PetroMagdalena Announces Filing of Third Quarter 2011 Results

    




 TORONTO, Nov. 29, 2011 /CNW/ - PetroMagdalena Energy Corp.   has filed today its interim condensed consolidated financial statements  for the three and nine months ended September 30, 2011, together with  its Management's Discussion and Analysis ("MD&A") for the corresponding  period. These documents will be posted on the Company's website at www.petromagdalena.com and at www.sedar.com. 

 Luciano Biondi, the Company's Chief Executive Officer, stated: "we are  very encouraged by the continuing operational and financial  improvements evidenced in our third quarter results. As we carry our  exploration and development program into the fourth quarter, we are  setting the stage to exit 2011 on a significantly more solid foundation  upon which we can continue to build our production and reserve growth  in 2012. Our preliminary investment programs for 2012 stay the course  we have established this past year, leveraging our successes in our  core oil assets and creating value in our other properties through our  strategic partnerships." 

 Financial and Operating Summary 

 A summary of the financial and operating results for the three and nine  months ended September 30, 2011 is as follows: 





    (000s, except per         Three months ended         Nine months ended
    share and                     September  30,             September 30,
    operational data)

                                2011        2010         2011         2010

                                                                          

    Financial                                                             

    Revenue from oil      $   21,258   $  13,124   $   58,449   $   34,315
    and gas sales

    Gross margin (3)           4,569         306       13,227        2,040

    Net loss                (14,030)     (7,153)     (37,044)     (12,960)

    Basic and diluted         (0.10)      (0.07)       (0.27)       (0.12)
    loss per share

    Total assets at          368,450     370,736      368,450      370,736
    period end

    Total debt at             41,634      32,349       41,634       32,349
    period end

                                                                          

    Operational                                                           

    Average daily              2,708       2,561        2,469        2,378
    production (boed)
    (1)

    Total sales (boe)        235,078     211,895      692,516      602,373
    (2)  

    Operating netback          55.11       41.29        53.62         39.49
    ($/boe) (3)










            (1)      Company share, gross before deduction of royalties.

            (2)      Company share, net after deduction of royalties.

            (3)      See Additional Financial Measuresin the MD&A.






 Third Quarter Highlights 




        --  Reserves: Three new discoveries in the third quarter of 2011
            were the key driver behind a 5.0 MMbbls, or 86%, increase in 2P
            oil reserves at Cubiro as per the September 30, 2011 Petrotech
            report compared with December 31, 2010 report.
        --  Production: The Company remains on track to meet its production
            guidance for 2011. Fuelled by the discoveries at Cubiro, the
            Company's gross share of production for the month of September
            averaged 3,248 barrels oil-equivalent per day ("boed"), up 37%
            from the December 2010 monthly average rate of 2,374 boed.
        --  Revenues: The shift in Cubiro's deliveries to Guaduas to take
            advantage of Vasconia pricing for light-medium oil combined
            with production growth increased revenues in the third quarter
            to $21.3 million, or 62% higher than the same period a year
            ago. 
        --  Operating netback: The Company reported its third consecutive
            quarter of improving its operating netback, which averaged
            $55.11 per boe in the third quarter of 2011.
        --  G&A expenses: The cost savings initiatives implemented in the
            first quarter of 2011 have resulted in two consecutive quarters
            of reduced G&A expenses. Combined with the Company's production
            growth, G&A per boe decreased by 42% to approximately $13 per
            boe sold in the third quarter of 2011 compared with the same
            period a year ago.
        --  Liquidity: The Company has taken steps to strengthen its
            balance sheet in 2011. Cash at September 30, 2011 stood at
            $12.3 million and the working capital deficit has been reduced
            by $44 million since December 31, 2010.
        --  Value creation: The Company continues to take action to develop
            its portfolio and to reduce its risk through joint venture
            relationships. During the third quarter the Company announced a
            strategic partnership with YPF S.A. to farm-out a portion of
            its interests in Carbonera and Catguas and to explore further
            business opportunities with respect to several of its other
            properties. Subsequent to September 30, 2011, the Company also
            announced a farm-out arrangement with respect to its Santa Cruz
            exploration property and a farm-in to give the Company a
            control position in the Arrendajo exploration property. All of
            these farm-out/ farm-in arrangements are subject to ANH
            approval.




