CALGARY, Alberta – NuVista Energy Ltd. (“NuVista” or the “Company”) (TSX:NVA) is pleased to announce record-setting quarterly production, the achievement of our key net debt target, and the corresponding increase of return of capital to shareholders, as previously promised.
Production for the quarter ended December 31, 2022 achieved a new record for NuVista, reaching a field-estimated 74,250 Boe/d, above our fourth quarter guidance range of 72,000 – 74,000 Boe/d. This production included approximately 33% condensate, 8% NGLs, and 59% natural gas as new wells continued to benefit from flush condensate production. With steady execution in the fourth quarter, capital expenditures(1) for 2022 are expected to be at the top of the prior guidance range of $410 – 420 million.
Net debt(1) for year-end 2022 is forecast to be comfortably below the previously announced target of $200 million, with approximately $40 million of cash on hand and nil drawn on NuVista’s $440 million credit facility. As a result, NuVista has now increased the return of capital to shareholders to approximately 75% of free adjusted funds flow(1), with the remainder continuing to be allocated to the reduction of net debt.
Progress on NuVista’s Normal Course Issuer Bid (“NCIB”) has been significant since midyear 2022, with approximately 13.5 million shares repurchased and cancelled as at December 31, 2022, representing 74% of the maximum number of shares available for repurchase pursuant to the NCIB.
NuVista is also pleased to note that, despite the volatility in gas prices so far this winter, our diversified sales portfolio has once again shown its value with over 10% of natural gas sales volumes being delivered into California, which has seen elevated pricing.
Drilling, completion, and pipeline operations are moving ahead efficiently once again after a short break at the end of December. At Wapiti, two rigs are drilling on a 6-well pad in Elmworth while our third rig is drilling a 5-well pad in the Bilbo area. In addition, we have just started flowback on a 3-well pad at Bilbo and are setting up to complete a 5-well pad at Gold Creek. These activities are expected to drive a significant ramp-up in volumes throughout the first half of the year in Wapiti. At Pipestone, production is performing well, continuing to run near full capacity. We are currently completing a 6-well pad which will come on-stream prior to the end of the first quarter, and we will be moving the two drilling rigs from Wapiti back to Pipestone in February. The steady cadence of our 3-rig program continues to underpin our consistent performance and has allowed us to enter 2023 with positive momentum.
Production for the first quarter of 2023 is expected to be in the range of 71,000 – 74,000 Boe/d, followed by a significant ramp-up of production through the remainder of the year as new pads are brought online. Guidance for 2023 is re-affirmed at 79,000 – 83,000 Boe/d of production and $425 – $450 million of capital expenditures.
We look forward to releasing our full financial results for the quarter and year ended December 31, 2022 prior to the opening of markets on March 8.
Notes:
(1) “Capital expenditures”, “net debt”, “free adjusted funds flow” are specified financial measures (as such terms are defined in National Instrument 52-112 – Non-GAAP Disclosure and Other Financial Measures Disclosure (“NI 51-112”)). Reference should be made to the section entitled “Non-GAAP and other financial measures” in this news release for further information.
FOR FURTHER INFORMATION CONTACT:
Jonathan A. Wright | Ivan J. Condic | Mike J. Lawford | ||
President and CEO | VP, Finance and CFO | Chief Operating Officer | ||
(403) 538-8501 | (403) 538-1945 | (403) 538-1936 | ||
Advisories Regarding Oil and Gas Information
BOEs 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. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
Basis of presentation
Unless otherwise noted, the financial data presented in this news release has been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) also known as International Financial Reporting Standards (“IFRS”). The reporting and measurement currency is the Canadian dollar. National Instrument 51-101 – “Standards of Disclosure for Oil and Gas Activities” includes condensate within the product type of natural gas liquids. NuVista has disclosed condensate values separate from natural gas liquids herein as NuVista believes it provides a more accurate description of NuVista’s operations and results therefrom.
Production split for Boe/d amounts referenced in the news release are as follows:
Reference | Total Boe/d | % Natural Gas | % Condensate | % NGLs | |||
Q4 2022 production guidance | 72,000 – 74,000 | 62 | % | 30 | % | 8 | % |
Q1 2023 production guidance | 71,000 – 74,000 | 61 | % | 30 | % | 9 | % |
2023 annual production guidance | 79,000 – 83,000 | 62 | % | 29 | % | 9 | % |