CALGARY, Alberta, Nov. 12, 2019 (GLOBE NEWSWIRE) — Altura Energy Inc. (“Altura” or the “Corporation”) (TSXV: ATU) is pleased to announce its financial and operating results for the three and nine months ended September 30, 2019. The unaudited interim condensed consolidated financial statements and related management’s discussion and analysis (“MD&A”) are available at www.sedar.com and www.alturaenergy.ca. Selected financial and operating information for the three and nine months ended September 30, 2019 appear below and should be read in conjunction with the related financial statements and MD&A.
OPERATIONAL AND FINANCIAL SUMMARY
|Three months ended||Nine months ended|
|Average daily production|
|Heavy oil (bbls/d)||1,150||1,016||805||1,190||611|
|Medium oil (bbls/d)||–||–||51||22||242|
|Natural gas (Mcf/d)||3,733||2,914||1,128||3,057||1,257|
|Total boe/d per million shares – diluted||17.2||14.4||9.5||16.4||9.9|
|Average realized prices|
|Heavy oil ($/bbl)||55.31||62.83||56.59||56.01||53.93|
|Medium oil ($/bbl)||–||–||66.74||48.97||58.36|
|Natural gas ($/Mcf)||0.95||1.30||1.23||1.36||1.58|
|Petroleum and natural gas sales||37.12||43.89||48.29||41.09||46.30|
|Realized gain (loss) on financial instruments||(0.22||)||1.23||–||0.28||–|
|General and administrative||(2.16||)||(2.94||)||(4.25||)||(2.56||)||(4.46||)|
|Credit facility interest and financing expense||(0.27||)||(0.50||)||(0.03||)||(0.35||)||(0.46||)|
|Adjusted funds flow per boe(1)||20.42||23.12||30.31||22.40||24.95|
|FINANCIAL ($000, except per share amounts)|
|Petroleum and natural gas sales||6,420||6,353||4,741||20,226||13,785|
|Adjusted funds flow(1)||3,532||3,346||2,977||11,031||7,430|
|Per share – diluted(1)||0.03||0.03||0.03||0.10||0.07|
|Per share – diluted||–||0.01||0.01||0.02||0.03|
|Property acquisitions (dispositions), net||–||–||2,637||–||(25,075||)|
|Total capital expenditures||3,553||6,350||19,354||11,356||5,331|
|Common shares outstanding (000)|
|End of period – basic||108,921||108,921||108,921||108,921||108,921|
|Weighted average for the period – basic(2)||108,921||108,921||108,921||108,921||108,921|
|Weighted average for the period – diluted(2)||109,517||110,503||112,281||110,191||110,475|
1. Adjusted funds flow, net debt and operating netback are non-GAAP measures that do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. Refer to the heading entitled “Non-GAAP Measures” contained within the “Advisories” section of Altura’s MD&A.
THIRD QUARTER 2019 HIGHLIGHTS
- Produced an average of 1,880 boe per day, a 76 percent increase from the third quarter of 2018 and an 18 percent increase from the second quarter of 2019, on an absolute and per share basis.
- Adjusted funds flow1 was $3.5 million, up 19 percent from the third quarter of 2018 and up six percent from the second quarter of 2019.
- Operating expenses were $6.92 per boe, a two percent decrease from the third quarter of 2018 and a 28 percent decrease from the second quarter of 2019.
- Transportation expenses were $2.93 per boe compared to $2.17 per boe in the third quarter of 2018 and $4.92 per boe in the second quarter of 2019.
- Net G&A was $2.16 per boe, a decrease of 49 percent from the third quarter of 2018, and 26 percent from the second quarter of 2019.
- Capital expenditures totaled $3.6 million. Altura completed and equipped two 1.5-mile extended reach horizontal (“ERH”) wells and commenced drilling a third ERH well at Leduc-Woodbend.
- Year-to-date capital expenditures totaled $11.4 million, consistent with year-to-date adjusted funds flow of $11.0 million.
- Net debt1 at September 30, 2019 was $5.1 million, 0.4 times annualized third quarter adjusted funds flow.
- October 2019 AER Liability Management Rating (“LMR”) of 9.98.
