PetroBakken Announces April Production of Approximately 48,000 Boepd and First Quarter Funds Flow from Operations of $177

PetroBakken Announces April Production of Approximately 48,000 Boepd and First 
Quarter Funds Flow from Operations of $177 Million 
CALGARY, ALBERTA -- (Marketwired) -- 05/01/13 -- PetroBakken Energy
Ltd. (the "Company" or "PetroBakken") (TSX:PBN) is pleased to provide
an operations update and to announce our first quarter financial and
operating results. 
FIRST QUARTER FINANCIAL & OPERATING HIGHLIGHTS 


 
--  First quarter production averaged 49,078 barrels of oil equivalent per
    day ("boepd") (82% light oil and liquids), a 4% increase over the fourth
    quarter of 2012. 
--  Our operating netback for the first quarter was $49.79/boe, a 5%
    increase from the fourth quarter of 2012. 
--  Funds flow from operations was $177 million ($0.92 per basic share) for
    the quarter, a 5% increase over the fourth quarter of 2012 due to higher
    average production and increased netback, and a 5% decrease from the
    first quarter of 2012 due to realized pricing. 
--  Capital expenditures before acquisitions and dispositions totalled $302
    million in the first quarter, resulting in 53 net wells drilled. 
--  Net income was $2 million ($0.01 per basic share) for the first quarter.
--  The maturity date on our $1.4 billion credit facility was again extended
    by one year to June 2016. 

 
Summary of Results 


 
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                                              Three months ended March 31,  
                                                         ($000s)            
----------------------------------------------------------------------------
                                                        2013           2012 
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Oil and natural gas sales                            315,533        330,361 
Funds flow from operations (1)                       176,986        185,327 
 Per share - basic ($)(1)(2)                            0.92           0.99 
Adjusted Net income(1)                                 1,556        102,609 
 Per share - basic ($)(1) (2)                           0.01           0.55 
Net Capital Expenditures(1)                          308,420       (410,086)
Total debt (1)                          
           2,246,867      1,610,790 
Dividends per share ($)(2) (3)                          0.24           0.24 
Cash dividends per share ($)(2) (3)                     0.17           0.14 
Common Shares, end of period (000) (4)               194,423        187,895 
Operating netback ($/boe) (1) (5) (6)                  49.79          52.83 
Average daily production (boe) (5)                    49,078         46,772 
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(1) Non-GAAP measure. See "Non-GAAP Measures" section.                      
(2) 2012 balance calculated using shares outstanding of PetroBakken prior to
    the reorganization with Petrobank Energy and Resources Ltd. in December 
    2012.                                                                   
(3) 2012 balance represents dividends paid by PetroBakken prior to the      
    reorganization in December 2012.                                        
(4) Denotes basic common shares outstanding.                                
(5) Six Mcf (thousand cubic feet) of natural gas is equivalent to one barrel
    of oil equivalent ("boe").                                              
(6) Net of transportation expenses.                                         

 
OPERATING RESULTS  
Our first quarter average production of 49,078 boepd was comprised of
19,029 boepd from the Bakken business unit and 20,614 boepd from the
Cardium business unit, with the remainder from the Saskatchewan
Conventional and AB/BC business units. Production growth quarter over
quarter can be primarily attributed to the successful execution of
our drilling program in the Cardium, as well as optimization
activities on existing wells in Saskatchewan which continue to
mitigate production declines. The liquids weighting of our production
has slightly decreased to 82% as a result of growth in our Cardium
production, which has a higher gas/oil ratio compared to our
Saskatchewan production, as well as temporary facility restrictions
in the Cardium business unit having a proportionately larger impact
on our light oil production. 
Average Daily Production       


 
                                               Three months ended March 31, 
                                                           2013             
                                                Oil &NGL       Gas     Total
Business Unit                                    (bbl/d)   (Mcf/d)   (boe/d)
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 Bakken                                           18,103     5,557    19,029
 Conventional (SE SK)                              5,830     1,456     6,073
 Cardium (central AB)                             14,862    34,513    20,614
 Alberta/BC                                        1,595    10,602     3,362
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                                                  40,390    52,128    49,078
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----------------------------------------------------------------------------

