CALGARY, Alberta, June 29, 2018 (GLOBE NEWSWIRE) — Clearview Resources Ltd. (“Clearview” or the “Company”) is pleased to announce its financial and operational results for the year ended March 31, 2018.
Over the past fiscal year, the Company continued to transform from a non-operated producer into a growth-oriented, light oil focused operator of a majority of its production. Building on the properties acquired in the Greater Pembina area late in the fourth quarter of the prior year, the Company focused on integrating the newly acquired assets with its legacy assets. This resulted in the following:
- completed optimization work on the newly acquired assets to increase production to over 2,100 boe/d for the last three quarters of the year;
- reduced costs on a per boe basis in several areas of the Company’s operations and corporate structure to improve the operating and corporate netback per boe;
- funded the field capital program (excluding acquisitions) from internally generated adjusted funds flow;
- acquired a 50% working interest in a light oil prospect at Windfall, Alberta in the fourth quarter;
- initiated the planning and process to drill the Company’s first operated light oil well at its Wilson Creek, Alberta property;
- initiated the planning and process to drill the Company’s first operated light oil well at its Windfall, Alberta property;
- maintained strong lending values to support the Company’s credit facility;
- maintained an appropriate debt versus equity capital structure;
- established a management incentive plan consistent with growing shareholder value;
- maintaining a current licensee liability rating of 2.7, providing the Company with the ability to transact on further acquisition opportunities; and
- continued to evaluate non-core assets for potential dispositions to fund the capital program.
During the fourth quarter of the fiscal year, the Company initiated several strategic transactions to further transform the Company. On April 10, 2018, the Company closed the disposition of a light oil property located in southern Alberta for $3,369,000. The Company sold the property for approximately $53,500 per flowing boe/d. The proceeds from the disposition were immediately applied against the Company’s bank debt to further improve its financial flexibility towards funding the Company’s upcoming summer drilling program. This property had been reclassified to assets held for sale in the statement of financial position as of March 31, 2018.
Also, in the fourth quarter of 2018, the Company initiated discussions with its joint venture partner and the operator of its newly acquired Windfall property. On April 16, 2018, the Company closed the acquisition of Bashaw Oil Corp. (“Bashaw”) through a share for share exchange based on 25.379 common shares of Bashaw for one voting common share of the Company. Clearview issued 1,560,046 voting common shares to the shareholders of Bashaw. The Company acquired the remaining 50% working interest at Windfall and increased its financial flexibility resulting from the cash and working capital surplus position of Bashaw.
As part of the Bashaw merger, the Board of Directors of Clearview effected a change in management with an emphasis on current operational excellence and expertise in horizontal drilling and completions using multi-stage fracing technology.
The proceeds from the disposition and the positive cash position from the acquisition of Bashaw have strategically positioned the Company for the commencement of operated, light oil development drilling activity in the second half of 2018.
Clearview has licensed its first horizontal well (85% working interest) to be drilled on the Wilson Creek property targeting light oil in the Cardium Formation at 15-20-44-4W5M (“15-20”). This well will be drilled using the latest two-mile-long, extended reach, horizontal drilling technology and completed with over one hundred stages of fracture stimulation. The 15-20 well will be tied-in to existing Clearview infrastructure. The same surface pad location for 15-20 can be used to drill two additional wells of this type on this property.
Clearview is also preparing to drill a horizontal development well (100% working interest) on the Windfall property targeting light oil in the Bluesky Formation at 1-3-59-15W5M (“1-3”). The 1-3 well will also be drilled and completed using the latest technologies and techniques available in industry. The lateral length of this horizontal well will be approximately 1,900 meters. The surface pad location is an existing well lease that is already tied-in to the Company’s 100% owned and operated oil handling facility. Clearview also plans to begin the expansion of the waterflood pilot currently in place at Windfall. The Company is targeting the enhanced recovery of the light oil in place through the addition of water injection well(s) and volumes in the future.
Clearview continues to pursue its growth strategy within its focus area of west central Alberta, including asset or corporate acquisitions, development drilling and production optimization. This activity will be funded through existing funds from operations, non-core dispositions, debt and possibly additional equity financing to maintain financial flexibility.
