CALGARY, ALBERTA–(Marketwired – March 14, 2017) – Pine Cliff Energy Ltd. (“Pine Cliff” or the “Company“) (TSX:PNE) is pleased to announce its fourth quarter and year-end financial and operating results and the filing of its 2016 disclosure documents. Included in the filings are Pine Cliff’s annual information form (“AIF“), which includes disclosure and reports related to reserves data and other oil and gas information pursuant to National Instrument 51‐101 Standards of Disclosure for Oil and Gas Activities and its consolidated financial statements and related management’s discussion and analysis for the year ended December 31, 2016 (the “Annual Report“). Selected highlights are shown below and should be read in conjunction with the Annual Report and the AIF.
Fourth Quarter 2016 Highlights
Significant highlights from the fourth quarter of 2016 were as follows:
- achieved record quarterly funds flow from operations of $15.0 million ($0.05 per basic share), 129% higher than the $6.6 million ($0.03 per basic share) in the fourth quarter of 2015;
- achieved record revenue of $35.2 million, 73% higher than the $20.3 million in the fourth quarter of 2015;
- achieved earnings of $3.2 million ($0.01 per basic share) compared to a loss of $3.3 million (($0.01) per basic share) in the fourth quarter of 2015;
- increased production by 43% to 21,525 Boe/d (93% natural gas) from 15,051 Boe/d (94% natural gas) in the fourth quarter of 2015 (a 12% increase on a per basic share basis);
- closed the disposition of a non-core oil asset for total proceeds of $31.7 million;
- continued to strengthen its balance sheet, paying down $40.9 million of bank debt, ending the year with $30.9 million in bank debt; and
- reduced net debt by $46.1 million, ending the year with $64.2 million in net debt.
Pine Cliff’s primary focus in 2016 was to strengthen its balance sheet and integrate the largest asset acquisition the Company has ever undertaken. Pine Cliff reduced its bank debt by $125.0 million in 2016 without issuing equity to dilute shareholders, and at the same time continued to improve margins. Throughout 2016, Pine Cliff stayed focused on reducing costs, prudently spending capital and lowering the production decline rate. As natural gas prices recovered in the fourth quarter, Pine Cliff saw the benefits of these efforts with record funds flow. As a result of the lowest AECO prices in Alberta in 18 years, 2016 realized natural gas prices were only $2.13 per Mcf and Pine Cliff still achieved funds flow from operations of $19.7 million ($0.06 per share) with minimal production decline (net of dispositions), while only spending $8.4 million in net capital.
Over the last five years, Pine Cliff has built a portfolio of assets that it estimates will generate positive funds flow in 2017 at natural gas prices above $1.70 per Mcf and generate positive funds flow while keeping production flat in 2017 at natural gas prices above $2.15 per Mcf. These numbers speak to the sustainability of the business model that has been built. If natural gas prices rise, Pine Cliff is well positioned with every $0.10 per Mcf move in AECO prices equating to almost $4.2 million of annual funds flow or $0.014 per outstanding share. Exiting 2016 with a strong balance sheet allows the Company to withstand the volatility in natural gas prices as well as provide flexibility for possible future acquisitions.
Financial and Operating Results(1)
|Three months ended
|($000s, unless otherwise indicated)||2016||2015||2016||2015|
|Oil and gas sales (before royalties)||38,316||21,548||118,642||78,593|
|Cash flow from operating activities||12,632||973||22,489||20,768|
|Funds flow from operations(2)||15,026||6,550||19,741||25,818|
|Per share – Basic and Diluted ($/share)||0.05||0.03||0.06||0.11|
|Per share – Basic and Diluted ($/share)||0.01||(0.01||)||(0.16||)||(0.10||)|
|Acquisitions, after adjustments||(1,029||)||179,540||(807||)||193,065|
|Percent natural gas||93||94||93||95|
|Combined sales price ($/Boe)||19.35||15.56||14.41||16.75|
|Operating netback ($/Boe)(4)||8.81||6.16||4.08||7.08|
|Operating netback ($ per Mcfe)||1.47||1.03||0.68||1.18|
|Corporate netback ($/Boe)(5)||7.59||4.74||2.39||5.51|
|Corporate netback ($ per Mcfe)||1.27||0.79||0.40||0.92|
|(1)||Includes results for acquisitions and excludes results for dispositions from the closing dates.|
|(2)||Funds flow from operations is a non-IFRS measure that represents the total of funds provided by operating activities, before adjusting for changes in non-cash working capital, and decommissioning obligations settled.|
|(3)||Net debt is a non-IFRS measure calculated as the sum of bank debt, subordinated promissory notes at the principal amount, amounts due to related party, and trade and other payables less trade and other receivables, cash, prepaid expenses and deposits and investments.|
|(4)||Operating netback is a non-IFRS measure calculated as the Company’s total revenue, less operating expenses, divided by the Boe production of the Company for the period.|
|(5)||Corporate netback is a non-IFRS measure calculated as the Company’s operating netback, less general and administrative expenses, interest and bank charges plus finance and dividend income, divided by the Boe production of the Company.|
About Pine Cliff
Pine Cliff is an Alberta based natural gas company that is focused on acquiring and developing long life assets that are cash flow positive even in a low commodity price environment. Further information relating to Pine Cliff, including the Annual Report and the AIF, may be found on www.sedar.com as well as on Pine Cliff’s website at www.pinecliffenergy.com. To request a printed copy, free of charge, please send an email to [email protected].