CALGARY, May 28, 2015 /CNW/ – 3MV Energy Corp. (“3MV” or the “Company“) (TSXV: TMV) is pleased to report its financial and operating results for the three months ended March 31, 2015. 3MV’s unaudited financial statements and related management’s discussion and analysis for the three months ended March 31, 2015 have been filed and are available on the SEDAR website at www.sedar.com and on the Company’s website at www.3mvenergy.com.
3MV announces the following financial and operating highlights:
Operations
During Q1 2015 the Corporation and its JV partner completed and equipped a vertical well previously drilled in Q4 2014 and brought onto production with favorable results.
In addition the Corporation and its JV partner re-fractured and equipped an existing shut in vertical well. Further to this, 3MV Energy participated in the re-fracturing of an existing horizontal oil well in order to increase production. The Corporation used a new completion technique that allowed it to reduce the cost of hydraulic fractures.
Land
During Q1 2015 the Corporation, along with its JV partner acquired further prospective land locations at its Fiske play. 3MV Energy now holds over 64 gross contiguous sections of land in its Fiske core area. In addition the Corporation acquired land parcels in Southeast Saskatchewan.
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Three months ended |
Three months ended |
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March 31, 2015 |
March 31, 2014 |
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Average Daily Production |
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Crude oil & NGL (bbl/d) |
106.4 |
66.5 |
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Natural gas (Mcf/d) |
24.7 |
61.2 |
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Total (boe/d) |
110.5 |
76.7 |
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Average sales prices |
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Crude oil & NGL ($/bbl) |
47.62 |
93.50 |
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Natural gas ($/Mcf) |
2.41 |
5.37 |
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Operating Netbacks ($/boe) |
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Average realized sales price |
46.38 |
85.36 |
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Royalty expense |
4.19 |
5.09 |
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Operating & transportation expense |
23.69 |
47.22 |
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Operating netback (1) |
18.50 |
33.05 |
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($000s, except per share numbers) |
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Petroleum & natural gas revenues, |
461 |
589 |
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Funds used in operations (2) |
(281) |
(15) |
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Per share – basic and diluted |
(0.01) |
(0.00) |
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Net earnings (loss) |
(748) |
(80) |
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Per share – basic and diluted (3) |
(0.01) |
(0.00) |
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Net debt (working capital) (4) |
(2,293) |
(3,974) |
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Total assets |
11,066 |
20,138 |
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Shares outstanding |
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Basic and diluted |
55,352 |
51,217 |
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1) |
Operating netbacks (calculated on a per unit basis as oil, gas and natural gas liquids revenues, less royalties, transportation and operating costs) is not a recognized measure under IFRS. |
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2) |
Funds generated by operations is not a prescribed IFRS measure and is calculated as oil, gas and natural gas liquids revenues, less royalties, operating costs, general and administrative expenses, interest expense and current income taxes on a per unit basis multiplied by the total number of barrels produced in the period. This is not a recognized measure under IFRS. |
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3) |
Net earnings (loss) per share is calculated using weighted average shares outstanding. |
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4) |
Net debt (working capital) is an industry term, and is calculated as current assets less current liabilities, and is not a recognized measure under IFRS. |
Outlook
3MV Energy intends to focus its drilling and production efforts on its Fiske core asset for 2015 and into the future. In early 2013, the Corporation acquired a significant position of land in the area which has solidified its asset base and creates potential for further growth and expansion through the drill bit.
In the current environment of depressed global commodity prices, the Corporation plans to be conservative moving forward; working to conserve cash flow and to select drilling locations that are economically viable. The Corporation plans to work with its joint venture partner to evaluate production results at Fiske with the goal of creating a long term exploitation strategy. 3MV Energy is also exploring potential accretive acquisitions, mergers and farm-in opportunities in Saskatchewan that are arising from the current economic state.
[expand title=”Advisories & Contact”]Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.
Forward-Looking Statements
Certain statements in this news release constitute forward-looking statements. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by 3MV. Although 3MV believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because 3MV can give no assurance that they will prove to be correct.
Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect 3MV’s operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
The forward-looking statements contained in this document are made as of the date hereof and 3MV undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Oil and Gas Disclosure
For the purpose of calculating unit costs, natural gas volumes have been converted to a barrel of oil equivalent (“BOE”) using six thousand cubic feet equal to one barrel unless otherwise stated. A BOE conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. BOEs may be misleading, particularly if used in isolation.
Net present value of future net revenue does not represent fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material.
Non-GAAP Measures
This press release contains the terms “operating netbacks”, “funds generated by operations”, and “net debt”, which do not have a standardized meaning prescribed by GAAP and therefore may not be comparable with the calculation of similar measures by other issuers. 3MV uses operating netbacks and funds generated by operations to analyze operating and financial performance. 3MV believes these benchmarks are key measures of profitability and overall sustainability for the Company. Both of these terms are commonly used in the oil and gas industry. Operating netbacks and funds generated by operations are not intended to represent operating profits nor should they be viewed as an alternative to cash flow provided by operating activities, net earnings (loss) or other measures of financial performance calculated in accordance with GAAP. Operating netbacks are determined by deducting royalties, operating costs and transportation from oil and gas revenue. Funds generated by operations are calculated as cash flows from operating activities excluding transaction costs less changes in non-cash working capital and share base payments.3MV uses net debt to assess the financial position and health of the Company. 3MV believes this benchmark is a key measure of financial leverage and displays a Company’s ability to repay its debts when due. Net debt is calculated as current assets less current liabilities.
SOURCE 3MV Energy Inc.