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, its  first 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 SEDAR profile at www.sedar.com.  Operational Highlights:            --  Commenced production in September and exited the year with             gross production of 10,000 barrels of oil per day ("bopd");         --  Commenced exploration drilling with first two successful wells:       o Mangara-5 a discovery in the lower Cretaceous E sands tested at up         to 1,917 bopd1 and       o Krim, a discovery in Cretaceous C, D and E sands tested at up to         1,470 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 million for a 25% working interest             in the Badila and Mangara EXAs;         --  Commenced trading  on the premium list of the London Stock             Exchange on July 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;       o targeting gross average production in 2014 of 22,000 to 26,000 bopd         --  Revenue generation commenced on March 23, with Caracal's first             lifting of approximately 560,000 barrels of oil, net to the             Company. Pricing for the crude was in line with the Company's             competent person's report assumptions of Brent minus a             differential of five per cent;         --  Badila-7 drilled and tested in March, and flowed naturally at a             rate of 4,500 barrels of oil per day3. The well is expected to             be tied-in during April;         --  Badila-9 spudded on March 20, 2014;         --  Mangara-4 has been successfully side-tracked and cased as a             Cretaceous E sands producer;         --  Mangara-6 has been completed and testing of the Cretaceous E             sands is underway. The comprehensive completion program will             also include tests of the Cretaceous D and C sands;         --  The first of the four new drilling rigs contracted in 2014 has             arrived at the port in Cameroon, on schedule, and should be on             site in Q2;         --  The Company remains on track to mobilize six drilling and three             completion rigs by the end of 2014 to support the active             exploration, appraisal and development drilling program;         --  2014 exploration programs in the Doba and Doseo basins have             commenced to  test one billion barrels of unrisked mean             Prospective Resources with the first 8 to 10 wells in the             program;         --  Finally, furthering its long term strategy, on March 15, 2014             Caracal entered into an arrangement agreement to merge with             TransGlobe Energy Corporation (TSX:TGL)(NASDAQ:TGA)             ("TransGlobe") by way of an exchange of shares pursuant to a             plan of arrangement under the Business Corporations Act             (Alberta) (the "Arrangement").  The Arrangement would create             one of the largest independent Africa focused oil producers,             which together will be poised for strong growth in oil             production and reserves from development and exploration in             Chad and Egypt.  Gary Guidry, Chief Executive of Caracal, said:  "2013 was a very significant year for Caracal.  We commenced production,  closed a major farm-in agreement with Glencore and listed on the London Stock  Exchange.  All of which enabled us to maintain our operational development  with the drilling of development and exploration wells.  "Since the year end, we have become revenue generating with the first lifting  earlier this month.  Production is increasing inline with our expectations and  we 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  wells will test one billion barrels of unrisked mean Prospective Resources.  "Earlier this month we announced the agreement to merge with TransGlobe to  create one of the largest independent Africa focused oil producers with  focused operations in Chad and Egypt.  Post-merger, we will continue to be  entirely focused on onshore, conventional oil production, development and  exploration. The combination will provide shareholders with significant  organic production and 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          27,159           -        27,159             -     Inventory                            27,239           -        27,239             -     Expenses                                                                  Operating               4,249           -         4,249             -     expenses     Transportation          2,527           -         2,527             -     expenses     Depreciation and        4,508         328         5,823         1,082     depletion     Salaries and            8,175       4,072        21,108        13,122     benefits     Share-based             3,589       2,076        11,044         8,564     compensation     General and             3,949       5,523        27,996        30,493     administrative     Travel                  2,590       3,167         8,586         7,821     Finance expense         7,290       7,246        28,872         8,083     Foreign exchange        (140)         474         1,573           228     loss (gain)                            36,737      22,886       111,778        69,393     Net loss before         9,498           -        84,539        69,393     tax     Deferred tax            (329)     (5,381)         (329)       (5,381)     reduction     Net and                 9,169      17,505        84,210        64,012     comprehensive     loss  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  was 264,575 barrels. All production for the period to December 31, 2013 was  directed 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  line fill 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 fill inventory if required to meet the standard cargo size and replace  the draw during the next production inventory build period. Hence, the  Company's net entitlement share of production for the period ended December  31, 2013 has been recognised as crude oil inventory and valued at the  estimated net realisable value. 