only predictions and actual events or results may differ materially. Although Longview believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Longview’s actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Longview.
In particular, forward-looking statements included in this press release include, but are not limited to, 2014 guidance; statements with respect to targeted average production; expected operating expenses for the year ended December 31, 2014; future royalty rates; projected capital expenditures for the year ended December 31, 2014; focus of capital budget; the focus of and timing of capital expenditures; drilling plans; timing of drilling of rigs; and crude oil and natural gas production levels. The payment and the amount of dividends declared in any month will be subject to the discretion of the board of directors and may vary depending on a variety of factors, including fluctuations in commodity prices, production levels, capital expenditure requirements, debt service requirements, operating costs, royalty burdens and foreign exchange rates. 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.
These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Corporation’s control, including the impact of general economic conditions; volatility in market prices for crude oil and natural gas; industry conditions; volatility of commodity prices; currency fluctuation; imprecision of reserve estimates; liabilities inherent in crude oil and natural gas operations; environmental risks; incorrect assessments of the value of acquisitions and exploration and development programs; competition from other producers; the lack of availability of qualified personnel or management; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; 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; stock market volatility; ability to access sufficient capital from internal and external sources and the other risks considered under “Risk Factors” in Longview’s Annual Information Form dated March 26, 2013, which is available on www.sedar.com.
With respect to forward-looking statements contained in this press release, Longview has made assumptions regarding: current commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil and natural gas; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; royalty rates and future operating costs.
Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide shareholders with a more complete perspective on Longview’s future operations and such information may not be appropriate for other purposes. Longview’s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive there from. Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this press release and the Company 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.
The payment and the amount of dividends declared in any month will be subject to the discretion of the board of directors and will depend on the board of directors’ assessment of the Corporation’s outlook for growth, capital expenditure requirements, funds from operations, potential acquisition opportunities, debt position and other conditions that the board of directors may consider relevant at such future time, including applicable restrictions that may be imposed under the Corporations’ Credit Facilities and on the ability of the Corporation to pay dividends. The amount of future cash dividends, if any, may also vary depending on a variety of factors, including fluctuations in commodity prices, production levels, capital expenditure requirements, debt service requirements, operating costs, royalty burdens and foreign exchange rates.
All dollar amounts in this press release are Canadian dollars unless otherwise indicated.
Non-GAAP Measures, Definitions and Abbreviations
The Corporation discloses several financial measures in this press release that do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS” or “GAAP”), such as funds from operations and payout ratio. 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. Longview’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. Please see the Corporation’s most recent management’s discussion and analysis, which is available on www.sedar.com for additional information about these financial measures.
“Boe” may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) 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.
“Funds from operations” represents cash provided by operating activities, adjusted for expenditures on decommissioning liability, changes in non-cash working capital and interest on bank indebtedness.
“Debt to cash flow ratio” is calculated as bank indebtedness plus working capital deficit divided by funds from operations.
“Operating netback” is calculated as revenue less hedging losses, royalties and operating costs.
“Payout ratio” is calculated as cash dividends declared and capital expenditures divided by funds from operations.
“Working capital deficit” includes trade and other receivables, prepaid expenses and deposits, trade and other accrued liabilities and due to parent.
The following abbreviations used in this press release have the meanings set forth below:
bbls | barrels | mcf | thousand cubic feet | |||||||||
bbls/d | barrels per day | mcf/d | thousand cubic feet per day | |||||||||
boe | barrels of oil equivalent, on the basis of 1 bbl of oil for 6 mcf of natural gas |
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boe/d | barrels of oil equivalent per day | |||||||||||
SOURCE Longview Oil Corp.
For further information:
Investor Relations
Toll free: 1-855-813-0313
Longview Oil Corp.
700, 400 -3rd Avenue SW
Calgary, Alberta
T2P 4H2
Phone: (403) 718-8000
Fax: (403) 718-8300
Web Site: www.longviewoil.com
E-mail: ir@longviewoil.com