GeoGlobal Reports Third Quarter 2012 Financial Results

GeoGlobal Reports Third Quarter 2012 Financial Results 
CALGARY, ALBERTA -- (Marketwire) -- 11/16/12 -- GeoGlobal Resources
Inc. ("GeoGlobal" or the "Company") (NYSE MKT:GGR) (NYSE Amex:GGR)
today announced operating highlights and selected financial results
for the quarter ended September 30, 2012. All amounts are in US
dollars unless otherwise noted.  
Selected Operational Highlights 
Since July 1, 2012 the Company has announced: 


 
--  Sale of 8,500,000 shares acquired in the Securities Purchase and
    Exchange Agreement between the Company and ILDE for net proceeds to
    GeoGlobal of approximately US$1.4 million; 
--  Completion of drilling operations and initiation of testing on the
    Punam-1 well on the RJ-20 block onshore India based on positive
    indications of oil-bearing formations within the targeted Bilara-Jodhpur
    reservoirs. The oil samples recovered from the wireline formation tests
    and conventional testing program have a density of 17-degree API. Based
    on this oil discovery, the consortium is pursuing a further extension of
    Exploration Phase-I to complete the minimum work program commitments on
    this block; 
--  Approval by the Government of India of a 28-month extension to the
    Phase-I exploration period on the KG Onshore Block. This extension
    allows the Oil India Limited GeoGlobal consortium until December 2014 to
    complete the minimum work program commitments in the block, primarily
    the drilling of 12 exploratory wells; 
--  Completion of drilling of the Myra-1 side-track well reaching a final
    Total Vertical Depth Subsea ("TVDSS") of 5,388 metres. Based on logging
    performed during the drilling, sands were encountered in the Miocene but
    they appeared to be water saturated and no significant quantities of
    hydrocarbons were detected and the well was plugged and abandoned; 
--  Completion of drilling of the Sara-1 well reaching a final TVDSS of
    3,928 metres. We encountered approximately 98 meters of high quality
    reservoir sands in the lower Miocene / upper Oligocene which had good
    porosity and permeability. Wireline logs confirmed residual gas
    saturation in the reservoir suggesting hydrocarbon migration through the
    system. The sands were wet with no commercial quantities 
of hydrocarbons
    present and the well was plugged and abandoned; 
--  Receipt of a Resource Report prepared by Netherland, Sewell &
    Associates, Inc. of Houston, Texas on the offshore Israel license known
    as 388/Samuel. The Company holds an effective 34.872% interest in the
    license; and 
--  Grant of a further extension by the Ministry of Energy and Water of the
    State of Israel of the dates for the execution of a drilling rig
    contract and the spudding of the first well on the Samuel offshore
    license to March 31, 2013 and April 30, 2013, respectively. 

