Santonia Announces 2013 Fourth Quarter Summary and Year End Results

Santonia Announces 2013 Fourth Quarter Summary and Year End Results 
FOR: Santonia Energy Inc. 
MARCH 12, 2014 
Santonia Announces 2013 Fourth Quarter Summary and Year End Results 
CALGARY, ALBERTA--(Marketwired - March 12, 2014) - Santonia (TSX:STE) is
pleased to provide this summary of its financial and operating results for the
2013 year. A complete copy of the Company's consolidated financial
statements for the years ended December 31, 2013 and 2012, along with
management's discussion and analysis in respect thereof will be filed on
SEDAR and is available on the Company's website at 
2013           2012 
Financial ($thousands, except per share                                     
Petroleum and natural gas revenue                     54,958        110,530 
Funds generated from operations (1)                   19,694         45,442 
  Per share - basic                              $      0.19    $      0.44 
  Per share - diluted                            $      0.19    $      0.44 
Loss (2)                                             (25,790)      (185,116)
  Per share - basic                              $     (0.25)   $     (1.80)
  Per share - diluted                            $     (0.25)   $     (1.80)
Exploration and development expenditures              45,320         63,843 
Proceeds from the sale of petroleum and                                     
 natural gas properties                               17,242        272,201 
Working capital deficit                                1,751          6,885 
Bank indebtedness                                     23,454         10,103 
Average production                                                          
  Natural gas (Mcf per day)                           19,344         58,987 
  Crude oil (bbls per day)                               714          1,243 
  Natural gas liquids (bbls per day)                     313            776 
  Sulphur (tonnes per day) (3)                            42             30 
  Total (BOE per day)                                  4,293         11,880 
Proved and probable reserves                                                
  Natural gas (Bcf)                                    117.1          110.0 
  Crude oil (Mbbls)                                      160          2,153 
  Natural gas liquids (Mbbls)                          4,532          4,790 
  BOE (MBOE)                                          24,212         25,269 
Netback per BOE ($ per BOE)                                                 
  Petroleum and natural gas sales  (4)                 35.07          25.43 
  Royalties                                            (4.89)         (2.16)
  Operating expenses                                  (11.11)         (7.69)
  Transportation                                       (1.12)         (1.03)
  Operating netback                                    17.95          14.55 
Wells drilled (gross)                                      7             15 
Undeveloped land (net acres)                          96,868        132,056 
(1) The calculation of funds generated from operations for the year ended    
December 31, 2013 excludes $1.3 million (2012 - $8.1 million) of         
interest expense which is classified as finance expense.                
(2) Included in the loss for the year ended December 31, 2012 is an after    
tax impairment loss of $153.2 million.                                  
(3) A BOE conversion ratio has been calculated using a conversion rate of    
one tonne of sulphur to one barrel.                                     
(4) Excludes the change in fair value of derivatives.                        
2013 FINANCIAL AND OPERATING HIGHLIGHTS                                      
--  Santonia's reorganization continued in 2013 with the successful 
disposition of the Company's Clive property as well as other non-core 
property dispositions which generated proceeds of $17.2 million;  
--  Capital expenditures of $45.3 million were concentrated on the Harlech 
property, including drilling seven (5.7 net) natural gas wells and 
acquiring additional undeveloped acreage;  
--  Average 2013 production of 4,293 BOE per day (2012 - 11,880 BOE per day) 
reflected property dispositions completed over the past two years offset 
by incremental production from new wells on the Company's core Harlech 
--  Funds generated from operations for the year were $19.7 million ($0.19 
per share) before interest ($18.4 million after deducting $1.3 million 
of interest expense);  
--  Operating netbacks of $17.95 per BOE were 23% higher than the prior 
year, reflecting stronger natural gas prices;  
--  Net debt of $25.2 million was outstanding at December 31, 2013 (2012 - 
$17.0 million) on an available credit facility of $80 million.  
2013 FOURTH QUARTER HIGHLIGHTS                                               
--  Average fourth quarter production of 3,948 BOE per day, (17% Oil and 
--  Operating costs of $9.51 per BOE were 14% lower than the preceding third 
--  Funds generated from operations of $3.0 million,($2.8 million after 
deducting interest expense) resulting in an operating netback of $13.94 
per BOE;  
--  Net capital expenditures totaled $4.4 million which focused on the 
completion and tie in of two (1.3 net) wells on the Company's Harlech 
core property.  
