Clarification on Non-GAAP Measures for 2013 Annual Results

VANCOUVER, British Columbia--()--Dejour Energy Inc. (NYSE MKT:DEJ / TSX:DEJ), (“Dejour” or the “Company”) refers the reader to its press release dated March 20, 2014, “Dejour Reports Positive Cash Flow in 2013, 35% Increase in Gross Revenues, and 17% Increase in Reserves Value.” Dejour wishes to provide additional disclosure about Non-GAAP measures, and the full and revised press release follows:

VANCOUVER, British Columbia, March 20, 2014 – Dejour Energy Inc. (NYSE MKT: DEJ / TSX: DEJ), an independent oil and gas exploration and production company operating in North America’s Piceance Basin and Peace River Arch regions, today announced its 2013 financial results. The Company generated $9.3 million in gross revenues, a 35% increase over 2012, and positive cash flow from operations of $521,000 compared with a cash deficiency from operations of $2.2 million in 2012.

Other Financial and Operating Highlights are:

  • A comprehensive loss for the year of $1.5 million representing an 87% reduction from the Company’s comprehensive loss of $11.8 million in 2012;
  • Average production for the year of 504 boepd, a 35% increase over average production of 372 boepd for the year ended December 31, 2012;
  • Average production of 620 boepd for the 4th quarter of 2013, a 94% increase over average production of 319 boepd in the 4th quarter of 2012;
  • Year-end 2P reserves value of $115.6 million, an increase of 16.8% over the 2P reserve value of $98.9 million at December 31, 2012;
  • A 10.4% reduction in operating and transportation costs from $3.8 million in 2012 to $3.4 million in 2013;
  • A 12% reduction in general and administrative expenses from 2012 to 2013 (after adjusting for certain non-recurring severance payments to the former President and COO paid in 2013), and
  • A successful 4-well drilling program in 2013 at Kokopelli, Colorado, a core property for the Company, which increased the number of “proven undeveloped” Williams Fork drilling locations for future development by 51% to 139 locations.



CORPORATE SUMMARY – DECEMBER 31, 2013

OPERATIONS      

Three months ended
December 31,

     

Twelve months ended
December 31,

        2013     2012     Change   2013     2012     Change
                                         
Production                                        
Oil and natural gas liquids

(bbls/d)

  167   193   -13%       215   198   9%
Natural gas (mcf/d)       2,714     755     259%       1,733     1,040     67%
Combined (BOE/d)       620     319     94%       504     372     35%
                                         
Realized sales prices                                        
Oil and natural gas liquids ($/bbl)       80.17     78.33     2%       86.21     81.37     6%
Natural gas ($/mcf)       4.55     3.44     32%       4.06     2.57     58%
                                         
Operating expenses                                        
Oil operations ($/bbl)       26.24     32.59     -19%       26.75     37.57     -29%
Natural gas operations ($/mcf)       2.11     2.63     -20%       2.06     2.72     -24%
                                         
Operating netback                                        
Oil operations ($/bbl)       36.61     31.47     16%       42.51     28.74     48%
Natural gas operations ($/BOE)       8.91     4.26     109%       7.40     -1.23     702%
                                         

General and administrative expenses
($/BOE)(1)

      14.98     35.06     -57%       18.39     25.91     -29%

Note:
(1) Excluding interest and financing charges



FINANCIAL (CA$ thousands,
except per share)

 

Three months ended
December 31,

 

Twelve months ended
December 31,

    2013   2012   Change   2013   2012   Change
                         
Revenue   2,354   1,631   44%   9,317   6,882   35%
Royalties   501   261   92%   1,811   1,116   62%
                         
Cash flow (1)   2   -505   100%   521   -2,218   123%
Cash flow per share (basic)   0.000   -0.003   100%   0.003   -0.016   122%
Cash flow per share (diluted)   0.000   -0.003   100%   0.003   -0.016   117%
                         
