CALGARY, AB – Clearview Resources Ltd. (“Clearview” or the “Company”) is pleased to announce its financial and operational results for the three and six months ended June 30, 2022.
“Clearview has made significant progress in transforming the Company’s balance sheet by further reducing bank debt in the second quarter. During this time, Clearview repaid the Export Development of Canada loan, renewed its credit facility and sold a non-core property. As a result, the Company had bank debt of $3.2 million owed to its lender at quarter end. Clearview’s continued focus on debt repayment combined with higher commodity prices signifies the ability to be free of bank debt in the near term”, commented Tony Angelidis, Clearview’s CEO.
- Generated an operating netback(1) of $37.26 per barrel of oil equivalent (“boe”) in the three months ended June 30, 2022, an increase of 170% over the comparative period of 2021;
- Generated adjusted funds flow(2) of $3.2 million in the three months ended June 30, 2022 and cash provided by operating activities of $2.1 million as compared to $1.0 million and $0.3 million, respectively, in the comparative period of 2021;
- Renewed the Company’s operating credit facility (“Operating Facility”) with its lender at $10.0 million, during the second quarter of 2022, with the next scheduled review date set for June 30, 2023;
- Repaid the Export Development of Canada guarantee loan of $6.25 million, in the second quarter of 2022, eliminating the annual renewal fee of 1.8%, using the Company’s Operating Facility and cash on hand;
- Reduced the Company’s net debt(2) to $5.0 million at June 30, 2022, from $10.2 million at December 31, 2021, inclusive of the Company’s convertible debentures of $1.2 million;
- Increased the realized sales price per boe(3) by 99%, in the three months ended June 30, 2022 over the comparative period, to $69.89 per boe resulting in an increase in oil and natural gas sales of $5.6 million over the comparative period of 2021; and
- Closed the disposition of 14,240 acres of undeveloped lands in the Jarvie area of Alberta for proceeds of $1.35 million, recording a gain on the sale of $1.2 million.
Notes |
|
(1) |
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 and Ratios” contained within this press release. |
(2) |
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 and Ratios” contained within this press release. |
(3) |
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 and Ratios” contained within this press release. |
FINANCIAL and OPERATIONAL RESULTS
Production for the three months ended June 30, 2022 was 2,016 boe per day (“boe/d”) as declines were largely offset through the reactivation and optimization programs undertaken in the first and second quarters of 2022. The Company also experienced reduced volumes from several processing facilities being taken offline in the quarter to complete repair and maintenance operations on the facilities.
Adjusted funds flow for the three months ended June 30, 2022 was $3.2 million, an increase of 232%, over the comparative period of 2021, primarily due to a 99% increase in oil and natural gas revenue as a result of higher realized sales prices for the Company’s production. This increase in revenue was offset by higher royalties due to the higher prices, higher operating costs due to an increase in the cost of field services and a greater realized loss on financial instruments due to the significant increase in oil and natural gas prices. For the six months ended June 30, 2022, the Company generated adjusted funds flow of $5.7 million ($0.49 per basic share), up 142% (145%), as compared to the six months of the prior year.
Capital expenditures for the three months ended June 30, 2022 were $0.6 million, primarily focused on a reactivation/optimization program undertaken in the Garrington area. Net capital expenditures for the three months ended June 30, 2022 were a negative $0.8 million due to the proceeds of $1.35 million received on the disposition of undeveloped lands in the Jarvie area of Alberta. Clearview recorded a gain of $1.2 million on the disposition.
Clearview reduced its outstanding bank debt by $5.6 million and increased its working capital deficit by $0.4 million for a net debt reduction of $5.2 million in the first six months of 2022. At June 30, 2022, the Company had net debt of $5.0 million, consisting of bank debt with ATB Financial of $3.2 million, convertible debentures of $1.2 million and a working capital deficit of $0.6 million. The Company renewed its credit facility with its lender at $10.0 million with the next scheduled review date set for June 30, 2023.
