Clearview drills and fracks its first operated, horizontal well.
Bashaw acquisition increases area of focus, improves financial position and adds core competencies.
Disposition reduces bank debt; lender confirms credit facility.
CALGARY, Alberta, Aug. 24, 2018 (GLOBE NEWSWIRE) — Clearview Resources Ltd. (“Clearview” or the “Company”) is pleased to announce its financial and operational results for the three months ended June 30, 2018.
June 30, 2018 HIGHLIGHTS
- 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 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 fracturing technology.
- On April 10, 2018, the Company closed the disposition of a non-core, non-operated light oil property located in southern Alberta for $3.4 million. The Company sold the property for approximately $53.5 thousand per flowing boe/d.
- As a result of the above transactions, net debt was reduced to $12.1 million at June 30, 2018 from $14.2 million at March 31, 2018. The proceeds from the disposition and cash position from the acquisition of Bashaw were applied against the Company’s bank debt to further improve its financial flexibility towards funding the upcoming summer capital program. Outstanding bank debt was reduced from $16.3 million at March 31, 2018 to $12.0 million at June 30, 2018.
- Realized sales price for the three months ended June 30, 2018 was $28.99 per boe compared to $27.04 per boe for the comparative period, an increase of 7%, due to higher crude oil and natural gas liquids prices. The realized sales price for the three months ended June 30, 2018 was 3% lower than the prior quarter ended March 31, 2018, primarily due to lower natural gas and ethane prices.
- Operating costs were $14.80 per boe, including $1.97 per boe for workovers, for the three months ended June 30, 2018, 3% lower than the prior quarter ended March 31, 2018 at $15.32 per boe, including $1.18 per boe for workovers.
- General and administrative costs were $2.76 per boe for the three months ended June 30, 2018 versus $2.95 per boe for the comparative period, a reduction of 6% over the comparative quarter.
- Cash finance costs were $1.17 per boe for the three months ended June 30, 2018, compared to $1.31 per boe for the comparative period, a reduction of 11%. Cash finance costs in the prior quarter ended March 31, 2018 were $1.27 per boe.
- Corporate netback increased by 42% to $3.17 per boe for the three months ended June 30, 2018 as compared to $2.23 per boe in the three months ended March 31, 2018.
- Subsequent to the end of the quarter, the Company’s lender reconfirmed Clearview’s credit facility at $21.0 million.
Clearview has drilled and fracked its first operated, horizontal well. This well located on the Company’s Wilson Creek core property at 15-20-44-4W5M (“15-20”) (85% working interest) targeted light oil in the Cardium Formation. The well was drilled to a total measured depth of 4,883 meters including a 3,005 meter, extended reach, horizontal leg. The horizontal wellbore was completed with 110 stages of fracture stimulation at 15 tonnes of sand per stage (0.55 tonnes per meter) utilizing a total of 9,710 cubic meters of slickwater. The 15-20 well was completed as planned and on budget. The well is currently flowing back frac-water during the cleanup phase prior to being equipped for production. 15-20 will be tied-in to existing Clearview infrastructure. The same surface pad location for 15-20 could be used to drill two additional wells of this type on this property. The initial productivity of 15-20 will be known over the next few months.
Clearview is now 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 successful 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) 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.
The Company continues 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 fiscal 2017 with the acquisition of Bashaw Oil Corp. and the disposition of non-core assets, the Company is moving forward with its operated, light oil focused summer drilling program.
These transactions and the capital program are significant milestones towards the Company’s objectives which continue to be:
- acquire long life, cash generating oil and natural gas properties with growth potential;
- maintain a low cost and financially robust structure;
- maintain an appropriate debt versus equity capital structure;
- build the Company’s production base to fund the field capital program from internally generated funds;
- maintain strong lending values to support the Company’s credit facility;
- maintain a licensee liability rating of 2.0 or greater, providing the Company with the ability to transact on further acquisition opportunities; and
- evaluate non-core assets, for potential disposition, to fund the capital program.
Financial and Operating Highlights
|Financial||Three months ended June 30|
|($ 000’s except per share amounts)||2018||2017||% Change|
|Oil and natural gas sales||5,391||4,903||10|
|Net earnings (loss)||(1,749||)||(282||)||520|
|Per share–basic and diluted||(0.18||)||(0.03||)||500|
|Adjusted funds flow (1)||592||1,237||(52||)|
|Per share–basic and diluted||0.06||0.15||526|
|Capital expenditures – net||(2,992||)||278||–|
|Weighted average shares|
|Basic and diluted (000’s)||9,724||8,438||15|
|(1) See non-GAAP measures|
|Production||Three months ended June 30
|Oil – bbl/d||455||389||17|
|Natural gas liquids – bbl/d||462||435||6|
|Total liquids – bbl/d||917||824||11|
|Natural gas – mcf/d||6,764||7,006||(3||)|
|Total – boe/d||2,044||1,992||3|
|Realized sales prices||Three months ended June 30
|Oil – $/bbl||73.71||55.23||33|
|NGLs – $/bbl||36.49||29.36||24|
|Natural gas – $/mcf||1.27||2.79||(54||)|
|Total – $/boe||28.99||27.04||7|
|Netback analysis||Three months ended June 30|
|Barrel of oil equivalent ($/boe)||2018||2017||% Positive
|Realized sales price||28.99||27.04||7|
|Realized gain (loss) on commodity contracts||(2.97||)||0.66||–|
|General & administrative||(2.76||)||(2.95||)||6|
|Cash finance costs||(1.17||)||(1.31||)||11|
|(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.|