TORONTO, ONTARIO–(Marketwired – April 28, 2016) – Dundee Energy Limited (“Dundee Energy” or the “Corporation”) (TSX:DEN) today announced its financial results for the three months ended March 31, 2016. The Corporation’s unaudited condensed interim consolidated financial statements, along with management’s discussion and analysis have been filed on the System for Electronic Document Analysis and Retrieval (“SEDAR”) and may be viewed under the Corporation’s profile at www.sedar.com or the Corporation’s website at www.dundee-energy.com.
FINANCIAL HIGHLIGHTS
- Net loss attributable to owners of the parent for the three months ended March 31, 2016 was $2.9 million or a loss of $0.02 per share. The net loss in the current period includes a realized loss of $1.5 million related to the disposal of a redundant offshore jack-up drilling platform. This compares with a net loss attributable to owners of the parent of $1.2 million or $0.01 per share incurred in the same period of the prior year.
- Revenues before royalty interest earned from oil and natural gas sales during the first quarter of 2016 were $5.0 million, compared with $8.0 million of revenues earned in the same quarter of 2015, reflecting substantial decreases in the realized sales price for commodities on a comparative period-over-period basis.
- Production volumes during the first quarter of 2016 averaged 10,872 Mcf/d (three months ended March 31, 2015 – 11,620 Mcf/d) of natural gas and 490 bbls/d (three months ended March 31, 2015 – 533 bbls/d) of oil and liquids.
- Field netbacks during the three months ended March 31, 2016, before realized amounts related to derivative financial instruments, were $0.98/Mcf (three months ended March 31, 2015 – $2.56/Mcf) from natural gas and $12.34/bbl (three months ended March 31, 2015 – $13.94/bbl) from oil and liquids.
SOUTHERN ONTARIO ASSETS | ||||||||||
(in thousands) | ||||||||||
Natural Gas | Oil and Liquids | Total | ||||||||
Net Sales | ||||||||||
Three months ended March 31, 2016 | $ | 2,642 | $ | 1,588 | $ | 4,230 | ||||
Three months ended March 31, 2015 | 4,433 | 2,393 | 6,826 | |||||||
Net decrease in net sales | $ | (1,791 | ) | $ | (805 | ) | $ | (2,596 | ) | |
Effect of changes in production volumes | $ | (239 | ) | $ | (173 | ) | $ | (412 | ) | |
Effect of changes in commodity prices | (1,552 | ) | (632 | ) | (2,184 | ) | ||||
$ | (1,791 | ) | $ | (805 | ) | $ | (2,596 | ) |
During the first quarter of 2016, sales of oil and natural gas, net of royalty interests, were $4.2 million, a decrease of $2.6 million from net sales generated in the first quarter of the prior year. As illustrated in the above table, the decrease arises primarily from lower realized prices for the underlying commodities, which reduced revenues by $2.2 million, as well as lower production volumes resulting from the natural decline in the underlying assets, which further reduced revenues by $0.4 million.
Field Level Cash Flows and Field Netbacks | ||||||||||||||||||
(in thousands) | ||||||||||||||||||
For the three months ended March 31, | 2016 | 2015 | ||||||||||||||||
Natural Gas | Oil and Liquids | Total | Natural Gas | Oil and Liquids | Total | |||||||||||||
Total sales | $ | 3,110 | $ | 1,865 | $ | 4,975 | $ | 5,221 | $ | 2,822 | $ | 8,043 | ||||||
Royalties | (468 | ) | (277 | ) | (745 | ) | (788 | ) | (429 | ) | (1,217 | ) | ||||||
Production expenditures | (1,668 | ) | (1,039 | ) | (2,707 | ) | (1,757 | ) | (1,725 | ) | (3,482 | ) | ||||||
974 | 549 | 1,523 | 2,676 | 668 | 3,344 | |||||||||||||
Gain on derivative financial instruments | 199 | – | 199 | – | 341 | 341 | ||||||||||||
Field level cash flows | $ | 1,173 | $ | 549 | $ | 1,722 | $ | 2,676 | $ | 1,009 | $ | 3,685 | ||||||
For the three months ended March 31, | 2016 | 2015 | ||||||||||||||||
Natural Gas | Oil and Liquids | Total | Natural Gas | Oil and Liquids | Total | |||||||||||||
$ | /Mcf | $ | /bbl | $ | /boe | $ | /Mcf | $ | /bbl | $ | /boe | |||||||
Total sales | $ | 3.14 | $ | 41.89 | $ | 23.76 | $ | 4.99 | $ | 58.81 | $ | 36.18 | ||||||
Royalties | (0.47 | ) | (6.21 | ) | (3.56 | ) | (0.75 | ) | (8.93 | ) | (5.47 | ) | ||||||
Production expenditures | (1.69 | ) | (23.34 | ) | (12.93 | ) | (1.68 | ) | (35.94 | ) | (15.66 | ) | ||||||
0.98 | 12.34 | 7.27 | 2.56 | 13.94 | 15.05 | |||||||||||||
Gain on derivative financial instruments | 0.20 | – | 0.95 | – | 7.11 | 1.53 | ||||||||||||
Field netbacks | $ | 1.18 | $ | 12.34 | $ | 8.22 | $ | 2.56 | $ | 21.05 | $ | 16.58 |
Capital Expenditures
In response to declining commodity prices for both crude oil and natural gas, the Corporation’s work plan for 2016 was set at $0.8 million and consists of costs to maintain the existing and essential land portfolio. During the first quarter of 2016, the Corporation incurred costs of $0.4 million related to these activities.
CASTOR UNDERGROUND GAS STORAGE PROJECT
The Corporation continues to prepare for the binding arbitration proceedings to resolve contractual disputes with ACS Servicios Communicacions y Energia S.L., its 67% partner in the underlying Castor project, in anticipation of a decision before the end of 2016.
NON-IFRS MEASURES
The Corporation believes that important measures of operating performance include certain measures that are not defined under International Financial Reporting Standards (“IFRS”) and as such, may not be comparable to similar measures used by other companies. While these measures are non-IFRS, they are common benchmarks in the oil and natural gas industry, and are used by the Corporation in assessing its operating results, including net earnings and cash flows.
- “Field Level Cash Flows” are calculated as revenues from oil and gas sales, less royalties and production expenditures, adjusted for realized gains or losses on risk management contracts.
- “Field Netbacks” refer to field level cash flows expressed on a measurement unit or barrel of oil equivalent basis.
ABOUT THE CORPORATION
Dundee Energy Limited is a Canadian-based oil and natural gas company with a mandate to create long-term value for its shareholders through the exploration, development, production and marketing of oil and natural gas, and through other high impact energy projects. Dundee Energy holds interests, both directly and indirectly, in the largest accumulation of producing oil and gas assets in Ontario and, through a preferred share investment, in certain exploration and evaluation programs for oil and natural gas offshore Tunisia. The Corporation’s common shares trade on the Toronto Stock Exchange under the symbol “DEN”.