Invicta Energy Corp. Announces Financial and Operating Results for the Second Quarter of 2012

    




 CALGARY, Aug. 23, 2012 /CNW/ - Invicta Energy Corp. ("Invicta" or the "Company")  is pleased to report its  financial and operating results for the three and six months ended June  30, 2012. Invicta's interim condensed financial statements and related  management's discussion and analysis for three months and six months  ended June 30, 2012 have been filed and are available on the SEDAR  website at www.sedar.com and may also be obtained on Invicta's website at www.invictaenergy.ca. 

 HIGHLIGHTS  




        --  Drilled 6.0 gross (3.3 net) horizontal oil wells at Kindersley,
            Saskatchewan. Two wells were brought on production by the end
            of the quarter and the other four wells were producing by the
            third week of July, 2012.
        --  Production results from the six well drilling program at
            Kindersley have once again exceeded the Company's expected
            Viking type curves.
        --  133% increase in net light oil production year to date from 150
            bbl/d, (the initial rate of 2012) to 350 bbl/d (current field
            estimate).  Oil production is 85% of total corporate production
            and 96% of corporate revenue.
        --  Achieved operating costs for the quarter of $8.76/boe (11%
            decrease from Q1 2012 and 64% decrease from Q2 2011).
        --  Operating netback continues to be top quartile at $57.75/boe
            and $56.08/boe for three months and six months ended June 30,
            2012 respectively.
        --  Achieved funds flow from operations of $972,138 ($0.01/share)
            and earnings of $159,353 ($0.00/share) for the quarter.
        --  Credit facility raised $3 million to $13 million August 15,
            2012 based on the recent successful drilling program.
        --  Prepared for drilling a further 8 gross (4.4 net) horizontal
            wells at Kindersley during the remaining six months of 2012.




  





    HIGHLIGHTS

     

                            Three months ended           Six months ended

                                     June 30                    June 30

                                2012         2011          2012        2011

                                  (unaudited)                (unaudited)

    Operations                                                             

    Drilling                                                               

      Oil wells (net)        6.0(3.3)    4.0(2.2)     11.0(6.0)    5.0(2.8)

                                                                           

    Undeveloped land
    holdings (net             48,260       29,870        48,260      29,870
    acres) 

                                                                           

    Average daily                                                          
    production

      Crude oil (bbls/d)          217          46           219          48

      Natural gas                 331         264           391         311
      (mcf/d)

      Total equivalent            272          90           285         100
      (boe/d)

                                                                           

    Average product                                                        
    prices

      Crude oil (Cdn     $      81.52 $     94.85   $     84.37 $     90.70
      $/bbl)

      Natural gas (Cdn   $       1.73 $      3.74   $      1.86 $      3.71
      $/mcf)

      Total equivalent   $      67.13 $     59.54   $     67.63 $     55.11
      (Cdn $/boe)

                                                                           

      Royalties (Cdn     $       0.62 $      8.27   $      2.21 $      7.44
      $/boe)

      Production and
      operating costs    $       8.76 $     24.54   $      9.34 $     17.31
      (Cdn $/boe)

      Operating netback  $      57.75 $     26.73   $     56.08 $     30.36
      (1) (Cdn $/boe)

                                                                           

    Financial                                                              

                                                                           

    Petroleum and        $  1,664,316 $   489,673   $ 3,487,099 $   995,850
    natural gas revenue 

    Funds flow from      $    972,138 $ (252,202)   $ 1,946,115 $ (528,324)
    operations(1) 

      Per share - basic  $       0.01 $    (0.01)   $      0.03 $    (0.01)
      and diluted 

    Earnings (loss)      $    159,353 $ (346,624)   $   339,703 $ (843,984)

      Per share - basic  $       0.00 $    (0.01)   $      0.00 $    (0.02)
      and diluted 

    Capital              $  2,734,731 $ 2,879,473   $ 5,817,685 $ 3,672,081
    expenditures 

    Net debt (working    $  6,974,403 $ (476,891)   $ 6,974,403 $ (476,891)
    capital)(1) 

    Shares outstanding         75,609      54,662        75,609      54,662
    (000)

    Weighted average
    shares Outstanding         75,604      47,756        75,542      41,736
    (000)






   