 
During the first quarter of 2013, we drilled 53 wells and brought 41
wells on production, which is down from the 79 wells drilled and 99
wells brought on production in the fourth quarter of 2012 but up from
the 47 wells drilled and 36 wells brought on production in the first
quarter of 2012. At March 31, 2013, there were 30 wells waiting to be
completed and/or brought on production. A delayed spring break-up has
allowed us to remain active and we anticipate approximately half of
the wells in inventory will be brought on production by the end of
the second quarter. 
Q1 2013 Drilling Activity         


 
                                                         On                 
                               Drilled    Completed  Production Inventory(1)
Business Unit                Gross   Net Gross   Net Gross   Net Gross   Net
----------------------------------------------------------------------------
 Bakken                         21    15    23    17    20    14     5     2
 Conventional (SE SK)           11     7    14     9    14     8     3     2
 Cardium (central AB)           29    23    27    23    21    17    26    22
 Alberta/BC                      9     8     6     5     2     2     5     4
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Total                           70    53    70    54    57    41    39    30
----------------------------------------------------------------------------
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(1) Inventory refers to wells pending completion and/or tie-in.             

 
Bakken Business Unit  
Production in the Bakken business unit averaged 19,029 during the
first quarter. A maturing production profile combined with drilling
and well optimization activity has kept production within 4% of the
fourth quarter rate of 19,741 boepd. Our activity has allowed us to
replace about half of the production we sold in our non-core
disposition near the end of the first quarter of 2012, when
production averaged 20,735 boepd. Through future drilling and the
optimization of our extensive inventory of existing wells, we expect
to continue to mitigate production declines and generate significant
free cash flow from this business unit.  
Cardium Business Unit  
The Cardium business unit remains our most active region as we
continue to grow this asset. Production averaged 20,614 boepd in the
first quarter, representing an 8% increase over the fourth quarter of
2012 and a 24% increase over the first quarter of 2012. For the
balance of the year, we expect growth to continue as we spend
approximately half of our remaining capital program in the Cardium,
with the majority of the activity occurring in the West Pembina area
of the business unit.  
AB/BC Business Unit 
Production in our Alberta/BC business unit averaged 3,362 boepd in
the quarter, with the growth driven by our new Swan Hills resource
play, where we drilled 5 wells and brought 2 wells on production in
the quarter. Consistent with this light oil-focused activity, the
liquids weighting in this business unit has increased from 40% in the
fourth quarter of 2012 to 47% in the first quarter of 2013. We have
compiled an inventory of over 294 net sections of land prospective
for light oil resource potential in one or more of the Nordegg,
Montney, Duvernay and Swan Hills zones. We continue to pursue other
opportunities in this business unit to increase the depth and
prospectivity of our inventory. 
Saskatchewan Conventional Business Unit 
Our southeast Saskatchewan Conventional business unit continues to
provide a low decline, light oil production base. We drilled 7 wells
in the business unit in the first quarter and generated average
production of 6,073 boepd. 
FINANCIAL RESULTS  
Our production of 49,078 boepd and operating netback of $49.79/boe
resulted in funds flow from operations of $177 million ($0.92 per
basic share) for the first quarter, a 5% increase over the preceding
quarter. As compared to the first quarter of 2012, our growth in
production did not offset lower light oil benchmark prices and higher
differentials experienced in the first quarter of 2013, resulting in
a 5 percent decrease in funds flow from operations. Our adjusted net
income for the first quarter was $1.6 million ($0.01 per basic
share). This represents a material change from first quarter 2012
adjusted net income of approximately $103 million, which included
gains on dispositions of $129 million. Capital expenditures before
acquisitions and dispositions in the first quarter were $302 million,
representing an 18% decrease from the fourth quarter of 2012 and a
46% increase from the first quarter of 2012. This reflects our plan
to execute a more balanced program between the first and second half
of 2013, which requires the highest capital spending levels in the
first quarter as expenditures typically decrease in the second
quarter with reduced activity during spring break-up. Conversely, in
2012 our capital program was more heavily weighted to the back half
of the year as we actively reinvested a portion of our proceeds from
asset dispositions following the completion of spring break-up.  
Our monthly dividend of $0.08 per share has remained constant since
the Company's inception. During the first quarter, total dividends of
$47 million were declared, representing 27% of funds flow from
operations. However, with approximately 30% of shareholders
participating in our dividend reinvestment and share dividend plans,
cash dividends were $33 million, or 19% of quarterly funds flow from
operations.  
As at March 31, 2013, PetroBakken had $1.1 billion of debt drawn on
our $1.4 billion credit facility. Effective April 2013, the credit
facility was amended to extend the maturity by an additional year to
June 2016. All other terms of the facility remain the same, including
the tiered covenants and the $100 million accordion feature
potentially allowing us to increase the facility size to $1.5
billion. 
CURRENT OPERATIONS UPDATE  
Average production in April was approximately 48,000 boepd, based on
field estimates. In the Cardium business unit, the 600 boe/d of
production previously restricted at Lochend is being restored with
the recent start-up of a third-party facility expansion. We continue
to have about 1,000 boepd of production in the Brazeau region
restricted due to high line pressures at third-party gas processing
facilities, which is anticipated to be restored in the third quarter
with the completion of planned infrastructure improvements.
Consistent with previous years, second quarter production is expected
to decrease from current levels as we experience restricted activity
due to spring break-up conditions. However, we expect the impact of
spring break-up to be reduced from previous years due to our maturing
production base and a greater number of wells being tied-in to
infrastructure. 
OUTLOOK AND GUIDANCE  
As planned, the first quarter was very active and results are in line
with our forecasts. We spent 45% of our $675 million capital program
in the quarter by drilling 41% of our projected 129 wells. Cooler
spring weather has, to-date, mitigated the impacts of spring break-up
and production in April has been ahead of our forecasts, putting us
on track to deliver an average annual daily production rate of 46,000
to 48,000 boepd. We look forward to executing our capital program for
the remainder of the year, which is expected to generate a 2013
production exit rate of 49,000 to 52,000 boepd and year-over-year
average production growth of 8% to 12%.  