 
"We made rapid progress on our planned drilling program offshore
Israel during the quarter, drilling exploration wells in both the
Myra and Sara licenses," said Paul B. Miller, President and CEO of
GeoGlobal. "Although we did not find commercial quantities of
hydrocarbons in either well, we significantly expanded the
consortium's understanding of the geology of the region, which will
support future drilling decisions in the area. We also secured an
extension to the drilling deadlines at Samuel, which will give us
sufficient time to finalize our plans for the license." 
Financial Review 
All of the Company's oil and gas sales were derived from production
of six wells in India. Oil and gas sales for the three months ended
September 30, 2012 were $109,000 compared with $195,000 for the three
months ended September 30, 2011. Oil and gas sales for the nine
months ended September 30, 2012 were $379,000 compared with $446,000
for the nine months ended September 30, 2011. The decreases are
mainly attributable to lower oil and gas production and sales for the
three and nine months ended September 30, 2012 combined with a
decrease in the average oil and gas commodity price when compared
with the same periods in 2011. 
Oil sales are currently based on the spot price based on discount to
the Nigeria Bonny Light Crude bench mark. To date, none of
GeoGlobal's production has been hedged. All associated natural gas is
sold to local markets at a firm contract price of $7.00 per Mcf
adjusted for rebate/premium on account of calorific value. 
Operating costs for the three months ended September 30, 2012
remained fairly constant at $34,000, or $20.86 per BOE, compared with
$36,000 or $19.95 per BOE for the three months ended September 30,
2011. Operating costs for the nine months ended September 30, 2012
also remained fairly constant at $106,000, or $19.57 per BOE,
compared with $104,000 or $20.47 per BOE for the nine months ended
September 30, 2011. The operating costs include handling and
processing charges, transportation costs and utilities, maintenance
and tank rental charges and contain a fixed and variable portion. 
For the three months ended September 30, 2012, general and
administrative expenses decreased to $121,000 from $826,000 for the
three months ended September 30, 2011. This decrease is mostly
attributable to management's efforts on overall cost control combined
with an increase in our overhead recoveries as a result of our
drilling activity in Israel. Management's efforts on overall cost
control include a decrease in the Directors' and Special Committee
fees of $107,000, a decrease in salaries and benefits of $85,000, and
a decrease in travel, hotel, advertisement and promotion of $64,000.
These efforts when combined with an increase in overhead recoveries
of $559,000 contributed to a significant decrease in overall general
and administrative costs. 
The decrease in the overall general and administrative costs were
offset with an increase in stock-based compensation costs of $99,000
to $192,000 for the three months ended September 30, 2012 from
$93,000 for the comparative three months in 2011. These compensation
costs are for stock-based compensation arrangements with employees
and directors which are being expensed over their respective vesting
periods of the related option grants. 
For the nine months ended September 30, 2012, general and
administrative expenses were $933,000, a decrease of $2,192,000
compared with $3,125,000 for the nine months ended September 30,
2011. This decrease is mostly attributable to management's efforts on
overall cost control combined with an increase in our overhead
recoveries as a result of our drilling activity in Israel.
Management's efforts on overall cost control resulted in a reduction
of $294,000 in the Directors' and Special Committee fees and a
decrease in salaries and benefits of $262,000, which mostly relate to
bonuses in 2011 paid to directors and employees that was not paid in
2012. These efforts when combined with an increase in our overhead
recoveries as a result of increased drilling activity in Israel
further contributed to the reduction in general and administrative
costs by $1,018,000. 
These decreases combined with additional reductions in travel and
hotel by $114,000, education and training of $19,000, bank guarantee
fees of $132,000, and a decrease in stock-based compensation costs of
$332,000 to $251,000 for the nine months ended September 30, 2012
compared with $583,000 for the nine months ended September 30, 2011
all contributed to a significant decrease in the Company's overall
general and administrative costs. 
General and administrative exp
enses also include other costs related
to the corporate head office including rent and office costs,
insurance, NYSE MKT listing and filing fees, investor relation
services and transfer agent fees and services. 
For the three and nine months ended September 30, 2012, the Company
recorded $9.6 and $10.6 million, respectively, of impairment on oil
and gas properties compared to $nil for the three and nine months
ended September 30, 2011. Any impairment to unproved properties is
transferred to the Company's full cost pool of proved properties
which is subject to ceiling test limitations and impairment charges
and is recorded if the net capitalized costs of proved oil and gas
properties exceed the ceiling test limitations. 
For the three and nine months ended September 30, 2012, the Company
recorded a $2.7 million loss on and impairment of available for sale
investment. This loss on and impairment of available for sale
investment can be split into two components. During the year, the
Company received 28.4 million common shares of ILDE as an available
for sale investment, in exchange for the issuance of certain
securities in GeoGlobal. ILDE's common stock is listed and traded on
the Tel Aviv Stock Exchange. 
During the third quarter of 2012, GeoGlobal sold 13.9 million shares
of ILDE for a net loss of $0.8 million. Fair value of this investment
is measured on the reporting date using the closing price of ILDE's
shares traded on the Tel Aviv Stock Exchange. As the decrease in fair
value is deemed other than temporary, a further $1.9 million of
impairment charges were recorded. 
During the three months ended September 30, 2012, the Company
incurred a net loss of approximately $13.9 million, used
approximately $1.5 million of cash flow in its operating activities,
used approximately $0.1 million in its investing activities and had
an accumulated deficit of approximately $75.8 million. 
At September 30, 2012, GeoGlobal's cash and cash equivalents were
$10.1 (December 31, 2011 - $10.5 million) of which $10.0 million is
committed to carry out the exploration activities of the Myra and
Sara joint venture and not available for use in general operations or
other exploration activities. The residual cash of $0.1 million is
available to us for general operations. As at September 30, 2012, the
Company had a working capital deficiency of approximately $14.2
million. 
GeoGlobal's cash balance at September 30, 2012 and anticipated cash
flow from operating activities are not sufficient to satisfy its
current liabilities and meet its exploration commitments of $15.1
million and $27.9 million, over the twelve months ending September
30, 2013 and the twenty-seven months ending December 31, 2014,
respectively. 
To meet its obligations, the Company will be required to divest
certain oil and gas interests, subsidiaries or other available
assets, including by entering into other financing arrangements
typical in the industry such as farming out interests in oil and
natural gas properties. The Company will also continue to seek to
raise capital through equity and debt markets. 
The Company's cash as at September 30, 2012, available for general
operations of $0.1 million is not sufficient to meet its ongoing
operational requirements. Subsequent to September 30, 2012, the
Company has curtailed staffing at its Canadian and Indian offices and
rationalized other expenditures to minimize the ongoing operational
requirements pending the outcome of uncommitted financing activities
described above. If these activities are unsuccessful, the Company
will be forced to substantially curtail or cease exploration,
appraisal and development expenditures and other operating
activities. 
The Company's ability to continue as a going concern is dependent on
the success of the operational and financing initiatives and the
successfully completion of further exploration and development
activities that will generate profitable operations from its oil and
natural gas interests in the future. The Company must make an
assessment of its ability to fulfill current liabilities and to meet
future exploration requirements in the normal course of business. The
assessment requires estimates regarding future uncommitted financing,
future costs of exploration programs, timing of activities, future
oil and gas prices, amongst other things. Such estimates are subject
to uncertainty and should our estimates be materially incorrect, the
Company's ability to continue as a going concern would be impaired
and these unaudited consolidated financial statements could require
material adjustments to the value of assets and liabilities. The
unaudited consolidated financial statements for the quarter ended
September 30, 2012, do not reflect any such adjustments or
reclassifications. 
Outlook 
Management's exploration and development activities pursuant to the
Company's PSCs in India will continue through the remainder of 2012
and throughout 2013 in accordance with the terms of those agreements.
During the first quarter of 2013, based on the current budgets in
India, GeoGlobal anticipates drilling its first shallow exploration
well in the KG Onshore block as well as anticipates, during the
second and third quarters of 2013, drilling one additional
exploration well and ten core wells. The Company further expects to
tie-in additional oil wells in Tarapur along with the Tarapur G gas
well and to continue with the construction of the gas gathering and
production facilities together with further development drilling on
the KG Offshore Block in which it has a carried interest. Additional
expenditures may be incurred in connection with additional
exploratory, appraisal and development wells the Company may
participate in. 
Management also expects exploration activities pursuant to our
licenses in Israel will continue through the remainder of 2012 and
2013 in accordance with the terms of those agreements. 
The Company has filed with the US and Canadian Regulatory authorities
its unaudited consolidated financial statements for the quarter ended
September 30, 2012. 
Set forth below is certain financial information taken from the
unaudited consolidated financial statements. 


