CALGARY, AB–(Marketwired – March 23, 2016) –
BOULDER ENERGY LTD. (“Boulder” or the “Company“) (TSX: BXO) (OTCQX: BLLDF) is pleased to release its financial and operating results for the year ended December 31, 2015. Boulder has filed its audited financial statements for the year ended December 31, 2015 and related Management’s Discussion and Analysis with Canadian securities regulatory authorities. Boulder’s annual financial materials may be viewed in their entirety on www.sedar.com and on the Company’s website at www.boulderenergy.ca.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
Financial and operational highlights for the quarter and year ended December 31, 2015 with comparative data for 2014 are as follows.
|Three Months Ended December 31,||Year Ended December 31,|
|(000s, except per share amounts)||($)||($)||(%)||($)||($)||(%)|
|Oil and natural gas revenues||22,402||45,492||(51)||116,725||181,657||(36)|
|Funds from operations (1)||12,946||26,300||(51)||64,604||109,799||(41)|
|Per share – basic and diluted||0.28||0.58||(52)||1.40||2.41||(42)|
|Cash flow from operating activities||21,835||28,749||(24)||65,335||116,469||(44)|
|Per share – basic and diluted||(0.20)||0.37||(154)||(0.82)||1.03||(180)|
|Capital expenditures (2)||13,171||59,857||(78)||82,301||211,675||(61)|
|Net debt (3)||142,837||107,781||33||142,837||107,781||33|
|Weighted average – basic and diluted||46,468||45,517||2||45,991||45,517||1|
|Natural gas (mcf/d)||9,728||13,393||(27)||10,608||10,991||(3)|
|Crude oil (bbls/d)||4,193||5,822||(28)||5,076||4,666||9|
|Average wellhead prices|
|Natural gas ($/mcf)||2.68||4.03||(33)||2.86||4.79||(40)|
|Crude oil and NGLs ($/bbl)||50.31||67.11||(25)||54.08||85.37||(37)|
|Combined average ($/boe)||40.99||56.25||(27)||44.93||70.68||(36)|
|Operating netback ($/boe)||21.77||32.32||(33)||23.54||46.09||(49)|
|Funds flow netback ($/boe)||23.66||32.54||(27)||24.89||42.74||(42)|
|Proved plus probable (mboe)||34,580||34,858||(1)||34,580||34,858||(1)|
|Total net present value- proved plus probable (10% discount, before taxes) ($000s)||471,847||557,715||(15)||471,847||557,715||(15)|
|Gross (net) wells drilled|
|Gas (#)||— (–)||— (–)||—||— (–)||1 (1.0)||-100 (-100)|
|Oil (#)||1 (1.0)||8 (8.0)||-88 (-88)||16 (16.0)||28 (27.93)||-43 (-43)|
|Total (#)||1 (1.0)||8 (8.0)||-88 (-88)||16 (16.0)||29 (28.93)||-45 (-45)|
|Average working interest (%)||100||100||100||100|
|(1)||Funds from operations, funds from operations per share, operating netbacks and funds flow net back are not recognized measures under International Financial Reporting Standards (IFRS). Refer to the commentary below under “Reader Advisory – Non-GAAP Measurements” for further discussion.|
|(2)||Total capital expenditures, including acquisitions and excluding non-cash transactions. Refer to commentary in the Management’s Discussion and Analysis under “Capital Expenditures and Acquisitions” for further information.|
|(3)||Net debt, which is calculated as current liabilities (excluding derivative financial instruments) and bank debt less current assets (excluding derivative financial instruments), is not a recognized measure under IFRS. Please refer to the commentary in this news release under “Reader Advisory – Non-GAAP Measurements” for further discussion.|
|(4)||For a description of the boe conversion ratio, refer to the commentary below under “Reader Advisory – BOE Presentation”.|
FOURTH QUARTER 2015 FINANCIAL AND OPERATIONAL HIGHLIGHTS
- Achieved average production of 5,940 boe/d (73% oil and NGLs).
- Generated revenue of $22.4 million.
- Generated funds from operations of $12.9 million (including realized hedge gains of $4.6 million) or $0.28/share.
- Reduced drilling and completion costs to approximately $3.2 million per well, a decrease of 38% as compared to $5.2 million per well in the fourth quarter of 2014 (by its predecessor DeeThree Exploration Ltd. (“DeeThree”) on the same properties).
- Realized operating netbacks of $21.77/boe.
- Received confirmation from its banking syndicate regarding the semi-annual review of the Credit Facility, with availability under the Credit Facility being reduced to $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.
2015 ANNUAL FINANCIAL AND OPERATIONAL HIGHLIGHTS
- Achieved average production of 7,118 boe/d (75% oil and NGLs).
- Generated revenue of $116.7 million.
