CALGARY, Alberta, June 26, 2018 (GLOBE NEWSWIRE) — (TSX-V:BBI) Blackbird Energy Inc. (“Blackbird” or the “Company”) is pleased to announce record financial and operational results for the quarter ended April 30, 2018. Blackbird’s unaudited condensed consolidated interim financial statements and related management’s discussion and analysis for the quarter ended April 30, 2018 are available on SEDAR at www.sedar.com and are also posted on Blackbird’s website at www.blackbirdenergyinc.com.
“This was another exceptional quarter for Blackbird. We achieved record quarterly revenue of $6.4 million on the back of strong condensate pricing and a corporate liquids weighting of 56%. Our development north of the Wapiti River is expected to commence in August. This next leg of development will allow Blackbird to graduate to an intermediate producer, and will continue to unlock the value of our significant condensate rich resource in the Pipestone / Elmworth Montney Corridor,” said Garth Braun, President, CEO and Chairman of Blackbird.
- Record Revenue: Blackbird is pleased to report a record $6.4 million ($49.81/boe) of petroleum and natural gas sales for the three months ended April 30, 2018. These results were achieved with the Company producing for approximately 70% of the quarter due to third-party natural gas processing shut-downs.
- Corporate Production: During the three months ended April 30, 2018, the Company achieved corporate production of 2,081 boe/d (56% liquids) for the 62 days it was on production. Total production averaged 1,447 boe/d on a calendar day basis for the three months, with volumes being impacted by approximately 27 days of unscheduled third-party downtime.
- Operating and Corporate Netback: Blackbird’s operating and corporate netback was $27.28/boe and $18.80/boe, respectively, for the third quarter of 2018, which Management believes compares favorably with industry leaders in the basin.
- Adjusted Funds Flow: The Company generated $2.4 million of adjusted funds flow during the three months ended April 30, 2018.
- Balance Sheet Strength Maintained: Blackbird remains well capitalized, and between its credit facility capacity (which was expanded during the quarter from $1.0 million to $20.0 million) and working capital surplus the Company had approximately $24.6 million of available funding at April 30, 2018.
See below for a summary table containing certain financial and operational figures:
|By the Numbers – Q3 2018|
|(CDN$ thousands, except where otherwise noted)||Three months ended April 30||Nine months ended April 30|
|2018||2017||% Change||2018||2017||% Change|
|Petroleum and natural gas sales||6,414||3,312||94||15,032||3,437||337|
|Cash provided by (used in) operating activities||2,811||(1,122||)||351||4,233||(4,084||)||204|
|Net loss and comprehensive loss||(47||)||(1,500||)||(97||)||(3,489||)||(7,436||)||(53||)|
|Net loss per share – basic and diluted ($/share)||(0.00||)||(0.00||)||–||(0.00||)||(0.01||)||(100||)|
|Condensate & oil (bbls/d)||753||384||96||586||130||351|
|Natural gas (mcf/d)||3,802||2,663||43||3,046||882||245|
|Liquids ratio (%)||56||49||14||55||48||15|
|Condensate & oil gas ratio (bbls/mmcf)||198||144||38||192||147||31|
|Total liquids gas ratio (bbls/mmcf)||213||158||35||207||161||29|
|Average Montney realized selling prices|
|Condensate & oil ($/bbl)||76.77||62.35||23||72.02||62.47||15|
|Natural gas ($/mcf)||3.33||4.57||(27||)||3.77||4.57||(18||)|
|Petroleum and natural gas sales||49.81||42.87||16||48.27||42.45||14|
|Transportation and processing expenses||(12.29||)||(14.75||)||(17||)||(12.83||)||(16.21||)||(21||)|
|General and administrative expenses||(8.24||)||(15.30||)||(46||)||(9.66||)||(35.86||)||(73||)|
(1) See the Company’s Q3 2018 financial statements and related management’s discussion and analysis filed on SEDAR for further discussion and cautionary statements regarding the figures above.
(2) See “Non-IFRS Measures” below.
