CALGARY, ALBERTA–(Marketwired – March 7, 2016) – Raging River Exploration Inc. (the “Company” or “Raging River”) (TSX:RRX) announces its operating and financial results for the three months and year ended December 31, 2015. Selected financial and operational information is outlined below and should be read in conjunction with the audited financial statements and the related management, discussion and analysis (“MD&A”). These filings will be available at www.sedar.com and the Company’s website at www.rrexploration.com. In addition, readers are also directed to the Company’s Annual Information Form for the year ended December 31, 2015, which will be filed on SEDAR at www.sedar.com prior to March 30, 2016.
Financial and Operating Highlights
|Three months ended
|Financial (thousands of dollars except share data)|
|Petroleum and natural gas revenue||62,943||78,634||(20||)||254,932||336,838||(24||)|
|Funds from operations (1)||40,708||57,704||(29||)||167,351||221,650||(24||)|
|Per share – basic||0.20||0.32||(38||)||0.85||1.24||(31||)|
|Per share – basic||0.03||0.14||(79||)||0.15||0.62||(76||)|
|Development capital expenditures||43,494||97,123||(55||)||171,047||273,893||(38||)|
|Total capital expenditures||76,284||97,123||(21||)||243,568||278,594||(13||)|
|Net debt (1)(3)||139,943||152,250||(8||)|
|Weighted average shares (thousands)|
|Shares outstanding, end of period (thousands)|
|Operating (6:1 boe conversion)|
|Average daily production|
|Crude oil and NGLs (bbls/d)||14,194||12,059||18||13,235||10,323||28|
|Natural gas (mcf/d)||3,461||2,931||18||2,877||2,594||11|
|Barrels of oil equivalent (2)(boe/d)||14,771||12,548||18||13,715||10,755||28|
|Oil and gas sales(3)||46.32||68.12||(32||)||50.93||85.80||(41||)|
|Field netback (1)||31.32||50.04||(37||)||34.60||64.26||46|
|Realized gain on derivatives||0.89||4.01||(78||)||0.91||0.25||264|
|Operating netback (1)($/boe)||32.21||54.05||(40||)||35.51||64.51||(45||)|
|General and administrative expense||(1.35||)||(1.44||)||(6||)||(1.30||)||(1.43||)||(9||)|
|Asset retirement expenditures||(0.06||)||(0.09||)||(33||)||(0.02||)||(0.03||)||(33||)|
|Funds flow netback(1)||29.96||49.99||(40||)||33.43||56.46||(41||)|
|Net earnings per boe||3.77||20.86||(82||)||5.78||28.06||(79||)|
|(1) See “Non-IFRS Measures”|
|(2) Boe conversion ratio for natural gas of 1 Boe: 6 Mcf has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil 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.|
|(3) Excludes unrealized risk management contracts.|
FOURTH QUARTER 2015 HIGHLIGHTS
- Achieved another quarterly production record with average production of 14,771 boe/d (91% oil) representing an increase of 18% over the comparable period in 2014. This represents a 5% production per share increase from the fourth quarter of 2014.
- Achieved funds flow from operations of $40.7 million ($0.20/share basic)
- Achieved our 16th consecutive quarter of earnings despite a year over year drop of 48% in the benchmark WTI price. Fourth quarter earnings were $5.1 million.
- The Company’s exploration and development expenditures for the quarter were $43.5 million. A total of 63.0 net Viking wells were drilled at a 98% success rate. Average on stream costs during the quarter were approximately $680,000 per well representing a 25% cost reduction from the average costs seen in 2014 and a 3% quarter over quarter decrease in on stream costs.
- Raging River generated top decile operating netbacks of $32.21/boe and funds flow netbacks of $29.96/boe in addition to earnings of $3.77 per boe.
- Achieved our 10th consecutive quarterly decrease in operating and transportation costs to $10.28/boe, a 19.4% reduction from the comparable quarter of 2014 and a 2.2% reduction quarter over quarter.
- Closed the $125.8 million previously announced corporate acquisition of Anegada Energy Corp. (“Anegada”). The acquisition includes 2,750 boe/d (58% light oil) of estimated 2016 average production and 50 net sections of highly prospective land targeting Viking oil in areas complementary to Raging River’s existing Viking assets.
- Maintained balance sheet strength with fourth quarter exit net debt of $139.9 million representing 0.86 times debt to the fourth quarter annualized cash flow.
YEAR ENDED DECEMBER 31, 2015
- Increased average production to 13,715 boe/d, a 28% increase (15% per share) over 2014 production of 10,755 boe/d.
- The Company invested a total of $339.2 million consisting of $171 million of development capital and $168.2 million of acquisition capital into the expansion and development of the Viking play.
- Executed a $171 million exploration and development program drilling a total of 233 (216.9 net) Viking wells with a 99% success rate.
- Achieved a 16.9% reduction in operating and transportation costs to $11.36/boe from the year ended December 31, 2014.
- Attained top decile general and administrative costs of $1.30/boe, a 9% decrease from the comparable period in 2014.
- Proved plus probable reserves increased 20% to 76.4 mmboe (90% oil) and proven reserves increased 15% to 57.4 mmboe (92% oil).
- Finding, development and acquisition (“FD&A”) costs including the change in future development capital were $16.59/boe on a total proved plus probable basis resulting in a recycle ratio of 2.14 times.
- Total net undeveloped land holdings increased 26% to 279,628 acres in our core Viking prospect areas in southwest Saskatchewan and southeast Alberta.
SUBSEQUENT TO THE YEAR ENDED DECEMBER 31, 2015
- On February 17, 2016, Raging River entered a bought deal financing to issue 11,000,000 common shares at a price of $8.65 per common share for gross proceeds of $95.2 million. The underwriters have provided notice of their intention to exercise in full the over-allotment option granted to them to purchase an additional 1,500,000 common shares at a price of $8.65 per common share at closing.
All capital activities for the first quarter were completed as at February 29th. A total of 57.5 net Viking wells were drilled including 49.5 net wells in Saskatchewan and 8 net wells on the recently acquired lands in Alberta. A total of 50.4 net wells will be brought on production in the first quarter with 25 drilled but uncompleted wells carried into the second quarter activities.
Favorable conditions through the winter drilling season, when combined with historically low service costs, have resulted in on-stream well costs of approximately $670,000.
Raging River has also tested drilling longer well laterals during the quarter. A total of five 1,300 meter laterals were successfully drilled in Alberta during the quarter. The costs associated with the drilling and completion of these wells were approximately $250,000 higher than our 600 meter lateral wells. The initial results from the longer wells have encouraged the Company to pursue the application of similar technology in various other areas throughout the Viking resource play.
During the first quarter, Raging River implemented additional waterflood facilities at Gleneath and completed construction and startup of our phase one waterfloods in the Plato and Beadle areas. Although results are very premature, early injection rates are as expected with no pre-mature water breakthrough.
The February 17, 2016 announced bought deal financing is expected to provide the Company with a great deal of flexibility. Executing the defined budget as disclosed in our February 3, 2016 press release, assuming a WTI price of US$32.50/bbl WTI for the first half of 2016 and US$35.00/bbl WTI for the second half of 2016 and assuming full take up of the overallotment option on the equity issue would see Raging River exit 2016 with a trailing debt to cashflow of approximately 0.6 times.
Additional corporate information can be found in our March corporate presentation, which will be available on our website at www.rrexploration.com on March 9, 2016.