Condor Announces 2016 First Quarter Results

CALGARY, AB—(Marketwired – May 12, 2016) – Condor Petroleum Inc. (“Condor” or the “Company”) (TSX: CPI) is pleased to announce the release of its Unaudited Interim Consolidated Financial Statements for the three months ended March 31, 2016, together with the related Management's Discussion and Analysis. These documents will be made available under Condor's profile on SEDAR at www.sedar.com and on the Condor website at www.condorpetroleum.com. All financial amounts in this news release are presented in Canadian dollars, unless otherwise stated.

Q1 2016 Highlights

  • On January 7, 2016 the Company entered into an agreement with Marsa Energy Inc. (“Marsa”) to acquire all of the issued and outstanding common shares of Marsa based on an exchange ratio of 1.84326 Condor common shares for each Marsa common share (the “Marsa Transaction”). On March 24, 2016 the Marsa Transaction was completed and Condor issued 8,653,013 post–consolidation common shares to the Marsa shareholders. Following the Marsa Transaction, the outstanding Condor common shares were consolidated on a ten–to–one basis with numbers of common shares adjusted retrospectively. The Company currently has 43.3 million common shares outstanding.
  • The Marsa Transaction provides Condor with a 100% interest in the four Ortakoy production licenses in Turkey that includes the Poyraz Ridge field which increases Condor's gross Proved plus Probable reserves 119% from 3,104 Mboe to 6,808 Mboe as of December 31, 2015 as per the independent evaluation of crude oil reserves prepared by McDaniel & Associates Consultants Ltd. for the Kazakhstan assets and per the independent evaluation of gas and condensate reserves prepared by DeGolyer and McNaughton for the Turkish assets (see Reserves Advisory).
  • As per the independent evaluations of the crude oil, condensate and gas reserves of the Kazakhstan and Turkish assets as at December 31, 2015, the corresponding reserves values (NPV10 after tax) for Proved reserves is USD 44.1 million, for Proved plus Probable reserves is USD 95.2 million and for Proved plus Probable plus Possible reserves is USD 163.3 million (see Reserves Advisory).
  • Detailed design for a 15 MMscf/day gas processing facility is underway for the Poyraz Ridge field and contracts are being completed for long lead equipment including refrigeration and gas compression. Location construction for the central processing facility has commenced and development well locations are being surveyed with drilling scheduled to commence in the third quarter of 2016. Up to four development wells are planned this year that will compliment gas production from three existing wells. The export pipeline route is also being surveyed. The project remains on track for gas sales to commence in mid–2017.
  • Working capital (defined as current assets minus current liabilities) as of March 31, 2016 was $40.9 million and the Company had no debt.
  • Shoba operations remained suspended as at March 31, 2016. Production is expected to resume in 2016 once Shoba and Taskuduk production contracts are executed and export sales are permitted.
  • The Company recorded net loss of $4.1 million for the three months ended March 31, 2016 (2015: $0.04 million), which includes $2.3 million of foreign exchange loss (2015: gain of $5.5 million) and deferred tax recovery of $1.8 million (2015: deferred tax expense of $1.4 million).

About Condor

Condor is a Canadian based oil and gas company with a 100% interest in the exploration rights to the 3,777 square kilometer Zharkamys West 1 Territory located in the Pre–Caspian basin in the Republic of Kazakhstan and a 100% working interest in four contiguous production licenses covering 171 square kilometers located in the Gallipoli Peninsula in the Republic of Turkey. Condor is listed on the TSX under the symbol “CPI”.

Reserves Advisory

This news release includes information pertaining to the independent Evaluation of Crude Oil Reserves Shoba and Taskuduk West Fields, Kazakhstan as of December 31, 2015 prepared by independent reserves evaluators McDaniel & Associates Consultants Ltd. (“McDaniel”) and the Report as of December 31, 2015 on Reserves and Revenue Attributable to the Poyraz Ridge Field in the Thrace Basin, Turkey prepared by DeGolyer and MacNaughton (“D&M”). Each report was prepared by qualified reserves evaluators in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51–101, Standards of Disclosure for Oil and Gas Activities (“NI 51–101″) and are based on respective McDaniel and D&M forecast pricing effective December 31, 2015. Additional reserve information as required under NI 51–101 is included in the Company's Annual Information Form filed on SEDAR.

