CALGARY, May 11, 2016 /CNW/ – Altura Energy Inc. (“Altura” or the “Corporation”) (TSX Venture: ATU) is pleased to announce its financial and operating results for the three months ended March 31, 2016. The associated management’s discussion and analysis (“MD&A”) and unaudited interim condensed consolidated financial statements as at March 31, 2016 and for the three months ended March 31, 2016 can be found at www.sedar.com and www.alturaenergy.ca.
OPERATIONAL AND FINANCIAL SUMMARY |
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Three months ended |
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March 31, 2016 |
December 31, 2015 |
March 31, 2015 |
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OPERATING |
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Average daily production |
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Crude oil (bbls/d) |
341 |
320 |
355 |
|
Natural gas (mcf/d) |
348 |
374 |
268 |
|
NGLs (bbls/d) |
7 |
6 |
6 |
|
Total (boe/d) |
405 |
389 |
405 |
|
Average realized prices |
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Crude oil ($/bbl) |
28.04 |
39.46 |
43.73 |
|
Natural gas ($/mcf) |
1.96 |
2.59 |
2.99 |
|
NGLs ($/bbl) |
24.26 |
41.13 |
40.14 |
|
Total ($/boe) |
25.65 |
35.66 |
40.84 |
|
NETBACK AND COST ($/boe) |
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Petroleum and natural gas sales |
25.65 |
35.66 |
40.84 |
|
Royalties |
(1.33) |
(1.37) |
(1.90) |
|
Operating |
(9.67) |
(9.97) |
(9.26) |
|
Transportation |
(2.81) |
(2.76) |
(2.61) |
|
Operating netback(1) |
11.84 |
21.56 |
27.07 |
|
General and administrative |
(9.65) |
(10.61) |
(6.68) |
|
Interest and financing expense |
(0.18) |
(0.21) |
(0.12) |
|
Interest income |
1.19 |
0.87 |
0.02 |
|
Corporate netback(1) |
3.20 |
11.61 |
20.29 |
|
FINANCIAL ($) |
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Petroleum and natural gas sales |
946 |
1,275 |
1,489 |
|
Funds from operations(1) |
117 |
415 |
738 |
|
Per share – basic and diluted(1) |
– |
– |
0.02 |
|
Cash flow from / (used in) operating activities |
(137) |
262 |
678 |
|
Per share – basic and diluted |
– |
– |
0.02 |
|
Income (loss) |
(753) |
(418) |
361 |
|
Per share – basic and diluted |
(0.01) |
– |
0.01 |
|
Capital expenditures, net of divestitures |
204 |
1,666 |
388 |
|
Working capital surplus (deficit) |
22,199 |
22,129 |
(208) |
|
Common shares outstanding (000)(2) |
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End of period – basic |
108,921 |
108,921 |
35,168 |
|
Weighted average for the period – basic and diluted |
108,921 |
108,821 |
35,289 |
(1) |
Funds from operations, funds from operations per share, corporate netback, and operating netback, do not have standardized meanings prescribed by generally accepted accounting principles and therefore should not be considered in isolation. These reported amounts and their underlying calculations are not necessarily comparable or calculated in an identical manner to a similarly titled measure of other companies where similar terminology is used. Where these measures are used they should be given careful consideration by the reader. Refer to the Non-GAAP Measures paragraph in the Advisories section of the MD&A. |
(2) |
A share consolidation was effected on October 16, 2015. The number of shares, warrants and options outstanding have been adjusted for the consolidation on a retroactive basis. |
FIRST QUARTER 2016 HIGHLIGHTS
- Production volumes averaged 405 boe per day, four percent higher than the fourth quarter of 2015 and consistent with the first quarter of 2015.
- Funds from operations was $117 thousand, down 72 percent from the fourth quarter of 2015 and 84 percent from the first quarter of 2015 as a result of significantly lower realized crude oil and natural gas prices.
