CALGARY, March 16, 2017 /CNW/ – Ironhorse Oil & Gas Inc. (“Ironhorse” or the “Company”) (TSX-V: IOG) announces its fourth quarter and full year 2016 financial and operating results and year-end reserves information.
Highlights of 2016:
- Funds from operations decreased 113% to negative $30,000 for the year ended December 31, 2016 from positive $228,000 for the year ended December 2015.
- Despite producing for just 31 days during the first seven months of 2016 as a result of being shut-in, annual production from the Pembina area averaged 105 boe/d net, a decrease of 43% compared to 2015.
- Realized net loss of $1.0 million for 2016 triggered primarily by the $0.8 million impairment of the Pembina asset due to a decline in estimated future commodity prices provided by the Company’s third party external reserve report evaluators as compared with 2015.
- General and administrative costs decreased 38% to $427,000 compared to $688,000 for the year ended December 31, 2015 which incurred $270,000 in costs in defense of the unsolicited take-over-bid by 1927297 Alberta Ltd. initiated on November 4, 2015 which expired on February 5, 2016.
- The Company’s proved plus probable reserve volumes are 85% oil and natural gas liquids weighted, with 73% of reserve volumes being proved.
Outlook 2017:
Production from the Nisku L2L Pool (the “Pool”), the Company’s primary source of cash flows, is projected to average in the range of 140 boe/d to 170 boe/d for the next six months as the operator manages reservoir performance and optimizes the Pool production and water injection requirements. During the second half of 2017 downhole pump upgrades are to be completed on the Pembina producer wells which will impact production slightly.
Additional expenditures will be incurred in 2017 related to capital costs for pump upgrades at Pembina and surface reclamation activity primarily related to the Company’s Dawson, Alberta operated property.
SELECTED INFORMATION |
Three months ended |
Year ended December 31 |
|||
($ thousands except per share & unit amounts) |
2016 |
2015 |
2016 |
2015 |
|
Financial |
|||||
Petroleum and natural gas revenues (1) |
884 |
892 |
1,731 |
3,343 |
|
Funds from operations (2) |
142 |
(144) |
(30) |
228 |
|
Per share – basic and diluted |
0.01 |
(0.01) |
– |
0.01 |
|
Net (loss) |
(700) |
(2,076) |
(1,036) |
(5,719) |
|
Per share – basic and diluted |
(0.03) |
(0.07) |
(0.04) |
(0.21) |
|
Capital expenditures (3) |
– |
– |
(1) |
44 |
|
Operation |
|||||
Production |
|||||
Gas (mcf/d) |
212 |
202 |
142 |
192 |
|
Oil & NGL (bbl/d) |
167 |
197 |
89 |
164 |
|
Total (boe/d) |
202 |
231 |
113 |
196 |
|
Petroleum and natural gas revenues ($/boe) |
47.61 |
42.08 |
41.81 |
46.83 |
|
Royalties ($/boe) |
19.09 |
18.00 |
15.48 |
17.62 |
|
Operating expenses ($/boe) |
16.41 |
12.55 |
17.16 |
16.60 |
|
Operating netback ($/boe) |
12.11 |
11.53 |
9.17 |
12.61 |
(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. |
The Company’s year-end reserves evaluation with the effective date of December 31, 2016 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.
Reserves Summary – Oil Equivalent (Mboe) |
||||||
(Mboe) |
Proved |
Proved |
Proved |
Total Proved |
Total Probable |
Proved plus |
2015 |
483 |
89 |
– |
572 |
175 |
747 |
2016 |
450 |
2 |
– |
452 |
165 |
617 |
Net Present Value Summary(1) |
||||||
($ thousands) |
Proved |
Proved |
Proved |
Total Proved |
Total Probable |
Total Proved plus |
10% |
6,834 |
3 |
– |
6,838 |
2,324 |
9,162 |
15% |
6,012 |
6 |
– |
6,019 |
1,795 |
7,813 |
(1) Net present value summary is before income taxes |
Reserves Reconciliation – Oil Equivalent (Mboe) |
|||
(Mboe) |
Total |
Total Probable |
Total Proved plus |
December 31, 2015 |
572 |
175 |
747 |
Technical Revisions |
(79) |
(10) |
(89) |
Dispositions |
– |
– |
– |
Economic Factors |
(0.1) |
– |
(0.1) |
Production |
(41) |
– |
(41) |
December 31, 2016 |
452 |
165 |
617 |
Net Asset Value (“NAV”) before income tax – Discounted at 10% |
|||
($ thousands except share and per share data) |
December 31, |
December 31, |
|
Net present value-proved and probable |
9,162 |
10,538 |
|
Net working capital (1) |
2,788 |
2,915 |
|
Net asset value |
11,950 |
13,453 |
|
Common shares outstanding |
27,885,824 |
27,885,824 |
|
NAV per share, December 31 |
0.43 |
0.48 |
Sproule Price Forecasts as of December 31, 2016 (1) |
|||
Year |
Canadian Light Sweet Oil Price At Edmonton 40o API ($Cdn/bbl) |
AECO/NIT Spot Gas Price ($Cdn/Mmbtu) |
|
2017 |
65.58 |
3.44 |
|
2018 |
74.51 |
3.27 |
|
2019 |
78.24 |
3.22 |
|
2020 |
80.64 |
3.91 |
|
2021 |
82.25 |
4.00 |
|
2022 |
83.90 |
4.10 |
|
2023 |
85.58 |
4.19 |
|
2024 |
87.29 |
4.29 |
|
2025 |
89.03 |
4.40 |
|
2026 |
90.81 |
4.50 |
|
2027 |
92.63 |
4.61 |
|
Thereafter |
+2.0%/year |
+2.0%/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, 2016, 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.”