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Dejour Energy Reports Q3 2012 Revenue Of $1.55 Million

Dejour Energy Inc. (NYSE MKT: DEJ / TSX: DEJ), an independent oil and natural gas exploration and production company operating in North America's Piceance Basin and Peace River Arch regions, today announced the release of its financial results for the third quarter period ended September 30, 2012.

Co-Chairman and CEO Robert Hodgkinson states, “Although production and resulting netbacks per BOE were impaired by an unanticipated 38% downtime at the Company’s key production well (A-1-I) at Woodrush BC during the quarter, we are pleased that:

  1. Dejour was on schedule to drill and case the lease earning well at our flagship 'liquids-rich' Kokopelli project and expect to mobilize completion and tie-in activities in the next few weeks.
  2. Dejour’s discovery well at our 77% owned 6000 acre South Rangely project is currently being prepared for tie-in to production facilities. Both of these events are milestones in the Company’s history, providing the first U.S. based production for Dejour.
  3. The production issues encountered at the Company’s Woodrush facility appear to have been substantially rectified and the injection rate of the waterflood has now resumed to amounts accretive to the stronger pre-defined production profile anticipated by the Company’s production team. The three Woodrush oil pool wells have now been operating at 98% time efficiency, to date in October.

Q3-2012 was a difficult quarter for the Company, where, in the U.S., NGL prices weakened, while natural prices rose off the lows experienced early in Q2 on Nymex, (but not in the Canadian market), adding encouragement to finalizing prudent project financing for the Company’s key projects. Additionally, higher product prices are now being encountered in Canada to date in Q4 as transportation bottlenecks seem to be diminishing.”

Q3 2012 Highlights

During the quarter, the Company achieved the following major objectives and also made significant progress on key strategic initiatives that resulted in:

  1. In September 2012, the Company added about 31,000 net acres to its current landholdings in northwestern Colorado through a restructuring of its US exploration joint venture.
  2. In September 2012, the Company successfully drilled the initial well in the Kokopelli Field. The well has been has been cased to total depth in preparation for completion operations, including perforating, fracturing and production tie-in are expected to be completed during the fourth quarter of 2012.

Near-Term Corporate Objectives

  • Continue to pressurize the waterflood to maximize oil production at the Woodrush Project;
  • Finalize the appropriate financing and development plan for Kokopelli;
  • Pursue oil and NGL commercialization opportunities at the Company’s South Rangely leasehold where the Company’s average WI is now 77%;
  • Arrange for the procurement of a 32,000 acre 3D survey over the Company’s 100% owned North Rangely prospect to isolate its deep objective prospectivity;
  • Analyze and pursue other high impact exploration opportunities.

Summary of Selected Financial Highlights

  Three months ended September 30,   Nine months ended September 30,
  2012   2011 2012   2011
$ $ $ $
Gross Revenues 1,552,000 2,947,000 5,251,000 6,347,000
Operating Cash Flow (1) (751,000) 682,000 (1,714,000) (71,000)
Operating Loss (1) (1,372,000) (48,000) (4,088,000) (2,042,000)
EBITDA (1) (701,000) 1,341,000 85,000 627,000
Adjusted EBITDA (1) (691,000) 948,000 (1,329,000) 712,000
Net Loss (1,365,000) (346,000) (2,299,000) (2,614,000)
Net loss per share (0.009) (0.003) (0.017) (0.022)

(1) A non-GAAP measure, which is defined in the “Non-GAAP Measures” section of this news release.

Summary of Selected Operational Highlights

DEAL Production and Netback Summary
  Three months ended September 30,   Nine months ended September 30,
  2012   2011 2012   2011
Production Volumes:
Oil and natural gas liquids (bbls/d) 181 327 200 217
Natural gas (mcf) 993 1,120 1,136 1,119
Total (BOE/d) 346 514 389 403
 
Average Price Received:
Oil and natural gas liquids ($/bbls) 79.66 85.37 82.35 87.47
Natural gas ($/mcf) 2.49 3.66 2.37 3.82
Total ($/BOE) 48.73 62.34 49.22 57.62

 

Royalties ($/BOE) 7.35 12.98 8.02 10.88
 
Operating and Transportation Expenses ($/BOE) 37.93 14.04 28.12 14.76
         
Netbacks ($/BOE) 3.45 35.31 13.08 31.97

Revenue

For the three months ended September 30, 2012 (“Q3 2012”), the Company recorded $1,552,000 in oil and natural gas sales as compared to $2,947,000 in oil and natural gas sales for the three months ended September 30, 2011 (“Q3 2011”). The decrease in gross revenues was due to lower realized oil and gas prices and lower production in the current quarter.

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