Q3 2018 Summary
- Record Revenue: Blackbird achieved record revenue from its Pipestone / Elmworth project during the third quarter of 2018. The Company reported $6.4 million of petroleum and natural gas sales during the three months ended April 30, 2018. These results were achieved with the Company producing for approximately 70% of the quarter due to third-party natural gas processing shut-downs;
- Corporate Production: While on production during the quarter, Blackbird produced 5.5 mmcf/d of natural gas, 1,081 bbls/d of condensate and oil and 83 bbls/d of NGLs for total production of 2,081 boe/d from its Pipestone / Elmworth project. The Company produced for approximately 62 days during the third quarter of 2018 compared to 89 total calendar days in the quarter. Improved run times at Blackbird’s third-party natural gas processing facility during the quarter contributed to more consistent production rates and stronger operating results. During the three months ended April 30, 2018, the Company achieved an average total production rate of 1,447 boe/d (including 2 boe/d of non-core production) comprised of 56% liquids;
- Q3 2018 Condensate & Oil Gas Ratio: 198 bbls/mmcf during the three months ended April 30, 2018;
- Q3 2018 Total Liquids Gas Ratio: 213 bbls/mmcf during the three months ended April 30, 2018;
- Operating Netback and Corporate Netback: Blackbird’s operating and corporate netback was $27.28/boe and $18.80/boe, respectively, for the third quarter of 2018. Improved commodity pricing combined with a larger production base led to increased netbacks over comparative periods;
- Adjusted Funds Flow: The Company generated $2.4 million of adjusted funds flow during the three months ended April 30, 2018 as a result of the increased production rates;
- Capital Investment: Blackbird invested $4.8 million during the three months ended April 30, 2018 on production testing, furthering infrastructure development and bringing 5 gross (1.8 net) wells on production. During the third quarter of 2018 Blackbird incurred production testing costs related to its 2-20-70-6W6 Middle Montney and 3-27-71-7W6 Upper Montney delineation wells, which were both completed in previous quarters. Following the production testing operations at its 11-9 pad site, which were completed by mid-February 2018, Blackbird moved the production testing equipment north of the Wapiti River to its 6-33 pad to flow the 3-27-71-7W6 well. The Company also progressed its infrastructure development during the quarter with the tie-in of its 100% owned and operated 1-20-70-7W6 Upper Montney well in late February 2018 in addition to its non-operated 3-17-70-5W6 Middle Montney, 9-20-70-5W6 Middle Montney, 1-06-70-5W6 Middle Montney and 13-13-70-6W6 Middle Montney wells; and
- Working Capital Surplus and Available Funding: At April 30, 2018 the Company had positive working capital of approximately $5.3 million, which included $5.6 million of cash and no bank debt. The positive working capital and Blackbird’s credit facility capacity provided the Company with $24.6 million of future available funding at April 30, 2018. During the third quarter of 2018 Blackbird expanded its existing operating loan facility with ATB Financial from $1.0 million to $20.0 million. The terms of the facility are unchanged, and Blackbird may, at its option, elect to submit an updated engineering report in advance of its required annual review for the purposes of a borrowing base redetermination. The available funding and adjusted funds flow will be utilized by Blackbird to fund its future development plans north of the Wapiti River.
Blackbird is highly encouraged by its early-stage results to date from its Pipestone / Elmworth lands. With a liquids weighting of 56% achieved from its production this past quarter, the Company is well positioned to take advantage of condensate prices in Alberta resulting from the supply / demand imbalance that currently exists, and is expected to continue. Global oil prices have also seen a recovery from the lows experienced in 2016 due to the rebalancing efforts of OPEC and non-OPEC producers combined with increased global demand. The Company continued delivering its natural gas to Chicago at favourable prices relative to AECO during the quarter. With natural gas prices in western Canada continuing to falter due to the lack of sufficient take away capacity, Blackbird remains focused on diversifying its transportation for future and long-term production so it can target markets with higher returns and create value from its gas production.
With a strong test result from the Company’s 3-27-71-7W6 Upper Montney delineation well to the north of the Wapiti River management is confident in the long-term development potential of its northern acreage. Blackbird has continued to progress its developments plans for north of the Wapiti River with the acquisition of surface land sites, surveying and well licensing. Blackbird anticipates that it will begin its drilling program in August 2018. The Company will provide additional details as the program is finalized in the coming months. The Company has minimal capital expenditures budgeted for the fourth quarter of 2018.
Blackbird estimates that its exit production for fiscal 2018 will approximate current year to date levels. From May 1, 2018 to the date of this news release, the Company has produced for approximately 48 days. There is currently a planned outage at the Company’s third-party gas processing plant scheduled for the beginning of July 2018 which is expected to cause a service disruption of approximately 14 days. The timing and / or length of this planned outage may change and Blackbird may experience further production interruptions due to unexpected downtimes.
For more information, please view our Corporate Presentation at www.blackbirdenergyinc.com.
Blackbird Energy Inc. is a highly innovative oil and gas exploration and development company focused on the condensate and liquids-rich Montney fairway at Pipestone / Elmworth, near Grande Prairie, Alberta.