CALGARY, ALBERTA–(Marketwired – Nov. 4, 2015) – Paramount Resources Ltd. (TSX:POU)
OIL AND GAS OPERATIONS
STRATEGIC INVESTMENTS
CORPORATE
OUTLOOK
The Company has accelerated completion operations for two “Ultra-Rich” six-well pads at Musreau to November 2015 to secure lower pricing for services and materials. These 12 wells were previously scheduled to be completed in the first quarter of 2016. Paramount’s 2015 capital spending is anticipated to be $490 million, primarily related to incremental spending in the Kaybob area due to the accelerated well completions, higher third quarter completion costs as a result of higher intensity oil-based fracks and higher facilities costs, and additional costs for the La Biche Shale gas project.
Paramount was impacted by a scheduled third-party NGLs pipeline outage that required the majority of its Kaybob area wells to be shut in on October 20th. The third-party NGLs pipeline has resumed service and the Company is in the process of restarting the Musreau Deep Cut Facility and bringing its wells back on production. Sales volumes are expected to increase as the Company resumes Kaybob area production, brings on Montney wells at Birch through the new compression facility and begins to bring on new Ultra-Rich wells at Musreau. Paramount’s 2015 sales volumes are expected to average approximately 45,000 Boe/d.
FINANCIAL AND OPERATING HIGHLIGHTS (1) ($ millions, except as noted) |
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Three months ended September 30 |
Nine months ended September 30 |
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2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||
Sales volumes | |||||||||||||
Natural gas (MMcf/d) | 181.8 | 93.6 | 94 | 161.7 | 99.2 | 63 | |||||||
Condensate and oil (Bbl/d) | 10,214 | 4,690 | 118 | 8,144 | 3,537 | 130 | |||||||
Other NGLs (Bbl/d) (2) | 9,483 | 1,643 | 477 | 8,587 | 1,118 | 668 | |||||||
Total (Boe/d) | 49,990 | 21,936 | 128 | 43,680 | 21,186 | 106 | |||||||
% Liquids | 39 | % | 29 | % | 38 | % | 22 | % | |||||
Petroleum and natural gas sales | 110.7 | 84.4 | 31 | 285.5 | 250.6 | 14 | |||||||
Average realized price ($/Boe) | 24.07 | 41.80 | (42 | ) | 23.94 | 43.33 | (45 | ) | |||||
Operating expense ($/Boe) | 5.67 | 7.65 | (26 | ) | 5.63 | 8.48 | (34 | ) | |||||
Netback including realized hedges | 69.9 | 54.6 | 28 | 169.3 | 158.8 | 7 | |||||||
$/Boe | 15.23 | 27.06 | 14.20 | 27.46 | |||||||||
Funds flow from operations | 36.9 | 36.4 | 1 | 72.2 | 99.4 | (27 | ) | ||||||
per share – diluted ($/share) | 0.35 | 0.35 | 0.68 | 0.98 | |||||||||
Net income (loss) | (171.8 | ) | (9.4 | ) | nm | (302.3 | ) | 34.8 | nm | ||||
per share – diluted ($/share) | (1.62 | ) | (0.09 | ) | (2.86 | ) | 0.34 | ||||||
Principal Properties Capital (3) | 90.5 | 222.7 | (59 | ) | 366.9 | 589.3 | (38 | ) | |||||
Investments in other entities – market value (4) | 131.4 | 667.1 | (80 | ) | |||||||||
Total assets | 3,367.8 | 3,090.9 | 9 | ||||||||||
Net Debt | 1,830.8 | 1,256.7 | 46 | ||||||||||
Common shares outstanding (thousands) | 106,212 | 104,614 | 2 |
(1) | Readers are referred to the advisories concerning Non-GAAP Measures and Oil and Gas Measures and Definitions in the Advisories section of this document. ‘nm’ means not meaningful. |
(2) | Other NGLs means ethane, propane and butane. |
(3) | Principal Properties Capital includes capital expenditures and geological and geophysical costs related to the Company’s Principal Properties, and excludes land acquisitions and capitalized interest. |
(4) | Based on the period-end closing prices of publicly-traded investments and the book value of the remaining investments. |
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ADDITIONAL INFORMATION
Paramount is an independent, publicly traded, Canadian corporation that explores for and develops conventional petroleum and natural gas prospects, pursues longer-term non-conventional exploration and pre-development projects and holds investments in other entities. The Company’s properties are primarily located in Alberta, British Columbia and the Northwest Territories. Paramount’s Class A Common Shares are listed on the Toronto Stock Exchange under the symbol “POU”.