Statements relating to reserves are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated. The reserve estimates described herein are estimates only. The actual reserves may be greater or less than those calculated. Estimates with respect to reserves that may be developed and produced in the future are often based upon volumetric calculations, probabilistic methods and analogy to similar types of reserves, rather than upon actual production history. Estimates based on these methods generally are less reliable than those based on actual production history. Subsequent evaluation of the same reserves based upon production history will result in variations, which may be material, in the estimated reserves.

References herein to barrels of oil equivalent (“boe”) are derived by converting gas to oil in the ratio of six thousand cubic feet (“Mcf”) of gas to one barrel of oil based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given 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 Mcf to 1 barrel, utilizing a conversion ratio at 6 Mcf to1 barrel may be misleading as an indication of value, particularly if used in isolation.

“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.

“Possible” reserves are those additional reserves that are less certain to be recovered than Probable reserves. There is a 10 percent probability that the quantities actually recovered will equal or exceed the sum of Proved plus Probable plus Possible reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated Proved plus Probable plus Possible reserves.

Advisory on Forward–Looking Statements

All statements other than statements of historical fact may be forward–looking statements. Such statements are generally identifiable by the terminology used, such as “seek”, “appear”, “anticipate”, “believe'', “intend”, “expect”, “plan”, “estimate”, “continue”, “project”, “predict”, “budget”, “outlook”, “may”, “will”, “should”, “could”, “would” or other similar wording. Forward–looking statements in this news release include, but are not limited to, information concerning: the timing and ability to mature drill–ready targets; the timing and ability to obtain various approvals for the Company's exploration and development activities; the expectations, timing and costs of exploration, appraisal and development activities including the cost of drilling future wells; the timing and ability to develop the gas reserves, construct the required infrastructure and deliver first gas; the timing and ability to obtain future funding on favourable terms; the timing and ability to access oil and gas pipelines and oil and gas domestic and export sales markets; the timing and ability to bring discoveries into commercial production including the timing and ability to obtain production contracts; the timing and duration of production interruptions; the timing and ability to re–commence production.

Forward–looking statements involve the use of certain assumptions that may not materialize or that may not be accurate and are subject to known and unknown risks and uncertainties and other factors, which may cause actual results or events to differ materially from those expressed or implied by such information. Condor's operations are also subject to certain other risks and uncertainties inherent with oil and gas operations and additional information on these and other factors that could affect Condor's operations and financial results. These factors are discussed in greater detail under Risk Factors – Risks Relating to the Company in Condor's Annual Information Form, which may be accessed through the SEDAR website (www.sedar.com). The Company believes that the expectations reflected in these forward–looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward–looking statements should not be unduly relied upon. The Company does not undertake any obligation to update or to revise any of the forward looking information, except as required by applicable law.

Abbreviations

The following is a summary of abbreviations used in this news release:

   
Mboe Thousands of barrels of oil equivalent
NPV Net present value
USD United States dollars
   

The TSX does not accept responsibility for the adequacy or accuracy of this news release.

American Hotel Income Properties REIT LP Reports Record First Quarter 2016 Financial Results

VANCOUVER, BC—(Marketwired – May 12, 2016) –
American Hotel Income Properties REIT LP (“AHIP“) (TSX: HOT.UN) (OTCQX: AHOTF) reported today its financial results for the three months ended March 31, 2016.

Rob O'Neill, CEO of AHIP, commented, “I am very pleased to announce record operating results from our well diversified portfolio of 80 hotels located in 27 U.S. states. Our branded hotels performed very well with exceptional performance in Virginia, North Carolina and Florida coupled with positive tailwinds experienced by hotels that underwent significant renovations last year. Our secure rail hotel revenues and cash flows were supported by long–term contractual guarantees. The hotel manager delivered meaningful growth in operating income and margins in both rail and branded hotels through effective yield management and strong cost discipline. We are now paying a U.S. dollar denominated distribution which aligns our payout with our cash flows, eliminating currency risk and related costs, and equates to a pro–forma payout ratio below 75% of current full year 2016 analyst consensus AFFO. This low payout ratio, combined with our conservative balance sheet, positions AHIP for further growth in the seasonally stronger second and third quarters.”