 
----------------------------------------------------------------------------
($000s, except where noted and per                                          
 share amounts)                            2013 Guidance      Q1 2013 Actual
----------------------------------------------------------------------------
Production (annual average)                                                 
 Oil and NGL (bbl/d)                     39,000 - 41,000              40,390
 Natural Gas (Mmcf/d)                            41 - 43                  52
 Total (boe/d)                           46,000 - 48,000              49,078
                                                                            
Exit Production (boe/d)                  49,000 - 52,000                   -
                                               645,000 -                    
Funds Flow from Operations(1)(4)(5)   $         $680,000    $        176,986
Funds Flow per share(2)(4)(5)         $     3.30 - $3.50    $           0.92
Declared Dividends per share          $             0.96    $           0.24
Capital Expenditures(3)(4)(5)         $          675,000    $        301,985
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(1) Commodity price assumptions include WTI US$90.00/bbl, AECO CDN$3.50/mcf,
    foreign exchange rate of US$/CDN$1.00, and corporate oil differential of
    10%.                                                                    
(2) Funds flow per share calculation based on 194 million shares outstanding
    for 2013.                                                               
(3) Projected capital expenditures exclude acquisitions and divestitures,   
    which are evaluated separately. Comparatives for Q1 2013 shown prior to 
    acquisition and disposition activity of $6.4 million.                   
(4) Forecasted funds flow from operations, funds flow per share and capital 
    expenditures are shown prior to the impact of reclassifying             
    decommissioning liabilities from capital to funds flow. Decommissioning 
    liability costs are forecasted in capital expenditures for 2013 annual  
    guidance purposes.                                                      
(5) Non-GAAP measure. See "Non-GAAP Measures" section within this document. 

