CALGARY, Alberta, Nov. 29, 2017 (GLOBE NEWSWIRE) — PetroShale Inc. (“PetroShale” or the “Company”) (TSXV:PSH) (OTCQX:PSHIF) is pleased to announce its financial and operating results for the three and nine month periods ending September 30, 2017. The Company’s unaudited consolidated financial statements and corresponding Management’s Discussion and Analysis (MD&A) for the period are available on SEDAR at www.sedar.com, on the OTCQX website at www.otcqx.com, and on PetroShale’s website at www.petroshaleinc.com. Copies of the materials can also be obtained upon request without charge by contacting the Company directly. Please note, currency figures presented herein are reflected in Canadian dollars, unless otherwise noted.
Following an active second quarter in which PetroShale completed a $110 million equity offering, closed a significant property acquisition, and enhanced the senior management team, the Company continued to advance our oil-focused operations in the North Dakota Bakken.
During the period, PetroShale:
- Recorded average production of 1,894 Boe per day, 23% higher than the 1,540 Boe per day in the same quarter of 2016. For the nine month period ended September 30, 2017, the Company’s production averaged 2,555 Boe per day, an increase of 64% from the corresponding period in 2016.
- Generated operating netbacks of $22.78 per Boe, and $26.41 per Boe for the three and nine months ended September 30, 2017, an increase of 11% and 43%, respectively, over the comparable periods in 2016, primarily as a result of improved WTI prices and a shrinking Bakken to WTI oil price differential.
- Generated EBITDA of $3.0 million and $15.5 million for the three and nine months ended September 30, 2017, respectively, compared to $2.4 million and $5.9 million in the corresponding periods in 2016.
- Commenced drilling two (1.7 net) wells on an operated unit in the Antelope area, with completions expected before the end of 2017, and participated in the drilling of four wells within a non-operated area in which PetroShale has a working interest of approximately 19%.
- Increased the borrowing capacity under our senior credit facility to US$39.9 million from US$30.9 million and extended the renewal date of the facility to June 30, 2018.
- Closed an acquisition of significant acreage in an undrilled spacing unit, which the Company plans to operate, in our South Berthold focus area.
Subsequent to the end of the quarter, the Company commenced drilling two (2.0 net) wells in a second operated drilling unit within the South Berthold area, with completions expected in January, 2018.
RESULTS OF OIL AND GAS ACTIVITIES
|Three months ended
||Nine months ended
|Crude Oil (Bbl/d)||1,411||1,138||1,988||1,186|
|Natural gas and NGLs (Mcf/d)||2,900||2,409||3,402||2,202|
|Barrel of oil equivalent (Boe/d)(1)||1,894||1,540||2,555||1,553|
|Operating Netbacks ($/Boe) (1)|
|Operating netback, on a net of royalty basis(1)||$||28.96||$||25.70||$||33.39||$||23.14|
|Benchmark WTI price during the period (US$ / bbl)||$||48.17||$||44.85||$||49.39||$||41.35|
(1) See “Oil and Gas Advisory” and “Non-GAAP Measures”.
MESSAGE FROM THE CEO
I am pleased to report that following the second quarter, PetroShale enhanced our acreage portfolio with a significant acquisition of an interest in an undrilled spacing unit and commenced a four well drilling program which is expected to result in meaningful production increases in early 2018.
Our third quarter average daily production increased 23% relative to the same period in 2016. Volumes were impacted in the quarter by a temporary but anticipated cessation of production from our first operated well (“8H” – completed in December 2016), as reservoir pressures declined to a point where the well stopped flowing naturally. We are in the process of working over this well and expect to bring it back into production later in the fourth quarter.
During the quarter, we invested $15.0 million in capital, including drilling and completion costs and the acquisition of land in an operated undrilled spacing unit. During the period, PetroShale commenced drilling two (1.7 net) wells on our operated unit (“Primus”) in the prolific Antelope area and we anticipate completing these wells in December of 2017, with commencement of production expected in January 2018. We also participated in the drilling of four (0.75 net) non-operated wells in Antelope on a spacing unit (“Landforms”) immediately adjacent to Primus, in which we have a 19% working interest. We expect these wells to be completed and placed into production before the end of the fourth quarter. Subsequent to the end of the quarter, we commenced the drilling of two wells (100% working interest) on a second operated drilling unit (“Horse Camp”) in the South Berthold area, which we plan to complete in January 2018 and place on production shortly afterwards. PetroShale is also participating in an additional seven (1.0 net) non-operated wells which are in various stages of drilling and completion. As a result of these activities, we anticipate a meaningful increase in net production in the first and second quarters of 2018.
While WTI prices remained below US$50 through the third quarter, differentials between WTI and Bakken prices narrowed further following the commissioning of the Dakota Access Pipeline. Subsequent to the end of the third quarter, WTI has increased to the mid US$50’s and PetroShale took the opportunity to execute “costless” oil price collars on 1,500 barrels of oil per day (“bopd”) for calendar 2018 at an average WTI price band of US$45.67 to US$56.48. These hedges support the execution of our business plan.
PetroShale successfully secured an increase to the borrowing capacity under our senior credit facility, from US$30.9 million to US$39.9 million, with an extension of the renewal date to June 30, 2018. PetroShale also obtained an extension of our subordinated credit facility to January 15, 2019. The increase in senior borrowing capacity, the net proceeds from the equity offering completed in April, the undrawn capacity on the existing subordinated loan and the extension of maturity dates on both credit facilities are expected to provide the Company with sufficient financial flexibility to continue executing our planned capital program through the end of 2018.
I would like to thank PetroShale’s employees, directors and shareholders for your continued support of our strategy and our Company.
President and CEO
PetroShale is an oil company engaged in the acquisition, development and consolidation of interests in the North Dakota Bakken / Three Forks.
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