(TSX: AAV)
CALGARY,
AB, April 28, 2022 /CNW/ - Advantage
Energy Ltd. ("Advantage" or the "Corporation") is pleased to report
its first quarter 2022 results including record production, record
adjusted funds flow(a) and continued financial and
operational discipline. Profitability increased rapidly as
commodity prices increased during the quarter and debt fell
significantly below our $200 million
target. As a result, Advantage has initiated a return-of-capital
strategy whereby all free cash flow (in excess of capital spending
and acquisitions) will be allocated to share buybacks, subject to
market conditions and regulations.
Financial Highlights
- Record cash provided by operating activities of $109.2 million
- Record adjusted funds flow ("AFF")(a) of
$108.9 million or $0.57/share
- Free cash flow ("FCF")(a) of $22.9 million (21% of AFF)
- Cash used in investing activities was $77.0 million
- Net capital expenditures(a) were $86.0 million
- Net income of $19.5 million or
$0.10/share
- Tax pools of $1.4 billion are
expected to provide near-term cash tax deferrals
- Operating expenses remained low at $2.79/boe including a major plant turnaround at
Glacier
- Bank indebtedness decreased $49.8
million to $117.6 million
- Net debt(a) decreased to $136.7 million with net debt to AFF(a)
ratio at 0.5x
Operational Highlights and
Update
- Record quarterly production of 52,946 boe/d (288.2 MMcf/d
natural gas, 4,908 bbls/d liquids), a 10% increase compared to
fourth quarter 2021
- Record quarterly liquids production of 4,908 bbls/d (997 bbls/d
oil, 1,057 bbls/d condensate, and 2,854 bbls/d NGLs)
- Glacier Gas Plant raw gas throughput exceeded 375 MMcf/d for
sustained periods during the quarter
- Executed a major plant turnaround at the Glacier Gas Plant in
co-ordination with construction of the Entropy Modular Carbon
Capture and Storage project
- Completed six wells at Wembley
with encouraging early flow-back results
- Completed the construction of a trunk-line from Advantage's
Wembley oil battery to the Keyera
Pipestone Processing Facility adding 30 MMcf/d firm capacity for
the asset
- Completed construction of a new 25 MMcf/d compressor station at
Progress, increasing transportation capacity for the area and
capturing 10 MMcf/d of contracted third-party volumes
(a)
|
Specified financial
measure which is not a standardized measure under International
Financial Reporting Standards ("IFRS") and may not be comparable to
similar specified financial measures used by other entities. Please
see "Specified Financial Measures" for the composition of such
specified financial measure, an explanation of how such specified
financial measure provides useful information to a reader and the
purposes for which management of Advantage uses the specified
financial measure, and where required, a reconciliation of the
specified financial measure to the most directly comparable IFRS
measure.
|
Marketing Update
Advantage increased its hedging position to approximately 44% of
its forecast natural gas production for summer 2022 at an average
of US$4.23/MMbtu and 34% for winter
2022/23 at an average of US$4.98/MMbtu.
In the first quarter of 2022, Advantage secured an additional
47.4 MMcf/d of firm transportation capacity to Empress, AB on the NGTL system for a 4-year
term commencing April 2022.
Looking Forward
In order to maximize shareholder returns, Advantage's priority
is growing adjusted funds flow per share(a). To
optimize growth of adjusted funds flow(a), Advantage
will continue to grow organically at approximately 10% per year,
though growth may increase modestly should market conditions
continue to be supportive. To supplement organic funds flow
growth, Advantage will continue to evaluate synergistic
acquisitions based on funds flow accretion, using available cash
and debt.
Advantage's bank debt fell below our current debt target of
approximately $200 million during the
fourth quarter of 2021 and continued to drop faster than
anticipated. As a result of the current surge in
profitability, Advantage anticipates that 2022 adjusted funds
flow(a) will substantially exceed capital and
acquisition spending. Free cash flow (net of capital and
acquisitions) will be allocated to our share buyback program, with
4.1 million common shares already purchased since inception on
April 13, 2022.
The capital program for the second half of 2022 will focus on
oil-weighted growth which delivers outsized adjusted funds
flow(a) growth per unit of production growth.
While total production for 2022 is expected to grow by
approximately 10%, relative adjusted funds flow(a) would
be expected to grow by over 25% assuming consistent commodity
prices. We are on-track to generate free cash
flow(a) of over $140
million in the first half of 2022.
