Investor Relations
Toll free: 1-866-393-0393
Advantage Oil & Gas Ltd.
700, 400 – 3rd Avenue SW
Calgary, Alberta
T2P 4H2
Phone: (403) 718-8000
Fax: (403) 718-8300
Web Site: www.advantageog.com
E-mail: ir@advantageog.com
CALGARY, May 9, 2013 /CNW/ – Advantage Oil & Gas Ltd. (“Advantage” or the “Corporation”) is pleased to announce the financial and operating results for the three months ended March 31, 2013. The following press release summarizes and discusses the unconsolidated financial and operating highlights for Advantage (excludes Longview Oil Corp).
Three months ended | |||||||
March 31 | |||||||
2013 | 2012 | ||||||
Financial ($000, except as otherwise indicated) | |||||||
Sales including realized hedging | $ | 41,598 | $ | 33,425 | |||
per share (2) | $ | 0.25 | $ | 0.20 | |||
per boe | $ | 21.75 | $ | 15.89 | |||
Funds from operations | $ | 21,484 | $ | 12,419 | |||
per share (2) | $ | 0.13 | $ | 0.07 | |||
per boe | $ | 11.23 | $ | 5.91 | |||
Dividends received from Longview | $ | 3,173 | $ | 4,417 | |||
per share (2) | $ | 0.02 | $ | 0.03 | |||
Total capital expenditures | $ | 54,107 | $ | 63,327 | |||
Working capital deficit (3) | $ | 49,027 | $ | 70,422 | |||
Bank indebtedness | $ | 164,025 | $ | 188,569 | |||
Convertible debentures (face value) | $ | 86,250 | $ | 86,250 | |||
Shares outstanding at end of period (000) | 168,383 | 166,573 | |||||
Basic weighted average shares (000) | 168,383 | 166,541 | |||||
Operating | |||||||
Daily Production | |||||||
Natural gas (mcf/d) | 119,692 | 129,951 | |||||
Crude oil and NGLs (bbls/d) | 1,308 | 1,463 | |||||
Total boe/d @ 6:1 | 21,257 | 23,121 | |||||
Average prices (including hedging) | |||||||
Natural gas ($/mcf) | $ | 3.04 | $ | 2.00 | |||
Crude oil and NGLs ($/bbl) | $ | 75.58 | $ | 73.31 | |||
(1) | Non-consolidated financial and operating highlights for Advantage excluding Longview. | ||||||
(2) | Based on weighted average shares outstanding | ||||||
(3) | Working capital deficit includes trade and other receivables, prepaid expenses and deposits, | ||||||
and trade and other accrued liabilities |
Stable Production, Increased Funds from Operations and Reduced Bank Indebtedness
Looking Forward – Focused on Glacier Development Plan to Double Production by 2015
Commodity Hedging Program
Average Price | |||||||
Period | Average Volume Hedged | $Cdn. AECO | |||||
2013 Year | 29,224 mcf/d | $3.31/mcf | |||||
2014 Year | 47,391 mcf/d | $3.79/mcf | |||||
2015 Year | 45,021 mcf/d | $3.91/mcf | |||||
2016 Q1 | 42,652 mcf/d | $3.90/mcf |
Interim Consolidated Financial Statements and MD&A
Advantage’s unaudited interim consolidated financial statements for the three months ended March 31, 2013 together with the notes thereto, and Management’s Discussion and Analysis for the three months ended March 31, 2013 have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and posted on our website at www.advantageog.com and filed under our profile on SEDAR at www.sedar.com.
Approval of Advance Notice By-Law
Advisory
The information in this press release contains certain forward-looking statements, including within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future intentions or performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “demonstrate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe”, “would” and similar expressions and include statements relating to, but not limited to, the estimated royalty rate for the life of a Glacier Montney horizontal well; the Corporation’s anticipated drilling and completion plans; estimated production from the remainder of 2013 from the completion of the Corporation’s wells drilled inventory; effect of undrawn credit facility, ownership of Longview shares and cash flow on the Corporation’s financial flexibility and drilling and completion plans; and the Corporation’s development plan to increase production at Glacier and the anticipated production levels and timing thereof. In addition, statements relating to “reserves” or “resources” are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future.