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's crude oil, the price formula uses a dated Brent average  and certain adjustments, including a discount or premium to Brent for the  difference in crude oil quality. In computing the estimated net realisable  value the forward March 2014 Brent price as at December 31, 2013 has been used  and reduced for estimated adjustments under the JMA price formula. The  estimated net realizable value as at December 31, 2013 has been adjusted for  the transit fees that will be due and paid once the volumes are loaded on a  tanker.  The estimated net realisable value of crude oil for the period has been  recorded in the statement of operations as an increase in the value of crude  oil inventory and the value of the inventory is shown in the current assets  within the Company's statement of financial position. The following table  depicts the Company's crude oil inventory position as at December 31, 2013:                                          Volumes       Net Realizable Value                                           (BBLS)                   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        264,575                     27,159     at December 31, 2013                                                                                 Inland Transportation Pipeline          2013                       2012     Tariff revenue                            80                          -                                                                              During the year ended December 31, 2013, the Company also earned revenue  related to the tariff charged for the use of the Company's inland  transportation pipeline operated by, its subsidiary PetroChad Transportation  Company.  Oil inventory comprises production volumes accumulated in pipeline and storage  facilities that have not yet been offloaded and transported to market. The  first off load of oil production occurred on March 21, 2014 which resulted in  the 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 of  production 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 the  264,575 barrels of oil produced in 2013 and held as oil inventory. The unit  costs are expected to decrease as production increases. Production commenced  in late 2013 and as such there was no operating or transportation expense  recorded in 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. The  increase is the result of the recognition of depletion in the net book value  of the 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 two  drilling rigs, one service rig, constructing a variety of facilities and  infrastructure, and operating production facilities. With the a high level of  activity throughout 2013 and beyond, the Company undertook the required  recruiting campaign to attract and retain needed professionals, scaling its  headcount from approximately 113 employees at the end of December 31, 2012 to  approximately 287 employees at the end of December 31, 2013.  Share-based compensation - Increased for the three and twelve months ended  December 31, 2013 by $1.5 million and $2.5 million respectively. The increase  relates to stock options granted to employees as well as the establishment of  the Long Term Incentive Plan for officers and other key executives of the  Company aimed at retaining, attracting and motivating key executives  responsible for executing the Company's long term business strategy.  General and administrative costs - General and administrative costs decreased  by $1.6 million for the three months ended December 31, 2013 and $2.5 million  for 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 fines  for an issue that was resolved in the first quarter of 2013. During the third  quarter of 2013, Caracal paid $9.8 million in listing fees relating to legal,  financial and accounting advisory services in conjunction with listing the  common shares of Caracal on the London Stock Exchange. As Caracal did not  raise any capital, at that time all fees were expensed.  Travel - The increase in travel during year ended December 31, 2013 is  primarily due to increased personnel traveling to Chad supervising and  executing capital and operating programs. The Company's share of travel for  the three months ended December 31, 2013 compared to the three months ended  December 31, 2012 has decreased due to the change in the carrying interest of  the 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 September  30, 2017, and can be called in September 2015 at par. The interest rate was  subject to increases unless a qualifying public offering occurred. The  qualifying public offering occurred in 2013 and the interest rate is fixed at  12.5% until maturity. In December 30, 2013, upon completion of the qualifying  public offering, $28.7 million of accrued and unpaid interest was paid out in  cash and shares.  Outlook  With production from Badila coming on-stream during the fourth quarter of 2013  and Mangara production targeted for the third quarter of 2014, Caracal's  financial strategy for 2014 will focus its cash flow from operating activities  to fund the Company's 8-10 high-impact exploration drilling prospects.  About Caracal Energy Inc.  