NOV 10, 2011 - 09:06 ET

CALGARY, ALBERTA--(Marketwire - Nov. 10, 2011) - C&C Energia Ltd. ("C&C" or the "Corporation") (TSX:CZE) is pleased to report its unaudited interim operating and financial results for the three and nine months ended September 30, 2011.

The Corporation reported record results for the third quarter 2011 highlighted by average production for the quarter of 9,572 bbls/day, a 40% increase in the average daily production from third quarter 2010 and a 16% increase over the second quarter 2011. Current production rates are approximately 10,250 bbls/day.

Operating cash flow for the third quarter 2011 was $47.6 million while funds flow from operations was $37.6 million ($0.59 per share). Operating netback for the third quarter 2011 was $63.65 per barrel.

During the quarter, C&C invested $30.9 million (excluding acquisitions) including, facilities installation and the drilling of two development, one exploration and one appraisal well resulting in four (four net) oil wells.

The Corporation has a strong balance sheet with a $69.7 million adjusted working capital surplus (including $74.4 million in cash) and no debt at the end of the third quarter.

Consolidated financial statements with Management's Discussion and Analysis ("MD&A") are now available on the Corporation's website at www.ccenergialtd.com and will also be available on the SEDAR website at www.sedar.com.

FINANCIAL and OPERATIONAL HIGHLIGHTS

(All references to $ are to thousands of United States dollars unless otherwise noted.)

Three months ended September 30, Nine months ended September 30,
(unaudited) 2011 2010 2011 2010
Operating (thousands of US$, except share, per share and per bbl amounts)
Operating cash flow(1) 47,646 25,647 119,766 57,324
Average crude oil volumes (before royalties)
Production (bbls/day) 9,572 6,820 7,768 5,659
Sales (bbls/day) 8,430 7,797 7,372 5,629
Average reference price
WTI ($ per bbl) 89.48 76.12 95.28 77.38
Operating netback ($ per bbl)(4)
Average realized price(4)
Royalties
Production expenses
Transportation expenses 		104.14
10.03
15.95
14.51 		70.96
9.62
13.77
10.20 		104.85
12.49
16.86
13.71 		72.16
10.10
13.72
9.44
Operating netback 63.65 37.37 61.79 38.90
Financial
Oil revenues (net of royalties) 72,988 44,000 185,881 95,362
Funds flow from operations(2) 37,601 24,961 87,698 54,812
Per share - basic ($)
Per share - diluted ($) 		0.59
0.59 		0.46
0.46 		1.48
1.45 		1.13
1.13
Net income 20,811 11,414 43,080 23,173
Per share - basic ($)
Per share - diluted ($) 		0.33
0.32 		0.21
0.21 		0.73
0.71 		0.48
0.48
Capital expenditures(5) 30,943 17,837 109,682 58,394
Total assets
Total long-term financial liabilities 		492,149
21,532 		280,116
15,161 		492,149
21,532 		280,116
15,161
Adjusted working capital surplus(3) 69,697 69,425 69,697 69,425
Common shares outstanding
Basic
Diluted 		63,842,503
69,360,005 		54,297,503
55,096,437 		63,842,503
69,360,005 		54,297,503
55,096,437
Weighted average common shares outstanding
Basic
Diluted 		63,842,503
64,068,369 		54,297,503
54,450,142 		59,332,228
60,612,028 		48,367,683
48,466,652
Notes:
(1) Operating cash flow is oil revenues less royalties, operating expenses, transportation expenses and administration expenses. Operating cash flow is not a measure recognized by GAAP (as defined herein). See "GAAP and Non-GAAP Measures" in the Management's Discussion and Analysis.
(2) Funds flow from operations is cash flow from operating activities before changes in other non-cash items. Funds flow from operations is not a measure recognized by GAAP. See "GAAP and Non-GAAP Measures" in the Management's Discussion and Analysis..
(3) Adjusted working capital surplus includes current assets less current liabilities excluding risk management contracts (unrealized gains (losses) on commodity swaps) and deferred taxes. Adjusted working capital surplus is not a measure recognized by GAAP. See "GAAP and Non-GAAP Measures" in the Management's Discussion and Analysis.
(4) Excludes impact of risk management contracts (unrealized gains (losses) on commodity swaps). See "GAAP and Non-GAAP Measures" in the Management's Discussion and Analysis.
(5) Excludes net acquisition costs of $4.7 million and $95.3 million for the three and nine months ended September 30, 2011, (2010-nil).

HIGHLIGHTS

  • Successful drilling has continued at C&C's Zopilote discovery (as disclosed in its November 10, 2011 press release) on its Cravoviejo block, underpinning an increase in production to 9,572 bbls/day for the third quarter 2011, an increase of 16% over the second quarter 2011.
  • During the third quarter C&C drilled and completed four oil wells (four net) resulting in approximately 1,200 bbls/day of production additions, bringing current production to approximately 10,250 bbls/day.
  • The operating net back of $63.65/bbl in the quarter is 70% higher than the third quarter 2010 and essentially flat to the second quarter 2011.
  • Capital investment, respectively for the three and nine month periods ending September 30, 2011 were $30.9 and $109.7 million (excluding acquisitions). Capital expenditures in the fourth quarter 2011 are estimated to be $40 to $50 million.
  • C&C plans to drill at least four (3.5 net) wells in the fourth quarter 2011 including the first exploratory well (Tardigrado-1) on the Andaquies block in the Putumayo Basin.

