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Forza Petroleum Q1 2022 Financial and Operational Results

14.05.2022  |  Newsfile

Forza Petroleum achieves another record quarter posting its highest oil sales volumes and revenue in company history

Calgary, May 13, 2022 - Forza Petroleum Ltd. (TSX: FORZ) ("Forza Petroleum" or the "Corporation") today announces its financial and operational results for the three months ended March 31, 2022. All dollar amounts set forth in this news release are in United States dollars.

Financial Highlights:

Operations Update:

2022 Forecasted Work Program:

Liquidity Outlook:

CEO's Comment

Commenting today, Forza Petroleum's Chief Executive Officer, Vance Querio, stated:

"We are extremely proud of our achievement in steadily increasing our production capacity over the past several years and we have produced more than 14,700 barrels per day on average since the beginning of 2022. As a result of this production, combined with the highest oil sales prices in more than seven years, Forza Petroleum posted a record $82.4 million of revenue for Q1 2022.

The execution of our work program proceeded according to plan during the first quarter of this year although some of the wells completed are not yet as productive as we had forecast, either because of unexpected geological circumstances or unanticipated complications with our completions. We are working to resolve these issues through revised completion procedures and relocation of horizontal drains in some reservoirs.

We continue to pursue a program that includes the completion of ten producing wells and the spudding of an eleventh well in 2022, as budgeted, but periodically adjust plans to align with available resources. Our program has incurred some relatively minor delay recently due to drilling issues in the Demir Dagh-14 pilot hole and we are not immune to the impediments caused by shortages of both services and materials that routinely occur in the oil and gas industry in the aftermath of rapidly increasing crude oil prices, exacerbated this time around by the lingering effects of COVID-19, especially in China, and the conflict in Ukraine.

We recognize that it will be challenging for us to maintain the aggressive schedule of development activities that we embarked on at the beginning of this year, but our robust cash flow will allow us to pursue our program at whatever pace is otherwise achievable. We look forward to delivering more oil to the Kurdistan Regional Government and more value to our shareholders during the remainder of 2022."

Selected Financial Results

Financial results are prepared in accordance with International Financial Reporting Standards ("IFRS") and the reporting currency is US dollars. References in this news release to the "Group" refer to Forza Petroleum and its subsidiaries. The following table summarizes selected financial highlights for Forza Petroleum for the three-month periods ended March 31, 2022 and March 31, 2021, as well as the year ended December 31, 2021.



Three Months Ended
March 31


Year Ended
December 31

($ in millions unless otherwise indicated)
2022

2021

2021









Revenue
82.4

35.7

187.8






Working Interest Production (bbl)
852,600

675,400

2,886,600
Average WI Production per day (bbl/d)
9,500

7,500

7,900
Working Interest Oil Sales (bbl)
851,000

673,400

2,885,300
Average Realized Sales Price ($/bbl)
81.07

44.44

54.52






Operating Expense
8.7

6.1

30.1
Operating Expense ($/bbl)
10.21

9.06

10.42
Field Operating Costs ($/bbl)(1)
6.64

5.89

6.78






Profit
22.2

21.2

10.3
Basic and Diluted Earnings per Share ($/sh)
0.04

0.04

0.02






Net Cash generated from
Operating Activities

12.6

4.2

51.2
Net Cash used in Investing Activities
(20.6 )
(7.2 )
(34.7 )
Capital Additions(2)
19.1

7.0

45.8






Cash and Cash Equivalents
16.6

10.2

24.7
Total Assets
612.5

604.5

587.7
Total Liabilities
123.2

126.8

120.9
Total Equity
489.9

477.7

466.8

(1) Field operating costs represent Forza Petroleum's working interest share of gross operating costs and exclude the partner share of operating costs carried by Forza Petroleum.

(2) Excludes non-cash additions / (credits) to the decommissioning obligation due to changes in estimates and drilling activity during the period.

Regulatory Filings

This announcement coincides with the filing with the Canadian securities regulatory authorities of Forza Petroleum's audited condensed consolidated financial statements for the three months ended March 31, 2022 and the related management's discussion and analysis thereon. Copies of these documents filed by Forza Petroleum may be obtained via www.sedar.com and the Corporation's website, www.forzapetroleum.com.

ABOUT FORZA PETROLEUM LIMITED

Forza Petroleum Ltd. is an international oil exploration, development and production company. The Corporation's shares are listed on the Toronto Stock Exchange and trade under the symbol "FORZ". Forza Petroleum has a 65% working interest in and operates the Hawler license area in the Kurdistan Region of Iraq, which has yielded oil discoveries in four areas, three of which are contributing to production while appraisal and development activity continues. Further information about Forza Petroleum is available at www.forzapetroleum.com or under Forza Petroleum's profile at www.sedar.com.

For additional information about Forza Petroleum, please contact:

Kevin McPhee
General Counsel and Corporate Secretary
Tel.: +41 (0) 58 702 93 00
info@forzapetroleum.com

Reader Advisory Regarding Forward-Looking Information

Certain statements in this news release constitute "forward-looking information", including statements related to forecast work program and capital expenditure, drilling and well workover plans, development plans and schedules and chance of success, future drilling of wells and the reservoirs to be targeted, future facilities work, ultimate recoverability of current and long-term assets, possible commerciality of our projects, future expenditures and sources of financing for such expenditures, expectations that cash on hand as of March 31, 2022 and cash receipts from net revenues from sales, exclusively made to the Kurdistan Regional Government at the tie-in to the Kurdistan Oil Export Pipeline, will fund the Corporation's forecasted capital expenditures and operating and administrative costs through the end of June 2023 and fund the $76.2 million in deferred purchase consideration that falls due in 2023 in connection with the original acquisition of the Hawler license area, the issuance of shares as a result of the vesting of Long Term Incentive Plan awards and the exercise of warrants, future requirements for additional funding, expectations that the COVID-19 virus outbreak will not restrict operations, the expected timing for settlement of liabilities including the purchase consideration arising from the acquisition of OP Hawler Kurdistan Limited in 2011, and statements that contain words such as "may", "will", "could", "should", "anticipate", "believe", "intend", "expect", "plan", "estimate", "potentially", "project", or the negative of such expressions and statements relating to matters that are not historical fact, constitute forward-looking information within the meaning of applicable Canadian securities legislation.

Although Forza Petroleum believes these statements to be reasonable, the assumptions upon which they are based may prove to be incorrect. For more information about these assumptions and risks facing the Corporation, refer to the Corporation's Annual Information Form dated March 23, 2022 available at www.sedar.com and the Corporation's website at www.forzapetroleum.com. Further, statements including forward-looking information in this news release are made as at the date they are given and, except as required by applicable law, Forza Petroleum does not intend, and does not assume any obligation, to update any forward-looking information, whether because of new information, future events or otherwise. If the Corporation does update one or more statements containing forward-looking information, it is not obligated to, and no inference should be drawn that it will make additional updates with respect thereto or with respect to other forward-looking information. The forward-looking information contained in this news release is expressly qualified by this cautionary statement.

Reader Advisory Regarding Certain Figures

Unless provided otherwise, all production and capacity figures and volumes cited in this news release are gross (100%) values, indicating that figures (i) have not been adjusted for deductions specified in the production sharing contract applicable to the Hawler license area, and (ii) are attributed to the license area as a whole and do not represent Forza Petroleum's working interest in such production, capacity or volumes.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/124067