 
DIVIDEND REINVESTMENT PROGRAM AND SHARE DIVIDEND PLAN 
PetroBakken has a dividend reinvestment program ("DRIP") in place
that is available only to Canadian PetroBakken shareholders. Our
share dividend plan ("SDP") is now available to Canadian shareholders
and most non-Canadian shareholders. The DRIP and the SDP allow
shareholders to effectively receive their monthly PetroBakken
dividends as PetroBakken shares at a 5% discount to the market price
at the date of the dividend payment.  
For further information regarding our SDP and DRIP, please visit
PetroBakken's website at www.petrobakken.com or contact Olympia Trust
Company at 403-668-8887, toll free at 1-800-727-4493 or via email at
corporateactions@olympiatrust.com. 
FIRST QUARTER FINANCIAL & OPERATING TABLES 


 
                                             Three months ended March 31,   
                                                 2013       2012   % Change 
----------------------------------------------------------------------------
Financial ($000s, except where noted)                                       
Oil and natural gas sales                     315,533    330,361         (4)
Funds flow from operations (1)                176,986    185,327         (5)
 Per share - basic ($)(1) (2)                    0.92       0.99         (7)
 - diluted ($)(1) (2) (3)                        0.91       0.95         (4)
Adjusted Net Income(1)                          1,556    102,609        (98)
 Per share - basic ($)(1) (2)                    0.01       0.55        (98)
 - diluted ($)(1) (2)                            0.01       0.54        (98)
Dividends(1) (4)                               47,027     45,556          3 
Per share ($)(1)                                 0.24       0.24          - 
Payout ratio(1)                                    27%        25%         - 
Cash dividends(1) (4)                          32,884     25,723         28 
Cash dividend payout ratio(1)                      19%        14%         - 
Net capital expenditures(1)                   308,420   (410,086)         - 
Total debt(1)                               2,246,867  1,610,790         39 
Basic common shares, end of period (000)      194,423    187,895          3 
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Operations                                                                  
Operating netback($/boe except where noted)                                 
 (1)(5)                                                                     
 Oil, NGL and natural gas revenue (6)           71.09      77.36         (8)
 Royalties                                       8.70      11.92        (27)
 Production expenses                            12.60      12.61          - 
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 Operating netback                              49.79      52.83         (6)
Average daily production                                                    
 Oil and NGL (bbls)                            40,390     40,336          - 
 Natural gas (mcf)                             52,128     38,320         36 
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 Total (boe) (5)                               49,078     46,772          5 
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(1) Non-GAAP measure. See "Non-GAAP Measures" section within this document. 
(2) 2012 balance calculated using shares outstanding by PetroBakken prior to
    the reorganization in December 2012.                                    
(3) Consists of common shares, stock options, deferred common shares,       
    incentive shares and convertible debentures as at the period end date.  
(4) 2012 balance represents dividends paid out by PetroBakken prior to the  
    reorganization in December 2012. Petrobank Energy and Resources Ltd.,   
    which amalgamated with PetroBakken Energy Ltd. pursuant to the          
    reorganization, did not payout out any dividends in the year ending     
    December 31, 2012.                                                      
(5) Six Mcf of natural gas is equivalent to one barrel of oil equivalent    
    ("boe").                                                                
(6) Net of transportation expenses.                                         