Caracal Energy Inc. is an international exploration and development company  focused on oil and gas exploration, development and production activities in  the Republic of Chad, Africa. In 2011, the Company entered into three  production sharing contracts ("PSCs") with the government of the Republic of  Chad. These PSCs provide exclusive rights, along with its partners, to explore  and develop reserves and resources over a combined area of 26,103 km2 in  southern 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|Flowing|Choke| Total  | Gas-Oil |Gravity|Productivity|     | (mKB)  |  Oil  |  WHP  |Size |  Flow  |  Ratio  | (Deg  |   Index    |     |        | Rate  |(psig) |(in.)|Duration|(scf/stb)| API)  | (bopd/psi) |     |        |(bopd) |       |     |  (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 |Flowing|Choke|Total Flow| Gas-Oil | Gravity |     |     (mKB)   |  Oil   |  WHP  |Size |Duration  |  Ratio  |(Deg API)|     |             |  Rate  |(psig) |(in.)|   (hr)   |(scf/stb)|         |     |             | (bopd) |       |     |          |         |         |     |_____________|________|_______|_____|__________|_________|_________|     |     C       | 1,470* |   140 |96/64|      38  |    519  |     36  |     |(2,012-2,166)|        |       |     |          |         |         |     |_____________|________|_______|_____|__________|_________|_________|     |     D       |  702** |   120 | 1/2 |      38  |      -  |     35  |     |(2,219-2,520)|        |       |     |          |         |         |     |_____________|________|_______|_____|__________|_________|_________|     |   E (2,582  |2,580***|   120 |64/64|      29  |    100  | 34 - 37 |     |    -2,630)  |        |       |     |          |         |         |     |_____________|________|_______|_____|__________|_________|_________|     *   - 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) |         |  (Deg |          |     |     |        |      |       |     |        |(scf/bbl)|  API) |(bopd/psi)|     |_____|________|______|_______|_____|________|_________|_______|__________|     | D2, |1758.0 -| 4986 |   580 |56/64|   20.0 |         |       |          |     | D3, | 1932.0 |      |       |     |        |         |       |          |     | D4, |        |      |       |     |        |         |       |          |     | D5, |        |      |       |     |        |         |       |          |     | D6, |        |      |       |     |        |         |       |          |     | D8, |        |      |       |     |        |         |       |          |     | D9  |        |      |       |     |        |  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. Information  relating to reserves and resources is deemed to be forward-looking  information, as it involves the implied assessment, based on certain estimates  and assumptions, that the reserves and resources described exist in the  quantities predicted or estimated, and can be profitably produced in the  future. The Company cautions readers not to place undue reliance on  forward-looking information which by its nature is based on current  expectations regarding future events that involve a number of assumptions,  inherent risks and uncertainties, which could cause actual results to differ  materially from those anticipated by the Company. In addition, any  forward-looking information is made as of the date hereof, and each of the  Company and its affiliates expressly disclaim any obligation or undertaking to  update, review or revise such forward-looking information contained in this  announcement to reflect any change in its expectations or any change in  events, conditions or circumstances on which such information is based unless  required to do so by applicable law.  Forward-looking information is not based on historical facts but rather on  current expectations and assumptions regarding, among other things, the timing  and scope of certain of the Company's operations and the timing and level of  production from the Company's properties, plans for and results of drilling  activity and testing programs, future capital and other expenditures  (including the amount, nature and sources of funding thereof), continued  political stability, and timely receipt of any necessary government or  regulatory approvals. Although the Company believes the expectations and  assumptions reflected in such forward-looking information are reasonable, they  may prove to be incorrect. Forward-looking information involves significant  known and unknown risks and uncertainties. A number of factors could cause  actual results to differ materially from those anticipated by the Company  including, but not limited to, risks associated with the oil and gas industry  (e.g. operational risks in exploration and production; inherent uncertainties  in interpreting geological data; changes in plans with respect to exploration  or capital expenditures; interruptions in operations together with any  associated insurance proceedings; reductions in production capacity, the  uncertainty of estimates and projections in relation to costs and expenses and  health, safety and environmental risks), the risk of commodity price and  foreign exchange rate fluctuations, the uncertainty associated with  negotiating with foreign governments, risk associated with international  activity, including the risk of political instability, the risk of adverse  economic market conditions, the actual results of marketing activities and the  risk of regulatory changes. Forward-looking information cannot be relied upon  as a guide to future performance. Well-test results are not necessarily  indicative of long-term performance or ultimate recovery. Financial outlook  information contained in this report about the Company's prospective cash  flows and financial position is based on assumptions about future events,  including economic conditions and proposed courses of action, based on  management's assessment of the relevant information currently available.  