CALGARY, Aug. 1, 2019 /CNW/ – Crew Energy Inc. (TSX: CR) (“Crew” or the “Company”) is pleased to announce our operating and financial results for the three and six month periods ended June 30, 2019. Crew’s Financial Statements and Notes, as well as Management’s Discussion and Analysis (“MD&A”) for the three and six month periods ended June 30, 2019 are available on Crew’s website and filed on SEDAR at www.sedar.com.
Q2 2019 HIGHLIGHTS
FINANCIAL & OPERATING HIGHLIGHTS:
FINANCIAL |
Three months |
Three months |
Six months |
Six months |
($ thousands, except per share amounts) |
June 30, 2019 |
June 30, 2018 |
June 30, 2019 |
June 30, 2018 |
Petroleum and natural gas sales |
51,543 |
54,040 |
106,994 |
113,467 |
Adjusted Funds Flow(1) |
22,513 |
21,804 |
48,284 |
48,177 |
Per share – basic |
0.15 |
0.14 |
0.32 |
0.32 |
– diluted |
0.15 |
0.14 |
0.32 |
0.32 |
Net income (loss) |
15,375 |
(9,181) |
21,561 |
(5,033) |
Per share – basic |
0.10 |
(0.06) |
0.14 |
(0.03) |
– diluted |
0.10 |
(0.06) |
0.14 |
(0.03) |
Exploration and Development expenditures |
13,997 |
12,468 |
69,238 |
46,389 |
Property acquisitions (net of dispositions) |
(3,249) |
17 |
(19,173) |
(9,990) |
Net capital expenditures |
10,748 |
12,485 |
50,065 |
36,399 |
Capital Structure |
As at |
As at |
||
($ thousands) |
June 30, 2019 |
Dec. 31, 2018 |
||
Working capital deficiency (surplus)(2) |
9,653 |
(11,984) |
||
Bank loan |
48,398 |
59,904 |
||
58,051 |
47,920 |
|||
Senior Unsecured Notes |
295,376 |
294,885 |
||
Total Net Debt(2) |
353,427 |
342,805 |
||
Current Debt Capacity(3) |
535,000 |
535,000 |
||
Common Shares Outstanding (thousands) |
152,032 |
151,730 |
Notes: |
|
(1) |
Non-IFRS Measure. AFF is calculated as cash provided by operating activities, adding the change in non-cash working capital, decommissioning obligation expenditures and accretion of deferred financing costs on the senior unsecured notes. AFF does not have a standardized measure prescribed by International Financial Reporting Standards (“IFRS”), and therefore may not be comparable with the calculations of similar measures for other companies. See “Non-IFRS Measures” contained within Crew’s MD&A for details including reasons for use and a reconciliation of AFF to its most closely related IFRS measure. |
(2) |
Non-IFRS Measure. Working capital deficiency / (surplus) includes cash and cash equivalents plus accounts receivable less accounts payable and accrued liabilities. See “Non-IFRS Measures” contained within Crew’s MD&A. |
(3) |
Current Debt Capacity reflects the bank facility of $235 million plus $300 million in senior unsecured notes outstanding. |
Three months |
Three months |
Six months |
Six months |
|
Operations |
June 30, 2019 |
June 30, 2018 |
June 30, 2019 |
June 30, 2018 |
Daily production |
||||
Light crude oil (bbl/d) |
155 |
261 |
190 |
288 |
Heavy crude oil (bbl/d) |
1,722 |
1,930 |
1,666 |
1,839 |
Condensate (bbl/d) |
3,127 |
2,304 |
2,873 |
2,500 |
Ngl (bbl/d) |
2,049 |
1,710 |
2,031 |
1,751 |
Natural gas (mcf/d) |
94,873 |
104,269 |
97,692 |
110,257 |
Total (boe/d @ 6:1) |
22,865 |
23,583 |
23,042 |
24,754 |
Average prices(1) |
||||
Light crude oil ($/bbl) |
66.15 |
75.72 |
63.14 |
71.62 |
Heavy crude oil ($/bbl) |
60.00 |
55.65 |
52.44 |
46.41 |
Condensate ($/bbl) |
68.96 |
82.73 |
65.88 |
77.95 |
Ngl ($/bbl) |
7.50 |
25.63 |
9.17 |
25.21 |
Natural gas ($/mcf) |
2.34 |
2.23 |
2.91 |
2.56 |
Oil equivalent ($/boe) |
24.77 |
25.18 |
25.65 |
25.32 |
Notes: |
|
(1) |
Average prices are before deduction of transportation costs and do not include realized gains and losses on financial instruments. |
Three months |
Three months |
Six months |
Six months |
|
June 30, 2019 |
June 30, 2018 |
June 30, 2019 |
June 30, 2018 |
|
Netback ($/boe) |
||||
Petroleum and natural gas sales |
24.77 |
25.18 |
25.65 |
25.32 |
Royalties |
(1.77) |
(1.83) |
(1.81) |
(1.77) |
Realized commodity hedging loss |
(0.16) |
(1.23) |
(0.52) |
(1.07) |
Marketing income(1) |
1.23 |
0.28 |
1.31 |
0.28 |
Net operating costs(2) |
(6.00) |
(6.56) |
(6.12) |
(6.42) |
