Clearview Resources Ltd. reports year end results

April 29, 2021 7:14 PM

CALGARY, AB – Clearview Resources Ltd. (“Clearview” or the “Company”) is pleased to announce its financial and operational results and reserves report for the year ended December 31, 2020.

“Unprecedented does not do the past twelve months justice,” commented Tony Angelidis, Clearview’s CEO. “Yet our management team, employees and directors displayed unparalleled resilience and determination to reduce costs, optimize production, raise capital and renegotiate our credit facilities with remarkable success. As a result, the Company is now poised for a much clearer and brighter future than this time last year,” added Mr. Angelidis.

HIGHLIGHTS

In 2020, the Company was focused on and completed three strategic imperatives.

Secured a workable credit agreement with its lender that provides the credit capacity and flexibility required for the current economic environment;
Secured long-term funding through the Federal Government sponsored Export Development Canada (“EDC”) Guarantee program in the amount of $6.25 million; and
Raised $1.26 million in convertible debentures from the Company’s very supportive shareholders to reduce the Company’s outstanding bank debt.

During the year Clearview also concentrated on a series of significant operational measures during unprecedented economic and pandemic related circumstances that helped mitigate significant downward revisions to the Company’s year end reserves.

During the first quarter of 2020, the Company adopted austere operating practices to conserve cash in light of the severe drop in prices associated with the COVID-19 pandemic. As a result, over 2020 Clearview reduced its operating costs by $3.0 million, a decrease of 23%, its general and administrative costs by $0.7 million, a decrease of 30% and its capital program by $1.6 million, representing a decrease of 81%;
Total production decreased 15% to average 2,055 barrels of oil equivalent per day (“boe/d”) for the year ended December 31, 2020, due in combination to a significant production shut-in during the price collapse of 2020, minimal net capital expenditures of $0.4 million and significantly reduced repairs and maintenance spending;
Clearview’s realized sales price was $21.45 per barrel of oil equivalent (“boe”) for the twelve months ended December 31, 2020, a decrease of 26%, compared to $29.08 per boe in the prior year. Natural gas prices continued to remain strong with the Company’s realized price per mcf increasing 23% over the prior year; and
Generated adjusted funds flow of $2.5 million in the year ended December 31, 2020 and cash flow from operations of $1.8 million as compared to $5.5 million and $5.0 million, respectively, in the comparative year.
Proved developed producing (“PDP”) reserves decreased by 1% to 5.0 million barrels of oil equivalent (“MMboe”), while the total proved (“1P”) and total proved plus probable (“2P”) categories decreased by 11% to 10.5 MMboe and 9% to 19.4 MMboe, respectively versus 2019; driven largely by a material change in the price forecast used in the McDaniel Report, and
Net present values (at 10% discount rates, before tax) are down year over year in the PDP, 1P and 2P categories by 16% to $28.1 million, 35% to $57.6 million and 35% to $97.0 million, respectively, primarily due to the lower commodity price forecast.

A combination of all these factors has resulted in a substantially brighter financial picture for the company in 2021 with net debt reduced by $2.1 million from the prior year to $13.2 million on total credit capacity from its lenders of $21.25 million resulting in the removal of the going concern note from Clearview’s financial statements.

Clearview is off to a strong start in the first quarter of 2021. The Company completed an optimization and repair and maintenance program on thirteen wells at a cost of approximately $0.7 million bringing Clearview’s production to 2,250 boe/d currently. The thirteen wells have been on production since early March 2021 and have produced an average of 270 boe/d in April generating approximately $0.6 million of revenue to date with a capital efficiency ratio of $2,600 per flowing boe. Clearview is pleased with the execution of this spending program and is reaching into its optimization inventory for future, organic growth in the form of a second program.

FINANCIAL and OPERATIONAL RESULTS

Production for the year ended December 31, 2020 was down 15% to 2,055 boe/d versus the comparative period of 2019, primarily due to the shut-in of oil and liquids production in the second quarter of 2020 due to the severe drop in prices associated with the COVID-19 pandemic and minimal spending on optimization projects and repairs and maintenance throughout the year.