Advantage’s actual decisions, activities, results, performance or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits that Advantage will derive from them.
These statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Advantage’s control, including, but not limited to: changes in general economic, market and business conditions; industry conditions; actions by governmental or regulatory authorities including increasing taxes and changes in investment or other regulations; changes in tax laws, royalty regimes and incentive programs relating to the oil and gas industry; the effect of acquisitions; Advantage’s success at acquisition, exploitation and development of reserves; unexpected drilling results, changes in commodity prices, currency exchange rates, capital expenditures, reserves or reserves estimates and debt service requirements; the occurrence of unexpected events involved in the exploration for, and the operation and development of, oil and gas properties; hazards such as fire, explosion, blowouts, cratering, and spills, each of which could result in substantial damage to wells, production facilities, other property and the environment or in personal injury; changes or fluctuations in production levels; delays in anticipated timing of drilling and completion of wells; individual well productivity; competition from other producers; the lack of availability of qualified personnel or management; credit risk; individual well productivity; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; our ability to comply with current and future environmental or other laws; stock market volatility and market valuations; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves; failure to realize the anticipated benefits of the sale of the Corporation’s non-core assets; and ability to obtain required approvals of regulatory authorities and ability to access sufficient capital from internal and external sources. Many of these risks and uncertainties and additional risk factors are described in the Corporation’s Annual Information Form which is available at www.sedar.com and www.advantageog.com. Readers are also referred to risk factors described in other documents Advantage files with Canadian securities authorities.
With respect to forward-looking statements contained in this press release, Advantage has made assumptions regarding: conditions in general economic and financial markets; effects of regulation by governmental agencies; current commodity prices and royalty regimes; future exchange rates; royalty rates; future operating costs; availability of skilled labor; availability of drilling and related equipment; timing and amount of capital expenditures; the impact of increasing competition; the price of crude oil and natural gas; that the Corporation will have sufficient cash flow, debt or equity sources or other financial resources required to fund its capital and operating expenditures and requirements as needed; that the Corporation’s conduct and results of operations will be consistent with its expectations; that the Corporation will have the ability to develop the Corporation’s crude oil and natural gas properties in the manner currently contemplated; current or, where applicable, proposed assumed industry conditions, laws and regulations will continue in effect or as anticipated; and the estimates of the Corporation’s production and reserves volumes and the assumptions related thereto (including commodity prices and development costs) are accurate in all material respects.
These forward-looking statements are made as of the date of this press release and Advantage disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
References in this press release to initial production test rates, initial “productivity”, initial “flow” rates, “flush” production rates and “behind pipe production” are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for Advantage.
Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. A boe conversion ratio of 6 mcf:1 bbls is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
The Corporation discloses several financial measures that do not have any standardized meaning prescribed under IFRS. These financial measures include funds from operations and cash netbacks. Management believes that these financial measures are useful supplemental information to analyze operating performance and provide an indication of the results generated by the Corporation’s principal business activities. Investors should be cautioned that these measures should not be construed as an alternative to net income, cash provided by operating activities or other measures of financial performance as determined in accordance with IFRS. Advantage’s method of calculating these measures may differ from other companies, and accordingly, they may not be comparable to similar measures used by other companies.
SOURCE: Advantage Oil & Gas Ltd.
Investor Relations
Toll free: 1-866-393-0393
Advantage Oil & Gas Ltd.
700, 400 – 3rd Avenue SW
Calgary, Alberta
T2P 4H2
Phone: (403) 718-8000
Fax: (403) 718-8300
Web Site: www.advantageog.com
E-mail: ir@advantageog.com