    (1)The term funds flow from operations should not be considered an
    alternative to, or more meaningful than, cash flow from operating
    activities as determined in accordance with IFRS as an indicator of the
    Company's performance. Funds flow from operating activities is a
    non-IFRS measure that represents cash provided by operating activities
    before changes in non-cash working capital.  Per share amounts are
    calculated using weighted average shares outstanding consistent with
    the calculation of loss per share. Other industry benchmarks and terms
    such as net debt and operating netback are not recognized measures
    under IFRS. Management believes these are useful supplemental measures
    of, firstly, the total amount of current and long-term debt the Company
    has, and secondly, the amount of revenues received after the royalties
    and operating costs. Net debt, which terms represent current assets
    less current liabilities is used to assess efficiency, liquidity and
    the general financial strength of the Company. Readers are cautioned,
    however, that these measures should not be construed as an alternative
    to other terms such as current debt or net earnings in accordance with
    IFRS as measures of performance. The Company's method of calculating
    these measures may differ from other companies, and accordingly, may
    not be comparable to measures used by other companies.






  

 OPERATIONS UPDATE 

 Kindersley, Saskatchewan 

 During the second quarter, the Company completed its six well drilling  program at a 100% success rate. This program was hampered by wet spring  conditions which delayed the timing and subsequent production startup  of these wells. However, the Company is pleased to report that the  initial production rates of the six wells have exceeded the forecasted  Viking type curves. Five of the six wells have 30 day production rates  ranging from 50-90 bbl/d. One well is still producing at 80 bbl/d after  70 days. All six wells are flowlined into existing Company  infrastructure which allows conservation of the solution gas. Current  net field production from the Kindersley property is 340 bbl/d and 350  mcf/d of solution gas. 

 Invicta acquired a section of petroleum and natural gas rights in the  second quarter. At quarter end the Company's drilling inventory is in  excess of 200 locations. The Company is preparing locations for the  upcoming drilling programs with an expectation of drilling another 8  gross (4.3 net) wells by year end. 

 Central Alberta 

 The Company completed a 21 sq km 3D program over one of its Central  Alberta properties. The 3D program is currently being interpreted for  horizontally drillable locations for light oil. Nine additional  sections of petroleum and natural gas rights, prospective for Viking &  Mannville light oil, were acquired subsequent to the second quarter.  The Company looks forward to initiating drilling activity on the  Alberta prospects in early 2013. 

 GUIDANCE 

 The Company has successfully completed two drilling programs at  Kindersley to date and looks forward to drilling the remaining 8 gross  (4.3 net) wells of the forecasted 20 gross (11 net) well program for  2012. The capital expenditures for year remain forecasted at $14  million. 

 We are very pleased with our financial results to date, especially our  top quartile net back of $56.08 year to date.  Invicta is on track to  achieving the previously forecasted $6.4 million funds flow  ($0.09/share) and annualized fourth quarter funds flow of $10 million  ($0.13/share).  Volatility in realized oil prices and delays in  bringing on the wells drilled in the second quarter, were offset by  lower operating costs and royalty rates.  The Company's exit oil  production remains at 535 bbl/d.  The exit production will be 625 -675  boe/d, approximately 7% lower than the previously forecasted 675 -725  boe/d as the Company has reduced the forecast for solution gas to  reflect curtailments at third party processing facilities.  It is  important to note that solution gas volumes have a large impact on the  BOE measure, but very little impact on financial results as oil  production accounts for 96% of oil and natural gas revenues. 

 OUTLOOK 

 Invicta is positioned for growth with top quartile operating netbacks  and a drilling inventory in excess of 200 development locations on its  low risk light oil resource play at Kindersley.  The Company continues  to work on a number of light oil prospects in Central Alberta and looks  forward to drilling and developing its next core area in 2013. 

 About the Company 

 Invicta is a Calgary based, emerging junior oil and gas company  exploring and developing light oil opportunities in Saskatchewan and  Alberta.  The Company's current focus is the development of its Viking  resource play in Kindersley, Saskatchewan. 

