Third quarter results from Caza Oil & Gas (LON:CAZA, CVE:CAZ)) reflect the group’s earlier decision to cut capital spending on new drilling, lower volumes and lower prices.
Net production volumes in the three months to September 30 reduced around 20% to average 594 barrels oil equivalent, from 744 boepd in the preceding quarter. Production of oil and natural gas liquids, which now represent 85% of all production, totalled 46,323 barrels, down 21% from 58,847 last quarter and 47% from the same period of 2014.
Caza’s financial performance continues to be impacted by lower crude prices. The group’s combined price averaged US$36.52 per boe, down 16% from US43.46 in the preceding quarter and 44% from last year.
Revenue from oil and gas sales were down 32% in the third quarter at US$1.99mln, compared to US$2.94mln in the second quarter and is 72% lower than the US$7.2mln generated last year.
Earnings (adjusted EBITDA) fell 32% to US$2.5mln (Q2 2015: US$3.7mln, Q3 2014: US$4.5mln).
Caza said it had US$1.8mln of cash and equivalents as at September 30, and it had drawn US$45mln via its funding arrangement with Apollo Investment Corporation.
The company continued to operate under a forbearance agreement with Apollo, though as a condition it is committed to pursuing alternative funding to refinance the debt. It is anticipated that this would likely take the form of an equity raise, and given the current market it is expected to be significantly dilutive to existing shareholders.