Bashaw acquisition increases area of focus, improves financial position and adds core competencies;
Disposition reduces bank debt to fund the summer capital program;
Company’s lender confirms credit facility at $21 million;
Wilson Creek Cardium horizontal well (85% working interest) achieves IP60 of 251 barrels of oil per day – ahead of type-curve expectations;
Equity of $2.0 million raised through September to November, 2018; and
Windfall Bluesky horizontal well (100% working interest) was drilled, completed and placed on production.
CALGARY, AB / ACCESSWIRE / November 21, 2018 / Clearview Resources Ltd. (“Clearview” or the “Company”) is pleased to announce its financial and operational results for the three and six months ended September 30, 2018.
HIGHLIGHTS
- On April 16, 2018, the Company closed the acquisition of Bashaw Oil Corp. (“Bashaw”) through a share for share exchange.
- 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.
- Clearview closed a private placement during the second quarter ended September 30, 2018 and through November, issuing 210,390 common shares at a price of $6.25 per share for gross proceeds of $1.3 million and 101,543 flow-through common shares at a price of $7.00 per share for gross proceeds of $0.7 million. Total gross proceeds raised were $2.0 million.
- The Company’s field capital program of $6.1 million in the six months ended September 30, 2018 has largely been funded from adjusted funds flow of $1.3 million, cash from the Bashaw acquisition of $1.7 million and equity proceeds of $1.3 million, with the balance funded by an increase in net debt. Net debt increased to $15.9 million at September 30, 2018 from $14.2 million at March 31, 2018. Outstanding bank debt was reduced from $16.3 million at March 31, 2018 to $13.1 million at September 30, 2018.
- During the second quarter, the Company’s lender reconfirmed Clearview’s credit facility at $21.0 million with the next scheduled review set for no later than June 30, 2019.
- During the second quarter, the Company drilled, completed and equipped its first Cardium formation, operated, horizontal well, brought on-stream at Wilson Creek 15-20-44-4W5M. Clearview also completed drilling operations at the Company’s second operated, horizontal well targeting the Bluesky formation at Windfall 1-3-59-15W5M. The 1-3 well has since been completed, equipped and placed on production.
- Consistent with the strategy of the Company, oil production increased 36% in the second quarter ended September 30, 2018 to 580 bbls/d, up from 427 bbls/d in the comparative period of the prior year.
- Realized sales price for the three months ended September 30, 2018 was $32.49 per boe compared to $21.54 per boe for the comparative period, an increase of 51%, due to higher crude oil and natural gas liquids prices. The realized sales price for the three months ended September 30, 2018 was 12% higher than the prior quarter ended June 30, 2018, primarily due to higher natural gas liquids prices for propane, butane and pentanes.
- Operating netbacks were $10.95 per boe for the three months ended September 30, 2018, 125% higher than the comparative period of the prior year at $4.87 per boe. The increase over the comparative period is primarily due to higher realized prices for the Company’s production. Operating netbacks in the prior quarter ended June 30, 2018 were $10.16 per boe.
- Corporate netback increased by 22% to $3.87 per boe for the three months ended September 30, 2018 as compared to $3.17 per boe in the three months ended June 30, 2018.
OPERATIONS UPDATE
Wilson Creek
Clearview’s previously announced operated, horizontal well located on the Company’s Wilson Creek core property at 15-20-44-4W5M (“15-20”) (85% working interest) has completed its first sixty days of continuous production (“IP60”). During the IP60, the well produced a gross average of 251 barrels of light, sweet oil per day (263 barrels of oil equivalent per day). This production exceeds the Company’s type curve IP60 estimate of 233 bbls/d.
The same surface pad location for 15-20 could be used to drill two additional wells of this type. The Company has mapped an additional 21 gross (14 net) Cardium horizontal drilling locations on this property.
Windfall
Clearview’s previously announced horizontal development well (100% working interest) on the Windfall core property targeting light, sweet oil in the Bluesky Formation at 1-3-59-15W5M (“1-3”) was drilled to a total measured depth of 4,047 meters including an 1,829 meter, horizontal lateral. The well has been completed, equipped, tied-in and placed on production. The Company will report the initial production performance of this well after the first thirty days of continuous production (IP30).
The 1-3 surface pad location is an existing well lease that is already tied-in to the Company’s 100% owned and operated oil handling facility. The Company has mapped an additional 16 net Bluesky horizontal drilling locations on this property.
STRATEGY
The Company has transformed 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 has moved forward with its successful operated, light oil focused drilling program at Wilson Creek and Windfall.