2013 YEAR END RESERVES                                                       
--  Proved producing reserves at December 31, 2013 were 10.0 MMBOE; total 
proved reserves were 16.3 MMBOE and proved plus probable reserves 
totaled 24.2 MMBOE;  
--  Proved developed producing reserves represent 62% of proved reserves on 
a volume basis;  
--  Reserve additions for continuing properties were 2.5 MMBOE on a proved 
basis and 2.7 MMBOE on a proved plus probable basis;  
--  Santonia replaced 170% of production from continuing properties on a 
proved basis and 187% of production on a proved plus probable basis;  
--  On a continuing property basis, proved producing reserves decreased 
2.4%, while total proved reserves increased 6.7% and proven plus 
probable reserves increased 5.6%;  
--  Reserve life index of 7.0 years on a proved producing basis, 11.3 years 
on a total proved basis and 16.8 years on a proved plus probable basis 
(based on fourth quarter of 2013 average production of 3,948 BOE per 
The following tables summarize Santonia's year end 2013 reserves as
evaluated by GLJ Petroleum Consultants Ltd. ("GLJ") in accordance
with the definitions set out under National Instrument 51-101 Standards of
Disclosure for Oil and Gas Activities ("NI51-101"). 
Summary of Oil and Gas Reserves - Working Interest (1) Reserves (Forecast   
Crude      Natural      Natural          Oil 
Oil          Gas  Gas Liquids   Equivalent 
(Mbbls)       (MMcf)      (Mbbls)       (MBOE)
Proved reserves                                                             
  Developed producing             104       49,702        1,654       10,042
  Developed non-producing           3        1,299          100          319
  Undeveloped                       -       28,306        1,242        5,960
Total Proved                      107       79,307        2,996       16,321
  Probable                         54       37,812        1,535        7,891
Total Proved plus                                                           
 Probable                         160      117,119        4,532       24,212
NOTE: May not add due to rounding.                                          
(1) "Working interest" reserves means "gross" reserves or Santonia's working 
interest (operating and non-operating) share before deduction of         
royalties payable to others and without including any royalty interest   
of Santonia.                                                             
Net Present Value of Future Net Revenue, before income taxes (4) at December
31, 2013 (1)(2)(3)                                                           
Discounted at:         
(thousands)                    Undiscounted         5%        10%        15%
Proved reserves                                                             
  Developed producing           $   224,706  $ 165,020  $ 131,479  $ 110,077
  Developed non-producing             9,945      7,673      6,236      5,263
  Undeveloped                        92,264     47,026     23,258      9,384
Total Proved                    $   326,916  $ 219,718  $ 160,973  $ 124,723
  Probable                          183,327     96,134     57,672     37,489
Total Proved plus Probable      $   510,242  $ 315,853  $ 218,646  $ 162,212
Note: May not add due to rounding.                                          
(1) Based on forecast prices and costs utilizing the GLJ January 1, 2014     
price forecast.                                                         
(2) As required by NI 51-101, undiscounted well abandonment costs of $4.3    
million for total proved reserves and $5.5 million for total proved plus 
probable reserves are included in the Net Present Value determination.  
(3) Prior to provision of income taxes, interest, debt service charges and   
general and administrative expenses. Net present value of future net     
revenue does not represent the fair market value of the reserves.       
(4) Net present value after income taxes for total proved reserves is $160.9 
million and for total proved plus probable reserves is $209.8 million    
based on a discount factor of 10%.                                       
Additional information relating to the Company's year-end reserve
evaluation will be available in the Company's Annual Information Form for
the year ended December 31, 2013 which will be filed on SEDAR on or before
March 31, 2014. 
On March 4, 2014 the Company announced it entered into an arrangement agreement
("Arrangement Agreement") with Tourmaline Oil Corp
("Tourmaline") pursuant to which Tourmaline, has agreed to acquire
all the issued and outstanding common shares of Santonia on the basis of
0.03012 of a Tourmaline common share for each outstanding common share of
Santonia. The transaction is to be completed by way of a plan of arrangement
under the Business Corporations Act (Alberta). The Arrangement is subject to
customary conditions for a transaction of this nature, which include court and
regulatory approvals (including the TSX), the approval of 66 2/3% of the votes
cast by Santonia shareholders represented in person or by proxy at a meeting of
Santonia shareholders to be called to consider the Arrangement. An information
circular regarding the Arrangement is expected to be mailed to shareholders of
Santonia in late March 2014 for a special meeting of the holders of common
shares scheduled to take place in April 2014. Closing of the Arrangement is
expected to occur shortly thereafter. 