- Operating and transportation costs were $12.48 per boe, a two percent reduction from the fourth quarter of 2015 and a five percent increase from the first quarter of 2015.
- Operating netback was $11.84 per boe, down 45 percent from the fourth quarter of 2015 and down 56 percent from the first quarter of 2015 as a result of the decline in the average realized sales prices for these periods.
- Exited the first quarter of 2016 with a Liability Management Rating (“LMR”) of 6.62 with the Alberta Energy Regulator.
- Ended the first quarter of 2016 with a $22.2 million working capital surplus and no debt.
OPERATIONAL UPDATE
Altura’s activities during the first quarter of 2016 were focused on maintaining the base production, evaluating organic growth concepts, finalizing the post break-up drilling program and reducing per unit operating costs, including negotiations with its key service providers. The Corporation also initiated the engineering for the expansion of Altura’s multi-well battery in the Klein North area to handle additional new wells and the waterflood project planned in the 2016 capital budget.
MODERNIZED ROYALTY FRAMEWORK
On January 29, 2016 the Alberta Government released a report of its Royalty Review and Advisory Panel. The report sets forth a new Modernized Royalty Framework (“MRF”) that is scheduled to commence for wells drilled starting January 1, 2017. In general, the MRF looks to reward those companies who continuously innovate, strive to reduce their costs and their environmental footprints.
Most of the details on the quantitative aspects of the MRF were released on April 21, 2016. Additional details are scheduled to be released by the Department of Energy in the coming weeks. From the information available so far, Altura concludes that the MRF will not have a significant impact on the Corporation’s well investment economics over the commodity price range that the Corporation would model for the foreseeable future.
OUTLOOK
With the improvement in the crude oil forward strip pricing from the lows seen in early 2016, the Corporation is planning to commence the 2016 drilling program in June, which includes three (3.0 net) wells in the Klein North area, two (1.4 net) wells in the Wildmere area and two (2.0 net) wells to evaluate a new area. The 2016 drilling, completion, equipping and tie-in capital budget of $8.7 million remains unchanged from the budget announced on March 31, 2016. The program is forecasted to add approximately 535 boe per day in December 2016, which will more than offset forecast base declines and is expected to grow overall production to exit 2016 at 770 boe per day, 90 percent higher than the first quarter of 2016 average of 405 boe per day.
Management intends to continuously monitor commodity prices and may at any time adjust the 2016 capital program if oil prices deteriorate or strengthen. This will ensure that Altura maintains a strong balance sheet and that returns on invested capital exceed the Corporation’s hurdle rate.
Altura is currently pursuing conventional crude oil plays in the Western Canadian Sedimentary Basin with an initial focus in central Alberta targeting the shallow, multi-zone, oil-weighted section of the Upper Mannville. This area is expected to generate strong cash netbacks with competitive drilling and completion costs for these shallow targets, thereby delivering attractive economics in the context of the current commodity price environment. To diversify and strengthen the long-term profitability of the Corporation, Altura is also evaluating other oil-prone regions that demonstrate these attributes.
Looking ahead, with a cash position of $21.9 million and no debt at the end of the first quarter of 2016, the Corporation is well-positioned to:
- Profitably grow corporate production and evaluate recently acquired lands by drilling select horizontal wells from its drilling inventory;
- Establish the Corporation in a second organic play concept by acquiring strategic parcels of land during a period when land prices are at a 20-year low; and
- Capitalize on strategic acquisition opportunities with the advantage provided by its strong LMR which gives the Corporation flexibility in respect to acquisition targets having lower LMR’s.
ANNUAL GENERAL MEETING
The Annual General Meeting of shareholders will be held at 10:30 a.m. on Wednesday, May 18, 2016 in the Royal Room at the Metropolitan Conference Centre, 333 4th Avenue SW, Calgary, Alberta.
ABOUT ALTURA ENERGY INC.
Altura Energy Inc. is a public oil and gas corporation active in the exploration and development of oil and natural gas in east central Alberta.