Calgary, Alberta – Pine Cliff Energy Ltd. (TSX: PNE) (“Pine Cliff” or the “Company“) is pleased to announce its year-end financial and operating results and the filing of its 2020 disclosure documents. 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, 2020 (the “Annual Report“). Selected highlights are shown below and should be read in conjunction with the Annual Report and the AIF.
2020 and Fourth Quarter 2020 Highlights
Pine Cliff’s adjusted funds flow of $8.0 million generated during the fourth quarter of 2020 was the highest quarterly adjusted funds flow for the Company since the second quarter of 2017. Stable and improved natural gas prices, combined with Pine Cliff’s portfolio of low decline assets, highlights the Company’s business model that provides for adjusted funds flow growth in a rising natural gas price environment.
Significant Pine Cliff highlights from the fourth quarter and 2020 include:
- generated $8.0 million of adjusted funds flow ($0.02 per basic share) for the three months ended December 31, 2020 and $8.8 million of adjusted funds flow ($0.03 per basic share) for the year ended December 31, 2020, 59% and 48% higher than the respective periods in the prior year;
- realized a natural gas price of $2.73 per Mcf for the fourth quarter and $2.28 per Mcf gas price for the year ended December 31, 2020, 8% and 6% higher than the respective periods in the prior year;
- spent $2.3 million on developmental drilling in 2020 and production averaged 19,130 Boe/d during the three months ended December 31, 2020, 2% higher than the 18,755 Boe/d produced during the prior quarter. Production averaged 19,006 Boe/d for the year ended December 31, 2020, 1% lower than the 19,142 Boe/d produced in 2019;
- increased its 2020 proved plus probable reserves by 4.0 million barrels of oil equivalent (“MMBoe“) prior to adjusting for 2020 production, largely as a result of 8.0 MMBoe of positive technical revisions, 1.2 MMBoe of extensions and a decrease of 5.1 MMBoe due to economic factors; and,
- received approval in 2020 for $4.0 million in government funded grants for asset site closure work, of which $0.8 million was spent during the fourth quarter of 2020 and received an additional $6.0 million in government funded grants in February 2021.
Pine Cliff’s portfolio of low decline natural gas assets, representing over 90% of Pine Cliff’s production, positions the Company to take advantage of improved natural gas prices in 2021. The Company’s 2021 capital budget of $13.0 million is expected to be fully funded from adjusted funds flow and includes $6.3 million on development drilling, $5.2 million on major maintenance and optimization capital and $1.5 million on abandonment and reclamation (exclusive of abandonments conducted pursuant to government funded grants).
The Alberta Site Rehabilitation Program (“ASRP“) and the Saskatchewan Accelerated Site Closure Program (“ASCP“) are programs launched by the respective provincial governments to utilize the $1.7 billion of federal funding allocated for the abandonment and reclamation of inactive oil and gas wells and facilities. To date, Pine Cliff has been allocated $10 million in funding under the ASRP and ASCP and expects to spend its current allocation in the next two years to accelerate the abandonment of over 300 inactive wellbores and reclamation and remediation work on over 250 well sites. Completion of this closure work will result in a reduction in municipal taxes and surface land rentals for Pine Cliff in subsequent years.
Financial and Operating Results
|Three months ended December 31,||Year ended December 31,|
|($000s, unless otherwise indicated)|
|Commodity sales (before royalty expense)||31,292||31,339||103,170||105,006|
|Cash flow from operating activities||2,666||4,039||8,787||15,536|
|Adjusted funds flow1||7,996||5,025||8,729||5,879|
|Per share – Basic and Diluted ($/share)1||0.02||0.02||0.03||0.02|
|Per share – Basic and Diluted ($/share)||(0.01)||(0.02)||(0.15)||(0.18)|
|Percent Natural Gas (%)||91%||92%||91%||92%|
|Weighted-average common shares
|Basic and diluted||335,284||327,784||330,284||319,274|
|Combined sales price ($/Boe)||17,78||17.33||14.83||15.03|
|Operating netback ($/Boe)1||6.08||4.16||2.72||2.25|
|Corporate netback ($/Boe)1||4.55||2.79||1.26||0.84|
|Operating netback ($ per Mcfe)1||1.01||0.69||0.45||0.38|
|Corporate netback ($ per Mcfe)1||0.76||0.47||0.21||0.14|
1This is a non-GAAP measure, see “NON-GAAP Measures” for additional information.
For further information, please contact:
Philip B. Hodge – President and CEO
Alan MacDonald – CFO and Corporate Secretary
Telephone: (403) 269-2289
Fax: (403) 265-7488