be found for viewing by electronic means on The System 
for Electronic Document Analysis and Retrieval at They can also 
be found on the Company's website at

Calvalley is listed on the Toronto Stock Exchange, trading under the symbol 


This press release may contain forward-looking statements including, without 
limitation, financial and business prospects and financial outlooks, and such 
statements may be forward-looking statements which reflect management's 
expectations regarding future plans and intentions, growth, results of 
operations, performance and business prospects and opportunities. Words such 
as "may", "will", "should", "could", "anticipate", "believe", "expect", 
"intend", "plan", "potential", "continue", and similar expressions have been 
used to identify these forward-looking statements. These statements reflect 
management's current beliefs and are based on information currently available 
to management. Forward-looking statements involve significant risk and 
uncertainties. A number of factors could cause actual results to differ 
materially from the results discussed in the forward-looking statements 
including, but not limited to, delays and interruptions in operations and 
drilling activities for undetermined periods, availability of equipment and 
services required for production operations, operating conditions affecting 
the ability to produce and/ or deliver crude oil production and complete 
project activities, changes in general economic and market conditions and 
other risk factors. Although the forward-looking statements contained herein 
are based upon what management believes to be reasonable assumptions, 
management cannot assure that actual results will be consistent with these 
forward-looking statements. Investors should not place undue reliance on 
forward-looking statements. These forward-looking statements are made as of 
the date hereof.

Edmund Shimoon, Chairman & CEO Gerry Elms, CFO+1 (403) 297-0490

SOURCE: Calvalley Petroleum Inc.

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CO: Calvalley Petroleum Inc.
ST: Alberta

-0- Nov/06/2012 12:00 GMT

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