Crocotta Energy Inc. (TSE:CTA), a junior oil and natural gas company operating in Western Canada, swung to profit in the fourth quarter amid higher production.
Net income was C$4.4 million, or 4 Canadian cents per diluted share, in the three months ended Dec. 31, from a net loss of C$2.1 million, or 2 Canadian cents per diluted share, a year earlier, the Calgary, Alberta–based company said in a statement today.
Oil and natural gas sales increased 25 percent to C$31.1 million from C$24.9 million a year earlier. An analyst had estimated revenue of C$28.9 million.
Fourth-quarter average production grew 26 percent to 9,233 barrels of oil equivalent per day, from 7,336 barrels of oil equivalent per day in the year-earlier period.
Funds flow from operations rose 36 percent to C$19.7 million, or 20 Canadian cents per share, in the fourth quarter, from C$14.5 million, or 16 Canadian cents per share, in the year-earlier period. Funds flow is a key measure that demonstrates a company's ability to generate the cash necessary to fund future capital investments and to repay debt.
Operating netback, another key measure as it demonstrates a company's profitability relative to current commodity prices, increased to $27.49 per barrel of oil equivalent, from $26.57 per barrel of oil equivalent in the year-earlier period.
At the end of 2013, Crocotta increased its proved-plus-probable reserves by 21 percent to 46.3 million barrels of oil equivalent, and its proved reserves by 29 percent to 28.6 million barrels of oil equivalent.
Looking forward, the company warned that average production in the current quarter is estimated at approximately 9,000 barrels of oil equivalent per day which was slightly lower than forecasted.
The company cited a number of factors that affected the production, including delays in bringing on new Montney wells, operational difficulties with the new Montney facility, and pipeline construction delays.
Crocotta closed down 0.3 percent to C$3.25 in Toronto yesterday, giving the company a market value of C$314.3 million. The stock has rallied 9.1 percent so far this year, outpacing a 4.8 percent gain in the benchmark S&P/TSX Composite index (INDEXTSI:OSPTX).