Calgary, Alberta–(Newsfile Corp. – March 8, 2022) – Pine Cliff Energy Ltd. (TSX: PNE) (“Pine Cliff” or the “Company“) announces its year-end financial and operating results and the filing of its 2021 disclosure documents
2021 and Fourth Quarter 2021 Highlights
Pine Cliff’s adjusted funds flow of $26.3 million generated during the fourth quarter of 2021 and $59.1 million for 2021 were the highest quarterly and annual adjusted funds flow for the Company since inception.
Highlights from the fourth quarter and 2021 include:
- generated $26.3 million of adjusted funds flow ($0.08 per basic and $0.07 per fully diluted share) for the three months ended December 31, 2021, and $59.1 million ($0.18 per basic and $0.17 per fully diluted share) for the year ended December 31, 2021, 329% and 677% higher than the respective periods in the prior year;
- generated net earnings of $80.5 million ($0.24 per basic and $0.23 per fully diluted share) for the three months ended December 31, 2021, and $81.4 million ($0.24 per basic and $0.23 per fully diluted share) for the year then ended;
- production averaged 19,056 Boe/d and 18,445 Boe/d during the three months and year ended December 31, 2021, compared to 19,130 Boe/d and 19,006 BOE/d for the comparable periods in 2020;
- closed the acquisition of a private company on December 29, 2021 for cash consideration of $22.2 million;
- repaid in full $19.0 million of Term Debt due July 31, 2022 during the third quarter of 2021;
- net debt decreased by 21.2% or $13.4 million from $63.0 million on December 31, 2020, to $49.7 million as at December 31, 2021; and
- drilled four (3.4 net ) Pekisko oil wells in the fourth quarter, two that were placed on production in Q4 and two that were placed on production on February 16, 2022.
The increase in net earnings during the three months and year ended December 31, 2021, was due primarily to recognizing a reversal of prior years’ asset impairment provisions totaling $14.0 million and the recognition of a deferred income tax recovery in the amount of $50.6 million. These amounts resulted in Pine Cliff recognizing additional net earnings of $64.6 million during the fourth quarter ($0.19 per basic and $0.18 per fully diluted share) and year ended December 31, 2021 ($0.19 per basic and fully diluted share).
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, 2021 (the “Annual Report“).
Pine Cliff’s portfolio of low decline natural gas assets, bolstered by the recent tuck-in acquisition of a private company with synergistic assets in the Company’s core Ghost Pine area, positions Pine Cliff to take advantage of improved commodity prices in 2022. The Company’s 2022 capital budget of $25.5 million is expected to be fully funded from adjusted funds flow and includes approximately $18.0 million of development drilling, $3.6 million on major maintenance and optimization capital and $3.9 million on abandonments and reclamation (exclusive of abandonments conducted pursuant to government funded grants). The Company expects to also spend approximately $6.9 million in government funded grants for site abandonment and reclamation activities in 2022. Annual production volumes for 2022 are expected to range between 20,000 and 21,000 BOE per day, weighted 87% to natural gas.
The Company’s net debt at December 31, 2021 totaled $49.7 million, comprised of $30.0 million in Term Debt, $12.0 million in promissory notes, both due December 31, 2024, with the balance representing a working capital deficiency of $7.7 million. Pine Cliff expects to repay all of the $30.0 million of Term Debt in 2022
Return of Capital
Pine Cliff considers the establishment and payment of a sustainable dividend to be the best way to return capital to shareholders and the Company expects to declare the timing and amount of its first regular dividend in conjunction with the release of its first quarter 2022 results, on May 4, 2022.
Financial and Operating Results
|Three months ended December 31,||Year ended December 31,|
|($000s, unless otherwise indicated)|
|Commodity sales (before royalty expense)||54,413||31,292||163,985||103,170|
|Cash provided by operating activities||20,431||2,666||49,483||8,787|
|Adjusted funds flow1||26,279||7,996||59,106||8,729|
|Per share – Basic ($/share)1||0.08||0.02||0.18||0.03|
|Per share – Diluted ($/share)1||0.07||0.02||0.17||0.03|
|Per share – Basic ($/share)1||0.24||(0.01||)||0.24||(0.15||)|
|Per share – Diluted ($/share)1||0.23||(0.01||)||0.23||(0.15||)|
|Percent Natural Gas (%)||90%||91%||91%||91%|
|Weighted-average common shares outstanding (000s)|
|Combined sales price ($/Boe)||31.04||17,78||24.36||14.83|
|Operating netback ($/Boe)1||16.50||6.08||10.36||2.72|
|Corporate netback ($/Boe)1||15.00||4.55||8.78||1.26|
|Operating netback ($ per Mcfe)1||2.75||1.01||1.73||0.45|
|Corporate netback ($ per Mcfe)1||2.50||0.76||1.46||0.21|
1This is a non-GAAP measure, see “NON-GAAP Measures” for additional information.