CALGARY, Aug. 8, 2018 /CNW/ – Gear Energy Ltd. (“Gear” or the “Company”) (TSX:GXE) is pleased to provide the following second quarter operating update to shareholders. Gear’s Interim Financial Statements and related Management’s Discussion and Analysis (“MD&A”) for the period ended June 30, 2018 are available for review on Gear’s website at www.gearenergy.com and on www.sedar.com.
Financial Summary
Three months ended |
Six months ended |
||||||
(Cdn$ thousands, per boe amounts) |
Jun 30, 2018 |
Jun 30, 2017 |
Mar 31, 2018 |
Jun 30, 2018 |
Jun 30, 2017 |
||
FINANCIAL |
|||||||
Funds from operations (1) |
13,674 |
10,248 |
8,078 |
21,753 |
18,977 |
||
Per weighted average basic share |
0.07 |
0.05 |
0.04 |
0.11 |
0.10 |
||
Per weighted average diluted share |
0.07 |
0.05 |
0.04 |
0.11 |
0.09 |
||
Cash flow from operating activities |
8,596 |
5,362 |
14,787 |
23,383 |
17,607 |
||
Net income (loss) |
(1,869) |
3,001 |
(4,294) |
(6,163) |
5,987 |
||
Per weighted average basic share |
(0.01) |
0.02 |
(0.02) |
(0.03) |
0.03 |
||
Per weighted average diluted share |
(0.01) |
0.01 |
(0.02) |
(0.03) |
0.03 |
||
Capital expenditures |
6,385 |
6,161 |
9,243 |
15,628 |
24,945 |
||
Net acquisitions (2) |
10 |
127 |
390 |
400 |
59 |
||
Net debt (1) |
38,960 |
43,409 |
45,330 |
38,960 |
43,409 |
||
Weighted average shares, basic (thousands) |
195,045 |
192,922 |
194,968 |
195,007 |
192,881 |
||
Weighted average shares, diluted (thousands) |
195,045 |
208,971 |
194,968 |
195,007 |
209,074 |
||
Shares outstanding, end of period (thousands) |
195,213 |
192,935 |
194,968 |
195,213 |
192,935 |
||
OPERATING |
|||||||
Production |
|||||||
Heavy oil (bbl/d) |
4,774 |
3,887 |
4,231 |
4,504 |
3,813 |
||
Light and medium oil (bbl/d) |
1,232 |
1,412 |
1,197 |
1,215 |
1,249 |
||
Natural gas liquids (bbl/d) |
219 |
322 |
223 |
221 |
270 |
||
Natural gas (mcf/d) |
4,806 |
5,334 |
5,229 |
5,016 |
5,266 |
||
Total (boe/d) |
7,025 |
6,510 |
6,522 |
6,775 |
6,210 |
||
Average prices |
|||||||
Heavy oil ($/bbl) |
55.04 |
44.72 |
42.97 |
49.40 |
43.94 |
||
Light oil ($/bbl) |
75.67 |
59.64 |
64.53 |
70.21 |
60.19 |
||
Natural gas liquids ($/bbl) |
40.51 |
28.11 |
39.74 |
40.12 |
26.10 |
||
Natural gas ($/mcf) |
1.08 |
2.91 |
1.66 |
1.38 |
2.96 |
||
Netback ($/boe) |
|||||||
Commodity and other sales |
52.67 |
43.77 |
42.42 |
47.76 |
42.92 |
||
Royalties |
(5.06) |
(4.96) |
(4.95) |
(5.01) |
(4.49) |
||
Operating costs |
(17.16) |
(17.78) |
(15.83) |
(16.52) |
(17.07) |
||
Operating netback (1) |
30.45 |
21.03 |
21.64 |
26.23 |
21.36 |
||
Realized risk management gains (losses) |
(5.55) |
(0.77) |
(4.15) |
(4.88) |
(0.99) |
||
General and administrative |
(2.55) |
(2.13) |
(2.83) |
(2.69) |
(2.54) |
||
Interest |
(0.93) |
(0.83) |
(0.92) |
(0.92) |
(0.85) |
||
Other |
(0.02) |
– |
0.02 |
– |
(0.09) |
||
Corporate netback (1) |
21.40 |
17.30 |
13.76 |
17.74 |
16.89 |
||
TRADING STATISTICS ($ based on intra-day trading) |
|||||||
High |
1.37 |
0.94 |
1.01 |
1.37 |
1.26 |
||
Low |
0.68 |
0.60 |
0.66 |
0.66 |
0.60 |
||
Close |
1.35 |
0.74 |
0.70 |
1.35 |
0.74 |
||
Average daily volume (thousands) |
820 |
253 |
458 |
642 |
403 |
(1) |
Cash flow from operations, net debt, operating netback and corporate netback are non-GAAP measures and additional information with respect to these measures can be found under the heading “Non-GAAP Measures” in Gear’s MD&A. |
(2) |
Net acquisitions exclude non-cash items for decommissioning liability and deferred taxes and is net of post-closing adjustments. |
MESSAGE TO SHAREHOLDERS
With this quarterly release, the team at Gear is pleased to report production above 7,000 boe per day with a liquids weighting of 89 per cent delivering a field netback of greater than $30 per boe. This is a netback number per boe that Gear shareholders have not seen since the fourth quarter of 2014. During that quarter in 2014 revenue was 14 per cent higher than it is this quarter however at the time royalties and operating costs per boe were 50 per cent and 14 per cent, respectively, higher as well. The combination of more stable oil prices and lower costs has provided an environment where the Gear team is excited to resume significant organic growth activity. Although only four wells were drilled during the second quarter, Gear will have two active rigs drilling for light and heavy oil throughout the third quarter, and into the fourth. In addition the Gear team is pleased to have further deleveraged during the second quarter with a reported net debt of $38.2 million, a 60 percent reduction from the previously mentioned fourth quarter of 2014, and a 14 percent reduction from the prior quarter in 2018. The Gear team remains cautiously optimistic regarding future commodity prices with recent positive news on two major oil pipeline developments and the continued crude-by-rail expansion.
QUARTERLY HIGHLIGHTS
STEPPE RESOURCES INC. (“Steppe”)
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