In April of 2020, the Company made the decision to shut-in approximately 50% of its production, comprised of primarily oil volumes and the associated natural gas. The Company chose to preserve the value of its reserves to be produced at a later date when better economic conditions and better pricing have returned. By August of 2020, Clearview had brought back on-stream all of its shut-in production with minimal start-up costs and operational issues due to a controlled shut-in.

To offset the severe drop in revenue as a result of lower prices for the Company’s oil and natural gas liquids production, Clearview quickly adopted a program of reducing its cost structure where possible while still maintaining a strong production profile with a top priority of safety and regulatory compliance for both the office staff and field operators.

Adjusted funds flow for the year ended December 31, 2020 was $2.5 million. Capital expenditures and decommissioning expenditures were minimal at $0.5 million which enabled the Company to further reduce its net debt. At December 31, 2020, the Company had net debt of $13.2 million.

Financial and Operating Highlights

Financial	Three months ended Dec. 31			Year ended Dec. 31	Year ended Dec. 31
($ 000’s except per share amounts)	2020	2019	% Change	2020	2019	% Change
Oil and natural gas sales	4,870	6,512	(25)	16,133	25,687	(37)
Adjusted funds flow (1)	957	1,271	(25)	2,487	5,494	(55)
Per share-basic and diluted	0.08	0.11	(27)	0.21	0.48	(56)
Cash flow from operations	55	1,120	(95)	1,783	4,980	(64)
Per share-basic and diluted	–	0.10	(100)	0.15	0.43	(65)
Net earnings (loss)	16,891	(5,527)	(406)	(10,842)	(8,768)	24
Per share–basic and diluted	1.45	(0.48)	(402)	(0.93)	(0.76)	22
Net debt (1)				13,235	15,358	(14)
Capital expenditures – net (2)	54	354	(85)	376	1,955	(81)
Weighted average shares
Basic and diluted (000’s)	11,671	11,671	–	11,671	11,472	2

(1)	See non-GAAP measures
(2)	Cash additions and acquisitions net of proceeds of dispositions

Production	Three months ended Dec. 31			Year ended Dec.31	Year ended Dec. 31
	2020	2019	% Change	2020	2019	% Change
Oil – bbl/d	487	621	(22)	480	684	(30)
Natural gas liquids – bbl/d	345	494	(30)	393	481	(18)
Total liquids – bbl/d	832	1,115	(25)	873	1,165	(25)
Natural gas – mcf/d	7,443	7,859	(5)	7,091	7,537	(6)
Total – boe/d	2,072	2,425	(15)	2,055	2,421	(15)



Realized sales prices	Three months ended Dec. 31			Year ended Dec. 31	Year ended Dec. 31
	2020	2019	% Change	2020	2019	% Change
Oil – $/bbl	45.41	64.03	(29)	41.50	64.69	(36)
NGLs – $/bbl	28.20	23.87	18	20.72	25.69	(19)
Natural gas – $/mcf	2.84	2.44	16	2.26	1.83	23
Total – $/boe	25.55	29.18	(12)	21.45	29.08	(26)

Netback analysis (1)	Three months ended Dec. 31			Year ended Dec. 31	Year ended Dec. 31
($/boe)	2020	2019	% Positive (Negative)	2020	2019	% Positive (Negative)
Realized sales price	25.55	29.18	(12)	21.45	29.08	(26)
Royalties	(0.51)	(2.86)	82	(1.18)	(3.18)	63
Processing income	0.62	0.87	(29)	0.69	0.79	(13)
Transportation	(1.56)	(1.53)	(2)	(1.57)	(1.62)	3
Operating	(12.21)	(15.93)	23	(13.44)	(14.88)	10
Operating netback (2)	11.89	9.73	22	5.95	10.19	(42)
Realized gain (loss) on financial instruments	(0.41)	(0.35)	(17)	1.59	0.06	2,550
General & administrative	(2.31)	(2.36)	2	(2.14)	(2.59)	17
Other costs	(1.07)	–	(100)	(0.27)	–	(100)
Transaction costs	–	(0.03)	100	–	(0.13)	100
Cash finance costs	(3.06)	(1.29)	(137)	(1.82)	(1.30)	(40)
Corporate netback (2)	5.04	5.70	(12)	3.31	6.23	(47)

(1)	% Positive (Negative) is expressed as being positive (better performance in the category) or negative (reduced performance in the category) in relation to operating netback, corporate netback and net earnings.
(2)	See non-GAAP measures.

