Q1 2013 Financial Highlights
The following represents the highlights of Hyperion’s first quarter ended March 31, 2013:
Financial Highlights
3 Months Ended March 31 | ||||
2013 | 2012 | Change | ||
Financial ($000’s except per share amounts) | ||||
Oil sales (net of financial contract settlements) | 5,545 | 5,334 | 4% | |
NGL sales | 818 | 685 | 19% | |
Natural gas sales | 1014 | 641 | 58% | |
Total Oil, NGL, & Natural gas | 7,377 | 6,660 | 11% | |
Funds inflow (outflow) from operations | 4,017 | 3,275 | 23% | |
Per common share basic & FD ($) | 0.07 | 0.06 | 17% | |
Net earnings (loss)1 | (14,228) | 173 | nm | |
Per common share basic & FD ($) | (0.26) | – | nm | |
Capital expenditures including deposits | 4,074 | 26,851 | -85% | |
Working capital (deficit) exit | (33,928) | (33,871) | 0% | |
Unused credit facilities | 17,466 | 19,479 | -10% | |
Production | ||||
Oil (bbls per day) | 723 | 677 | 7% | |
NGL (bbls per day) | 172 | 124 | 39% | |
Natural gas (mcf per day) | 3,480 | 3,069 | 13% | |
Total (boe per day) (6:1) | 1,475 | 1,312 | 12% | |
Per 1 million common share basic & FD (boe per day)2 | 27.219 | 24.211 | 12% | |
Average realized price ($’s – production weighted) | ||||
Oil ($ per bbl) | 84.63 | 86.59 | -2% | |
NGL ($ per bbl) | 53.01 | 60.79 | -13% | |
Natural gas ($ per mcf) | 3.24 | 2.29 | 41% | |
Average ($ per boe) | 55.29 | 55.77 | -1% | |
Netback ($’s per boe) | ||||
Oil, natural gas and NGL sales | 55.29 | 55.77 | -1% | |
Royalties | (4.63) | (11.29) | -59% | |
Operating and transportation expenses | (12.65) | (12.24) | 3% | |
Operating netback | 38.01 | 32.24 | 18% | |
Common Shares (000’s) | ||||
Basic and fully diluted common shares o/s, end of period3 | 54,190 | 54,190 | 0% | |
Weighted average basic and fully diluted common shares o/s3 | 54,190 | 54,190 | 0% | |
1 Net income includes non-cash asset impairment charges of $15,100 | ||||
2 Weighted average basic and fully diluted common share count used in calculation. Figures not adjusted for debt or working capital positions. | ||||
3 Basic and fully diluted common shares outstanding are considered equivalent prior to Q3 2012 as all dilutive instruments are considered anti-dilutive under IFRS. |
Operations Update
Hyperion drilled 1 gross (1 net) Cardium horizontal light oil well in Q1, 2013. In addition, 2 gross (2 net) Cardium horizontal wells were fracture stimulated, equipped and placed on production. Hyperion continued to focus on capital efficiency in Q1, 2013 by using monobore drilling techniques. Such techniques effectively reduced drilling times by approximately 4 days (as compared to setting intermediate casing on the initial wells) and completion flow back time by approximately 3 days.
Hyperion continues to be pleased with the production performance of the Cardium horizontal wells placed on production as detailed in the April 22, 2013 press release. The location selection of the initial drills was driven by land expiries and earning commitments and not based on our best geological opportunities. Future wells will target areas where the geology indicates increased net pay and improved reservoir quality. Based on results achieved, location of future wells and target capital per well (based on a full scale continuous drilling program) we expect rates of return to exceed 70% and payouts of approximately 1.3 years. This asset base contains all the attributes for top tier growth including a low risk, repeatable, drilling profile, and strong internal rate of return. Hyperion currently holds 37,440 gross (34,000net) acres of Cardium rights in the Niton/McLeod area, including the previously announced farm in, with an average working interest of approximately 90%. Total Petroleum Initially In Place (“TPIIP”) effective as of April 18, 2013, is internally estimated to be up to 171 MMbbls (net) of light oil with a primary recovery factor of 11.7%. The Niton/McLeod area is characterized by up to 191 gross (172 net) Cardium horizontal drilling locations with recycle ratios of greater than 2.0. At year end 2012, approximately 9.4% of these locations have been drilled or booked with approximately 174 gross (156) net locations remaining as un-booked. These estimates are subject to change with varying economic conditions and future drilling results.
Hyperion is a publically traded, junior light oil and gas company resulting from the recapitalization of Triple 8 Energy Ltd. in July 2010. Hyperion’s business strategy is to grow through acquisitions which lead to lower risk, scalable and repeatable, light oil, development drilling projects. Currently Hyperion has 54,190,359 common shares outstanding. The common shares of the Company trade on the TSX Venture Exchange under the trading symbol “HYX”.
Forward Looking and Cautionary Statements
This press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward-looking statements can be identified by terminology such as “may”, “will”, “should”, “expect”, “projects”, “plans”, “anticipates” and similar expressions. These statements represent management’s expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Hyperion. Undue reliance should not be placed on these forward-looking statements which are based upon management’s assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.
In the interest of providing Hyperion shareholders and potential investors with information regarding the Corporation, including management’s assessment of Hyperion’s future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on the Corporation’s beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe” and similar expressions are intended to identify forward looking statements. By its nature, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Hyperion believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements contained throughout this press release should not be unduly relied upon. These statements speak only as of the date specified in the statements.
In particular, this press release may contain forward looking statements pertaining to the following:
The material assumptions in making these forward-looking statements include certain assumptions disclosed in the Corporation’s most recent management’s discussion and analysis included in the material available on this press release.
The Corporation’s actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:
These factors should not be construed as exhaustive. Unless required by law, Hyperion does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
Total Petroleum Initially-in-Place (“TPIIP”) – is defined in the Canadian Oil and Gas Evaluation Handbook (“COGEH”) as the quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. TPIIP includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered. There is no certainty that it will be economically viable or technically feasible to produce any portion of this TPIIP except for those portions identified as proved or probable reserves.
Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.
Estimated values contained in this press release do not represent fair market value.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Hyperion Exploration Corp.
Trevor Spagrud
President and CEO
(403) 930-0701
tspagrud@hyperionexploration.com
Hyperion Exploration Corp.
Doug Bailey
CFO
(403) 930-0703
dbailey@hyperionexploration.com
Hyperion Exploration Corp.
Suite 2010, Calgary Place II
355 – 4th Avenue SW
Calgary, Alberta