March 31, 2018 HIGHLIGHTS
- Increased production through optimization projects for the last three quarters of the year to 2,115 boe/d compared to 1,992 boe/d for the first quarter ended June 30, 2017.
- Realized sales price was $26.30 per boe compared to $29.39 per boe in the prior year, a decrease of 11%, while the fourth quarter of 2018 was down 6% to $31.98 per boe due to lower natural gas prices.
- Operating costs were $14.69/boe for the year ended March 31, 2018, compared to $19.46/boe, down 25%, while the fourth quarter of the current and prior year were $15.32/boe and $16.96/boe, respectively, down 10%.
- General and administrative costs were $2.87/boe for the year ended March 31, 2018, compared to $5.26/boe, down 45%, while the fourth quarter of the current and prior year were $4.66/boe and $7.17/boe, respectively, down 35%.
- Cash finance costs were $1.27/boe for the year ended March 31, 2018, compared to $1.79/boe, down 29%, while the fourth quarter of the current and prior year were $1.27/boe and $2.24/boe, respectively, down 43%.
- Corporate netback increased by 385% to $4.78 per boe for the current fiscal year versus a loss of $1.68 per boe in the prior fiscal year.
- Acquired a 50% working interest in an Alberta light oil property (Windfall) in the Greater Pembina core area in January 2018; existing production net to Clearview is 55 bbls/d of light oil and liquids plus 330 mcf/d of natural gas; future development will focus on light oil targets with up to 16 gross (8 net) locations planned of which 1 gross well is planned for later in 2018.
- Successfully acquired 16.25 gross (16.25 net) sections contiguous to existing lands in the Greater Pembina core area, at an average cost of approximately $22,000 per section.
Financial and Operating Highlights
|Financial||Three months ended March 31||Year end March 31|
|($ 000’s except per share amounts)||2018||2017||% Change||2018||2017||% Change|
|Oil and natural gas sales||6,171||2,279||171||20,286||7,112||185|
|Net earnings (loss)||(3,879||)||1,031||(476||)||(8,460||)||(1,896||)||346|
|Per share–basic and diluted||(0.46||)||0.21||(316||)||(1.00||)||(0.48||)||111|
|Adjusted funds flow (1)||429||223||92||3,679||(408||)||1,002|
|Per share–basic and diluted||0.05||0.05||–||0.44||(0.10||)||526|
|Capital expenditures – net||3,919||30,615||(87||)||6,375||28,706||(78||)|
|Weighted average shares|
|Basic and diluted (000’s)||8,438||4,858||73||8,438||3,986||112|
|(1)||See non-GAAP measures|
|Production||Three months ended March 31||Year end March 31|
|2018||2017||% Change||2018||2017||% Change|
|Oil – bbl/d||498||243||105||437||240||82|
|Natural gas liquids – bbl/d||450||130||246||474||103||360|
|Total liquids – bbl/d||948||373||154||911||343||166|
|Natural gas – mcf/d||7,175||2,223||223||7,211||1,919||276|
|Total – boe/d||2,144||744||188||2,113||663||219|
|Realized sales prices||Three months ended March 31||Year end March 31|
|2018||2017||% Change||2018||2017||% Change|
|Oil – $/bbl||63.66||54.71||16||58.62||49.01||20|
|NGLs – $/bbl||37.37||37.51||–||32.68||32.51||1|
|Natural gas – $/mcf||2.71||2.66||2||1.98||2.22||(11||)|
|Total – $/boe||31.98||34.03||(6||)||26.30||29.39||(11||)|
|Netback analysis (2)||Three months ended March 31||Year end March 31|
|Barrel of oil equivalent ($/boe)||2018||2017||% Positive
|Realized sales price||31.98||34.03||(6||)||26.30||29.39||(11||)|
|Realized gain (loss) on commodity contracts||(1.59||)||0.29||(648||)||0.74||(1.13||)||165|
|General & administrative||(4.66||)||(7.15||)||35||(2.87||)||(5.26||)||45|
|Cash finance costs||(1.27||)||(2.24||)||43||(1.27||)||(1.79||)||29|
|(1)||% Positive (Negative) is expressed as being positive (better performance in the category) or negative (reduced performance in the category) in relation to operating netback, corporate netback and net earnings.|
|(2)||See non-GAAP measures.|