With recent cost inflation that is being experienced by the
industry, Advantage's 2022 capital program is migrating towards the
top of our guidance range at approximately $200 million. Given the increased commodity
price environment and accelerated royalty payouts, 2022 royalty
rates are expected to increase to between 12% and 17%. Having
secured additional Empress
transportation assets, 2022 transportation expenses are expected to
increase to between $4.85/boe and
$5.15/boe. Production is expected to
average between 52,000 and 55,000 boe/d in 2022 (see News Release
dated December 6, 2021).
With modern, low emissions-intensity assets, imminent start-up
of Entropy Inc's first carbon capture and storage project at
Glacier, and a plan to achieve net zero emissions by 2025, the
Corporation is proud to deliver clean, reliable, sustainable
energy, while contributing to a reduction in global emissions by
displacing high-carbon fuels.
Financial
Highlights
|
|
Three months
ended
March
31
|
($000, except as
otherwise indicated)
|
|
|
2022
|
2021
|
Financial Statement
Highlights
|
|
|
|
|
Natural gas and liquids
sales
|
|
|
177,569
|
99,373
|
Net income (loss) and
comprehensive income (loss)
|
|
|
19,496
|
(425)
|
per basic
share (2)
|
|
|
0.10
|
0.00
|
Basic weighted average
shares (000)
|
|
|
190,829
|
188,113
|
Cash provided by
operating activities
|
|
|
109,157
|
51,566
|
Cash used in financing
activities
|
|
|
(50,769)
|
(7,548)
|
Cash used in investing
activities
|
|
|
(76,983)
|
(15,069)
|
Other Financial
Highlights
|
|
|
|
|
Adjusted funds flow
(1)
|
|
|
108,878
|
53,978
|
per boe
(1)
|
|
|
22.85
|
12.04
|
per basic share
(1)(2)
|
|
|
0.57
|
0.29
|
Net capital
expenditures (1)
|
|
|
86,014
|
37,185
|
Free cash flow
(1)
|
|
|
22,864
|
16,793
|
Working capital
(surplus) deficit (1)
|
|
|
19,115
|
(27,516)
|
Bank
indebtedness
|
|
|
117,558
|
240,428
|
Net debt
(1)
|
|
|
136,673
|
212,912
|
(1)
|
Specified financial
measure which is not a standardized measure under International
Financial Reporting Standards ("IFRS") and may not be comparable to
similar specified financial measures used by other entities. Please
see "Specified Financial Measures" for the composition of such
specified financial measure, an explanation of how such specified
financial measure provides useful information to a reader and the
purposes for which management of Advantage uses the specified
financial measure, and where required, a reconciliation of the
specified financial measure to the most directly comparable IFRS
measure.
|
(2)
|
Based on basic weighted
average shares outstanding.
|
Operating
Highlights
|
|
Three
months
March
31
|
|
|
|
2022
|
2021
|
Operating
|
|
|
|
|
Production
|
|
|
|
|
Crude oil
(bbls/d)
|
|
|
997
|
1,395
|
Condensate
(bbls/d)
|
|
|
1,057
|
721
|
NGLs
(bbls/d)
|
|
|
2,854
|
2,493
|
Total
liquids production (bbls/d)
|
|
|
4,908
|
4,609
|
Natural
gas (Mcf/d)
|
|
|
288,226
|
271,262
|
Total
production (boe/d)
|
|
|
52,946
|
49,819
|
Average realized prices
(including realized derivatives)(2)
|
|
|
|
|
Natural
gas ($/Mcf)
|
|
|
5.04
|
3.07
|
Liquids
($/bbl)
|
|
|
82.48
|
48.11
|
Operating Netback
($/boe)
|
|
|
|
|
Natural
gas and liquids sales(2)
|
|
|
37.26
|
22.16
|
Realized
losses on derivatives(2)
|
|
|
(2.19)
|
(0.87)
|
Processing
and other income
|
|
|
0.30
|
-
|
Net sales
of purchased natural gas
|
|
|
0.01
|
-
|
Royalty expense(2)
|
|
|
(3.42)
|
(1.13)
|
Operating
expense(2)
|
|
|
(2.79)
|
(2.45)
|
Transportation expense(2)
|
|
|
(4.36)
|
(3.57)
|
Operating
netback (1) (2)
|
|
|
24.81
|
14.14
|
(1)
|
Specified financial
measure which is not a standardized measure under IFRS and may not
be comparable to similar specified financial measures used by other
entities. Please see "Specified Financial Measures" for the
composition of such specified financial measure, an explanation of
how such specified financial measure provides useful information to
a reader and the purposes for which management of Advantage uses
the specified financial measure, and where required, a
reconciliation of the specified financial measure to the most
directly comparable IFRS measure.
|
(2)
|
Specified financial
measure which is a supplementary financial measure. Please see
"Specified Financial Measures" for the composition of such
supplementary financial measure.
|
|
|
The Corporation's unaudited consolidated financial statements
for the three months ended March 31,
2022 together with the notes thereto, and Management's
Discussion and Analysis for the three months ended March 31, 2022 have been filed on SEDAR and are
available on the Corporation's website
at https://www.advantageog.com/investors/financial-reports.