FINANCIAL HIGHLIGHTS

  • Funds from operations (“FFO“) was up +65.4% to $7.2 million (2015 – $4.4 million) and adjusted funds from operations (“AFFO“) was up +72.2% to $6.1 million (2015 – $3.5 million) reflecting the acquisition of 19 hotels comprising approximately 1,800 guestrooms
  • For the current quarter, Diluted FFO per Unit was up +16.7% to $0.21 (2015 – $0.18) and Diluted AFFO per Unit was up +20.0% to $0.18 (2015 – $0.15)
  • Same–store revenue per available room (“RevPAR“) for the Branded Hotels was up +6.7% led by Virginia, which was up by +16.6%, North Carolina was up by +13.8%, Florida was up by +11.8% and Pittsburgh was up by +3.4%
  • Total revenues for the quarter increased by +35.9% to $40.1 million compared to $29.5 million last year
  • EBITDA for the quarter was up +56.6% to $10.7 million compared to $6.8 million in the same period last year and EBITDA margin improved by 350 basis points to 26.6% (2015 – 23.1%)
  • Certain Rail Hotels were impacted by lower rail carload volumes as Class I railroads continued to face headwinds primarily from lower coal shipments and lower exports caused by a strong U.S. Dollar. Rail Hotel revenues were stabilized by the contractual guarantees
  • AHIP's debt–to–gross book value at March 31, 2016 was 50.0% (2015 – 52.1%) and interest coverage ratio for the current quarter improved to 3.1x (2015 – 2.5x)
  • AHIP's weighted average stated interest rate improved to 4.58% (2015 – 4.71%) and the weighted average loan term to maturity increased to 8.0 years (2015 – 7.4 years)
  • During the first quarter, AHIP paid a regular monthly distribution of Cdn$0.075 per unit and the payout ratio improved to 93.5% of AFFO (2015 – 125.0%)
  • On January 8, 2016, AHIP completed the acquisition of a 133–room rail crew hotel in Lincoln, Nebraska for approximately $3.9 million including planned capital expenditures
  • On March 29, 2016, AHIP completed a $2.0 million, floating rate mortgage on a branded hotel located in Norman, Oklahoma maturing in April 2021
  • On April 1, 2016, AHIP completed the $2.4 million acquisition of a 24–room expansion of the Oak Tree Inn hotel located in Hearne, Texas. Two more expansions of Oak Tree Inn hotels located in Oregon and Nebraska are scheduled to be completed during the second and third quarters of 2016
  • As at March 31, 2016, AHIP had cash balances of $8.9 million, restricted cash balances of $15.9 million and an unutilized revolving line of credit with a limit of $10.0 million

Q1 2016 FINANCIAL RESULTS CONFERENCE CALL

Management will host a conference call at 4:00 p.m. (Eastern), 1:00 p.m. (Pacific) on Friday, May 13, 2016 to review the financial results and corporate results for the three months ended March 31, 2016.

To participate in this conference call, please dial one of the following numbers approximately 10 minutes prior to the commencement of the call, and ask to join the AHIP conference call.

Dial in numbers:   Toll free:   1–877–291–4570
    International or local Toronto   1–647–788–4919

CONFERENCE CALL REPLAY

If you cannot participate on Friday, May 13, 2016, a replay of the conference call will be available by dialing one of the following replay numbers. You will be able to dial in and listen to the conference call replay two hours after the call end time, and the replay will be available until Friday, May 20, 2016. An audio recording of this conference call will also be available at www.ahipreit.com under the “Investor Info/Presentations & Calls” tab.

Please enter replay PIN number 91255614 followed by the # key.

Replay dial in numbers:   Toll free:   1–800–585–8367
    International or local Toronto   1–416–621–4642

NON–IFRS MEASURES

Certain non–IFRS financial measures are included in this news release, which include EBITDA, FFO, FFO per Unit, AFFO, AFFO per Unit, interest coverage ratio, payout ratio and debt–to–gross book value. These terms are not measures recognized under International Financial Reporting Standards (“IFRS“) and do not have standardized meanings prescribed by IFRS. Real estate investment trusts often refer to NOI, FFO, FFO per Unit, AFFO, AFFO per Unit, and payout ratio as supplemental measures of performance and debt–to–gross book value as a supplemental measure of financial condition.

