CALGARY, Nov. 8, 2018 /CNW/ – (TSX: EGL): Eagle Energy Inc. (“Eagle“) is pleased to report its financial and operating results for the third quarter ended September 30, 2018.
When reflecting on Eagle’s third quarter and the Twining asset sale, Wayne Wisniewski, President and Chief Executive Officer, stated, “Eagle continues to execute its previously announced plan to reduce debt and corporate costs. To the end of September, and excluding one-time costs associated with the Salt Flat and Twining dispositions, our year-to-date general and administrative expenses are 22% lower than 2017 levels. In addition, when compared to 2017 year-end, we have reduced our term loan by 48%.”
Mr. Wisniewski continued, “We are pleased to report that we have successfully fracked our North Texas horizontal well with 26 stages as planned using 2.21 million pounds of sand for an average of 85,000 pounds of sand per stage. Initial production rates are very encouraging. At the same point in time, and relative to our first horizontal well, initial oil rates from our new well are approximately 600 barrels of oil equivalent per day (492 barrels of oil per day), which is about 100 barrels of oil per day higher than our first horizontal well. This well is producing from the middle Pennsylvanian formation. We will release updated production information after artificial lift is installed and after rates have stabilized.”
In other news, to mitigate the effects of fluctuating prices on a portion of its 2018 production, Eagle has entered into a fixed price financial swap for 650 barrels of oil per day at a West Texas Intermediate (“WTI”) price of $US 75.08 per barrel for the months of October through December 2018. Eagle has no other production hedged at this time.
Third Quarter 2018 Financial Results
Eagle’s unaudited condensed consolidated interim financial statements and accompanying notes for the three and nine months ended September 30, 2018 and related management’s discussion and analysis have been filed with the securities regulators and are available online under Eagle’s issuer profile at www.sedar.com and on Eagle’s website at www.EagleEnergy.com.
This news release contains non-IFRS financial measures and statements that are forward-looking. Investors should read “Non-IFRS Financial Measures” and “Note about Forward-looking Statements” near the end of this news release. Figures within this news release are presented in Canadian dollars unless otherwise indicated.
Highlights for the Three Months ended September 30, 2018
Operations Update
Summary of Quarterly Results
Q3/2018 |
Q2/2018 |
Q1/2018 |
Q4/2017 |
Q3/2017 |
Q2/2017 |
Q1/2017 |
Q4/2016 |
|
($000’s except for boe/d and per share amounts) |
||||||||
Sales volumes – boe/d |
1,958 |
2,262 |
2,974 |
3,804 |
3,749 |
3,966 |
3,767 |
3,803 |
Revenue, net of royalties |
9,010 |
10,228 |
12,461 |
14,725 |
12,459 |
14,167 |
14,218 |
13,891 |
per boe |
50.01 |
49.69 |
46.57 |
42.08 |
36.12 |
39.25 |
41.95 |
39.72 |
Operating, transportation and marketing expenses |
3,946 |
4,206 |
5,109 |
6,864 |
6,301 |
5,885 |
7,165 |
6,799 |
per boe |
21.91 |
20.43 |
19.10 |
19.61 |
18.27 |
16.31 |
21.14 |
19.44 |
Field netback(1) |
5,064 |
6,022 |
7,352 |
7,861 |
6,158 |
8,282 |
7,053 |
7,092 |
per boe |
28.10 |
29.26 |
27.47 |
22.47 |
17.85 |
22.94 |
20.81 |
20.28 |
Funds flow from operations |
1,622(2) |
1,932 |
1,718(3) |
3,488 |
3,346 |
4,272 |
1,589 |
3,901 |
per boe |
9.00 |
9.39 |
6.42 |
9.98 |
9.70 |
11.84 |
4.69 |
11.15 |
per share – basic |
0.04 |
0.04 |
0.04 |
0.08 |
0.08 |
0.10 |
0.04 |
0.09 |
per share – diluted |
0.04 |
0.04 |
0.04 |
0.08 |
0.07 |
0.10 |
0.04 |
0.09 |
(Loss) earnings |
(1,887) |
(15,093) |
(2,568) |
(14,293) |
(4,711) |
675 |
1,303 |
30,508 |
per share – basic |
(0.04) |
(0.34) |
(0.06) |
(0.34) |
(0.11) |
0.02 |
0.03 |
0.72 |
per share – diluted |
(0.04) |
(0.34) |
(0.06) |
(0.34) |
(0.11) |
0.02 |
0.03 |
0.72 |
Cash dividends declared |
– |
– |
– |
– |
– |
– |
425 |
637 |
per issued share |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.01 |
0.015 |
Current assets |
13,270 |
10,920 |
14,941 |
13,869 |
11,122 |
11,847 |
18,819 |
9,302 |
Current liabilities |
9,686 |
5,762 |
7,528 |
13,715 |
8,042 |
6,599 |
11,474 |
74,758 |
Total assets |
141,264 |
159,935 |
174,877 |
207,314 |
213,867 |
222,155 |
233,951 |
218,199 |
Total non-current liabilities |
51,886 |
62,427 |
70,870 |
94,312 |
92,367 |
97,086 |
104,359 |
26,202 |
Shareholders’ equity |
79,692 |
81,709 |
96,479 |
99,287 |
113,458 |
118,470 |
118,118 |
117,239 |
Shares issued |
44,244 |
43,750 |
43,750 |
43,302 |
43,302 |
42,857 |
42,857 |
42,452 |
(1) Field netback is a Non-IFRS financial measure. See “Advisories – Non-IFRS Financial Measures”. |
|
(2) Includes one-time disposition costs of $0.7 million relating to the Twining disposition. |
|
(3) Includes one-time disposition costs of $3.4 million relating to the Salt Flat disposition. |
For the three months ended September 30, 2018, sales volumes were lower than the previous quarters, primarily due to the effect of the February 2018 Salt Flat disposition and the August 2018 Twining disposition being only partially offset by additional production from wells drilled in Eagle’s North Texas area.
Third quarter 2018 field netback on a per boe basis decreased 4% from the second quarter of 2018 due to slightly higher realized commodity prices offset by higher royalties and increased operating costs, primarily due to the turnaround on the Dixonville plant.
Third quarter 2018 funds flow from operations decreased 16% from the second quarter of 2018 due to lower field netbacks and higher third quarter administrative and financing expenses due to one-time Twining disposition costs.
Total non-current liabilities decreased as a result of a repayment of $10.5 million ($US 8.1 million at the period end exchange rate) from the proceeds of the Twining disposition.
Changes in (loss) earnings from one quarter to the next often do not move directionally or by the same amount as quarterly changes in funds flow from operations. This is due to items of a non-cash nature that factor into the calculation of (loss) earnings, and those that are required to be fair valued at each quarter end. Third quarter 2018 funds flow from operations was 16% lower than the second quarter of 2018, yet the third quarter 2018 loss was 87% less than the second quarter of 2018 due to a non-cash impairment expense booked in the second quarter relating to the Twining oil and gas properties based on the sale agreement dated July 19, 2018.
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