Upon request, Advantage will provide a hard copy of any financial
reports free of charge.
Forward-Looking Information
and Advisory
The information in
this press release contains certain forward-looking statements,
including within the meaning of applicable securities laws. These
statements relate to future events or our future intentions or
performance. All statements other than statements of historical
fact may be forward-looking statements. Forward-looking statements
are often, but not always, identified by the use of words such as
"anticipate", "continue", "demonstrate", "expect", "may", "can",
"will", "believe", "would" and similar expressions and include
statements relating to, among other things, Advantage's position,
strategy and development plans and the benefits to be derived
therefrom; the Corporation's estimated tax pools and the
anticipated benefits to be derived therefrom; Advantage's
anticipated growth per year; that Advantage will pursue synergistic
acquisitions based on funds flow accretion using available cash and
debt; the Corporation's expectations that its adjusted funds flow
will substantially exceed capital and acquisition spending during
2022; that the Corporation will allocate its free cash flow to its
share buyback program; the focus of Advantage's capital program for
the second half of 2022; the Corporation's expectations that it
will generate free cash flow of over $140
million in the first half of 2022 and approach zero net debt
by mid-year; the Corporation's 2022 capital program guidance; the
Corporation's anticipated 2022 average production; and the
Corporation's expectations that it will continue to deliver clean,
reliable, sustainable energy, and contribute to a reduction in
global emissions by displacing high-carbon fuels. Advantage's
actual decisions, activities, results, performance or achievement
could differ materially from those expressed in, or implied by,
such forward-looking statements and accordingly, no assurances can
be given that any of the events anticipated by the forward-looking
statements will transpire or occur or, if any of them do, what
benefits that Advantage will derive from them.
These statements involve substantial known and unknown risks
and uncertainties, certain of which are beyond Advantage's control,
including, but not limited to: changes in general economic, market
and business conditions; industry conditions, including as a result
of demand and supply effects resulting from the COVID-19 pandemic;
actions by governmental or regulatory authorities including
increasing taxes and changes in investment or other regulations;
changes in tax laws, royalty regimes and incentive programs
relating to the oil and gas industry; Advantage's success at
acquisition, exploitation and development of reserves; unexpected
drilling results; changes in commodity prices, currency exchange
rates, net capital expenditures, reserves or reserves estimates and
debt service requirements; the occurrence of unexpected events
involved in the exploration for, and the operation and development
of, oil and gas properties, including hazards such as fire,
explosion, blowouts, cratering, and spills, each of which could
result in substantial damage to wells, production and processing
facilities, other property and the environment or in personal
injury; changes or fluctuations in production levels; delays in
anticipated timing of drilling and completion of wells; individual
well productivity; competition from other producers; the lack of
availability of qualified personnel or management; credit risk;
changes in laws and regulations including the adoption of new
environmental laws and regulations and changes in how they are
interpreted and enforced; our ability to comply with current and
future environmental or other laws; stock market volatility and
market valuations; liabilities inherent in oil and natural gas
operations; competition for, among other things, capital,
acquisitions of reserves, undeveloped lands and skilled personnel;
incorrect assessments of the value of acquisitions; geological,
technical, drilling and processing problems and other difficulties
in producing petroleum reserves; ability to obtain required
approvals of regulatory authorities; ability to access sufficient
capital from internal and external sources; the Corporation's
estimated tax pools may be less than anticipated; Advantage's
anticipated growth per year may be less than anticipated; that
growth in adjusted funds flow per share may not lead to increased
shareholder returns; that Advantage may not complete synergistic
acquisitions; that a capital program focused on oil-weighted growth
will deliver outsized adjusted funds flow growth per unit of
production growth; the Corporation's cash flow may not exceed
capital investment during 2022; that the Corporation may not
allocate its free cash flow to its share buyback program; the
Corporation may generate less free cash flow than anticipated; and
that the Corporation may not achieve zero net debt in its
anticipated timeframe, or at all . Many of these risks and
uncertainties and additional risk factors are described in the
Corporation's Annual Information Form which is available at
www.sedar.com ("SEDAR") and www.advantageog.com. Readers are also
referred to risk factors described in other documents Advantage
files with Canadian securities authorities.