SUMMARY OF OIL AND NATURAL GAS RESERVES
AND NET PRESENT VALUES OF FUTURE NET REVENUE
AS OF DECEMBER 31, 2020
FORECAST PRICES AND COSTS

McDaniel & Associates Consultants Ltd. (“McDaniel”), the Company’s independent petroleum engineering firm, has evaluated Clearview’s crude oil, natural gas and natural gas liquids reserves as at December 31, 2020 and prepared a reserves report (the “McDaniel Report”) in accordance with National Instrument 51-101 “Standards of Disclosure for Oil and Gas Activities” and the “Canadian Oil and Gas Evaluation Handbook” (“COGEH”). Consistent with the prior year’s reserve report, the Company used a three consultant (McDaniel, GLJ Petroleum Consultants Ltd. and Sproule) average commodity price forecast dated January 1, 2021 (“Price Forecast”) in the evaluation.

The following table is a summary of the Company’s reserves information as detailed in the McDaniel Report at December 31, 2020. Compared to the year-end 2019 report, proved developed producing (“PDP”) reserves fell by 1%, while total proved (“1P”) and total proved plus probable (“2P”) categories decreased by 11% and 9%, respectively.

RESERVES

	Light and Medium Crude Oil		Conventional Natural Gas¹		Natural Gas Liquids³		Oil Equivalent (BOE)²
Reserves Category	Gross⁴(Mbbls)	Net⁵(Mbbls)	Gross (MMcf)	Net (MMcf)	Gross (Mbbls)	Net (Mbbls)	Gross (Mboe)	Net (Mboe)
PROVED
Developed Producing	1,270.5	1,141.9	16,777.2	15,349.1	948.1	762.8	5,014.8	4,462.9
Developed Non-Producing	223.2	204.3	1,601.5	1,467.9	61.2	47.3	551.3	496.3
Undeveloped	2,806.1	2,522.4	10,969.4	10,162.0	290.6	253.5	4,924.9	4,469.6
TOTAL PROVED	4,299.8	3,868.5	29,348.1	26,979.1	1,299.9	1,063.6	10,491.1	9,428.6
Probable	2,087.8	1,814.6	30,090.0	27,385.3	1,833.1	1,584.8	8,935.9	7,963.6
TOTAL PROVED PLUS PROBABLE	6,387.7	5,683.1	59,438.1	54,364.4	3,133.0	2,648.4	19,427.1	17,392.2


Notes
(1)	Includes solution/associated gas.
(2)	Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil (6:1).
(3)	Includes ethane, propane, butane, pentane and condensate.
(4)	Gross Reserves are the Company’s working interest share of the remaining reserves before the deduction of any royalties.
(5)	Net Reserves are working interest reserves after royalty deductions plus royalty interest reserves.
Tables may not add due to rounding.

NET PRESENT VALUE OF FUTURE NET REVENUE

The estimated future net revenues associated with Clearview’s reserves at December 31, 2020, based on the Price Forecast, are summarized in the following table. Net present values (at 10% discount rates, before tax) are down year over year in the proved developed producing, total proved and total proved plus probable categories by 16%, 35% and 35%, respectively, due to the lower commodity price forecast offset by positive technical revisions due to lower production declines and reduced operating costs.

