CALGARY, ALBERTA–(Marketwired – May 12, 2015) – Bonterra Energy Corp. (TSX:BNE) (Bonterra or the Company) is pleased to announce its operating and financial results for the three months ended March 31, 2015. The related unaudited condensed financial statements and notes, as well as management’s discussion and analysis (MD&A), are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on Bonterra’s website at www.bonterraenergy.com.
|As at and for the three months period ended||March 31,||December 31,||March 31,|
|($000s except $ per share)||2015||2014||2014|
|Revenue – realized oil and gas sales||42,480||68,940||82,521|
|Funds flow (3)||22,090||31,926||54,414|
|Per share – basic||0.69||0.99||1.73|
|Per share – diluted||0.69||0.99||1.72|
|Cash flow from operations||26,079||50,465||49,094|
|Per share – basic||0.81||1.57||1.56|
|Per share – diluted||0.81||1.57||1.55|
|Cash dividends per share||0.60||0.90||0.87|
|Net earnings (loss)||(1,935||)||(32,877)(2)||23,041|
|Per share – basic||(0.06||)||(1.04||)||0.73|
|Per share – diluted||(0.06||)||(1.03||)||0.73|
|Capital expenditures and acquisitions, net of dispositions||38,960(1)||20,605||54,236|
|Working capital deficiency||37,633||53,642||62,488|
|Oil||– barrels per day||8,128||8,762||7,567|
|– average price ($ per barrel)||48.70||71.37||96.53|
|NGLs||– barrels per day||791||911||721|
|– average price ($ per barrel)||22.36||37.49||67.81|
|Natural gas||– MCF per day||19,709||22,883||22,307|
|– average price ($ per MCF)||2.97||3.92||6.16|
|Total barrels of oil equivalent per day (BOE) (4)||12,204||13,488||12,006|
|(1)||Includes a deposit of $17,200,000 for a purchase of primarily Pembina Cardium oil and gas assets that closed on April 15, 2015 and increased capital expenditures from $21,760,000.|
|(2)||Net loss in the fourth quarter of 2014 is primarily due to an increase in deferred tax expense as a result of an agreement with Canada Revenue Agency.|
|(3)||Funds flow is not a recognized measure under IFRS. For these purposes, the Company defines funds flow as funds provided by operations including proceeds from sale of investments and investment income received excluding the effects of changes in non-cash working capital items and decommissioning expenditures settled.|
|(4)||BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 MCF: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.|
Bonterra’s first quarter results have been impacted by the continued low commodity prices that started their decline in Q3 2014. The price reductions have resulted in a large reduction in funds flow and made it necessary for the Company to reduce the monthly dividend, its budgeted 2015 capital expenditures and to delay the completion of drilled wells until commodity prices improve.
Following are comparatives for Q1 2015, Q4 2014 and Q1 2014 as well as the implications Bonterra has realized as a result of the lower commodity price environment:
- Average Canadian dollar realized commodity price per barrel of oil equivalent (BOE) net of royalties was $35.50 in Q1 2015; $67.61 in Q1 2014; and $49.69 in Q4 2014.
- Corporate cash netback per BOE was $20.78 in Q1 2015; $50.37 in Q1 2014 and $34.20 in Q4 2014.
- Corporate funds flow for Q1 2015 was $22.1 million compared to $54.4 million in Q1 2014 and $31.9 million in Q4 2014.
- The reduction in funds flow resulted in a reduction of the monthly dividend from $0.30 to $0.15 per common share effective in February 2015, as well as a lower level of capital expenditures in Q1of $21.7 million compared to $55.2 million in Q1 2014.
- The Company achieved Q1 2015 production of 12,204 BOE per day compared to 12,006 in Q1 2014 and 13,488 in Q4 2014. The Q1 2015 production does not include any volumes from the January 2015 Pembina area acquisition of approximately 1,800 BOE per day, had fewer wells commencing production in Q1 2015, and had approximately 640 BOE per day of shut in production due to volume restrictions from non-operated facilities, oil apportionments and gas capacity restrictions imposed by pipeline operators and voluntary shut ins by the Company.
- Kindly refer to the “Highlights” and “Quarterly Comparison” sections of the full Q1 2015 quarterly report for further details.