With respect to forward-looking statements contained in this
press release, Advantage has made assumptions regarding, but not
limited to: conditions in general economic and financial markets;
the impact and duration thereof that the COVID-19 pandemic will
have on (i) the demand for crude oil, NGLs and natural gas, (ii)
the supply chain including the Corporation's ability to obtain the
equipment and services it requires, and (iii) the Corporation's
ability to produce, transport and/or sell its crude oil, NGLs and
natural gas; effects of regulation by governmental agencies;
current and future commodity prices and royalty regimes; the
Corporation's current and future hedging program; future exchange
rates; royalty rates; future operating costs; future transportation
costs and availability of product transportation capacity;
availability of skilled labor; availability of drilling and related
equipment; timing and amount of net capital expenditures; the
impact of increasing competition; the price of crude oil and
natural gas; the number of new wells required to achieve the budget
objectives; that the Corporation will have sufficient cash flow,
debt or equity sources or other financial resources required to
fund its capital and operating expenditures and requirements as
needed; that the Corporation's conduct and results of operations
will be consistent with its expectations; that the Corporation will
have the ability to develop the Corporation's properties in the
manner currently contemplated; current or, where applicable,
proposed assumed industry conditions, laws and regulations will
continue in effect or as anticipated; that growth in adjusted funds
flow per share will lead to increased shareholder returns; that
pursuing synergistic acquisitions will supplement organic growth;
that the Corporation will allocate its free cash flow to its share
buyback program; that a capital program focused on oil-weighted
growth will deliver outsized adjusted funds flow growth per unit of
production growth; and the estimates of the Corporation's
production and reserves volumes and the assumptions related thereto
(including commodity prices and development costs) are accurate in
all material respects. Estimates of free cash flow for 2022 are
based on forward looking information from the Corporation's
Consolidated Management's Discussion & Analysis for the quarter
and year-ended December 31, 2021
("MD&A") and can be found on page 3 of the MD&A available
on SEDAR at www.sedar.com and on the Corporation's website at
https://www.advantageog.com/investors/financial-reports and
commodity price assumptions including average AECO $4.00/mcf, Henry Hub US$4.35/mmbtu, WTI US$78/bbl, and $US/$CDN
0.79. All forward looking estimates include current hedging
and market diversification transactions. Readers are cautioned that
the foregoing lists of factors are not exhaustive.
The future acquisition by the Corporation of the
Corporation's common shares pursuant to its share buyback program,
if any, and the level thereof is uncertain. Any decision to acquire
common shares of the Corporation pursuant to the share buyback
program will be subject to the discretion of the board of directors
of the Corporation and may depend on a variety of factors,
including, without limitation, the Corporation's business
performance, financial condition, financial requirements, growth
plans, expected capital requirements and other conditions existing
at such future time including, without limitation, contractual
restrictions and satisfaction of the solvency tests imposed on the
Corporation under applicable corporate law. There can be no
assurance of the number of common shares of the Corporation that
the Corporation will acquire pursuant to its share buyback program,
if any, in the future.
Management has included the above summary of assumptions and
risks related to forward-looking information above and in its
continuous disclosure filings on SEDAR in order to provide
shareholders with a more complete perspective on Advantage's future
operations and such information may not be appropriate for other
purposes. Advantage's actual results, performance or achievement
could differ materially from those expressed in, or implied by,
these forward-looking statements and, accordingly, no assurance can
be given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what
benefits that Advantage will derive there from. Readers are
cautioned that the foregoing lists of factors are not exhaustive.
These forward-looking statements are made as of the date of this
news release and Advantage disclaims any intent or obligation to
update publicly any forward-looking statements, whether as a result
of new information, future events or results or otherwise, other
than as required by applicable securities laws.
This press release contains information that may be
considered a financial outlook under applicable securities laws
about the Corporation's potential financial position, including,
but not limited to, the Corporation's estimated tax pools; the
Corporation's expected growth in adjusted funds flow; the
Corporation's expectations that it will generate free cash flow of
over $140 million in the first half
of 2022 and approach zero net debt by mid-year; and Advantage's
2022 capital program; all of which are subject to numerous
assumptions, risk factors, limitations and qualifications,
including those set forth in the above paragraphs. The actual
results of operations of the Corporation and the resulting
financial results will vary from the amounts set forth in this
press release and such variations may be material. This information
has been provided for illustration only and with respect to future
periods are based on budgets and forecasts that are speculative and
are subject to a variety of contingencies and may not be
appropriate for other purposes. