CALGARY, Alberta, Nov. 06, 2018 (GLOBE NEWSWIRE) — Pine Cliff Energy Ltd. (“Pine Cliff” or the “Company”) (TSX: PNE) is pleased to announce the filing of its third quarter financial and operating results. Included in the filings were Pine Cliff’s unaudited interim condensed consolidated financial statements and related management’s discussion and analysis for the three and nine months ended September 30, 2018 (the “Q3-Report“). Selected highlights are shown below and should be read in conjunction with the Q3-Report.
Third Quarter 2018 Highlights
Highlights from the third quarter of 2018 are as follows:
- realized adjusted funds flow of $1.9 million during the quarter with realized gas prices of $1.88 per Mcf, despite AECO daily 5A natural gas pricing only being $1.19 per Mcf;
- achieved average production for the nine months ended September 30, 2018 of 19,721 Boe/d (118,326 Mcfe/d), down from 21,387 Boe/d (128,322 Mcfe/d) for the nine months ended September 30, 2017, despite only incurring $3.2 million of drilling and recompletion capital in the nine months ended September 30, 2018;
- entered into an amended and restated credit agreement with its banking syndicate for an $11.0 million revolving credit facility; and
- completed a private placement for gross proceeds of $19.0 million from Alberta Investment Management Corporation to pay down bank indebtedness and provide additional working capital.
Impact of Pine Cliff’s Diversification Strategy
The success of Pine Cliff’s 2018 marketing diversification strategy was highlighted this past quarter. Despite the AECO daily 5A reference price being 18% lower in the three months ended September 30, 2018 compared to the same period in 2017, realized natural gas pricing for Pine Cliff in the third quarter of 2018 was 1% higher at $1.88 per Mcf. This realized natural gas price was an increase of $0.69 per Mcf, or 58% above the average daily AECO price.
Balance Sheet Flexibility
This past quarter Pine Cliff better aligned its balance sheet with its business model by converting shorter term focused bank debt to longer-term focused term debt. Pine Cliff exited this past quarter with no bank debt and a positive cash balance of $4.6 million.
Pine Cliff has historically grown by acquisitions and through these acquisitions, Pine Cliff now owns the mineral rights on close to two million acres of land. Pine Cliff’s board of directors has approved an increase in its 2018 capital budget from $10.4 million to $13.4 million, including abandonments and reclamation and excluding acquisitions and dispositions. The increase in the capital budget will be used to drill an oil well in the fourth quarter of 2018.
Pine Cliff is also adjusting its 2018 production guidance from 20,000 – 20,500 Boe/d (120,000 – 123,000 Mcfe/d) to 19,500 – 20,000 Boe/d (117,000 – 120,000 Mcfe/d), weighted approximately 94% towards natural gas. The decrease is a result of short term voluntary shut-ins as a result of lower natural gas prices and delaying capital expenditures to the fourth quarter of 2018.
Financial and Operating Results
|Three months ended September 30,||Nine months ended September 30,|
|($000s, unless otherwise indicated)|
|Oil and gas sales (before royalty expense)||25,625||25,646||77,275||96,355|
|Cash flow from operating activities||(309||)||5,517||7,201||29,359|
|Adjusted funds flow1||1,920||2,879||6,080||24,946|
|Per share – Basic and Diluted ($/share)1||0.01||0.01||0.02||0.08|
|Per share – Basic and Diluted ($/share)||(0.03||)||(0.10||)||(0.14||)||(0.11||)|
|Weighted-average common shares outstanding (000s)|
|Basic and diluted||307,076||307,076||307,076||307,076|
|Combined sales price ($/Boe)||14.21||12.75||14.35||16.50|
|Operating netback ($/Boe)1||2.34||2.30||2.37||5.56|
|Corporate netback ($/Boe)1||1.06||1.44||1.13||4.27|
|Operating netback ($ per Mcfe)1||0.39||0.38||0.40||0.93|
|Corporate netback ($ per Mcfe)1||0.18||0.24||0.19||0.71|
1 This is a non-GAAP measure, see NON-GAAP Measures for additional information.