NET PRESENT VALUES OF FUTURE NET REVENUE
BEFORE INCOME TAXES DISCOUNTED AT (%/year)

Reserves Category	0% ($000s)	5% ($000s)	10% ($000s)	15% ($000s)	20% ($000s)	Unit Value ($/boe)¹
PROVED
Developed Producing	16,692.8	27,365.9	28,095.4	26,288.9	24,054.5	6.30
Developed Non-Producing	9,038.5	6,816.7	5,344.8	4,322.3	3,582.9	10.77
Undeveloped	61,604.4	39,204.7	24,125.3	14,535.9	8,382.9	5.40
TOTAL PROVED	87,335.8	73,387.4	57,565.5	45,147.0	36,020.4	6.11
Probable	101,025.9	63,107.9	39,453.8	25,463.8	16,910.3	4.95
TOTAL PROVED PLUS PROBABLE	188,361.7	136,495.2	97,019.3	70,610.9	52,930.6	5.58


Notes:
(1)	Unit values are before income tax discounted at 10% and based on net reserves.
(2)	Future net revenues are estimated using forecast prices, costs arising from the anticipated development and production of reserves, associated royalties, operating costs, development costs, and abandonment and reclamation costs. The estimated values disclosed do not necessarily represent fair market value.

TOTAL FUTURE NET REVENUE (UNDISCOUNTED) AS OF DECEMBER 31, 2020
FORECAST PRICES AND COSTS

Reserve Category	Revenue¹($000’s)	Royalties²($000’s)	Operating Costs ($000’s)	Development Costs ($000’s)	ADR Costs ($000’s)	Future Net Revenue Before Income Taxes ($000’s)	Income Taxes ($000’s)	Future Net Revenue After Income Taxes ($000’s)
Total Proved	402,898	35,771	156,680	83,040	40,071	87,336	–	87,336
Total Proved + Probable	706,275	63,787	261,678	145,664	46,785	188,362	17,549	170,813


Notes:
(1)	Includes all product revenues and other revenues as forecast
(2)	Royalties include Crown, freehold, overriding royalties and freehold mineral taxes

SUMMARY OF PRICING AND INFLATION RATE ASSUMPTIONS

FORECAST PRICES AND COSTS¹

Year	Inflation²%	USD/CAD³	WTI (USD/bbl)	Edmonton Light (CAD/bbl)	Bow River Medium (CAD/bbl)	Ethane (CAD/bbl)	Propane (CAD/bbl)	Butane (CAD/bbl)	Pentane (CAD/bbl)	AECO Spot (CAD/mmbtu)
Year	Inflation²%	USD/CAD³	WTI (USD/bbl)	Edmonton Light (CAD/bbl)	Bow River Medium (CAD/bbl)	Ethane (CAD/bbl)	Propane (CAD/bbl)	Butane (CAD/bbl)	Pentane (CAD/bbl)	AECO Spot (CAD/mmbtu)
2021	0.0	0.768	47.17	55.76	45.36	8.91	18.18	26.36	59.24	2.78
2022	1.3	0.765	50.17	59.89	48.96	8.65	21.91	32.85	63.19	2.72
2023	2.0	0.763	53.17	63.48	52.91	8.35	24.57	39.20	67.34	2.61
2024	2.0	0.763	54.97	65.76	54.95	8.46	25.47	40.65	69.77	2.65
2025	2.0	0.763	56.07	67.13	56.05	8.63	26.00	41.50	71.18	2.70
2026	2.0	0.763	57.19	68.53	57.16	8.81	26.54	42.36	72.61	2.76
2027	2.0	0.763	58.34	69.95	58.30	8.99	27.09	43.24	74.07	2.81
2028	2.0	0.763	59.50	71.40	59.47	9.17	27.65	44.14	75.56	2.87
2029	2.0	0.763	60.69	72.88	60.66	9.36	28.23	45.06	77.08	2.92
2030	2.0	0.763	61.91	74.34	61.87	9.54	28.79	45.96	78.62	2.98
2031	2.0	0.763	63.15	75.83	63.10	9.74	29.37	46.88	80.20	3.04
2032	2.0	0.763	64.41	77.34	64.37	9.93	29.95	47.82	81.80	3.10
2033	2.0	0.763	65.70	78.89	65.65	10.13	30.55	48.77	83.44	3.16
2034	2.0	0.763	67.01	80.47	66.97	10.33	31.16	49.75	85.10	3.23
2035	2.0	0.763	68.35	82.08	68.31	10.54	31.79	50.74	86.81	3.29
2036 +	2.0	0.763	+2%/yr	+2%/yr	+2%/yr	+2%/yr	+2%/yr	+2%/yr	+2%/yr	+2%/yr


Notes:
(1)	Consensus average price forecast from three evaluators (McDaniel & Associates Ltd., GLJ Petroleum Consultants Ltd. and Sproule), dated January 1, 2021.
(2)	Inflation rate for operating costs, capital costs and price differentials.
(3)	Exchange rate used to generate the benchmark reference pricing in this price forecast.

RESERVES RECONCILIATION

The following reconciliation of Clearview’s reserves compares changes in the Company’s working interest reserves at December 31, 2019, to the reserves at December 31, 2020, each evaluated in accordance with National Instrument 51-101 definitions.

	Proved Developed Producing	Total Proved	Total Proved + Probable
Light and Medium Oil (Mbbl)
Dec. 31, 2019 Opening Balance	1,447.1	4,761.2	6,933.6
Economic Factors	(236.0)	(571.4)	(666.6)
Technical Revisions	226.6	277.3	288.0
Production	(167.3)	(167.3)	(167.3)
Dec. 31, 2020 Closing Balance	1,270.5	4,299.8	6,387.7

Natural Gas (MMcf)
Dec. 31, 2019 Opening Balance	15,948.7	32,599.8	64,447.9
Economic Factors	(2,660.1)	(6,201.6)	(8,050.7)
Dispositions	(90.8)	(90.8)	(139.1)
Technical Revisions	6,107.6	5,568.9	5,708.3
Production	(2,528.3)	(2,528.3)	(2,528.3)
Dec 31, 2020 Closing Balance	16,777.2	29,348.1	59,438.1

Natural Gas Liquids (Mbbl)
Dec. 31, 2019 Opening Balance	983.2	1,648.3	3,759.1
Economic Factors	(172.9)	(427.0)	(511.0)
Dispositions	(5.8)	(5.8)	(8.9)
Technical Revisions	282.1	222.9	32.4
Production	(138.6)	(138.6)	(138.6)
Dec. 31, 2020 Closing Balance	948.1	1,299.9	3,132.9

Total (MBOE)
Dec. 31, 2019 Opening Balance	5,088.5	11,842.8	21,434.0
Economic Factors	(852.2)	(2,032.0)	(2,519.4)
Dispositions	(20.9)	(20.9)	(32.1)
Technical Revisions	1,526.7	1,428.3	1,271.8
Production	(727.3)	(727.3)	(727.3)
Dec. 31, 2019 Closing Balance	5,014.8	10,491.1	19,427.0

Economic factors have been calculated as the difference in reserves inputting the YE2020 Reserve Report price forecast into the YE2019 Reserve Report reserve forecasts. There is no consideration of changes in operating costs or price offset changes that occurred in 2020. Engineering consultants, under new guidance from COGEH, will no longer deviate more than 20% of strip pricing on the effective date of their price forecasts.

RESERVE LIFE INDEX

Using the average production in the first year of the McDaniel forecast, the Company’s PDP Reserve Life Index (“RLI”) is 7.1 years, Total Proved RLI is 13.9 years and Total Proved + Probable RLI is 25.2 years.

OPERATIONS

Due to the severe drop in prices in April of 2020, associated with the COVID-19 pandemic, the Company made the decision to shut-in approximately 50% of its production, comprised of primarily oil volumes and the associated natural gas. As oil prices recovered by August of 2020, Clearview had brought back on-stream all of its shut-in production.

Overall, the Company’s realized price per boe decreased 26% for the year ended December 31, 2020 due to the decrease in realized oil and natural gas liquids prices, partially offset by higher natural gas prices.

For the year 2020, the Alberta Energy Regulator (“AER”) cancelled the Area Based Closure program due to the COVID-19 pandemic and resulting economic slow down. Clearview continued to abandon wells despite the challenging economic environment funded in part by the government Site Rehabilitation Programs (“SRP”). Six gross wells (3.5 net) were abandoned for a total net corporate abandonment and reclamation obligation (“ARO”) reduction of $116,000. Highlighting this was a five well campaign initiated in December wherein the wells were abandoned at an average of 64% of the AER’s deemed downhole liability cost estimates.

