CALGARY, ALBERTA–(Marketwired – Dec. 17, 2015) – BOULDER ENERGY LTD. (“Boulder” or the “Company“) (TSX:BXO)(OTCQX:BLLDF) is pleased to provide an update on its confirmed syndicated credit facility as well as announce its planned 2016 capital program designed to take a conservative approach to the balance sheet, improve financial flexibility and maintain the prudent development of its high quality Brazeau Belly River project to preserve asset value.
CREDIT FACILITY UPDATE
The Company has received confirmation from its banking syndicate regarding the semi-annual review of its committed term syndicated facility (the “Credit Facility”). The Company’s total Credit Facility has been confirmed in the aggregate amount of $160 million, which is a decrease of 9% from the previous amount of $175 million established in May 2015. The Credit Facility is available on an extendible revolving term basis and consists of a $140 million revolving syndicated facility and a $20 million operating facility. Current availability under the Credit Facility is $140 million, with an additional $20 million available up to the total Credit Facility commitment of $160 million subject to approval of the lending syndicate. There are no financial covenants under the Credit Facility and the Company remains in compliance with all of the non-financial covenants.
OPERATIONAL UPDATE AND 2016 OUTLOOK
Further to the November 10, 2015 press release update, commodity prices have continued to deteriorate in the fourth quarter and the outlook for commodity pricing in 2016 for both crude oil and natural gas has declined.
Given the continued uncertainty in energy commodity prices, Boulder has chosen to adopt a conservative approach to the balance sheet with a view to preserving the value of the asset and production and in the interim focus on repayment of debt to improve financial flexibility. As a result, the Company is planning for a disciplined 2016 budget and hedging program, with capital spending of $26 to $28 million (80% on drilling and completions) as compared to currently expected cash flows of approximately $38 million based on a reduced crude oil price outlook. With this prudent approach to the balance sheet the Company retains the option to increase its capital program and production forecasts should commodity prices improve.
As highlighted in the November 10, 2015 press release, with the reduced spending outlook into 2016 the Company remains focused on achieving several core objectives:
- Mitigate corporate declines and maintain production at current levels with a reduced capital program;
- Streamline operations to maximize operating netbacks;
- Continue to build and develop the gas re-injection enhanced oil recovery (EOR) scheme;
- Pay down debt and maintain balance sheet flexibility; and
- Remain diligent and focused on field optimization and financial discipline.
The following table summarizes the Company’s 2016 outlook based on an average 2016 crude oil WTI price forecast of US$45/bbl.
|Operating Category||2016 Guidance|
|Annual average production (1)||5,500 boe/d with 74% oil and liquids
(80% oil and liquids in the Brazeau Belly River)
|Cash flow from operations||$38 million|
|Total capital expenditures||$26 – $28 million
(80% drilling and completions)
|Wells drilled||6 – 7 net wells|
|Royalties as % of revenue||23%|
|Cash flow netbacks||$18.00/boe|
|Ending 2016 net debt||$131 million
($24,000 per flowing boe)
|(1)||Sales volumes do not include the following productive capabilities: (i) 500 boe/d of natural gas being injected as part of an enhanced oil recovery (EOR) scheme; (ii) 250 boe/d of liquids from a temporary reduction in yields (now 25 bbl/mm compared to 55 bbl/mm); and (iii) 390 boe/d of production from the conversion of producing wells to gas injection wells.|
To ensure adequate cash flow for its capital budget requirements in the face of expected near term price volatility, Boulder has entered into cashless collars for the 2016 calendar year for 33% of its non-royalty oil production at an average range of US$40 x US$56.15. The Company will continue to add to this position by hedging up to 80% of expected non-royalty oil volumes for the first half of 2016 using costless collars. As oil production accounts for 86% of the Company’s revenue, this strategy is intended to protect the Company’s capital plans and balance sheet should oil prices persist at levels under US$40.
Boulder management remains positive about the continued development and prospects for its asset base in 2016. Over the past four years, Boulder has assembled and de-risked a property that is difficult to replicate in the Western Canadian Sedimentary Basin. Boulder’s Brazeau Belly River property consists of approximately 100,000 acres of multi-zone potential on a focused land base, high quality light oil and a network of owned and operated infrastructure, which results in an asset that has significant value in any oil price environment.
The Company currently has 5,500 boe/day of stabilized high-working interest production that contributes significant cash flow under current commodity prices and provides for long term value realization through its large inventory of high impact exploration and delineation wells. Boulder’s EOR initiative now under operation may provide a positive step change in proposed recovery factors over the coming year, creating additional value. The Company would like to thank shareholders for their continued loyalty and patience as Boulder manages its way through this industry downturn and is committed to maximizing the value of every Boulder share.