Calgary, Alberta–(Newsfile Corp. – August 3, 2022) – Pine Cliff Energy Ltd. (TSX: PNE) (“Pine Cliff” or the “Company“) announces record second quarter financial and operating results, a 20% increase in its monthly dividend, an increase in production and CAPEX guidance and an operational update.
Second Quarter 2022 Highlights
Pine Cliff’s adjusted funds flow of $55.8 million generated during the second quarter of 2022 was the highest quarterly adjusted funds flow for the Company since inception, surpassing the $32.3 million generated during the first quarter by 73%.
Highlights from the second quarter include:
- generated $55.8 million ($0.16 per basic and $0.15 per fully diluted share) and $88.1 million ($0.26 per basic and $0.25 per fully diluted share) of adjusted funds flow for the three and six months ended June 30, 2022, compared to $9.5 million ($0.03 per basic and fully diluted share) and $19.5 million ($0.06 per basic and fully diluted share) for comparable periods in 2021;
- generated net earnings of $50.2 million ($0.15 per basic and $0.14 per fully diluted share) and $65.6 million ($0.19 per basic and $0.18 per fully diluted share) for the three and six months ended June 30, 2022, compared to a net loss of $0.7 million (($0.00) per basic and fully diluted share) and a net loss of $1.4 million (($0.00) per basic and fully diluted share) for comparable periods in 2021;
- repaid $20.0 million of term debt and $12.0 million of insider debt during the quarter, to be debt free on June 30, 2022;
- paid the first monthly dividend in the Company’s history on June 30, 2022;
- production averaged 21,331 Boe/d and 20,866 Boe/d for the three and six months ended June 30, 2022, 18% and 15% higher respectively than comparable periods in 2021; and
- commenced a summer drilling program that will see Pine Cliff drill, complete and tie-in four gross (2.8 net) operated Pekisko oil wells before the end of the third quarter.
The Company’s Board of Directors (the “Board“) has approved the declaration and payment of a 20% increase in the monthly dividend to an amount of $0.01 per common share payable August 31, 2022, to shareholders of record on August 15, 2022.
Dividends paid on Pine Cliff’s common shares will be designated as “eligible dividends” for Canadian federal income tax purposes. The declaration of dividends is at the sole discretion of the Board and will be evaluated on a regular basis.
2022 Production and CAPEX Guidance Update
Pine Cliff’s Board of Directors has approved an increase in the 2022 capital expenditure budget from $25.5 million to $29.5 million. The increase reflects the expansion of facilities at the North Twining Unit (the “Unit“) to accommodate incremental production volumes from the drilling of Pekisko wells in the Unit, the drilling of an additional one gross (0.15 net) Edson area natural gas well and inflationary costs in the sector. The Company also expects to spend approximately $8.1 million in government funded abandonment and reclamation projects in the second half of 2022.
Pine Cliff has increased and narrowed its 2022 annual production guidance from a range of 20,000 to 21,000 Boe per day to a range of 20,750 to 21,250 Boe per day, weighted 87% to natural gas.
Pine Cliff drilled one (0.7 net) Pekisko oil well in the Unit in June that was completed, tied-in and on production by the end of July. Two (1.4 net) additional Pekisko Unit wells were drilled in July and are scheduled to be completed and tied-in by the end of August. A fourth (0.7 net) Pekisko Unit well is scheduled to be drilled, completed and tied-in prior to the end of the third quarter.
Pine Cliff expects five gross (0.7 net) non-operated wells in the Edson area will be drilled during the third quarter.
Pine Cliff’s abandonment and reclamation expenditures in the six months ended June 30, 2022 totaled $5.0 million ($2.1 million from government grants).
On July 21, 2022, the Company’s demand operating loan facility was increased to $8.0 million from $5.0 million.
Financial and Operating Results
|Three months ended June 30,||Six months ended June 30,|
|($000s, unless otherwise indicated)|
|Commodity sales (before royalty expense)||90,426||34,163||156,606||69,682|
|Cash flow from operating activities||50,532||8,171||74,403||16,642|
|Adjusted funds flow1||55,816||9,494||88,123||19,494|
|Per share – Basic ($/share)1||0.16||0.03||0.26||0.06|
|Per share – Diluted ($/share)1||0.15||0.03||0.25||0.06|
|Per share – Basic ($/share)1||0.15||(0.00||)||0.19||(0.00||)|
|Per share – Diluted ($/share)1||0.14||(0.00||)||0.18||(0.00||)|
|Positive net cash (net debt)1||22,496||(45,292||)||22,496||(45,292||)|
|Percentage natural gas (%)||87%||92%||88%||91%|
|Weighted-average common shares outstanding (000s)|
|Combined sales price ($/Boe)||46.59||20.75||41.47||21.15|
|Operating netback ($/Boe)1||30.40||7.50||25.07||7.69|
|Corporate netback ($/Boe)1||28.76||5.77||23.35||5.92|
|Operating netback ($ per Mcfe)1||5.07||1.25||4.18||1.28|
|Corporate netback ($ per Mcfe)1||4.79||0.96||3.89||0.99|
1This is a non-GAAP measure, see “NON-GAAP Measures” for additional information.
About Pine Cliff
Pine Cliff is a natural gas and oil company with a long-term view of creating shareholder value. Pine Cliff’s current focus is on acquiring, developing and operating long life assets that generate adjusted funds flow that allows for capital to be returned to shareholders in the form of a dividend. Further information relating to Pine Cliff may be found on www.sedar.com as well as on Pine Cliff’s website at www.pinecliffenergy.com