CALGARY, Alberta, March 13, 2019 (GLOBE NEWSWIRE) — Pine Cliff Energy Ltd. (“Pine Cliff” or the “Company”) (TSX: PNE) is pleased to announce its year-end financial and operating results, the filing of its 2018 disclosure documents and an operations update on the oil well drilled in Q4 2018. Included in the filings were Pine Cliff’s annual information form (“AIF”), which includes disclosure and reports related to reserves data and other oil and gas information pursuant to National Instrument 51‐101 Standards of Disclosure for Oil and Gas Activities and its consolidated financial statements and related management’s discussion and analysis for the year ended December 31, 2018 (the “Annual Report”). Selected highlights are shown below and should be read in conjunction with the Annual Report and the AIF.
Pine Cliff’s natural gas market diversification strategy was successful in generating positive adjusted funds flow in 2018, despite enduring the lowest AECO gas prices in 19 years. Pine Cliff was also able to use its extensive seismic database to expand the Company’s prospect inventory by identifying a number of operated, drilling locations on its existing land base. And on the macro side, LNG Canada announced in the last quarter of 2018 that it will be proceeding with a $40 billion LNG project in Western Canada that will initially export two Bcf per day of Western Canada gas. This project would be one of Canada’s largest infrastructure projects ever undertaken and will play a significant role in addressing the issue of getting Canadian natural gas to the world. Other significant Pine Cliff highlights from the fourth quarter and 2018 include:
- generated $4.4 million of adjusted funds flow ($0.01 per basic share) for the three months ended December 31, 2018;
- generated $10.5 million ($0.03 per basic share) of adjusted funds flow during the year ended December 31, 2018;
- realized a $2.51 per Mcf gas price for the three months ended December 31, 2018, 44% higher than the AECO 5A benchmark of $1.74 per Mcf;
- realized a $2.07 per Mcf gas price for the year ended December 31, 2018, 34% higher than the AECO 5A benchmark of $1.54 per Mcf;
- achieved average production of 19,684 Boe/d (94% natural gas) in 2018, only 8% lower than the 21,408 Boe/d in 2017, despite incurring only $6.5 million of drilling and recompletion capital spending in 2018, over half of which was spent in the fourth quarter of 2018 with no corresponding increase in production from that specific spend until 2019;
- completed a private placement of $19 million of term debt to Alberta Investment Management Corporation and extended $12 million of insider debt to 2020 to eliminate $18 million in bank debt, ending 2018 with $3.6 million in cash; and
- drilled and completed a 100% working interest horizontal oil well that was successfully brought on production in January, 2019.
Operations Update on Pekisko Oil Well
In 2018, Pine Cliff focused on identifying growth opportunities within the Company’s Central Alberta land base using the 420 square kilometers of 3D and 813 kilometers of 2D seismic owned or licensed in the area. This work resulted in Pine Cliff drilling its first horizontal oil well (100% working interest) targeting the Pekisko formation which came on production on January 14, 2019. Although the well was initially restricted for the first 14 days, it flowed at an average rate of 410 Boe/d for the first 30 days of production, consisting of 238 Bbl/d of 30 degree API oil and 940 Mcf/d of raw natural gas. Production for the first 57 days averaged 390 Boe/d (63% oil and NGLs).
Pine Cliff currently estimates that there are approximately 19 gross (15.8 net) Pekisko and Basal Quartz oil well locations on the Company’s Central Alberta lands that would be economic to drill at today’s commodity pricing, with 3 (2.5 net) of these locations already booked in the Company’s Reserve Report prepared by McDaniel & Associates Consultants Ltd. at December 31, 2018. Pine Cliff owns extensive infrastructure, operations and seismic in Central Alberta and it will continue to evaluate further development and acquisition potential in this area.
Financial and Operating Results
|Three months ended December 31,||Year ended December 31,|
|($000s, unless otherwise indicated)|
|Oil and gas sales (before royalty expense)||30,110||28,663||107,385||125,018|
|Cash flow from operating activities||1,415||(4,350)||8,616||25,009|
|Adjusted funds flow1||4,433||3,759||10,513||28,705|
|Per share – Basic and Diluted ($/share)1||0.01||0.01||0.03||0.09|
|Per share – Basic and Diluted ($/share)||(0.09)||(0.11)||(0.24)||(0.22)|
|Weighted-average common shares outstanding (000s)||94%||95%||94%||95%|
|Basic and diluted||307,076||307,076||307,076||307,076|
|Combined sales price ($/Boe)||16.72||14.50||14.95||16.00|
|Operating netback ($/Boe)1||3.56||2.85||2.68||4.88|
|Corporate netback ($/Boe)1||2.46||1.90||1.47||3.68|
|Operating netback ($ per Mcfe)1||0.59||0.48||0.45||0.81|
|Corporate netback ($ per Mcfe)1||0.41||0.32||0.25||0.61|
1 This is a non-GAAP measure, see “NON-GAAP Measures” for additional information.