Santonia is a crude oil and natural gas exploration, development and production
company headquartered in Calgary, Alberta, Canada. Santonia's shares trade
on the Toronto Stock Exchange under the symbol "STE". 
Certain information set forth in this press release, contain forward-looking
statements including management's assessment of future plans and
operations, drilling plans, expected activity levels, timing of mailing of the
information circular, shareholder meetings and closing of the proposed
transaction, and timing of filing of the Annual Information Form. By their
nature, forward-looking statements are subject to numerous risks and
uncertainties, some of which are beyond Santonia's control, including the
impact of general economic conditions, industry conditions, volatility of
commodity prices, risks associated with oil and gas exploration, development,
exploitation, production, marketing and transportation, loss of markets, delays
resulting from or the inability to obtain required regulatory approvals,
inability to retain and delays in retaining drilling rigs and other services,
currency fluctuations, imprecision of reserve estimates, environmental risks,
competition from other industry participants, the lack of availability of
qualified personnel or management, stock market volatility, incorrect
assessment of the value of acquisitions, failure to realize the anticipated
benefits of acquisitions and ability to access sufficient capital from internal
and external sources. The foregoing list is not exhaustive. Additional
information on these and other risks that could affect Santonia's
operations and financial results are included in reports on file with Canadian
securities regulatory authorities and may be accessed through the SEDAR website
(, or at Santonia's website (
Readers are cautioned that the assumptions used in the preparation of such
information, although considered reasonable at the time of preparation, may
prove to be imprecise and, as such, undue reliance should not be placed on
forward-looking statements. The actual results, performance or achievement of
Santonia could differ materially from those expressed in, or implied by, these
forward-looking statements and, accordingly, no assurance can be given that any
of the events anticipated by the forward-looking statements will transpire or
occur, or if any of them do so, what benefits that Santonia will derive
therefrom. Santonia disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by applicable securities laws. 
Natural gas volumes are converted to barrels of oil equivalent (BOE) on the
basis of 6,000 cubic feet (Mcf) of gas for 1 barrel (Bbl) of oil. The term
"barrels of oil equivalent" may be misleading, particularly if used
in isolation. A BOE conversion ratio of 6 Mcf to 1 Bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead. Given that the value ratio
based on the current price of crude oil as compared to natural gas is
significantly different from the energy equivalency of 6:1; utilizing a
conversion on a 6:1 basis may be misleading as an indication of value. 
This document contains funds generated from operations which is an additional
GAAP measure presented in the consolidated financial statements. The Company
uses funds generated from operations as a key measure to demonstrate the
Company's ability to generate funds to repay debt and fund future capital
investment. This document contains the terms "funds generated from
operations per share", "cash flow from operations per share",
"net debt" and "netbacks" which are non-GAAP financial
measures. The Company uses these measures to help evaluate its performance.
These non-GAAP financial measures do not have any standardized meaning
prescribed by GAAP and are therefore unlikely to be comparable to similar
measures presented by other issuers. The Company uses net debt (bank
indebtedness plus negative working capital or less positive working capital,
excluding convertible debentures) as an alternative measure of outstanding
debt. The Company considers corporate netbacks a key measure as it demonstrates
its profitability relative to current commodity prices. Netbacks which have no
GAAP equivalent are calculated on a BOE basis by deducting royalties, operating
costs, and transportation from petroleum and natural gas sales. Santonia also
presents funds generated from operations per share and cash flow from
operations per share and such per share amounts are calculated using weighted
average shares outstanding consistent with the calculation of profit (loss) per
Santonia Energy Ltd.
Steven R. VanSickle
President and Chief Executive Officer
(403) 290-7759
(403) 290-7724
Santonia Energy Ltd.
Aaron G. Grandberg
Chief Financial Officer
(403) 290-3217
(403) 290-7724 
INDUSTRY:  Energy and Utilities - Oil and Gas  
-0- Mar/12/2014 12:00 GMT
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