Clearview Resources Ltd. reports year end results

April 27, 2022 6:40 AM

CALGARY, AB – Clearview Resources Ltd. (“Clearview” or the “Company”) is pleased to announce its financial and operational results for the year ended December 31, 2021.

“Clearview maintained its focus on paying down bank debt during 2021 to further improve its financial position”, commented Tony Angelidis, Clearview’s CEO. “Much higher commodity prices will allow us to further reduce our bank debt during 2022 while undertaking a slightly higher capital program pursuing low-risk, organic opportunities to offset production declines”, added Mr. Angelidis.

2021 HIGHLIGHTS

Increased production 3% to average 2,119 barrels of oil equivalent per day (“boe/d”) for the year ended December 31, 2021, compared to the prior year, due to a successful reactivation and optimization program;
Realized sales price for oil increased 81% over the comparative year, to $75.18 per barrel and the realized sales price for natural gas increased 73% over the comparative year to $3.90 per mcf;
Generated adjusted funds flow⁽¹⁾ of $5.6 million in the year ended December 31, 2021 and cash provided by operating activities of $6.1 million as compared to $2.5 million and $1.8 million, respectively, in the comparative year; and
Reduced the Company’s net debt⁽¹⁾ to $10.2 million, utilizing adjusted funds flow in excess of capital expenditures⁽²⁾ and decommissioning expenditures, by repaying bank debt of $3.5 million in 2021.

Notes
(1)	Each of “adjusted funds flow” and “net debt” are capital management measures that do not have any standardized meaning as prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculations of similar measures of other entities. See “Non-IFRS Measures” contained within this press release.
(2)	Non-IFRS measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. See “Non-IFRS Measures” contained within this press release.

FINANCIAL and OPERATIONAL RESULTS

Production for the year ended December 31, 2021 was up 3% to 2,119 boe/d versus the comparative year of 2020 at 2,055 boe/d. The increase was due to a successful and capital efficient reactivation and optimization program completed during the year and redirecting a portion of the Company’s natural gas production to a different natural gas processing facility resulting in an increase to the natural gas liquids yield. Natural gas liquids production increased 18% compared to the prior year.

Adjusted funds flow for the year ended December 31, 2021 was $5.6 million, an increase of 124%, primarily due to an 88% increase in oil and natural gas sales as a result of higher realized sales prices for all the Company’s production. Capital expenditures for 2021 were $2.1 million and decommissioning expenditures funded by Clearview were $0.3 million which enabled the Company to further reduce its net debt. Clearview reduced its outstanding bank debt by $3.5 million and increased its working capital deficit by $0.5 million for a net debt reduction of $3.0 million. At December 31, 2021, the Company had net debt of $10.2 million, consisting of bank debt with ATB Financial of $8.8 million, of which $5.0 million is guaranteed by Export Development of Canada, convertible debentures of $1.2 million and a working capital deficit of $0.2 million.

FINANCIAL and OPERATING HIGHLIGHTS

Financial

	Three months ended			Year ended
	Dec. 31 2021	Dec. 31 2020	% Change	Dec. 31 2021	Dec. 31 2020	% Change
Oil and natural gas sales	8,918	4,870	83	30,364	16,133	88
Adjusted funds flow ⁽¹⁾	1,797	957	88	5,573	2,487	124
Per share – basic ⁽²⁾	0.15	0.08	88	0.48	0.21	129
Per share – diluted ⁽²⁾	0.14	0.08	75	0.44	0.21	110
Cash provided by operating activities	2,636	55	4,693	6,130	1,783	244
Per share – basic	0.23	–	100	0.53	0.15	253
Per share – diluted	0.21	–	100	0.48	0.15	220
Net earnings (loss)	10,512	16,891	(38)	5,212	(10,842)	(148)
Per share – basic	0.90	1.45	(38)	0.45	(0.93)	(148)
Per share – diluted	0.82	1.45	(43)	0.42	(0.93)	(145)
Net debt ⁽¹⁾				10,193	13,235
Average shares outstanding	11,671	11,671	–	11,671	11,671	–

(1)	Capital management measure that does not have any standardized meaning as prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculations of similar measures of other entities. See “Non-IFRS Measures” contained within this press release.
(2)	Supplementary financial measure that does not have any standardized meaning as prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculations of similar measures of other entities. See “Non-IFRS Measures” contained within this press release.

Production

	Three months ended			Year ended
	Dec. 31 2021	Dec. 31 2020	% Change	Dec. 31 2021	Dec. 31 2020	% Change
Oil – bbl/d	433	487	(11)	462	480	(4)
Natural gas liquids – bbl/d	487	345	41	464	393	18
Total liquids – bbl/d	920	832	11	926	873	6
Natural gas – mcf/d	6,755	7,443	(9)	7,158	7,091	1
Total – boe/d	2,045	2,072	(1)	2,119	2,055	3

Realized sales prices⁽¹⁾

	Three months ended			Year ended
	Dec. 31 2021	Dec. 31 2020	% Change	Dec. 31 2021	Dec. 31 2020	% Change
Oil – $/bbl	87.55	45.41	93	75.18	41.50	81
NGLs – $/bbl	52.61	28.20	87	44.23	20.72	113
Natural gas – $/mcf	4.95	2.84	74	3.90	2.26	73
Total – $/boe	47.39	25.55	85	39.26	21.45	83

(1) Supplementary financial measure that does not have any standardized meaning as prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculations of similar measures of other entities. See “Non-IFRS Measures” contained within this press release.