Through the first quarter of 2021, Clearview has abandoned seven gross (6.7 net) wells, retiring $0.4 million net of downhole liability. Clearview will continue to prioritize its abandonment program in the second half of 2021 once road bans are lifted in its areas of operations, and a closer examination of non-operated partner decommissioning spending is known. The Company anticipates spending a total of approximately $0.4 million on abandonment activities in 2021 in addition to any additional funds provided by the SRP programs.

OUTLOOK

In 2020, the Company successfully strengthened its financial position by reducing its net debt to $13.2 million, establishing a reserve-based credit facility agreement of $15.0 million, a second credit facility of $6.25 million, 80% guaranteed by the EDC and raised $1.26 million though a convertible debenture offering creating a total credit capacity from its lender of $21.25 million.

While the COVID-19 pandemic is not over, optimism around the global distribution of vaccine and the ultimate recovery of the economy has resulted in the price of oil recovering to over US $60.00 per barrel for West Texas Intermediate (“WTI”) as of April of 2021. This recovery has provided the Company with the opportunity to undertake capital programs on its assets to repair existing, previously producing wells that had ceased production during the 2020 downturn. Clearview has also begun to spend capital on the optimization and reactivation of existing wellbores to maximize revenue and further reduce its net debt during 2021.

Environment, Social and Governance (“ESG”) is a growing and significant underpinning of Clearview. We have prioritized the well-being of all field and office personnel and its culture of safety. Clearview is committed to strong health, safety and environmental management and protections for its employees, contractors, workers, suppliers, visitors and the public, the natural environment and its property. All staff, Officers and Directors of Clearview take a shared ownership in the culture of health, safety and environment protection.

Clearview continues to direct efforts toward strategic acquisitions and potential mergers/business combinations to significantly increase the size of the Company for greater efficiencies and cash generating capabilities. The objective of this effort would be to achieve enough adjusted funds flow to allow Clearview to access its deep inventory of light oil weighted development opportunities to increase its value per share and ultimately provide liquidity to all its stakeholders. To effect this change, Clearview’s Board has struck a Strategic Committee and engaged a Financial Advisor.

Clearview’s annual December 31, 2020 financial statements and management’s discussion and analysis are available on the Company’s website at www.clearviewres.com and SEDAR at www.SEDAR.com.

[expand title=”Advisories & Contact”]FOR FURTHER INFORMATION PLEASE CONTACT:

CLEARVIEW RESOURCES LTD.

2400 – 635 – 8th Avenue S.W. Calgary, Alberta T2P 3M3

Telephone: (403) 265-3503	Facsimile: (403) 265-3506
Email: info@clearviewres.com	Website: www.clearviewres.com

TONY ANGELIDIS	BRIAN KOHLHAMMER
President & CEO	V.P. Finance & CFO

Note Regarding Forward-Looking Statements
This press release contains forward-looking statements and forward-looking information (collectively “forward-looking information”) within the meaning of applicable securities laws relating to the Company’s plans and other aspects of our anticipated future operations, management focus, strategies, financial, operating and production results, industry conditions, commodity prices and business opportunities. Specifically, this press release has forward looking information with respect to: future drilling plans; waterflood recovery and overall growth strategy. Forward-looking information typically uses words such as “anticipate”, “believe”, “project”, “expect”, “goal”, “plan”, “intend” or similar words suggesting future outcomes, statements that actions, events or conditions “may”, “would”, “could” or “will” be taken or occur in the future. Statements relating to “reserves” are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future.

The forward-looking information is based on certain key expectations and assumptions made by our management, including expectations and assumptions concerning prevailing commodity prices and differentials, exchange rates, interest rates as set out in the appendices to this press release, also applicable royalty rates and tax laws; the impact of government assistance programs with have on the Company in connection with, among other things, the COVID-19 pandemic; the impact on energy demands going forward and the inability of certain entitles, including OPEC to agree on crude oil production output constraints; the impact on commodity prices, production and cash flow due to production shut-ins; the impact of regional and/or global health related events on energy demand; global energy policies going forward; our ability to execute our plans as described herein; global energy policies going forward; that the current commodity price and foreign exchange environment will improve; future exchange rates; future debt levels; the availability and cost of financing, labour and services; the impact of increasing competition and the ability to market oil and natural gas successfully and our ability to access capital. Although Clearview believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Clearview can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties which could include the possibility that Clearview will not be able to execute some or all of its ongoing programs; general economic and political conditions in Canada, the U.S. and globally, and in particular, the effect that those conditions have on commodity prices and our access to capital; further fluctuations in the price of crude oil, natural gas liquids and natural gas; fluctuations in foreign exchange or interest rates; adverse changes to differentials for crude oil and natural gas produced in Canada as compared to other markets and worsened transportation restrictions. Our actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that we will derive therefrom. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide securityholders with a more complete perspective on our future operations and such information may not be appropriate for other purposes.

Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this press release and we disclaim any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Non-GAAP Measures

The Company’s management uses and reports certain measures not prescribed by International Financial Reporting Standards (“IFRS”) (referred to as “non-GAAP measures”) in the evaluation of operating and financial performance.

Operating netback is a non-GAAP measure used by the Company to assess its operating results. The Canadian Oil and Gas Evaluation Handbook (“COGEH”) describes netback as “an operations indicator to assess operating priorities and evaluate smaller capital expenditures normally associated with field maintenance and improvement”. The COGEH provides guidance that “the netback calculation takes the price received for a unit of production at a point in time and deducts from it all production costs, royalties and production taxes to find the cash netback to the producer from each barrel of oil or mcf of sales gas”. The Company computes the operating netback for the Company directly from the applicable amounts on the Statements of Operations in the financial statements being oil and natural gas sales and processing income less royalties, production and transportation costs. This amount divided by the associated production volume (usually in boe’s) provides a per unit amount.
Corporate netback is the adjusted funds flow amount divided by the total production for the period and represents the cash margin received on each barrel of oil equivalent sold.
Adjusted funds flow is a non-GAAP measure derived from cash flow from operating activities excluding decommissioning expenditures and changes in non-cash working capital. The adjusted funds flow amount represents funds available for capital expenditures, repayment of net debt or distribution to shareholders. Readers are directed to review the reconciliation of adjusted funds flow to cash flow provided by operating activities set out in the Company’s MD&A for the year ended December 31, 2019.
Net debt consists of current assets (excluding financial derivatives) less current liabilities (excluding financial derivatives) less convertible debentures. Net debt is used to assess financial strength, capacity to finance future development and manage liquidity risk.
Operating netback, adjusted funds flow, corporate netback and net debt do not have any standardized meanings prescribed by IFRS and therefore may not be comparable with the calculation of a similar measure for other companies. The Company uses these terms as an indicator of financial performance because such terms are used internally in managing and governing the Company and are often utilized by investors and other financial statement users to evaluate producers in the oil and natural gas industry.

Oil and Gas Advisories
The reserves information contained in this press release has been prepared in accordance with NI 51-101. Reserves information within the press release is dated as of December 31, 2020 and was prepared by McDaniel & Associates Consultants Ltd.

Listed below are cautionary statements applicable to the reserves information that are specifically required by NI 51-101: (i) individual properties may not reflect the same confidence level as estimates of reserves for all properties due to the effects of aggregation; and (ii) this press release contains estimates of the net present value of the future net revenue from the reserves to be acquired – such amounts do not represent the fair market value of such reserves.

This press release contains certain oil and gas metrics which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. Such metrics have been included in this document to provide readers with additional measures to evaluate our performance however, such measures are not reliable indicators of our future performance and future performance may not compare to our performance in previous periods and therefore such metrics should not be unduly relied upon. Specifically, this press release contains the following metrics:

Reserve Life Index – calculated as total company interest reserves divided by annual production for the year indicated.
Boe means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boe’s may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6: 1, using a conversion on a 6: 1 basis may be misleading as an indication of value.

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Clearview Resources Ltd. reports year end results

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