Americas Petrogas Announces Second Quarter 2015 Results

CALGARY, ALBERTA -- (Marketwired) -- 09/01/15 -- Americas Petrogas Inc. ("Americas Petrogas" or the "Company") (TSX VENTURE: BOE) announces that it has filed its second quarter 2015 consolidated financial statements and Management's Discussion and Analysis ("MD&A"). These filings can be accessed electronically on the System for Electronic Document Analysis and Retrieval (SEDAR) website: www.sedar.com and on the Company's website at www.americaspetrogas.com.

The following Summary of Selected Financial and Operational Highlights have been derived from the consolidated financial statements and MD&A. Readers are strongly encouraged to review the entire consolidated financial statements and MD&A.

All amounts are in Canadian dollars unless otherwise stated.

Summary of Selected Financial and Operational Highlights

                     Three months ended June 30    Six months ended June 30
($ in thousands,
 except share, per
 share, and per
 barrel amounts)             2015          2014          2015          2014
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Crude oil sales      $      9,431  $      8,054  $     20,210  $     17,163

Net revenue(1)       $      7,678  $      6,761  $     16,690  $     14,524

Operating
 netback(2),(3)      $      2,857  $      3,173  $      6,408  $      7,267

Operating netback
 per barrel(2)       $      28.39  $      34.59  $      29.93  $      35.76

Net income (loss)
 attributable to
 owners of the
 Company(4)          $     (8,773) $    (15,063) $    (10,329) $    (39,620)

Earnings (loss) per
 share - basic and
 diluted             $      (0.04) $      (0.07) $      (0.04) $      (0.18)

Funds flow from
 operations(5)       $     (1,734) $     (1,159) $     (1,317) $        888
  Per share - basic  $      (0.01) $      (0.01) $      (0.01) $       0.00
  Per share -
   diluted           $      (0.01) $      (0.01) $      (0.01) $       0.00

Weighted average number of common shares outstanding(6)
  Basic               231,739,106   216,784,894   231,739,106   214,690,304
  Diluted             231,739,106   216,784,894   231,739,106   216,109,820

Capital expenditures $      1,267  $      4,034  $      7,921  $     14,982

Average barrels sold
 per day                    1,105         1,008         1,183         1,123

Average selling
 price per barrel    $      93.75  $      87.79  $      94.40  $      84.46
($ in thousands)                            June 30, 2015  December 31, 2014
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Cash and cash equivalents              $            2,872 $           14,718
Working capital(7)                     $           64,053 $            5,518

Notes:
(1)   "Net revenue" is an additional GAAP measure because it is presented in
      the consolidated statement of income (loss).Net revenue is calculated
      as crude oil sales less royalties. The Company uses "net revenue" as
      an indicator of operating performance.
(2)   "Operating Netback" is a non-GAAP measure and is calculated as crude
      oil sales less royalties and production costs. The Company uses
      "operating netback" as an indicator of operating performance,
      profitability and liquidity. Operating netback does not have a
      standardized meaning prescribed by IFRS. It is unlikely for non-GAAP
      measures to be comparable to similar measures presented by other
      companies. For the three months ended June 30, 2015, operating netback
      was $2.9 million (calculated as crude oil sales of $9.4 million less
      royalties of $1.8 million and production costs of $4.8 million).For
      the three months ended June 30, 2014, operating netback was $3.2
      million (calculated as crude oil sales of $8.1 million less royalties
      of $1.3 million and production costs of $3.6 million).For the six
      months ended June 30, 2015, operating netback was $6.4 million
      (calculated as crude oil sales of $20.2 million less royalties of $3.5
      million and production costs of $10.3 million).For the six months
      ended June 30, 2014, operating netback was $7.3 million (calculated as
      crude oil sales of $17.2 million less royalties of $2.6 million and
      production costs of $7.3 million).
(3)   During the second quarter of 2015, the Company recognized $0.5 million
      of benefits from the Crude Oil Stimulus program related to the first
      two quarters of 2015, all of which was recorded as a credit to
      production costs.
(4)   For the three months ended June 30, 2015, net loss attributable to
      owners of the Company included $3.1 million of non-cash, foreign
      exchange losses on intercompany loans (three months ended June 30,
      2014 -- $5.9 million foreign exchange losses).For the six months ended
      June 30, 2015, net loss attributable to owners of the Company included
      $0.1 million of non-cash, foreign exchange losses on intercompany
      loans (six months ended June 30, 2014 -- $23.9 million foreign
      exchange losses).
(5)   "Funds flow from operations" is an additional GAAP measure because it
      is presented in the consolidated statement of cash flows ('Cash
      provided by (used by) operating activities, before changes in non-cash
      working capital').The Company uses "funds flow from operations" and
      "funds flow from operations per share" to analyze operating
      performance and liquidity. Funds flow from operations is calculated as
      net cash generated from (used by) operating activities (as determined
      in accordance with IFRS) before changes in non-cash balance sheet
      operating items. Funds flow from operations per share is calculated by
      dividing funds flow from operations by the weighted average number of
      shares outstanding. Funds flow from operations should not be
      considered an alternative to, or more meaningful than net cash
      generated from (used by) operating activities as determined in
      accordance with IFRS. Funds flow from operations per share should not
      be considered an alternative to, or more meaningful than earnings
      (loss) per share as determined in accordance with IFRS.
(6)   Diluted weighted average number of common shares outstanding is
      computed by adjusting basic weighted average number of common shares
      outstanding for dilutive instruments. The number of shares included
      with respect to options, warrants and similar instruments is computed
      using the treasury stock method, which assumes any proceeds received
      by the Company upon exercise of the in-the-money instruments would be
      used to repurchase common shares at the average market price for the
      period. For the three and six months ended June 30, 2015, nil (three
      months ended June 30, 2014 - nil) and nil (six months ended June 30,
      2014 - 1,419,516), respectively, common shares were deemed to be
      issued for no consideration in respect of options.
(7)   Working capital is a non-GAAP measure and is calculated as current
      assets less current liabilities. Working capital is used to assess
      liquidity and general financial strength. Working capital does not
      have a standardized meaning prescribed by IFRS. It is unlikely for
      non-GAAP measures to be comparable to similar measures presented by
      other companies. Working capital should not be considered an
      alternative to, or more meaningful than current assets or current
      liabilities as determined in accordance with IFRS. The Company's
      current assets at June 30, 2015 include $79.3 million of assets held
      for sale and the Company's current liabilities at June 30, 2015
      include $14.6 million of liabilities held for sale.