THIRD QUARTER REVIEW
Altura invested $3.6 million of capital in the third quarter bringing the total capital invested in the nine months ended September 30, 2019 to $11.4 million. Third quarter capital activity included completing and equipping two ERH wells at Leduc-Woodbend that were brought on production in August 2019. Altura commenced drilling a third ERH well at Leduc-Woodbend that was rig released in early October and which is planned to be completed and brought on production later in the fourth quarter of 2019 or first quarter of 2020.
Altura changed its artificial lift system from progressive cavity pumps to pump jacks on three wells to improve run-time efficiencies and limit operating and capital workover events. Nine of eleven wells have been converted in the nine months ended September 30, 2019, with the last two wells converted in the fourth quarter of 2019.
The two wells brought on production in August 2019 increased third quarter production volumes to 1,880 boe per day (67 percent oil and liquids) compared to 1,591 boe per day (69 percent oil and liquids) in the second quarter of 2019.
Altura’s realized oil price decreased 12 percent in the third quarter from the second quarter of 2019 and the Corporation’s average realized price decreased 15 percent from the second quarter of 2019 due to lower natural gas prices and an increased weighting of natural gas production relative to total production.
Operating expenses in the third quarter decreased 28 percent to $6.92 per boe from the second quarter of 2019 due to lower repairs and maintenance costs from converting nine wells from progressive cavity pumps to pump jacks in the second and third quarters of 2019.
Transportation costs decreased 40 percent to $2.93 per boe from the second quarter of 2019 due to reduced hauls to sales terminals in eastern Alberta that have higher trucking costs and no road restrictions that limited oil volumes per load in the second quarter of 2019.
The Corporation’s operating netback1 averaged $22.85 per boe, down 14 percent from the second quarter of 2019 due to lower oil and natural gas prices and a loss on commodity hedging contracts, partially offset by lower operating and transportation expenses.
1 Adjusted funds flow, net debt and operating netback are non-GAAP measures that do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. Refer to the heading entitled “Non-GAAP Measures” contained within the “Advisories” section of Altura’s MD&A.
Adjusted funds flow1 was $3.5 million in the third quarter of 2019, up six percent from the second quarter of 2019 due to increased production volumes and lower operating and transportation expenses, partially offset by lower oil and natural gas prices.
Net income in the third quarter totaled $0.3 million, down 71 percent from the second quarter of 2019 due mainly to an unrealized loss on financial instruments of $265,000, compared to an unrealized gain on financial instruments in the second quarter of 2019 of $363,000.
Altura currently has the following crude oil contracts for 300 barrels per day hedged to September 30, 2020:
|Oct 1/19ꟷMar 31/20||Crude Oil||Fixed||300 bbls/d||WCS||CAD $57.00|
|Apr 1/20ꟷJun 30/20||Crude Oil||Fixed||300 bbls/d||WTI||CAD $70.20|
|Apr 1/20ꟷJun 30/20||Crude Oil||Fixed||300 bbls/d||WCS-WTI Differential||CAD ($28.00)|
|Jul 1/20ꟷSep 30/20||Crude Oil||Fixed||300 Bbls/d||WCS||CAD $43.75|
In the second quarter of 2019 Altura drilled two ERH producing wells at 200 meter inter-well spacing as part of the waterflood pilot project. These ERH wells offset a producing well that was converted to a water injection well which commenced water injection in October. The Corporation will actively monitor the performance of the two offsetting producing ERH wells for positive production response.
The Corporation has secured over 84 sections (53,760 net acres) of land at a 100% working interest within its new oil play at Entice, south of Strathmore, Alberta. Altura is currently evaluating options to advance the drilling of a horizontal well to assess commerciality of its exciting new prospect at Entice.
Altura’s annual average production is forecasted to be between 1,700 to 1,800 Boe per day in 2019, compared to 1,172 Boe per day in 2018, representing more than a 45 percent increase on an absolute and per share basis.
Planning for 2020 is focused on managing investment levels to protect balance sheet strength in the current volatile commodity price environment. Altura plans to provide guidance on its 2020 capital program in early 2020.
On behalf of the Board of Directors and the Altura management team, we would like to thank our shareholders for their ongoing support.
ABOUT ALTURA ENERGY INC.
Altura is a junior oil and gas exploration, development and production company with operations in central Alberta. Altura predominantly produces from the Rex member in the Upper Mannville group and is focused on delivering per share growth and attractive shareholder returns through a combination of organic growth and strategic acquisitions.
An updated corporate presentation is available on Altura’s website at www.alturaenergy.ca.