Debt–to–gross book value, EBITDA, FFO, FFO per Unit, AFFO, AFFO per Unit, and payout ratio should not be construed as alternatives to measurements determined in accordance with IFRS as indicators of AHIP's performance or financial condition. AHIP's method of calculating EBITDA, FFO, FFO per Unit, AFFO, AFFO per Unit, interest coverage ratio, payout ratio, debt and gross book value may differ from other issuers' methods and accordingly may not be comparable to measures used by other issuers. For further information, please refer to AHIP's Management's Discussion and Analysis (“MD&A“) dated May 11, 2016, which is available on SEDAR at www.sedar.com and on AHIP's website at www.ahipreit.com.

FORWARD–LOOKING INFORMATION

Certain statements in this news release may constitute “forward–looking” information that involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward–looking information. Forward–looking information generally can be identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “feel”, “intend”, “may”, “plan”, “predict”, “project”, “subject to”, “will”, “would”, and similar terms and phrases, including references to assumptions. Forward information includes, but is not limited, statements with respect to expectations, projections or other characterizations of future events or circumstances, and AHIP's objectives, goals, strategies, beliefs, intentions, plans, estimates, projections and outlook, including statements relating to the estimates or predictions of actions of customers, competitors or regulatory authorities, and statements regarding AHIP's future economic performance. Some of the specific forward–looking statements in this news release include, but are not limited to, statements with respect to: management's estimate of the AFFO payout ratio based on current analyst consensus AFFO for 2016; AHIP's future performance; the expansion of the Oak Tree Inn hotels in Oregon and Nebraska and the expected completion timing therefor; and AHIP's long–term objectives.

Forward–looking information is based on a number of key expectations and assumptions made by AHIP, including, without limitation: a reasonably stable North American economy and stock market, the continued strength of the U.S. lodging industry, the timing and completion of the expansion of the Oak Tree Inn Hotels in Oregon and Nebraska, and the value of the U.S. Dollar. Although the forward–looking information contained in this news release is based on what AHIP's management believes to be reasonable assumptions, AHIP cannot assure investors that actual results will be consistent with such information.

Forward–looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward–looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results. Those risks and uncertainties include, among other things, risks related to: general economic conditions; future growth potential; Unit prices; liquidity; tax risk; tax laws currently in effect remaining unchanged; ability to access capital markets; competition for real property investments; environmental matters; the value of the U.S. Dollar; and changes in legislation or regulations. Management believes that the expectations reflected in forward–looking statements are based upon reasonable assumptions and information currently available; however, management can give no assurance that actual results will be consistent with these forward–looking statements. Additional information about risks and uncertainties is contained in AHIP's MD&A and in its annual information form for the year ended December 31, 2015, copies of which are available on SEDAR at www.sedar.com.

The forward–looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward–looking information reflects management's current beliefs and is based on information currently available to AHIP. The forward–looking information is made as of the date of this news release and AHIP assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.

ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP

AHIP's current property portfolio is comprised of 80 hotels located in 27 U.S. states, representing 7,072 available guestrooms. The Rail Hotel segment, serving the U.S. freight railway industry, consists of 45 hotels comprising 3,772 guestrooms and 27 Penny's Diner restaurants. The Branded Hotel segment consists of 35 hotels comprising 3,330 guestrooms and is affiliated with leading hotel brands including Marriott, Hilton and IHG.

AHIP is a limited partnership formed under the Limited Partnerships Act (Ontario) to invest in hotel real estate properties located substantially in the United States and engaged primarily in the railway employee accommodation, transportation and branded, select service lodging sectors.

AHIP's long–term objectives are to: (i) generate stable and growing cash distributions from hotel properties substantially in the U.S.; (ii) enhance the value of its assets and maximize the long–term value of the hotel properties through active management; and (iii) expand its asset base and increase its AFFO per unit through an accretive acquisition program, participation in strategic development opportunities and improvements to its properties through targeted value–added capital expenditure programs.

ADDITIONAL INFORMATION

Additional information relating to AHIP, including AHIP's financial statements for the three months ended March 31, 2016, AHIP's MD&A dated May 11, 2016, and other public filings are available on SEDAR at www.sedar.com.

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS NEWS RELEASE.