 The net loss for the third quarter of 2011 includes a $15.2 million  non-cash write-off under successful efforts accounting of costs  associated with the Paramito-1 exploration well drilled at the  Carbonera block in 2009. After completing its evaluation of test  results to-date, the Company has decided not to proceed with this well. 

 Management will hold a conference call on Wednesday, November 30, 2011  at 9:00 a.m. (Eastern Time) to discuss the third quarter results.  Analysts and interested investors are invited to participate as  follows: 





              Toronto & International:          [phone]

              North America:                    [phone]

              Conference ID:                    32146371

                                                              






 A playback of this conference call will be available by dialling  416-849-0833 or 1-855-859-2056 (toll free) with the above conference ID  number until December 14, 2011. 

 PetroMagdalena is a Canadian-based oil and gas exploration and  production company, with working interests in 19 properties in five basins in Colombia. Further information can be  obtained by visiting our website at www.petromagdalena.com. 

 All monetary amounts in U.S. dollars unless otherwise stated. This news  release contains certain "forward-looking statements" and  "forward-looking information" under applicable Canadian securities laws  concerning the business, operations and financial performance and  condition of PetroMagdalena. Forward-looking statements and  forward-looking information include, but are not limited to, statements  with respect to estimated production and reserve life of the various  oil and gas projects of PetroMagdalena; the estimation of oil and gas  reserves; the realization of oil and gas reserve estimates; the timing  and amount of estimated future production; costs of production; success  of exploration activities; and currency exchange rate fluctuations.  Except for statements of historical fact relating to the company,  certain information contained herein constitutes forward-looking  statements. Forward-looking statements are frequently characterized by  words such as "plan," "expect," "project," "intend," "believe,"  "anticipate", "estimate" and other similar words, or statements that  certain events or conditions ��may" or "will" occur. Forward-looking  statements are based on the opinions and estimates of management at the  date the statements are made, and are based on a number of assumptions  and subject to a variety of risks and uncertainties and other factors  that could cause actual events or results to differ materially from  those projected in the forward-looking statements. Many of these  assumptions are based on factors and events that are not within the  control of PetroMagdalena and there is no assurance they will prove to  be correct. Factors that could cause actual results to vary materially  from results anticipated by such forward-looking statements include  changes in market conditions, risks relating to international  operations, fluctuating oil and gas prices and currency exchange rates,  changes in project parameters, the possibility of project cost overruns  or unanticipated costs and expenses, labour disputes and other risks of  the oil and gas industry, failure of plant, equipment or processes to  operate as anticipated. Although PetroMagdalena has attempted to  identify important factors that could cause actual actions, events or  results to differ materially from those described in forward-looking  statements, there may be other factors that cause actions, events or  results not to be anticipated, estimated or intended. There can be no  assurance that forward-looking statements will prove to be accurate, as  actual results and future events could differ materially from those  anticipated in such statements. PetroMagdalena undertakes no obligation  to update forward-looking statements if circumstances or management's  estimates or opinions should change except as required by applicable  securities laws. The reader is cautioned not to place undue reliance on  forward-looking statements.  

 Statements concerning oil and gas reserve estimates may also be deemed  to constitute forward-looking statements to the extent they involve  estimates of the oil and gas that will be encountered if the property  is developed. Boe may be misleading, particularly if used in isolation.  A boe conversion ratio of 6 mcf: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. Estimated values of  future net revenue disclosed do not represent fair market value. 

 Neither TSX Venture Exchange nor its Regulation Services Provider (as  that term is defined in the policies of the TSX Venture Exchange)  accepts responsibility for the adequacy or accuracy of this news  release. 

   

   

PetroMagdalena Energy Corp.


CONTACT:  Michael DaviesChief Financial Officer(416) 360-7915Miranda SmithInvestor Relations Representative(647) 428-7422 


    

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