Net income (loss)   4,350   -9,454   146%   -2,577   -11,752   78%
Basic ($/common share)   0.029   -0.063   146%   -0.017   -0.083   79%
Diluted ($/common share)   0.022   -0.063   135%   -0.017   -0.083   79%
                         

Capital expenditures, net of
dispositions

  -87   1,037   -108%   2,041   4,485   -54%
                         

Weighted average common shares
outstanding (thousands)

                       
Basic   148,916   148,916   0%   148,916   141,056   6%
Diluted   195,883   148,916   32%   195,883   141,056   39%
                         
Bank debt, net of working capital               8,908   8,557   4%
                         

PROVED + PROBABLE
RESERVES - NPV of Before Tax
Cash Flow Discounted at 10%
(CA$ thousands) (2)

                       
Oil and natural gas liquids               5,330   9,378   -43%
Natural gas               110,225   89,508   23%
Total               115,555   98,887   17%

Notes:

(1) It is a non-GAAP measure and calculated by adding back settlement of decommissioning liabilities
and change in non-cash operating working capital to cash provided by operating activities. See “Non-
GAAP Measure” below for details.

(2) Reserves are defined as the Company’s working interest share of gross reserves less royalty interest
reserves.



SUPPLEMENTAL FINANCIAL INFORMATION – NON-GAAP MEASURE

(CA$ thousands)

      Three months ended December 31       Year ended December 31
  2013   2012       2013       2012
$   $ $   $

Cash provided by (used in) operating activities

389 (444) 962     (3,227)

Change in operating working capital

      (387)   (61)       (441)       1,009

Funds from (used in) operations

      2   (505)       521       (2,218)




About Dejour

Dejour Energy Inc. is an independent oil and natural gas exploration and production company operating projects in North America’s Piceance Basin (71,500 net acres) and Peace River Arch regions (7,500 net acres). Dejour maintains offices in Denver, USA, Calgary and Vancouver, Canada. The company is publicly traded on the New York Stock Exchange Amex (NYSE MKT:DEJ) and Toronto Stock Exchange (TSX:DEJ).

Disclosures Regarding Reserve Estimates: The reserve estimates assume available funding for development of the properties. Disclosed values do not necessarily represent fair market value. A conversion ratio for Cubic Feet Equivalent of gas of 6 thousand cubic feet to 1 bbl is used in the above tables and is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Prospective Resources are defined as “those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity”. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. These estimates represent the likely size of the resource, if present, and have not been adjusted for risk of failure.

Statements Regarding Forward-Looking Information: This news release contains statements about oil and gas production and operating activities that may constitute "forward-looking statements" or “forward-looking information” within the meaning of applicable securities legislation as they involve the implied assessment that the resources described can be profitably produced in the future, based on certain estimates and assumptions. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated by Dejour and described in the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, adverse general economic conditions, operating hazards, drilling risks, inherent uncertainties in interpreting engineering and geologic data, competition, reduced availability of drilling and other well services, fluctuations in oil and gas prices and prices for drilling and other well services, government regulation and foreign political risks, fluctuations in the exchange rate between Canadian and US dollars and other currencies, as well as other risks commonly associated with the exploration and development of oil and gas properties. Additional information on these and other factors, which could affect Dejour’s operations or financial results, are included in Dejour’s reports on file with Canadian and United States securities regulatory authorities. We assume no obligation to update forward-looking statements should circumstances or management's estimates or opinions change unless otherwise required under securities law. The TSX does not accept responsibility for the adequacy or accuracy of this news release.

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Contacts

Dejour Energy Inc.
Robert L. Hodgkinson, 604-638-5050
Chairman & CEO
Facsimile: 604-638-5051
investor@dejour.com
or
Craig Allison, 914-882-0960
Investor Relations – New York
callison@dejour.com

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Contacts

Dejour Energy Inc.
Robert L. Hodgkinson, 604-638-5050
Chairman & CEO
Facsimile: 604-638-5051
investor@dejour.com
or
Craig Allison, 914-882-0960
Investor Relations – New York
callison@dejour.com