- Generated funds from operations of $64.6 million (including realized hedge gains of $14.6 million) or $1.40/share
- Realized operating netbacks of $23.54/boe.
- Completed the acquisition of its properties and commenced independent business operations on May 15, 2015.
- Reduced drilling and completion costs to approximately $3.2 million per well by the end of 2015 as compared to DeeThree’s $5.4 million per well in 2014.
- Achieved finding and development costs (“F&D”) of $18.90/boe (proved) and $18.18/boe (proved plus probable).
- Reduced drilling by 38% from DeeThree’s 2014 levels in order to minimize the Company’s overall production decline profile, while still allowing the Company to maintain cash flow from operations.
- Reduced overall corporate declines on its asset base to 30% at year-end 2015, a significant improvement from 40% at year-end 2014.
- Reported proved year end reserves of 26.1 million boe and proved plus probable year end reserves of 34.6 million boe (76% proved).
- Initiated its first gas injection enhanced oil recovery project (EOR) on its Brazeau Belly River Property.
- Exited 2015 with net debt of $142.8 million and $135.7 million drawn on $140 million of availability on its Credit Facility.
OPERATIONAL AND GUIDANCE UPDATE
Throughout the first quarter of 2016, the Company has been injecting approximately 2.5 mmcf/day of gas into its 15-14-47-15 horizontal well in the large D sand development pool as part of its first gas re-injection scheme. The Company is now in the process of converting its 11-29-47-15 horizontal well into a second high pressure injection well, this time in the C sand development pool, and plans to have the first gas re-injected into this C pool late in the second quarter of 2016.
As of the date of this press release, Boulder’s 2016 budget has the Company generating $18.5 million of cash flow for the year (based on WTI US$39/bbl and C$1.00/US$0.74) with average production of approximately 4,800 boe/d for the year (73% oil and NGLs) and exit production of approximately 4,500 boe/d (73% oil and NGLs). The Company is approaching 2016 conservatively with plans to drill only 2 wells and incur capital expenditures of approximately $13.6 million, ending the year with net debt of approximately $138 million. Boulder will re-evaluate the capital budget in order to ensure that spending levels are appropriate in the context of prevailing commodity prices. The Company’s plans are also subject to change pending the outcome of the proposed Transaction (see “Subsequent to Year End” and “Outlook” sections below).
Boulder has secured a number of crude oil hedging contracts throughout the remainder of 2016 and through the first half of 2017 to mitigate the oil price volatility that has dominated the industry over the past year.
The Company currently has 2,400 bbls/d of crude oil hedged at an average price of US$37.06/bbl from now until the end of June 2016, as well as 1,000 bbls/d hedged at US$40.00/bbl and 600 bbls/d hedged at an average of CAD$55.21 until the end of December 2016. The Company also has 650 bbls/d of crude oil hedged for January to June 2017 at an average price of CAD$55.28.
SUBSEQUENT TO YEAR END
On February 24, 2016, Boulder entered into a definitive arrangement agreement (the “Arrangement Agreement”) with 1951556 Alberta Ltd. (“AcquisitionCo”), a newly formed portfolio company of ARC Energy Fund 8, pursuant to which each Common Shareholder, other than certain members of senior management of Boulder (the “Management Participants”), will receive $2.59 in cash in exchange for each Common Share held (the “Transaction”). The Transaction, if approved by the Common Shareholders, will proceed by way of a court-approved plan of arrangement pursuant to the Business Corporations Act (Alberta) (the “Arrangement”).
Boulder’s Board of Directors has approved the terms of the Transaction and unanimously recommends that all Boulder Shareholders vote in favour of the Transaction at the special meeting of shareholders that will be held on April 12, 2016 in Calgary, Alberta (the “Special Meeting”) to consider the Transaction.
The Transaction is subject to customary conditions for the approval of a plan of arrangement, including the approval of the Court of Queen’s Bench of Alberta, and the approval of not less than 66 2/3% of the votes cast by Common Shareholders represented in person or by proxy at the Special Meeting. The application for the Final Order of the Court of Queen’s Bench of Alberta approving the Arrangement has been re-scheduled from 1:30pm to 2:00pm on April 12, 2016. Closing of the Transaction expected to occur on or about April 13, 2016. The Common Shares will be de-listed from the TSX and the OTCQX following closing.
A copy of each of the Arrangement Agreement and the management information circular of Boulder dated March 15, 2016 prepared in respect of the Special Meeting are available on Boulder’s SEDAR profile at www.sedar.com.
Assuming the successful completion of the Transaction, Boulder intends to maintain its oil production in 2016 through a moderate drilling program on its multi-zone Brazeau Belly River Property. These plans are subject to the approval of the Board of Directors as constituted following the completion of the Transaction and will adjust based on commodity prices.