OPERATIONAL REVIEW

C&C has eight blocks (seven operated) in Colombia with a total of 647,514 acres (559,301 net acres). The Corporation's lands are located in the Llanos Basin (four blocks), Putumayo Basin (three blocks) and the Middle Magdalena Valley (one block). Substantially all of the Corporation's current production is on the Cravoviejo and Cachicamo blocks in the Llanos Basin. The remaining six blocks are mainly in the early exploration stages with over 20 drill ready exploration prospects.

During the third quarter of 2011, C&C invested approximately $30.9 million on property, plant and equipment. Drilling and completion costs accounted for approximately $20.7 million of the total capital invested. Current production adds from four oil wells completed in the third quarter are approximately 1,200 bbls/day. During the quarter, C&C completed and brought on production from the Heredia-1 and Abedus-1 exploration wells on the Cravoviejo block. Heredia-1 had initial oil production rates of approximately 400 bbls/day at a water-cut of 26% from a C-5 reservoir. The well is currently producing approximately 120 bbls/day at a 78% water-cut. The Abedus-1 well was placed on production in October at 100 bbls/day from a C-5 reservoir. The Ubaque and Gacheta formations both tested formation water from this well. An analysis of the well results indicates Abedus-1 was drilled down-dip of the structural high and a follow-up well is planned for first quarter 2012. In addition during the third quarter the Corporation completed and brought into service its oil storage facilities (35,000 barrel capacity) at its centralized production facilities at the Carrizales field. 

CAPITAL & OUTLOOK

The Corporation will invest approximately $40 to $50 million in the fourth quarter 2011 on drilling, completions and facilities, as well as civil works, casing and tubulars in preparation for the 2012 drilling program. C&C plans to drill at least four (3.5 net) wells for the fourth quarter 2011, including the first exploration well (Tardigrado-1) on the Andaquies block in the Putumayo basin. 

Current production is approximately 10,250 bbls/day. Management continues to give considerable attention to ensure production volumes move unabated. Production in Colombia will continue be exposed to the potential impact of restricted access to offloading terminals and available pipeline capacity. Despite these challenges, the Corporation expects production to average approximately 10,000 to 10,500 bbls/day for the remainder of 2011 and expects 2011 annualized average production of 8,300 to 8,400 bbls/day. 

The Corporation is pleased to announce its planned capital budget for 2012 of between $140 and $150 million. C&C will invest funds on the following operations: seismic $4 to $6 million; drilling completions and testing $87 to $92 million; workovers, field development and health and safety costs $17 million; equipping, pipelines and facilities costs $27 to $30 million; and $5 million for various other projects. Production for 2012 is expected to average between 10,000 and 10,500 bbls/day, a 20% increase over the 2011 estimated annual average daily production.  

With a strong balance sheet and robust cash flow, Management believes the Corporation has sufficient resources to fund its ongoing programs.

ABOUT C&C ENERGIA LTD.

The Corporation, through its subsidiary Grupo C&C Energia (Barbados) Ltd., is engaged in the exploration for and the development and production of oil resources in Colombia. Its strategy is to develop producing oil assets by appraising and developing existing discoveries and exploring in areas assessed by management to be of low to moderate risk. With a total of eight blocks (seven operated) and over 647,000 acres (559,000 net acres) in Colombia, the Corporation's management expects that C&C Energia has considerable upside for future production and reserve growth.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This press release contains forward-looking information within the meaning of applicable Canadian securities laws that involves known and unknown risks and uncertainties. Forward-looking information typically contains statements with words such as "anticipate", "estimate", "expect", "potential", "could", "will", "plans" or similar words suggesting future outcomes. The Corporation cautions readers and prospective investors in the Corporation's securities to not place undue reliance on forward-looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by C&C Energia.

Forward-looking information in this press release includes, but is not limited to, information concerning the expectations of the Corporation with respect to future production (including the estimated production for 2011, average production for 2011 and average production for 2012), the Corporation's drilling plans, plans and expectations regarding the completion of certain of the Corporation's wells and expected future production from such well and C&C's planned capital budget for the fourth quarter of 2011 and for 2012,. These forward-looking statements are subject to assumptions regarding the Corporation's operations and the operating environment in Colombia. The Corporation's drilling and seismic plans are subject to change if circumstances change or if management of the Corporation determines that other business plans are more appropriate.

Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by C&C Energia including, but not limited to, general risks associated with the oil and gas industry (e.g. operational risks in exploration; inherent uncertainties in interpreting geological data; changes in plans with respect to exploration or capital expenditures; the uncertainty of estimates and projections in relation to costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with the negotiating with the Agencia Nacional de Hidrocarburos (ANH) or with other third parties in countries other than Canada and the risk associated with international activity. The forward-looking information included in this news release is expressly qualified in its entirety by this cautionary statement. The forward-looking information included herein is made as of the date hereof and C&C Energia assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law.