The following table provides a summary of Corridor’s financial and operating results for the three and nine months ended September 30, 2017, with comparisons to the three and nine months ended September 30, 2016. Corridor’s unaudited financial statements and management’s discussion and analysis for the third quarter have been filed on SEDAR at www.sedar.com and are available on Corridor’s website at www.corridor.ca. All amounts referred to in this press release are in Canadian dollars unless otherwise stated.
|Selected Financial Information|
|Three months ended
|Nine months ended
|thousands of dollars except per share amounts||2017||2016||2017||2016|
|Sales||–||$ 2,167||$ 4,513||$ 11,185|
|Net income (loss)||$ 3,826||$ (1,261)||$ 4,141||$ (41,607)|
|Net income (loss) per share – basic and diluted||$ 0.043||$ (0.014)||$ 0.047||$ (0.469)|
|Cash flow from operations (1)||$ (1,509)||$ 233||$ 892||$ 3,585|
|Working capital||$ 49,588||$29,334||$ 49,588||$29,334|
|Total assets||$ 107,849||$ 92,149||$ 107,849||$ 92,149|
|(1)||Cash flow from operations is a non-IFRS measure. Cash flow from operations represents net earnings adjusted for non-cash items including depletion, depreciation and amortization, deferred income taxes, share-based compensation and other non-cash expenses. See “Non-IFRS Financial Measures” in Corridor’s MD&A for the nine months ended September 30, 2017.|
2017 Third Quarter Highlights
- Management’s optimization strategy to shut-in wells at the McCully Field, which started in Q2 2017, continued throughout Q3 2017. As a result, Corridor had no natural gas production or natural gas sales in Q3 2017 as opposed to average natural gas production of 5.1 mmscfpd and natural gas sales of $1,878 thousand in Q3 2016. Corridor will continue to monitor forecast prices to determine when natural gas production should resume but expects to partially recommence production during November 2017, with a significant ramp-up of production expected in December 2017.
- During the quarter, Corridor and the Québec Government entered into a settlement agreement which facilitates an end to Corridor’s participation in oil and gas exploration on Anticosti Island, Québec. Under the settlement agreement, Corridor agreed to proceed with the cessation of all hydrocarbon exploration activities on Anticosti Island and the Québec Government paid $19.5 million to Corridor in consideration for, amongst other things, the prejudice suffered by Corridor in connection with its interests in Anticosti Hydrocarbons L.P. The Québec Government also agreed to reimburse Corridor for any further amounts expended prior to its departure from Anticosti Island, and to assume all abandonment and reclamation obligations in respect of three Anticosti wells in which Corridor has an interest outside of Anticosti Hydrocarbons L.P. The compensation received by Corridor resulted in a net gain on disposition of $5,589 thousand in Q3 2017.
- Corridor’s cash flow from operations in Q3 2017 decreased to a negative $1,509 thousand from $233 thousand in Q3 2016 due to management’s decision to shut-in wells at the McCully Field which resulted in no natural gas sales in Q3 2017. At September 30, 2017, Corridor had cash and cash equivalents of $48,892 thousand, working capital of $49,588 thousand and no outstanding debt.
|Q3 2017 Netback Analysis|
|Three months ended
|Nine months ended
|thousands of dollars||2017||2016||2017||2016|
|Natural gas sales||–||$ 1,878||$ 4,204||$ 10,397|
|Realized financial derivatives gain||–||–||1,094||–|
|Field operating netback||$ (607)||$ 802||$ 3,180||$ 5,954|
|Natural gas production per day (mmscfpd)||–||5.1||2.4||6.7|
|Barrels of oil equivalent per day (boepd)||–||855||400||1,116|
|Average natural gas price ($/mscf)||–||$ 3.98||$ 6.41||$ 5.66|
Unlike prior financial periods, Corridor has determined not to make any disclosure of its financial performance on a per boe basis for the three and nine months ended September 30, 2017 and 2016, as any such disclosure would not be a meaningful indicator of the performance of Corridor given there was no production in Q3 2017.
Old Harry update
As previously disclosed on November 7, 2017, the controlled source electromagnetic (“CSEM”) data program over the Newfoundland and Labrador sector of the Old Harry prospect is currently underway. Field acquisition of the CSEM data should be completed by November 18th. Corridor expects the final processing and interpretation of the CSEM data to be completed in the first quarter of 2018.
An updated management presentation is now available on Corridor’s website at www.corridor.ca.
Steve Moran, President and CEO of Corridor commented “Corridor enjoys robust winter pricing in its natural gas markets and has a balance sheet that provides considerable optionality in our ongoing evaluation of capital deployment opportunities.” Corridor has hedged approximately 50% of its expected production from December 1, 2017 to March 31, 2018 at prices ranging from $US7.40/mmbtu to $US7.83/mmbtu. Corridor forecasts its positive working capital balance will increase from approximately $50 million currently to approximately $53.5 million at the end of Q1 2018.
Corridor is a Canadian junior resource company engaged in the exploration for and development and production of petroleum and natural gas onshore in New Brunswick and offshore in the Gulf of St. Lawrence. Corridor currently has natural gas production and reserves in the McCully Field near Sussex, New Brunswick. In addition, Corridor has a shale gas prospect in New Brunswick and an offshore conventional hydrocarbon prospect in the Gulf of St. Lawrence.