OREANDA-NEWS. Quattro Exploration and Production Ltd. reports the release of its financial results for year-ended December 31st, 2015, reporting a CDN $0.08 per share loss due to a number of non-reoccurring charges totaling $4,488,200 while increasing reserves on a 2P basis by 166% at a cost of $4.80 per boe.

Despite the almost 48% decrease in world oil (WTI) and 40% decrease in natural gas prices (NYMEX) in 2015 from 2014, the Company realized gross revenues of $15,038,644 in 2015, representing a modest reduction of only 16.5% compared to gross revenues of $18,003,800 in 2014.  2015 was a challenging year for the industry and Quattro was not immune, realizing $4,488,203 in expenses for non-recoverable partner expenses (due to partner receiverships and bankruptcies), and administrative restructuring charges, which are in management’s opinion non-recurring in nature and therefore will not impact future profitability of the Company.  These challenges were compounded by over 61 days of maintenance and plant turn-rounds by mid-stream operators, materially restricting the Company’s revenues in 2015.

Despite these challenges in 2015 the Company’s strong balance sheet at the end of 2014, positioned the Company to make the best of a challenging year.  Below is a summary of the key results from the year-ended December 31, 2015:

Revenues       $ 15,038,644  
Net income from operations (net of non-reoccurring expenses) $15.56 per boe “Net Back”   $ 7,313,912  
Net income (net of non-reoccurring expenses)    $ 846,769  
Comprehensive loss    $ 3,641,434  
Cash and equivalents    $ 2,100,363  
Working capital (net of Long Term Debt)   $ 1,522,608  
Net debt (excluding decommissioning liabilities & deferred taxes)   $ 11,100,855  

At December 31, 2015, the Company’s restricted exit production was 1,580 boe/day, representing a 4% increase from December 31, 2014.  The Company’s average production was 1,546 boe/day for the 304(net) days that were available which resulted in an annualized average production rate of 1,288 boe/d.

The Company continues to focus on the strengthening of its financial foundation, as summarized above, and reported in its audited financial statements and corresponding management discussion and analysis.

Leonard Van Betuw, President and CEO commented, “Through measured capital spending decisions, and a continued focus on cost reductions in combination with strategic acquisitions, the Company is pleased to report year-over-year growth of 150% in Quattro’s oil gas reserves of 6.602 mmboe on a Total Proven (1P) Reserves basis valued on December 31, 2015 at $58.5 million (NPVdiscounted10%) and 10.977 mmboe on a Proven plus Probable (2P) basis valued at  $112.9 million (NPVdiscounted10%).  This growth, despite an extremely challenging macro-environment for the Company, proving to the market, Quattro’s continuing focus on maintaining the capacity to make patient, measured and sound business decisions that ultimately are for the betterment of all stakeholders.”

Quattro remained focused in 2015 on the long term development of its business and completed three strategic acquisitions funded through the issuance of three series of non-voting Class C preferred shares totaling a value of $6,063,500. The Acquisitions targeted additions to Quattro’s existing core areas in British Columbia and Saskatchewan. 

Following the filing of the year-end financial statements and correlated MD&A, Quattro will be filing with the Alberta Securities Commission for the revocation of the management cease trade order currently in place.

In December 2015, the Company completed the 100% acquisition of SRD Innovations Inc. (via the issuance of a fourth series of non-voting Class C shares), which was a strategic investment in a technology company which has certain products and intellectual property that in Management’s opinion will; vastly enhance the quality of data for the Company’s long term exploration and development program, reduce capital costs associated with this program, and potentially provide a significant diversified revenue stream to the Company.   

Strategic Investment – SRD Innovations Inc.

“The acquisition of SRD Innovations Inc., remains consistent with Quattro’s mission statement, of being positioned as a competitively priced supplier of energy and an environmentally responsible Company,” said Leonard B. Van Betuw, President and CEO of Quattro. “SRD has been a known asset to Quattro for many years.  A power house of intellectual personnel and capacity, recognized by a far reaching array of their peers including the IEEE, the National Science and Engineering Research Council and the Alberta Research Council. Quattro’s interest in SRD has been as a passive supporter for the past 5 years.  Their skills as innovators are boundless, ranging from the foundations of cellular wireless standards, and Wi-Fi in the 1980’s to development of the stable power systems required for what is now commonly known as the MIR.”

“Quattro’s interest in SRD Innovations developed into a need two years ago, as SRD’s patent portfolio and research resulted in their first commercialized application; the hyMesh™ wireless solution, developed for the collection of real-time seismic imaging for exploration, reservoir engineering and micro-seismic monitoring and the analysis of hydraulic fracking. This innovative solution, is now quickly migrating, as all proven technologies do, into a vast arena of needs, including wireless communications, voice and video. Applications range from private and secure wireless communications and data networks, to collecting data from remote industrial work sites, to monitoring pipelines, to wireless video monitoring,” said Mr. Van Betuw.

“Quattro commenced negotiations with SRD Innovations Inc. in 2014 for the application of SRD’s technologies in the areas of focus Quattro thought were a priority, only to realize that we were competing with a growing monster,  just a few competing industries were; WIRELESS COMMUNICATION NETWORKS, AGRI-TECH, INDUSTRIAL ASSET MANAGEMENT, AND ATONOMOUS EQUIPMENT CONTROL AND VIDEO DATA STREAMING.”

“After 18 months of contract negotiations, and the development of a strong appreciation of SRD’s technological applications, potential and challenges it became apparent that buying the Company, participating in the growing licensing revenues and gaining control over the SRD’s technology in the areas of resources exploration and development was not only the best solution for the low cost implementation and the continuing application of the technology for Quattro’s needs but it had the potential to be a very accretive investment opportunity.”