Transportation costs |
(3.01) |
(1.78) |
(2.63) |
(1.95) |
Operating netback(3) |
15.06 |
14.06 |
15.88 |
14.39 |
General & administrative (“G&A”) |
(1.39) |
(1.23) |
(1.45) |
(1.31) |
Other income |
– |
– |
– |
0.22 |
Financing costs on long-term debt |
(2.84) |
(2.67) |
(2.85) |
(2.55) |
Adjusted funds flow(3) |
10.83 |
10.16 |
11.58 |
10.75 |
Drilling Activity |
||||
Gross wells |
1 |
0 |
8 |
0 |
Working interest wells |
1.0 |
0.0 |
8.0 |
0.0 |
Success rate, net wells (%) |
100 |
– |
100% |
– |
Notes: |
|
(1) |
Marketing income was recognized from the monetization of forward physical sales contracts offset by the cost of committed natural gas transportation that was not available during the period. |
(2) |
Net operating costs are calculated as gross operating costs less processing revenue. |
(3) |
Non-IFRS Measure. Operating netback equals petroleum and natural gas sales including realized hedging gains and losses on commodity contracts, marketing income, less royalties, net operating costs and transportation costs calculated on a boe basis. Operating netback and adjusted funds flow netback do not have a standardized measure prescribed by IFRS, and therefore may not be comparable with the calculations of similar measures for other companies. See “Non-IFRS Measures” contained within Crew’s MD&A. |
FINANCIAL Overview
Positive Impacts from Increased Condensate and Total Liquids Weighting
AFF per Share Driven by Liquids and Condensate Production
Quarter-over-Quarter Improvement in Liquids Volumes and Pricing
Lower Net Operating Costs Bolster Operating Netbacks
Q2 Capital Expenditures In-Line with Guidance
Ongoing Focus on Balance Sheet Strength
Transportation, Marketing & HEDGING
Diversified Market Access Provides Strategic Benefit
Natural Gas & Liquids Hedging
OPERATIONS & AREA Overview
NE BC Montney – Greater Septimus
Greater Septimus |
|||||
Production & Drilling |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Average daily production (boe/d) |
19,594 |
19,535 |
18,447 |
19,240 |
18,953 |
Wells drilled (gross / net) |
1 / 1.0 |
6 / 6.0 |
6 / 6.0 |
4 / 4.0 |
– |
Wells completed (gross / net) |
– |
8 / 8.0 |
3 / 3.0 |
– |
2 / 1.6 |
Operating Netback |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
($ per boe) |
2019 |
2019 |
2018 |
2018 |
2018 |
Revenue |
22.20 |
25.61 |
26.53 |
22.83 |
22.70 |
Royalties |
(1.27) |
(1.56) |
(1.58) |
(1.15) |
(1.35) |
Realized commodity hedge gain (loss) |
0.28 |
(0.74) |
(1.79) |
(2.01) |
(1.32) |
Marketing income (1) |
1.43 |
1.66 |
1.23 |
0.34 |
0.34 |
Net operating costs(2) |
(4.46) |
(4.65) |
(4.51) |
(4.61) |
(4.71) |
Transportation costs |
(2.81) |
(1.73) |
(1.35) |
(1.22) |
(1.40) |
Operating netback(3) |
15.37 |
18.59 |
18.53 |
14.18 |
14.26 |
Notes: |
|
(1) |
Marketing income was recognized from the monetization of forward physical sales contracts offset by the cost of committed natural gas transportation. |
(2) |
Net operating costs are calculated as gross operating costs less processing revenue. |
(3) |
Non-IFRS Measure. Operating netback equals petroleum and natural gas sales including realized hedging gains and losses on commodity contracts, marking income, less royalties, net operating costs and transportation costs calculated on a boe basis. Operating netback does not have a standardized measure prescribed by IFRS, and therefore may not be comparable with the calculations of similar measures for other companies. See “Non-IFRS Measures” contained within Crew’s MD&A. |
Other NE BC Montney
AB / SK Heavy Oil – Lloydminster
OUTLOOK
Condensate and Liquids Trending Higher
Low Base Declines at Septimus Supports Sustainability
1 |
See “Information Regarding Disclosure on Oil and Gas, Operational Information and Non-IFRS Measures”. |
Significant Optionality Maintained
Net Capital Expenditures to Remain in Line with AFF
We thank our employees and directors for their commitment and dedication to the success of Crew, and we thank all of our shareholders and bondholders for their patience and continued support in this challenging operating environment.