CALGARY, Nov. 28, 2017 /CNW/ – Ironhorse Oil & Gas Inc. (“Ironhorse” or the “Company”) (TSX-V: IOG) announces its financial and operating results for the three and nine months ended September 30, 2017.
Financial and Operation Summary
The Company’s reported production declined 37% to 104 boe/d in the third quarter of 2017 compared to 165 boe/d produced in the second quarter of 2017. The current quarter production was impacted by unanticipated downtime and repair and maintenance work on the Pembina 9-5 well for a significant portion of September and the Pembina 14-5 well continued to produce intermittently while awaiting installation of an electric submersible pump which occurred in late October 2017.
Operating netbacks for Q3 2017 decreased 78% to $57,000 from $256,000 reported for Q2 2017 and corresponding with 37% lower production, a 10.7% decrease in the Company’s realized oil price received and higher operating costs recorded compared to the prior quarter.
The Company realized a net loss of $3.3 million for the third quarter. This loss pertained to a $1.6 million impairment charge at Pembina which reflects fair market value discussions with external parties related to the proposed transaction with Pond Technologies Inc. (“Pond”) and a $1.4 million non-cash deferred tax expense resulting from the reduction of the deferred tax asset recorded as the future net taxable income horizon was reduced.
Quarterly funds from operations were negative and decreased 208% to ($107,000) in Q3 2017 compared to $99,000 for Q2 2017 due to 37% less production and significantly lower netbacks realized.
Updated Production Guidance:
Net Pembina Q4 2017 production guidance is anticipated to be in the range of 100 to 120 boe/d due to restricted flow as a result of a piping failure at the Sinopec operated 13-2 battery. The repair is scheduled to be completed by the end of November.
Q1 2018 net Pembina production is expected to be 150 to170 boe/d with both wells producing at full capability.
Proposed transaction with Pond:
On November 17, 2017, Ironhorse together with Pond completed the filing and mailing of a joint management circular in connection with an annual and general meeting of Ironhorse Shareholders to be held on December 18, 2017 whereby the shareholders will be asked to approve the proposed transaction as described in the document. The TSX Venture Exchange (“TSXV”) has conditionally accepted the proposed transaction which will constitute a reverse takeover and change of business of Ironhorse pursuant to the TSXV’s policies, subject to Ironhorse fulfilling all of the requirements of the TSXV. Trading of Ironhorse shares on the TSXV resumed on November 23, 2017. A copy of the Circular is available under Ironhorse’s issuer profile at www.sedar.com
SELECTED INFORMATION |
For three months ended |
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September 30, |
June 30, |
September 30, |
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($ thousands except per share & unit amounts) |
2017 |
2017 |
2016 |
||
Financial |
|||||
Petroleum and natural gas revenues (1) |
415 |
734 |
669 |
||
Funds from operations (2) |
(107) |
99 |
53 |
||
Per share – basic and diluted |
– |
– |
– |
||
Net loss |
(3,259) |
(1,522) |
(123) |
||
Per share – basic and diluted |
(0.12) |
(0.05) |
– |
||
Operation |
|||||
Production |
|||||
Light Oil & NGL (bbl/d) |
90 |
140 |
145 |
||
Gas (mcf/d) |
84 |
150 |
162 |
||
Total (boe/d) |
104 |
165 |
172 |
||
Petroleum and natural gas revenues ($/boe) |
43.39 |
48.74 |
42.38 |
||
Royalties ($/boe) |
17.59 |
18.03 |
17.16 |
||
Operating expenses ($/boe) |
19.79 |
13.62 |
16.56 |
||
Operating netback ($/boe) |
6.01 |
17.09 |
8.66 |
||
(1) Petroleum and natural gas revenues are before royalty expense. |
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(2) Funds from operations is a non-GAAP measure as defined in the Advisory section of the MD&A. |
Additional Information
Ironhorse’s complete results for the three and nine months ended September 30, 2017, including unaudited condensed financial statements and the management’s discussion and analysis are available on SEDAR and 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.”