 
                                      September 30, 2012   December 31, 2011
                                                     US$                 US$
                                    ----------------------------------------
Current assets                                68,881,794          71,047,262
Property and equipment                        45,229,522          42,580,105
Total assets                                 116,158,415         114,967,629
Current liabilities                           83,116,114          72,978,114
Total liabilities                             83,931,621          73,744,826
Stockholders' equity                          32,226,794          41,222,803
                     Three months  Three months   Nine months   Nine months 
                       ended Sept    ended Sept    ended Sept    ended Sept 
                         30, 2012      30, 2011      30, 2012      30, 2011 
                    --------------------------------------------------------
Oil and gas sales         108,536       195,300       378,849       446,326 
Interest Income             3,271         7,528        10,785        27,730 
Total expenses         
12,967,942     1,443,870    15,953,672     4,823,766 
Net loss              (12,862,370)   (1,255,464)  (15,583,519)   (4,386,564)
Net loss per share -                                                        
 basic and diluted          (0.10)        (0.02)        (0.12)        (0.05)

 
Conference Call  
The Company's Annual Meeting of Stockholders is scheduled for
December 19, 2012 at 3:00 pm at the Westin Calgary, 320 - 4th Avenue
SW, Calgary, Alberta. The Company will not be holding a quarterly
update conference call at this time due to the proximity to the
upcoming Annual Meeting of Stockholders. The Company will address all
items associated with the third quarter financial results and
operational updates during the annual meeting on December 19, 2012. 
About GeoGlobal 
GeoGlobal Resources Inc., headquartered in Calgary, Alberta, Canada,
is a US publicly traded oil and gas company, which, through its
subsidiaries, is engaged in the pursuit of petroleum and natural gas
in high potential exploration targets through exploration and
development in India, Israel and Colombia. 
Cautionary Statement For Purposes Of The "Safe Harbor" Provisions Of
The Private Securities Litigation Reform Act Of 1995 
This press release contains statements which constitute
forward-looking statements within the meaning of the US Private
Securities Litigation Reform Act of 1995, including statements
regarding the plans, intentions, beliefs and current expectations of
GeoGlobal Resources Inc., its directors, or its officers with respect
to the oil and gas exploration, development and drilling and spudding
activities being conducted and intended to be conducted and the
outcome of those activities on the exploration blocks in which the
Company has an interest. The company updates forward-looking
information related to operations, production and capital spending on
a quarterly basis and updates reserves, if any, on an annual basis. 
We caution you that various risk factors accompany our
forward-looking statements and are described, among other places,
under the caption "Risk Factors" in our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K.
These risk factors could cause our operating results, financial
condition and ability to fulfill our plans to differ materially from
those expressed in any forward-looking statements made in this press
release and could adversely affect our financial condition and our
ability to pursue our business strategy and plans. If our plans fail
to materialize, your investment will be in jeopardy. 
An investment in shares of our common stock involves a high degree of
risk. Our periodic reports, which we file with the Securities and
Exchange Commission and Canadian provincial authorities may be viewed
at http://www.sec.gov and www.sedar.com.
Contacts:
GeoGlobal Resources Inc.
+1-403-777-9250
info@geoglobal.com
www.geoglobal.com 
Debby Communications
Moshe Debby
+1-972-3-5683000
moshe@debby.co.il 
The Equicom Group
Dave Feick
Managing Director, Western Canada
+1-403-218-2839
dfeick@equicomgroup.com
 
 
Press spacebar to pause and continue. Press esc to stop.