Highlights and Recent Activities

Argentina

--  On August 28, 2015, subsequent to quarter end, the Company closed a sale
    transaction (the "Transaction") pursuant to which Tecpetrol
    International S.A. and Tecpetrol Internacional S.L. (Unipersonal)
    (collectively, "Tecpetrol" or the "Purchasers") acquired all of the
    issued and outstanding common shares of Americas Petrogas Argentina S.A.
    ("Petrogas Argentina"), and assumed certain intercompany indebtedness
    owing by Petrogas Argentina to the Company and its other subsidiaries,
    for an aggregate cash purchase price of US$59.8 million (approximately
    Cdn$79.4 million based on the noon exchange rate on August 28, 2015, as
    reported by the Bank of Canada) after an initial working capital
    adjustment in accordance with the terms of the purchase and sale
    agreement entered into between the Purchasers and the Company (the "Sale
    Agreement"). The final Purchase Price is subject to any post-closing
    adjustments in accordance with the terms of the Sale Agreement. As part
    of the sale of the Petrogas Argentina shares, the Purchasers also
    assumed the third party financial debt of Petrogas Argentina in the
    amount of approximately US$2.5 million.

    Following completion of the Transaction, the Company, through its other
    wholly-owned Argentine subsidiary, Energicon S.A., has retained
    interests in conventional and unconventional properties in the Neuquen
    Basin of Argentina. The assets disposed of as part of the sale of the
    shares of Petrogas Argentina included, among other, Medanito Sur, the
    Company's main revenue-producing property.

    The Company also retains its 89% ownership interest in GrowMax, which
    holds phosphate, potash interests, and other minerals in Bayovar, Peru.

    Pursuant to the terms of the Sale Agreement, following closing of the
    Transaction, the Company is entitled to receive a portion of any Oil
    Plus benefits collected by Petrogas Argentina after August 28, 2015, the
    closing date of the Transaction.

Peru

--  In August 2014, the Company announced the discovery of near-surface
    Sechura phosphate rock on its Bayovar Property. Also in 2014, the
    Company's Peruvian subsidiary completed a trenching program on Bayovar
    concession 6, one of four concessions on Americas Petrogas' Bayovar
    Property. A total of five (5) trenches were sampled over a distance of
    350 meters. The lab results were favourable.

--  In 2015, the Company filed on SEDAR the NI 43-101 Mineral Resource
    technical report on the Company's drill holes on the Bayovar 6, 7 and 8
    concessions on its Bayovar Property located in the Sechura Desert, Peru.

--  In late 2014 and early 2015, the Company drilled numerous new holes on
    the Bayovar Property, drill cores from which are waiting to be assayed.

For further information regarding the Company's financial results, financial position and related changes, please see the consolidated financial statements and the related MD&A.

About Americas Petrogas Inc.

Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol "BOE". Americas Petrogas has conventional and unconventional shale oil and gas and tight sands oil and gas interests in numerous blocks in the Neuquen Basin of Argentina. Americas Petrogas and Indian Farmers Fertiliser Co-operative Limited (IFFCO) own GrowMax Agri Corp., a private company involved in the exploration for near-surface phosphates, potash and other minerals, and potential development of a fertilizer project in Peru.

Forward-Looking Information

This Press Release contains forward-looking information including, but not limited to, the Company's goals and growth strategy, outstanding Oil Plus benefits, the assaying of new holes in Peru, and the discovery of phosphate rock in Peru. Additional forward-looking information is contained in the Company's interim MD&A, and reference should be made to the additional disclosures of the assumptions, risks and uncertainties relating to such forward-looking information in that document.

Forward-looking information is based on management's expectations regarding the Company's future growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, plans for and results of drilling activity (including the timing, location, depth and the number of wells), environmental matters, business prospects and opportunities and expectations with respect to general economic conditions. Such forward-looking information reflects management's current beliefs and assumptions and is based on information, including reserves and resources information, currently available to management. Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information, including but not limited to, risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production, delays or changes to plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of geological interpretations; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environment risks, extensions of concessions and commitments), the risk of commodity price and foreign exchange rate fluctuations, and the uncertainty associated with negotiating with foreign governments and third parties located in foreign jurisdictions.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.

Contacts:
Americas Petrogas Inc.
Barclay Hambrook, P. Eng., MBA
President & Chief Executive Officer
(403) 685-1888
[email protected]
www.americaspetrogas.com

Source: Americas Petrogas Inc. and GrowMax Agri Corp.

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