Highlights
- Within the industrial metals and minerals business unit, the Company has amassed industrial metallic and mineral permits of over 3,900,000 acres in Alberta and British Columbia and issued its National Instrument 43-101 technical report on Lithium from Brine on July 16, 2021 and National Instrument 43-101 technical report on Ironstone-Vanadium on September 21, 2021 . The Company also engaged the third-party resource evaluator to compile a 43-101 Lithium from Brine Resource Assessment specific to Drumheller, Alberta, which was completed and released subsequent to December 31, 2021. The initial inferred Lithium-Brine resource at Drumheller has been calculated within 3 separate resource domains, the combined total of which is estimated to contain 18.14 million metric tonnes lithium carbonate equivalent (“LCE”).
- Within the upstream oil & gas production & processing business unit, the Company delivered average production of 125 bbl/d of oil in the fourth quarter of 2021. Current net production from Highwood remains at approximately 125 bbl/d of oil.
- Corporately, net debt at December 31, 2021 was $2.2 million, subsequent to year-end the Company has reduced this amount to $1.4 million.
Summary of Financial & Operating Results
Three months ended December 31, |
Year ended December 31, |
||||||||
2021 |
2020 |
% |
2021 |
2020 |
% |
||||
Financial (in thousands) |
|||||||||
Oil and natural gas sales |
$ 966 |
$ |
$ 6,686 |
(86) |
$ 7,389 |
$ 20,719 |
(64) |
||
Transportation pipeline revenues |
718 |
1,021 |
(30) |
3,523 |
3,740 |
(6) |
|||
Total revenues, net of royalties(1) |
1,351 |
6,122 |
(78) |
7,593 |
29,418 |
(74) |
|||
Income (Loss) |
(951) |
18,347 |
(105) |
(2,321) |
(9,284) |
(75) |
|||
Funds flow from operations(5) |
59 |
(985) |
106 |
(75) |
(239) |
69 |
|||
Capital expenditures |
3 |
228 |
(97) |
273 |
4,710 |
(94) |
|||
Net debt (2) |
(2,244) |
(1,132) |
(98) |
||||||
Shareholder’s equity (end of period) |
7,993 |
9,763 |
(12) |
||||||
Shares outstanding (end of period) |
6,014 |
6,014 |
– |
||||||
Weighted-average basic shares |
6,014 |
6,014 |
– |
6,014 |
6,014 |
– |
|||
outstanding |
|||||||||
Operations (3) |
|||||||||
Production |
|||||||||
Crude oil (bbls/d) |
125 |
1,908 |
(93) |
331 |
1,560 |
(79) |
|||
Total (boe/d) |
125 |
1,908 |
(93) |
331 |
1,560 |
(79) |
|||
Average realized prices (4) |
|||||||||
Crude Oil (per bbl) |
84.06 |
38.08 |
121 |
61.18 |
36.29 |
69 |
|||
Upstream Operating netback (per BOE) (5) |
31.85 |
13.94 |
128 |
20.98 |
5.37 |
291 |
|||
Wells drilled: |
|||||||||
Gross |
– |
– |
– |
– |
4.0 |
(100) |
|||
Net |
– |
– |
– |
– |
2.0 |
(100) |
|||
Success (%) |
– |
– |
– |
– |
100 |
– |
|||
(1) Includes realized and unrealized gains and losses on commodity contracts |
(2) Net debt consists of bank debt and working capital surplus (deficit) excluding commodity contract assets and/or liabilities. |
(3) For a description of the boe conversion ratio, see “Basis of Barrel of Oil Equivalent”. |
(4) Before hedging. |
(5) See “Non-GAAP measures”. |
2021 Fourth Quarter Operations
Highwood’s focus in the fourth quarter of 2021 was to evaluate the sizeable position of industrial mines and minerals permits throughout Western Canada for purposes of creating a 43-101 inferred resource assessment. Subsequent to December 31, 2021, Highwood filed a NI 43-101 Technical Report Lithium Resource Estimate for its Drumheller Property, resulting in a combined total resource estimate of 18.14Mt LCE.
The Company also focused time and resources in Q4 2021 on extraction technologies for Lithium from Brine.
With the strong improvement in commodity prices over the course of 2021, the Company also reviewed and assessed several potential acquisitions for its upstream operations. The Company will continue to review and assess opportunities which are accretive to the Company as Highwood seeks to grow this segment of its operations.
Outlook and Update to Metallic and Industrial Mineral Permits
Within the industrial metals and minerals business unit, the Company engaged a third-party resource evaluator to prepare a 43-101 Resource Estimate covering the Lithium from Brine within the region of Drumheller, Alberta. This 43-101 Resource Estimate was released subsequent to December 31, 2021 on February 28, 2022. The results were encouraging to Highwood as the combined total initial inferred lithium-brine resource estimate at its Drumheller asset is 18.14Mt LCE.
Given its clean balance sheet which provides considerable financial and operational flexibility, the Company remains open to completing accretive acquisitions through the balance of 2022 and beyond. The Company is currently engaged in several encouraging dialogues regarding various acquisitions and partnership opportunities. Global optimism around mitigating COVID-19 and restoring previous economic and industrial activities has created positive market and investment sentiment both within and outside oil & gas space.
While Highwood sold the majority of its producing oil assets in the first quarter of 2021, the Company has, and will continue to evaluate opportunities in the M&A market but will remain disciplined to pursue only those opportunities that are accretive with low to moderate liability profiles.
Corporately, the Company intends to build a growing profile of recurring free funds flow that will provide maximum flexibility for growth and / or other strategic M&A opportunities in a non-dilutive fashion.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.