 Cautionary Statements: 

 This press release contains certain forward-looking statements  (forecasts) under applicable securities laws relating to future events  or future performance. Forward-looking statements are necessarily based  upon assumptions and judgements with respect to the future including,  but not limited to, the outlook for commodity markets and capital  markets, the performance of producing wells and reservoirs, well  development and operating performance, general economic and business  conditions, weather, the regulatory and legal environment and other  risks associated with oil and gas operations. In some cases,  forward-looking statements can be identified by terminology such as  "may", "will", "should", "expect", "projects", "plans", "anticipates"  and similar expressions. These statements represent management's  expectations or beliefs concerning, among other things, future  operating results and various components thereof affecting the economic  performance of Invicta. Undue reliance should not be placed on these  forward-looking statements which are based upon management's  assumptions and are subject to known and unknown risks and  uncertainties, including the business risks discussed above, which may  cause actual performance and financial results in future periods to  differ materially from any projections of future performance or results  expressed or implied by such forward-looking statements. Accordingly,  readers are cautioned that events or circumstances could cause results  to differ materially from those predicted. 

 In the interest of providing Invicta shareholders and potential  investors with information regarding the Company, including  management's assessment of Invicta's future plans and operation,  certain statements throughout this press release constitute forward  looking statements.  All forward-looking statements are based on the  Company's beliefs and assumptions based on information available at the  time the assumption was made.  The use of any of the words  "anticipate", "continue", "estimate", "expect", "may", "will",  "project", "should", "believe" and similar expressions are intended to  identify forward looking statements.  By its nature, such  forward-looking information involves known and unknown risks,  uncertainties and other factors that may cause actual results or events  to differ materially from those anticipated in such forward looking  statements.  Invicta believes the expectations reflected in those  forward looking statements are reasonable but no assurance can be given  that these expectations will prove to be correct and such forward  looking statements contained throughout this press release should not  be unduly relied upon.  These statements speak only as of the date  specified in the statements.   

 In particular, this press release may contain forward looking statements  pertaining to the following: 




        --  the performance characteristics of the Company's oil and
            natural gas properties;
        --  oil and natural gas production levels;
        --  capital expenditure programs;
        --  the quantity of the Company's oil and natural gas reserves and
            anticipated future cash flows from such reserves;
        --  projections of commodity prices and costs;
        --  supply and demand for oil and natural gas;
        --  expectations regarding the ability to raise capital and to
            continually add to reserves through acquisitions and
            development; and
        --  treatment under governmental regulatory regimes.




 The material assumptions in making these forward-looking statements  include certain assumptions disclosed in the Company's most recent  management's discussion and analysis included in the material available  on this press release. 

 The Company's actual results could differ materially from those  anticipated in the forward looking statements contained throughout this  press release as a result of the material risk factors set forth below,  and elsewhere in this press release: 




        --  volatility in market prices for oil and natural gas;
        --  liabilities inherent in oil and natural gas operations;
        --  uncertainties associated with estimating oil and natural gas
            reserves;
        --  competition for, among other things, capital, acquisitions of
            reserves, undeveloped lands and skilled personnel;
        --  incorrect assessments of the value of acquisitions and
            exploration and development programs;
        --  geological, technical, drilling and processing problems;
        --  fluctuations in foreign exchange or interest rates and stock
            market volatility;
        --  failure to realize the anticipated benefits of acquisitions;
        --  general business and market conditions; and
        --  changes in income tax laws or changes in tax laws and incentive
            programs relating to the oil and gas industry.




 These factors should not be construed as exhaustive.  Unless required by  law, Invicta does not undertake any obligation to publicly update or  revise any forward looking statements, whether as a result of new  information, future events or otherwise. 

 Barrels of oil equivalent (boe) may be misleading, particularly if used  in isolation. A boe conversion ratio of six thousand cubic feet (mcf)  of natural gas to one barrel (bbl) of oil is based on an energy  conversion method primarily applicable at the burner tip and is not  intended to represent a value equivalency at the wellhead. All boe  conversions in this press release are derived by converting natural gas  to oil in the ratio of six thousand cubic feet of natural gas to one  barrel of oil. Certain financial amounts are presented on a per boe  basis, such measurements may not be consistent with those used by other  companies. 

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

Invicta Energy Corp.


CONTACT:  Gordon Reese     President & [e-mail][phone] ext 1orCarrie McLauchlinVice President, Finance & [e-mail][phone] ext 4 


    

Copyright