FINANCIAL and OPERATING HIGHLIGHTS
Financial
Three months ended |
Six months ended |
|||||
June 30 2022 |
June 30 2021 |
% Change |
June 30 |
June 30 |
% Change |
|
Oil and natural gas sales |
12,821 |
7,207 |
78 |
22,980 |
13,658 |
68 |
Adjusted funds flow (1) |
3,246 |
978 |
232 |
5,703 |
2,355 |
142 |
Per share – basic (2) |
0.28 |
0.08 |
250 |
0.49 |
0.20 |
145 |
Per share – diluted (2) |
0.25 |
0.08 |
213 |
0.45 |
0.20 |
125 |
Cash provided by operating activities |
2,067 |
342 |
504 |
4,400 |
1,788 |
146 |
Per share – basic |
0.18 |
0.03 |
500 |
0.38 |
0.15 |
153 |
Per share – diluted |
0.16 |
0.03 |
433 |
0.34 |
0.15 |
127 |
Net earnings (loss) |
3,849 |
(2,527) |
(252) |
2,192 |
(4,199) |
(152) |
Per share – basic |
0.33 |
(0.22) |
(250) |
0.19 |
(0.36) |
(153) |
Per share – diluted |
0.30 |
(0.22) |
(236) |
0.18 |
(0.36) |
(150) |
Net debt (1) |
5,019 |
11,642 |
(57) |
5,019 |
11,642 |
(57) |
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 and Ratios” 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 and Ratios” contained within this press release. |
Production
Three months ended |
Six months ended |
|||||
June 30 2022 |
June 30 2021 |
% Change |
June 30 |
June 30 |
% Change |
|
Oil – bbl/d |
446 |
504 |
(12) |
441 |
483 |
(9) |
Natural gas liquids – bbl/d |
482 |
549 |
(12) |
487 |
450 |
8 |
Total liquids – bbl/d |
928 |
1,053 |
(12) |
928 |
933 |
(1) |
Natural gas – mcf/d |
6,528 |
7,233 |
(10) |
6,745 |
7,473 |
(10) |
Total – boe/d |
2,016 |
2,258 |
(11) |
2,052 |
2,179 |
(6) |
Realized sales prices (1)
Three months ended |
Six months ended |
|||||
June 30 2022 |
June 30 2021 |
% Change |
June 30 |
June 30 2021 |
% Change |
|
Oil – $/bbl |
132.15 |
72.43 |
82 |
120.96 |
67.73 |
79 |
NGLs – $/bbl |
66.66 |
34.23 |
95 |
64.36 |
38.07 |
69 |
Natural gas – $/mcf |
7.64 |
3.30 |
132 |
6.27 |
3.42 |
83 |
Total – $/boe |
69.89 |
35.07 |
99 |
61.88 |
34.63 |
79 |
(1) |
Supplementary financial measure that does not have any standardized meaning as prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculations of similar measures of other entities. See “Non-IFRS Measures and Ratios” contained within this press release. |
Netback analysis (1)
Three months ended |
Six months ended |
|||||
Barrel of oil equivalent ($/boe) |
June 30 2022 |
June 30 2021 |
% Positive |
June 30 |
June 30 |
% Positive |
Realized sales price |
69.89 |
35.07 |
99 |
61.88 |
34.63 |
79 |
Royalties |
(11.41) |
(5.94) |
(92) |
(10.71) |
(4.25) |
(152) |
Processing income |
0.62 |
0.73 |
(15) |
0.67 |
0.68 |
(1) |
Transportation |
(1.83) |
(1.82) |
(1) |
(1.65) |
(1.75) |
6 |
Operating |
(20.01) |
(14.22) |
(41) |
(19.65) |
(15.34) |
(28) |
Operating netback (2) |
37.26 |
13.82 |
170 |
30.54 |
13.97 |
119 |
Realized gain (loss) – financial instruments |
(13.80) |
(4.90) |
(182) |
(10.50) |
(3.82) |
(175) |
General and administrative |
(4.79) |
(2.78) |
(72) |
(3.66) |
(2.65) |
(38) |
Other (costs) income |
– |
0.09 |
(100) |
– |
0.05 |
(100) |
Cash finance costs (2) |
(0.99) |
(1.47) |
37 |
(1.02) |
(1.57) |
37 |
Corporate netback (2) |
17.68 |
4.76 |
271 |
15.36 |
5.98 |
157 |
(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 and Ratios” contained within this press release. |
OPERATIONS
Field activity in the second quarter of 2022 resumed in mid-May after spring break-up conditions ended and allowed suitable access to the Company’s fields. Clearview reactivated 5 gross (3.3 net) wells and performed workovers on 5 gross (4.3 net) wells in the Company’s Garrington area, for a cost of approximately $0.4 million. This program, combined with the first phase of the 2022 reactivation and optimization program in the first quarter, has been successful in mitigating corporate declines, achieving a production rate in the second quarter of 2022 of 2,016 boe/d compared to the first quarter of 2022 of 2,088 boe/d and the fourth quarter of 2021 of 2,045 boe/d. These production totals were achieved despite approximately 75 boe/d of downtime in the second quarter due to various third-party gas plant turnarounds.
The Company has initiated the third phase of the 2022 reactivation and optimization program and will utilize a service rig from early September through mid-December performing various workovers in conjunction with Clearview’s operated well abandonment program.
In addition to internally funded abandonment and reclamation activities, Clearview continues to utilize the government funded Site Rehabilitation Program to reclaim wellsites and perform environmental assessments with the goal of achieving reclamation certificates.
OUTLOOK
Consistent with Clearview’s strategy to seek liquidity for its shareholders, management and the Board intend to continue to improve the corporation’s financial position by prioritizing bank debt repayment to enhance shareholder value.
As part of the liquidity strategy, the Company is continuing with an optimization and reactivation program, leveraging on the successful results of the 2021 and first half 2022 programs. Maintaining a strong producing asset base and minimizing production declines, as the Company retires its bank debt, is expected to support Clearview’s objective to provide liquidity to its shareholders.
As Clearview’s line-of-sight to being debt-free in the fourth quarter of 2022 becomes clearer, combined with the current robust commodity price environment, the Company remains excited about the future development opportunities within its core operating areas.
Clearview’s June 30, 2022 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.