CALGARY, Alberta, May 08, 2019 (GLOBE NEWSWIRE) — GRANITE OIL CORP. (“Granite” or the “Company”) (TSX:GXO)(OTCQX:GXOCF) is pleased to report its operating and unaudited financial results for the three months ended March 31, 2019.
FINANCIAL AND OPERATING HIGHLIGHTS
Three Months Ended March 31, | ||||
2019 | 2018 | |||
(000s, except per share amounts) | ($) | ($) | ||
FINANCIAL | ||||
Oil and natural gas revenues | 9,296 | 10,675 | ||
Cash flow from (used in) operations | 2,427 | 3,957 | ||
Funds from (used in) operations (1) | 4,302 | 2,711 | ||
Per share – basic | 0.11 | 0.08 | ||
Per share – diluted (2) | 0.11 | 0.08 | ||
Net income (loss) | (1,884 | ) | (3,353 | ) |
Per share – basic | (0.05 | ) | (0.10 | ) |
Per share – diluted (2) | (0.05 | ) | (0.10 | ) |
Capital expenditures (3) | 719 | 3,461 | ||
Net debt (4) | 43,638 | 42,949 | ||
Shareholders’ equity | 190,945 | 195,391 | ||
(000s) | (#) | (#) | ||
SHARE DATA | ||||
At period-end | 38,369 | 34,191 | ||
Weighted average – basic | 38,201 | 34,191 | ||
Weighted average – diluted | 38,685 | 34,357 | ||
OPERATING (5) | ||||
Production | ||||
Natural gas (mcf/d) | 189 | 289 | ||
Crude oil (bbls/d) | 1,553 | 2,157 | ||
Total (boe/d) | 1,585 | 2,205 | ||
Average wellhead prices | ||||
Natural gas ($/mcf) | 4.84 | 2.19 | ||
Crude oil and NGLs ($/bbl) | 65.91 | 54.71 | ||
Combined average ($/boe) (6) | 65.18 | 53.80 | ||
Netbacks | ||||
Operating netback ($/boe) (7) | 41.30 | 20.12 | ||
Gross (net) wells drilled | ||||
Oil (#) | – | 1 (1.0 | ) | |
Total (#) | – | 1 (1.0 | ) | |
Average working interest (%) | – | 100 |
(1) | Funds from operations and funds from operations per share are not recognized measures under International Financial Reporting Standards (IFRS). Refer to the commentary in the “Reader Advisories” under “Non-GAAP Measurements” for further discussion. |
(2) | The Company uses the weighted average common shares (basic) when there is a net loss for the period to calculate net income (loss) per share diluted. The Company uses the weighted average common shares (diluted) to calculate the funds from operations diluted. |
(3) | Total capital expenditures, excluding acquisitions and excluding non-cash transactions. Refer to commentary in the Management Discussion and Analysis under “Capital Expenditures” for further information. |
(4) | Net debt, which is calculated as current liabilities (excluding derivative financial instruments) and bank debt less current assets (excluding derivative financial instruments), is not a recognized measure under IFRS. Please refer to the commentary in the “Reader Advisories” under “Non-GAAP Measurements” for further discussion. |
(5) | For a description of the boe conversion ratio, refer to the commentary in the ”Reader Advisories” under “BOE Presentation”. |
(6) | Combined average realized prices includes all oil, gas and NGL sales revenue, excluding other income |
(7) | Operating netback, which is calculated by deducting royalties, operating expenses and transportation expenses from oil and gas revenue and adjusting for any realized hedging on financial instruments is not a recognized measure under IFRS. Please refer to the commentary in “Reader Advisories” under “Non-GAAP Measurements” for further discussion. |
Operational Update and Budget
Granite recently brought its development well drilled in the second quarter on-stream at a restricted rate, and is currently maintaining Corporate production of approximately 2,000 bbl/d with a number of wells shut-in as part of its rotational re-pressurization process and EOR optimization. The Company continues to focus on cost reduction, operational efficiencies, and debt reduction, as it prioritizes stability in light of the recent volatility in the Canadian energy market. The Company is maintaining its conservative budget for 2019 of approximately 1,650 bbl/d of oil production for the year, with capital expenditures of approximately $6.1 million, providing for total funds from operations of approximately $17.6 million, and exit net debt of approximately $36 million. The budget assumes average West Texas Intermediate (‘WTI’) pricing of approximately $60 USD/bbl, an average Western Canada Select (‘WCS’) differential to WTI of approximately $16 USD/bbl, and a foreign exchange rate of $1.33 CAD per USD for the remainder of 2019.
Outlook
Following an exceptionally challenging time for the Canadian energy industry in 2018, Granite continues to show its resiliency. The Company posted top-tier producing reserve metrics again for 2018, reduced its total net debt by over 8% in the first quarter of 2019 alone, and continues to prove-up its drilling inventory with its recent development well. With this positive momentum and improvement in Canadian commodity pricing, Granite is off to a strong start for 2019.