Readers are cautioned that any such financial outlook information contained  herein should not be used for purposes other than for which it is disclosed  herein. The Company does not assume responsibility for the accuracy and  completeness of the forward-looking information or statements and such  information and statements should not be taken as guarantees of future  outcomes. Subject to applicable securities laws, the Company does not  undertake any obligation to revise this forward-looking information or these  forward-looking statements to reflect subsequent events or circumstances. This  cautionary statement expressly qualifies the forward-looking information and  statements contained in this press release.  Terms related to reserves and resources classifications referred to in this  announcement are based on definitions and guidelines in the Canadian Oil and  Gas Evaluation Handbook which are as follows.  "Proved reserves" are those reserves that can be estimated with a high degree  of certainty to be recoverable. It is likely that the actual remaining  quantities recovered will exceed the estimated proved reserves.  "Probable reserves" are those additional reserves that are less certain to be  recovered than proved reserves. It is equally likely that the actual remaining  quantities recovered will be greater or less than the sum of the estimated  proved plus probable reserves.  The qualitative certainty levels referred to in the definitions above are  applicable to individual reserves entities (which refers to the lowest level  at which reserves calculations are performed) and to reported reserves (which  refers to the highest-level sum of individual entity estimates for which  reserves estimates are presented). Reported reserves should target the  following levels of certainty under a specific set of economic conditions:         --  at least a 90 percent probability that the quantities actually             recovered will equal or exceed the estimated proved reserves.             This category of reserves can also be denoted as 1P;         --  at least a 50 percent probability that the quantities actually             recovered will equal or exceed the sum of the estimated proved             plus probable reserves. This category of reserves can also be             denoted as 2P; and         --  at least a 10 percent probability that the quantities actually             recovered will equal or exceed the sum of the estimated proved             plus probable plus possible reserves. This category of reserves             can also be denoted as 3P.  Additional clarification of certainty levels associated with reserves  estimates and the effect of aggregation is provided in the COGE Handbook. The  estimates of reserves and future net revenue for individual properties may not  reflect the same confidence level as estimates of reserves and future net  revenue for all properties, due to the effects of aggregation.  "Prospective resources" are those quantities of petroleum estimated, as of a  given date, to be potentially recoverable from undiscovered accumulations by  application of future development projects. Prospective resources have both an  associated chance of discovery (geological chance of success or "COS") and a  chance of development (economic, regulatory, market, facility, corporate  commitment or political risks). The chance of commerciality is the product of  these two risk components. The prospective resource estimates referred to  herein have not been risked for either the chance of discovery or the chance  of development.  There is no certainty that any portion of the prospective resources will be  discovered. If a discovery is made, there is no certainty that it will be  developed or, if it is developed, there is no certainty as to the timing of  such development or that it will be commercially viable to produce any portion  of the prospective resources.  Figures related to the Company's reserves and resources are derived from the  December 31, 2013 McDaniel Report and the June 30, 2013 McDaniel Report.  A description of the uncertainties and significant positive and negative  factors associated with the estimates of reserves and resources in respect of  the December 31, 2013 McDaniel Report is contained in the Company's Annual  Information Form dated March 31, 2014 and a description of the uncertainties  and significant positive and negative factors associated with the estimates of  resources in respect of the June 30, 2013 McDaniel Report is contained in the  Company's July 25, 2013 material change report.  Copies of these documents are  available on the internet under the Company's profile at www.sedar.com.  Information relating to reserves and resources is deemed to be forward-looking  information, as it involves the implied assessment, based on certain estimates  and assumptions, that the reserves and resources described exist in the  quantities predicted or estimated, and can be profitably produced in the  future. Well-test results are not necessarily indicative of long-term  performance or ultimate recovery.    SOURCE  Caracal Energy Inc.  Caracal Energy Inc. Gary Guidry, President and Chief Executive Officer Trevor  Peters, Chief Financial Officer +1 403-724-7200  Longview Communications - Canadian Media Enquiries Alan Bayless +1  604-694-6035 Joel Shaffer +1 416-649-8006  FTI Consulting - UK Media Enquiries  Ben Brewerton / Ed Westropp + 44 (0) 207 8313 3113  caracalenergy.sc@fticonsulting.com   To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/March2014/31/c7843.html  CO: Caracal Energy Inc. ST: Alberta NI: OIL ERN