Paramount’s third quarter 2015 report, including Management’s Discussion and Analysis and the Company’s Consolidated Financial Statements, can be obtained at: http://media3.marketwire.com/docs/1031305.pdf.
This information will also be made available through Paramount’s website at www.paramountres.com and SEDAR at www.sedar.com.
ADVISORIES
Forward Looking Information
Certain statements in this document constitute forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “estimate”, “will”, “expect”, “plan”, “schedule”, “intend”, “propose”, or similar words suggesting future outcomes or an outlook. Forward-looking information in this document includes, but is not limited to:
Such forward-looking information is based on a number of assumptions which may prove to be incorrect. Assumptions have been made with respect to the following matters, in addition to any other assumptions identified in this document:
Although Paramount believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on it as Paramount can give no assurance that such expectations will prove to be correct. Forward-looking information is based on expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Paramount and described in the forward-looking information. The material risks and uncertainties include, but are not limited to:
The foregoing list of risks is not exhaustive. For more information relating to risks, see the section titled “RISK FACTORS” in Paramount’s current annual information form. The forward-looking information contained in this document is made as of the date hereof and, except as required by applicable securities law, Paramount 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.
Non-GAAP Measures
In this document “Funds flow from operations”, “Netback”, “Net Debt”, “Principal Properties Capital” and “Investments in other entities – market value”, collectively the “Non-GAAP measures”, are used and do not have any standardized meanings as prescribed by International Financial Reporting Standards.
Funds flow from operations refers to cash from operating activities before net changes in operating non-cash working capital, geological and geophysical expenses and asset retirement obligation settlements. Funds flow from operations is commonly used in the oil and gas industry to assist management and investors in measuring the Company’s ability to fund capital programs and meet financial obligations. Netback equals petroleum and natural gas sales less royalties, operating costs and transportation and NGLs processing costs. Netback is commonly used by management and investors to compare the results of the Company’s oil and gas operations between periods. Net Debt is a measure of the Company’s overall debt position after adjusting for certain working capital amounts and is used by management to assess the Company’s overall leverage position. Refer to the liquidity and capital resources section of the Company’s Management’s Discussion and Analysis for the period for the calculation of Net Debt. Principal Properties Capital includes capital expenditures and geological and geophysical costs related to the Company’s Principal Properties, and excludes land acquisitions and capitalized interest. The Principal Properties Capital measure provides management and investors with information regarding the Company’s Principal Properties spending on drilling and infrastructure projects separate from land acquisition activity and capitalized interest. Refer to the Exploration and Capital Expenditures section of the Company’s Management’s Discussion and Analysis. Investments in other entities – market value reflects the Company’s investments in enterprises whose securities trade on a public stock exchange at their period end closing price (e.g. Trilogy Energy Corp., MEG Energy Corp., Marquee Energy Ltd., Strategic Oil & Gas Ltd. and others), and investments in all other entities at book value. Paramount provides this information because the market values of equity-accounted investments, which are significant assets of the Company, are often materially different than their carrying values.
Non-GAAP measures should not be considered in isolation or construed as alternatives to their most directly comparable measure calculated in accordance with GAAP, or other measures of financial performance calculated in accordance with GAAP. The Non-GAAP measures are unlikely to be comparable to similar measures presented by other issuers.
Oil and Gas measures and Definitions
This document contains disclosures expressed as “Boe” and “Boe/d”. All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head. During the nine months ended September 30, 2015, the value ratio between crude oil and natural gas was approximately 22:1. This value ratio is significantly different from the energy equivalency ratio of 6:1. Using a 6:1 ratio would be misleading as an indication of value. NGLs consist of condensate and Other NGLs. The term “Other NGLs” means ethane, propane and butane.
Paramount Resources Ltd.
J.H.T. (Jim) Riddell, President and Chief Executive Officer
B.K. (Bernie) Lee, Chief Financial Officer
www.paramountres.com
Phone: (403) 290-3600
Fax: (403) 262-7994
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