CALGARY, Alberta, Aug. 22, 2018 (GLOBE NEWSWIRE) — Traverse Energy Ltd. (“Traverse” or “the Company”) (TSX Venture:TVL) presents financial and operating results for the three and six months ended June 30, 2018.
|Three months ended June 30,||Six months ended June 30,|
|Financial ($ thousands, except per share amounts)|
|Petroleum and natural gas revenue||1,778||2,615||3,758||5,641|
|Cash from operating activities||481||1,389||1,624||2,492|
|Adjusted funds flow (1)||420||1,147||1,033||2,588|
|Per share – basic and diluted||0.00||0.01||0.01||0.03|
|Per share – basic and diluted||(0.08||)||(0.01||)||(0.08||)||(0.02||)|
|Working capital (deficiency)||(6,028||)||1,019||(6,028||)||1,019|
|Weighted average (millions)||103.5||89.1||103.5||87.9|
|Operations (Units as noted)|
|Natural gas (Mcf/day)||1,551||2,300||1,899||2,363|
|Oil and NGL (bbls/day)||262||384||280||425|
|Average sales price|
|Natural gas ($/Mcf)||1.35||3.11||1.85||3.05|
|Oil and NGL ($/bbl)||66.57||56.19||61.60||56.29|
|Petroleum and natural gas revenue||37.54||37.44||34.81||38.04|
|Operating and transportation expenses||(19.29||)||(15.95||)||(17.82||)||(15.42||)|
|Operating netback (2)||16.47||19.92||15.52||21.07|
|General and administrative||(6.13||)||(3.32||)||(4.86||)||(3.47||)|
|Finance income and expense (3)||(1.48||)||(0.19||)||(1.08||)||(0.15||)|
|Corporate netback (4)||8.86||16.41||9.58||17.45|
(1) Adjusted funds flow represents cash from operating activities prior to changes in non-cash working capital and settlement of decommissioning obligations.
(2) Operating netback represents revenue, less royalties, operating and transportation expenses. Operating netback per BOE is the operating netback divided by barrels of oil equivalent production volumes for the applicable period.
(3) Excludes non-cash accretion.
(4) Corporate netback represents the operating netback less general and administrative costs and finance income and expense before accretion. Corporate netback per BOE is the corporate netback divided by barrels of oil equivalent production volume for the applicable period.
Traverse’s production averaged 521 BOE per day (50% oil and NGL) during the second quarter of 2018, a decrease of 23% from the first quarter of 2018. Production declined as no new production has been added in 2018 and decreased natural gas pricing resulted in the shut-in of natural gas wells during the quarter. Adjusted funds flow decreased 32% from the first quarter of 2018 due mainly to decreased production and the impact of a fixed physical oil delivery contract which expired June 30, 2018. Capital expenditures in the second quarter related mainly to land acquisition and production testing and facility construction at Chigwell.
At June 30, 2018 Traverse has accumulated approximately 90,000 net acres in the Duvernay shale basin. In the east Duvernay shale basin Traverse drilled and completed a well late in 2017. The well was placed on production in December and total load fluid recovered to July 31, 2018 was 91,100 barrels, which is 35% of the completion fluids. During the second quarter a clean out of the well was performed and the downhole pump was replaced and lowered in the wellbore. Water cuts remain high (90%) with minor increases in the oil cut over the last several months.
Total fluid production at Chigwell averaged 240 barrels per day (10% oil) in the month of July. Traverse has determined that at this level of production the carrying amount of the Duvernay well would not be recoverable. Commercial viability of the well has not been proven and no economic reserves have been assigned, therefore the full carrying amount of the well was determined to be impaired at June 30, 2018. Traverse will continue to produce the well and evaluate results. Any future assignment of reserves could result in a full or partial reversal of the impairment charge.
Traverse is actively assessing its current asset base and pursuing a strategy to optimize existing assets, including evaluating alternatives for development of the Duvernay lands. Undeveloped land holdings in Alberta at June 30, 2018 were 197,600 gross (196,900 net) acres. At June 30, 2018 the Company had a working capital deficiency of approximately $6.0 million and credit facilities of $9.0 million. The Company’s 2018 capital budget has currently been reduced to $3.0 million while the assessment of assets and evaluation of the Chigwell Duvernay well continues. The remaining capital budget for 2018 will be financed with adjusted funds flow.