- Closed the acquisition to acquire oil and gas assets on April 15 2015 in the Pembina area of Alberta for $170 million (after adjustments) that averaged production of approximately 1,760 BOE per day (86 percent liquids) for the period January 1, 2015 to April 30, 2015. The decline rate for this production is approximately 7 percent and Bonterra has identified 136 Cardium horizontal drill locations on this property.
- Renewed the existing bank credit facility with its syndicated banks to $425 million from $250 million to finance the above described $170 million acquisition. Equity issues to reduce the debt may be considered in the future, subject to commodity and Bonterra share prices.
- The possible impact on the oil and gas industry resulting from the Alberta Provincial election remains unclear.
It is a volatile period for the industry and difficult to develop a five year plan. The likely largest impact items will be predicting commodity prices, the policies of the new Alberta government and take away pipeline capacity.
Bonterra’s favourable asset base makes it possible to operate successfully at low commodity prices and with its present debt levels. The Company continues to take the approach that capital spending and dividend payments will continue to be monitored on an ongoing basis and can be modified quickly in response to changes in production volumes, commodity prices and regulatory changes.
If commodity pricing continues to move upward as seen subsequent to Q1 2015, the Board and Management will give considerations to increasing capital expenditures, reducing the debt or increasing the dividend, or a combination of these options in 2015.
It is important to remember that not all is negative during difficult times. Capital costs on a per well basis have been reduced by 20 to 25 percent; operating and general and administration costs are lower; the differential between WTI oil prices is substantially lower than in recent months and realized prices received by the Company are beginning to trend higher; and the Canadian dollar compared to the U.S. dollar is substantially lower which contributes to higher revenues in Canadian dollar. Each of these items help to somewhat offset the broader negative impact of low commodity pricing.
Bonterra Energy Corp. is a conventional oil and gas corporation with operations in Alberta, Saskatchewan and British Columbia. The shares are listed on The Toronto Stock Exchange under the symbol “BNE”.
This summarized news release should not be considered a suitable source of information for readers who are unfamiliar with Bonterra Energy Corp. and should not be considered in any way as a substitute for reading the full report. For the full report, please go to www.bonterraenergy.com.
Use of Non-IFRS Financial Measures
Throughout this release the Company uses the terms “payout ratio” and “cash netback” to analyze operating performance, which are not standardized measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. These measures are commonly utilized in the oil and gas industry and are considered informative by management, shareholders and analysts. These measures may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies.
The Company calculates payout ratio by dividing cash dividends paid to shareholders by cash flow from operating activities, both of which are measures prescribed by IFRS which appear on our statements of cash flows. We calculate cash netback by dividing various financial statement items as determined by IFRS by total production for the period on a barrel of oil equivalent basis.
Frequently recurring terms
Bonterra uses the following frequently recurring terms in this press release: “bbl” refers to barrel, “NGL” refers to Natural gas liquids, “MCF” refers to thousand cubic feet and “BOE” refers to barrels of oil equivalent. Disclosure provided herein in respect of a BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 MCF: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
The reporting and the functional currency of the Company is the Canadian dollar.
Certain statements contained in this release include statements which contain words such as “anticipate”, “could”, “should”, “expect”, “seek”, “may”, “intend”, “likely”, “will”, “believe” and similar expressions, relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this release includes, but is not limited to: expected cash provided by continuing operations; cash dividends; future capital expenditures, including the amount and nature thereof; oil and natural gas prices and demand; expansion and other development trends of the oil and gas industry; business strategy and outlook; expansion and growth of our business and operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit risks; and other such matters.
All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas companies to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control.
Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do, what benefits will be derived there from. Except as required by law, Bonterra disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
The forward-looking information contained herein is expressly qualified by this cautionary statement.
Not for distribution to U.S. news wire services or dissemination in the United States. The TSX does not accept responsibility for the accuracy of this release.
Bonterra Energy Corp.
George F. Fink
Chairman and CEO
(403) 265-7488 (FAX)
Bonterra Energy Corp.
Robb D. Thompson
CFO and Secretary
(403) 265-7488 (FAX)
Bonterra Energy Corp.
(403) 265-7488 (FAX)