 
INVESTOR CONFERENCE CALL  
Management of PetroBakken will be holding a conference call for
investors, financial analysts, media and any interested persons on
Thursday, May 2, 2013 at 9:00 a.m. (MST) (11:00 a.m. EST) to discuss
PetroBakken's first quarter financial and operating results. 
The investor conference call details are as follows: 
Live call dial-in numbers: 1-416-340-2216/1-866-226-1792  
Replay dial-in numbers: 1-905-694-9451 / 1-800-408-3053 
Passcode: 2866206  
http://events.digitalmedia.telus.com/petrobakken/050213/index.php 
PetroBakken Energy Ltd. is an oil and gas exploration and production
company combining light oil Bakken and Cardium resource plays with
conventional light oil assets, delivering industry leading operating
netbacks, strong cash flows and production growth. PetroBakken is
applying leading edge technology to a multi-year inventory of Bakken
and Cardium light oil development locations, along with a significant
inventory of opportunities in the Horn River and Montney gas resource
plays in northeast BC. Our strategy is to deliver accretive
production and reserves growth, along with an attractive dividend
yield. 
Non-GAAP Measures. This press release contains financial terms that
are not considered measures under IFRS, such as funds flow from
operations, adjusted net income, funds flow per share, adjusted net
income per share, payout ratio, total debt, operating netback and net
capital expenditures. These measures are commonly utilized in the oil
and gas industry and are considered informative for management and
stakeholders. Specifically, funds flow from operations reflects cash
generated from operating activities before changes in non-cash
working capital. Adjusted net income is determined by adding back any
losses or deducting any gains on the derivative liabilities, adding
back any losses or deducting any gains on settlement of convertible
debentures, and adding back impairments. Payout ratio is determined
as dividends paid as a percentage of funds flow from operations.
Management considers funds flow from operations, funds flow per
share, adjusted net income, adjusted net income per share, and payout
ratio important as it helps evaluate performance and demonstrate the
ability to generate sufficient cash to fund future growth
opportunities, pay dividends and repay debt. Total debt includes bank
debt outstanding plus accounts payable less accounts receivable and
prepaid expenses plus the full value outstanding on the senior
unsecured notes and convertible debentures converted to Canadian
dollars at the exchange rate on the period end date. Total debt is
used to evaluate PetroBakken's financial leverage. Profitability
relative to commodity prices per unit of production is demonstrated
by an operating netback. Operating netback reflects revenues less
royalties, transportation costs, and production expenses divided by
production for the period. Net capital expenditures represent capital
expenditures, including exploration and evaluation expenditures, less
proceeds from asset dispositions. Funds flow from operations, funds
flow per share, adjusted net income, adjusted net income per share,
payout ratio, total debt, operating netbacks, and net capital
expenditures may not be comparable to those reported by other
companies nor should they be viewed as an alternative to cash flow
from operations or other measures of financial performance calculated
in accordance with IFRS. Further information in respect of these
non-GAAP measures is set forth in our MD&A. 
Well Counts. All references to well counts are on a net basis. 
Forward Looking Statements. Certain information provided in this
press release constitutes forward-looking statements. Specifically,
this press release contains forward-looking statements relating to
financial results, results from operations, future production rates,
proposed exploration and development activities (including the number
of wells to be drilled, completed and put on production), our
drilling prospect inventory, projected capital expenditures, the
timing of certain projects and future dividend payments. The
forward-looking statements are based on certain key expectations and
assumptions, including expectations and assumptions concerning the
success of future drilling, completion, recompletion and development
activities, the performance of new and existing wells, prevailing
commodity prices and economic conditions, the availability and cost
of labour and services, timing of pipeline and facilities
construction, access to third party facilities and weather and access
to drilling locations. Although we believe that the expectations and
assumptions on which the forward-looking statements are based are
reasonable, undue reliance should not be placed on the
forward-looking statements because we can give no assurance that they
will prove to be correct. Since forward-looking statements address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks. These include, but are not limited to, risks
associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production; delays
or changes in plans with respect to exploration or development
projects or capital expenditures; the uncertainty of reserve
estimates; the uncertainty of estimates and projections relating to
production, costs and expenses, reliance on industry partners,
availability of equipment and personnel, uncertainty surrounding
timing for drilling and completion activities resulting from weather
and other factors, changes in applicable regulatory regimes and
health, safety and environmental risks), commodity price and exchange
rate fluctuations and general economic conditions. Certain of these
risks are set out in more detail in our Annual Information Form which
has been filed on SEDAR and can be accessed at www.sedar.com. Except
as may be required by applicable securities laws, PetroBakken assumes
no obligation to publicly update or revise any forward-looking
statements made herein or otherwise, whether as a result of new
information, future events or otherwise. 
Natural gas volumes have been converted to barrels of oil equivalent
("boe"). Six thousand cubic feet ("Mcf") of natural gas is equal to
one barrel of oil equivalent based on an energy equivalency
conversion method primarily attributable at the burner tip and does
not represent a value equivalency at the wellhead. Boes may be
misleading, especially if used in isolation. 
Contacts:
PetroBakken Energy Ltd.
John D. Wright
President and Chief Executive Officer
(403) 268-7800
ir@petrobakken.com 
PetroBakken Energy Ltd.
Peter D. Scott
Senior Vice President and Chief Financial Officer
(403) 268-7800
ir@petrobakken.com 
PetroBakken Energy Ltd.
Bill A. Kanters
Vice President Capital Markets
(403) 268-7800
ir@petrobakken.com
www.petrobakken.com