Netback analysis⁽¹⁾

	Three months ended			Year ended
Barrel of oil equivalent ($/boe)	Dec. 31 2021	Dec. 31 2020	% Positive (Negative)	Dec. 31 2021	Dec. 31 2020	% Positive (Negative)
Realized sales price	47.39	25.55	85	39.26	21.45	83
Royalties	(8.79)	(0.51)	(1,624)	(5.52)	(1.18)	(368)
Processing income	0.68	0.62	10	0.61	0.69	(12)
Transportation	(1.55)	(1.56)	1	(1.69)	(1.57)	(8)
Operating	(16.83)	(12.21)	(38)	(15.80)	(13.44)	(18)
Operating netback ⁽²⁾	20.90	11.89	76	16.86	5.95	183
Realized gain (loss) – financial instruments	(8.44)	(0.41)	(1,959)	(5.85)	1.59	(468)
General and administrative	(3.10)	(2.31)	(34)	(2.84)	(2.14)	(33)
Other (costs) income	1.75	(1.07)	264	0.51	(0.27)	289
Cash finance costs ⁽²⁾	(1.57)	(3.06)	49	(1.48)	(1.82)	19
Corporate netback ⁽²⁾	9.54	5.04	89	7.20	3.31	118

(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)	Non-IFRS measure or ratio that does not have any standardized meaning as prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculations of similar measures or ratios of other entities. See “Non-IFRS Measures” contained within this press release.

OPERATIONS

Clearview finished 2021 on a strong operational note. The Company’s Phase 1 and 2 optimization and reactivation capital programs in 2021 met the objective of significantly offsetting corporate declines. The Company’s 2021 annual production averaged 2,119 barrels of oil equivalent per day, representing a 3% increase over 2020 despite minimal capital spending. In January 2022, Clearview initiated its 2022 optimization program. This program is estimated to consist of approximately $2.3 million of well optimization and reactivation activity. At current commodity prices, these capital projects are expected to achieve payback in less than six months once brought on-stream.

The Company continued abandonment and reclamation activities through to the end of 2021. During the year, the Company incurred $0.9 million in abandoning 29 gross (13.2 net) wells, represented by $0.3 million funded from cash provided by operating activities and $0.6 million from eligible government grants from the Site Rehabilitation Program of the Government of Alberta. Spending for 2022 has been budgeted for approximately $0.8 million. The ultimate level of decommissioning expenditures will depend on the amount of non-operated spending activities conducted by Clearview’s partners while Clearview executes its own operated abandonment and reclamation program commensurate with Alberta Energy Regulator closure targets.

OUTLOOK

Consistent with Clearview’s strategy to seek a liquidity option for its shareholders, management and the Board will continue to improve the corporation’s financial position by prioritizing debt repayment to enhance shareholder value.

As part of the liquidity strategy, the Company has initiated a 2022 optimization and reactivation program, leveraging on the successful results of the 2021 programs. Maintaining a strong producing asset base and minimizing production declines, as the Company retires its debt, is expected to support Clearview’s objective to provide liquidity to its shareholders. Initial results of the optimization program for 2022 will be realized in the coming months.

Clearview’s December 31, 2021 year-end audited 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=”Read More”]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; realized results from the Company’s optimization program; expected cash provided by continuing operations; future asset retirement obligations; future capital expenditures, including the amount and nature thereof; oil and natural gas prices and demand; expansion and other development trends of the oil and gas industry; retirement of debt 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, applicable royalty rates and tax laws; the impact government assistance programs will 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 entities, 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; 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 such information involves 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-IFRS Measures

Throughout this press release and other materials disclosed by the Company, Clearview uses certain measures to analyze financial performance, financial position and cash flow. These non-IFRS and other financial measures do not have any standardized meaning prescribed under IFRS and therefore may not be comparable to similar measures presented by other entities. The non-IFRS and other financial measures should not be considered alternatives to, or more meaningful than, financial measures that are determined in accordance with IFRS as indicators of Clearview’s performance. Management believes that the presentation of these non-IFRS and other financial measures provides useful information to shareholders and investors in understanding and evaluating the Company’s ongoing operating performance, and the measures provide increased transparency and the ability to better analyze Clearview’s business performance.

