CALGARY, April 11, 2016 /CNW/ – Ironhorse Oil & Gas Inc. (“Ironhorse” or the “Company”) (TSX-V: IOG) announces its fourth quarter and full year 2015 financial and operating results and year-end reserves information.
The Company’s year-end reserves evaluation with the effective date of December 31, 2015 was prepared by Sproule Associates Limited in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”) and NI 51-101 “Standards of Disclosure for Oil & Gas Activities”. Reserves included herein are stated on a company gross basis (working interest before deduction of royalties without including any royalty interest) unless otherwise noted.
Highlights of 2015:
- Funds from operations decreased 57% to $228,000 for the year ended December 31, 2015 from $535,000 for the year ended December 2014.
- Annual production from Pembina increased over 300% compared to 2014 and averaged 185 boe/d net, despite restricted production during 7-months of the current year.
- Realized net loss of $5.7 million for 2015 primarily resulting from; $6.4 million impairment at Pembina, 67% decrease in operating netbacks on a boe basis compared to 2014, partially offset by $2 million non-cash deferred tax recovery.
- General and administrative costs increased 45% to $688,000 compared to $473,000 for the year ended December 31, 2014, as the Company incurred $270,000 in fourth quarter costs in defense of the unsolicited take-over-bid by 1927297 Alberta Ltd. initiated on November 4, 2015. The bid expired on February 5, 2016 and 1927297 Alberta Ltd. did not take up any Ironhorse shares.
- The Company’s proved plus probable reserve volumes are 80% oil and natural gas liquids weighted, with 77% of reserve volumes being proved.
- 2015 property impairments recorded were largely attributed to the significant decline in estimated future commodity prices provided by the Company’s third party external reserve report evaluators.
Outlook for 2016:
Production from the Nisku L2L Pool (the “Pool”), the Company’s primary source of cash flows, was shut-in January 19, 2016 because production is uneconomic under the current commodity price environment. The Company believes that, with continued downward pressure on commodity prices, a temporary shut-in of the Pool production is a prudent decision that will preserve the value of oil and natural gas reserves. The Company anticipates that the Pool will remain shut-in until there is a recovery in commodity prices.
Currently the Company does not have significant capital commitments authorized for 2016 and is well positioned financially to withstand the temporary shut-in of the Pool, with a positive working capital balance of $2.9 million as at December 31, 2015.
SELECTED INFORMATION |
Three months ended December 31 |
Year ended December 31 |
||
($ thousands except per share & unit amounts) |
2015 |
2014 |
2015 |
2014 |
Financial |
||||
Petroleum and natural gas revenues (1) |
892 |
545 |
3,343 |
1,429 |
Funds from operations (2) |
(144) |
123 |
228 |
535 |
Per share – basic and diluted |
(0.01) |
0.01 |
0.01 |
0.02 |
Net (loss) |
(2,076) |
(331) |
(5,719) |
(221) |
Per share – basic and diluted |
(0.07) |
(0.01) |
(0.21) |
(0.01) |
Capital expenditures (3) |
– |
13 |
44 |
666 |
Operation |
||||
Production |
||||
Gas (mcf/d) |
202 |
150 |
192 |
129 |
Oil & NGL (bbl/d) |
197 |
77 |
164 |
40 |
Total (boe/d) |
231 |
102 |
196 |
62 |
Petroleum and natural gas revenues ($/boe) |
42.08 |
57.84 |
46.83 |
63.16 |
Royalties ($/boe) |
18.00 |
17.86 |
17.62 |
10.00 |
Operating expenses ($/boe) |
12.55 |
17.50 |
16.60 |
14.58 |
Operating netback ($/boe) |
11.53 |
22.48 |
12.61 |
38.58 |
(1) Petroleum and natural gas revenues are before royalty expense.
(2) Funds from operations and net debt are non-GAAP measures as defined in the Advisory section of the MD&A.
(3) Capital expenditures are before acquisitions and dispositions.
Reserves Summary – Oil Equivalent (Mboe)
(Mboe) |
Proved |
Proved |
Proved |
Total |
Total |
Proved plus |
2014 |
556 |
68 |
– |
624 |
176 |
799 |
2015 |
483 |
89 |
– |
572 |
175 |
747 |
Net Present Value Summary(1)
($ thousands) |
Proved |
Proved |
Proved |
Total Proved |
Total Probable |
Total Proved plus |
10% |
7,427 |
588 |
– |
8,015 |
2,523 |
10,538 |
15% |
6,543 |
411 |
– |
6,954 |
2,396 |
9,350 |
(1) Net present value summary is before income taxes
Reserves Reconciliation – Oil Equivalent (Mboe)
(Mboe) |
Total |
Total |
Total |
December 31, 2014 |
624 |
176 |
799 |
Technical Revisions |
20 |
(1) |
19 |
Dispositions |
– |
– |
– |
Economic Factors |
(0.1) |
0.1 |
– |
Production |
(72) |
– |
(72) |
December 31, 2015 |
572 |
175 |
747 |
Net Asset Value (“NAV”) before income tax – Discounted at 10%
($ thousands except share and per share data) |
December 31, 2015 |
December 31, 2014 |
|
Net present value-proved and probable |
10,538 |
18,383 |
|
Net working capital (1) |
2,915 |
2,731 |
|
Net asset value |
13,453 |
21,114 |
|
Common shares outstanding |
27,885,824 |
27,885,824 |
|
NAV per share, December 31 |
0.48 |
0.76 |
Sproule Price Forecasts as of December 31, 2015 (1)
Year |
Canadian Light Sweet Oil Price At Edmonton 40o API ($Cdn/bbl) |
AECO/NIT Spot Gas Price ($Cdn/Mmbtu) |
|
2016 |
55.20 |
2.25 |
|
2017 |
69.00 |
2.95 |
|
2018 |
78.43 |
3.42 |
|
2019 |
89.41 |
3.91 |
|
2020 |
91.71 |
4.20 |
|
2021 |
93.08 |
4.28 |
|
2022 |
94.48 |
4.35 |
|
2023 |
95.90 |
4.43 |
|
2024 |
97.34 |
4.51 |
|
2025 |
98.80 |
4.59 |
|
2026 |
100.28 |
4.67 |
|
Thereafter |
+1.5%/year |
+1.5%/year |
(1) This summary table identifies benchmark reference pricing schedules that might apply to a reporting issuer.
Additional Information
Ironhorse’s complete results for the year ended December 31, 2015, including audited financial statements and the management’s discussion and analysis, statement of reserves data and other oil and gas information are available on SEDAR or the Company’s web site at www.ihorse.ca.
About Ironhorse:
Ironhorse Oil & Gas Inc. is a Calgary-based junior oil and natural gas production company trading on the TSX Venture Exchange under the symbol “IOG.”