These transactions and the capital program are significant milestones towards the Company’s objectives which continue to be:
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- 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
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Three months ended Sept. 30, 2018
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Six months ended Sept. 30
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($ 000’s except per share amounts)
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2018
|
2017
|
% Change
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2018
|
2017
|
% Change
|
||||||||||||||||||
Oil and natural gas sales
|
6,297 | 4,335 | 45 | 11,688 | 9,238 | 27 | ||||||||||||||||||
Net earnings (loss)
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(1,000 | ) | (1,864 | ) | (46 | ) | (2,749 | ) | (2,146 | ) | 28 | |||||||||||||
Per share-basic and diluted
|
(0.10 | ) | (0.22 | ) | (55 | ) | (0.28 | ) | (0.25 | ) | 12 | |||||||||||||
Adjusted funds flow (1)
|
749 | 824 | (9 | ) | 1,341 | 2,061 | (35 | ) | ||||||||||||||||
Per share-basic and diluted
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0.07 | 0.10 | (30 | ) | 0.14 | 0.24 | (42 | ) | ||||||||||||||||
Capital expenditures – net
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5,800 | 1,377 | 321 | 2,808 | 1,655 | 70 | ||||||||||||||||||
Weighted average shares
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||||||||||||||||||||||||
Basic and diluted (000’s)
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10,047 | 8,438 | 19 | 9,886 | 8,438 | 17 |
(1) See non-GAAP measures
Production
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Three months ended Sept. 30
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Six months ended Sept. 30
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2018
|
2017
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% Change
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2018
|
2017
|
% Change
|
|||||||||||||||||||
Oil – bbl/d
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580 | 427 | 36 | 518 | 406 | 28 | ||||||||||||||||||
Natural gas liquids – bbl/d
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437 | 497 | (12 | ) | 447 | 463 | (3 | ) | ||||||||||||||||
Total liquids – bbl/d
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1,017 | 924 | 10 | 965 | 869 | 11 | ||||||||||||||||||
Natural gas – mcf/d
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6,537 | 7,576 | (14 | ) | 6,650 | 7,253 | (8 | ) | ||||||||||||||||
Total – boe/d
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2,104 | 2,187 | (4 | ) | 2,075 | 2,079 | – |
Realized sales prices
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Three months ended Sept. 30
|
Six months ended Sept. 30
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2018
|
2017
|
% Change
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2018
|
2017
|
% Change
|
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Oil – $/bbl
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73.44 | 51.70 | 42 | 73.56 | 53.37 | 38 | ||||||||||||||||||
NGLs – $/bbl
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39.70 | 28.85 | 38 | 38.06 | 29.09 | 31 | ||||||||||||||||||
Natural gas – $/mcf
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1.24 | 1.40 | (11 | ) | 1.26 | 2.07 | (39 | ) | ||||||||||||||||
Total – $/boe
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32.49 | 21.54 | 51 | 30.78 | 24.15 | 27 |
Netback analysis
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Three months ended Sept. 30
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Six months ended Sept. 30
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Barrel of oil equivalent ($/boe)
|
2018
|
2017
|
% Positive (Negative)
|
2018
|
2017
|
% Positive (Negative)
|
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Realized sales price
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32.49 | 21.54 | 51 | 30.78 | 24.15 | 27 | ||||||||||||||||||
Royalties
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(5.09 | ) | (2.04 | ) | (150 | ) | (4.30 | ) | (2.43 | ) | (77 | ) | ||||||||||||
Processing income
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1.04 | 0.99 | 5 | 0.95 | 0.96 | (1 | ) | |||||||||||||||||
Transportation
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(1.09 | ) | (1.08 | ) | (1 | ) | (1.26 | ) | (1.33 | ) | 5 | |||||||||||||
Operating
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(16.40 | ) | (14.54 | ) | (13 | ) | (15.61 | ) | (13.85 | ) | (13 | ) | ||||||||||||
Operating netback
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10.95 | 4.87 | 125 | 10.56 | 7.50 | 41 | ||||||||||||||||||
Realized gain (loss) on commodity contracts
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(3.33 | ) | 2.37 | (241 | ) | (3.16 | ) | 1.56 | (303 | ) | ||||||||||||||
General & administrative
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(2.63 | ) | (1.75 | ) | (50 | ) | (2.69 | ) | (2.32 | ) | (16 | ) | ||||||||||||
Transaction costs
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– | – | – | (0.04 | ) | – | (100 | ) | ||||||||||||||||
Cash finance costs
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(1.12 | ) | (1.38 | ) | 19 | (1.14 | ) | (1.34 | ) | 15 | ||||||||||||||
Corporate netback
|
3.87 | 4.11 | (6 | ) | 3.53 | 5.40 | (35 | ) |
(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.
Clearview’s September 30, 2018 financial statements and management’s discussion and analysis are available on the Company’s website at www.clearviewres.comand SEDAR at www.SEDAR.com.