Capital Management Measures

Adjusted Funds Flow

Adjusted funds flow represents cash provided by operating activities before changes in operating non-cash working capital and decommissioning expenditures. The Company considers this metric as a key measure that demonstrate the ability of the Company’s continuing operations to generate the cash flow necessary to maintain production at current levels and fund future growth through capital investment, to repay debt and return capital to shareholders. Management believes that this measure provides an insightful assessment of the Company’s operations on a continuing basis by eliminating the actual settlements of decommissioning obligations, the timing of which is discretionary. Adjusted funds flow should not be considered as an alternative to or more meaningful than cash provided by operating activities as determined in accordance with IFRS as an indicator of the Company’s performance. Clearview’s determination of adjusted funds flow may not be comparable to that reported by other companies. Clearview also presents adjusted funds flow per share whereby per share amounts are calculated using weighted average shares outstanding consistent with the calculation of earnings per share. Please refer to Note 14(e) “Capital Management” in Clearview’s December 31, 2021 audited financial statements for additional disclosure on Adjusted Funds Flow.

Net Debt

Clearview closely monitors its capital structure with a goal of maintaining a strong balance sheet to fund the future growth of the Company. The Company monitors net debt as part of its capital structure. The Company uses net debt (current assets, excluding financial derivatives, less current liabilities, excluding financial derivatives, less convertible debentures to assess financial strength, capacity to finance future development and to assist in assessing the liquidity of the Company. Please refer to Note 14(e) “Capital Management” in Clearview’s December 31, 2021 audited financial statements for additional disclosure on Net Debt.

Non-IFRS Measures and Ratios

Capital Expenditures

Capital expenditures equals additions to property, plant & equipment and additions to exploration & evaluation assets. Clearview considers capital expenditures to be a useful measure of adjusted funds flow used for capital reinvestment. The most directly comparable IFRS measure to capital expenditures is additions to property, plant & equipment and additions to exploration & evaluation assets.

Net Capital Expenditures

Net capital expenditures equals capital expenditures plus acquisitions of property, plant & equipment and less dispositions of property, plant & equipment. Clearview uses net capital expenditures to measure its total capital investment compared to the Company’s annual capital budget expenditures. The most directly comparable IFRS measure to net capital expenditures is cash used in investing activities.

	Three months ended		Year ended
	Dec. 31 2021	Dec. 31 2020	Dec. 31 2021	Dec. 31 2020
Cash used in investing activities	624	202	1,423	534
Changes in non-cash working capital	16	(148)	685	(158)
Net capital expenditures	640	54	2,108	376

Cash Finance Costs per boe

Cash finance costs per boe is calculated by dividing cash finance costs by total production volumes sold in the period. Management considers cash finance costs per boe an important measure to evaluate the Company’s cost of debt financing relative to the Company’s corporate netback per boe. The most directly comparable IFRS measure to cash financing costs is finance costs.

	Three months ended		Year ended
	Dec. 31 2021	Dec. 31 2020	Dec. 31 2021	Dec. 31 2020
Finance costs	350	673	1,610	1,657
Accretion of decommissioning obligations and convertible debentures	(55)	(89)	(462)	(287)
Cash finance costs	295	584	1,148	1,370

Operating Netback per boe

Operating netback per boe is calculated by dividing operating netback by total production volumes sold in the period. Operating netback equals oil and natural gas sales plus processing income, less royalties, transportation expenses and operating expenses. Management considers operating netback per boe an important measure to evaluate its operational performance as it demonstrates its field level profitability relative to current commodity prices.

Corporate Netback per boe

Corporate netback per boe is calculated as operating netback less general and administrative expenses and finance costs, plus/(minus) realized gains (losses) on financial instruments, minus(plus) other costs (income), plus accretion of decommissioning obligations and convertible debentures divided by total production volumes sold in the period. Management considers corporate netback per boe an important measure to assist management and investors in assessing Clearview’s overall cash profitability.

Supplementary Financial Measures

Adjusted funds flow per share is comprised of adjusted funds flow divided by the basic weighted average common shares.

Adjusted funds flow per diluted share is comprised of adjusted funds flow divided by the diluted weighted average common shares.

Realized sales price – oil is comprised of light crude oil commodity sales from production, as determined in accordance with IFRS, before deduction of transportation costs and excluding gains and losses on financial instruments, divided by the Company’s oil production.

Realized sales price – ngl is comprised of natural gas liquids commodity sales from production, as determined in accordance with IFRS, before deduction of transportation costs and excluding gains and losses on financial instruments, divided by the Company’s ngl production.

Realized sales price – natural gas is comprised of natural gas commodity sales from production, as determined in accordance with IFRS, before deduction of transportation costs and excluding gains and losses on financial instruments, divided by the Company’s natural gas production.

Realized sales price – total is comprised of oil and natural gas sales from production, as determined in accordance with IFRS, before deduction of transportation costs and excluding gains and losses on financial instruments, divided by the Company’s total production on a boe basis.

Oil and Gas Advisories

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:

Boe means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. The term “boe” 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.

Abbreviations

Bbl	barrel
Boe	barrel of oil equivalent
Mbbl	thousands of barrels
Mboe	thousands of barrels of oil equivalent
MMboe	million barrels of oil equivalent
mcf	thousand cubic feet
MMbtu	millions of British thermal units
MMcf	million cubic feet

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Clearview Resources Ltd. reports year end results

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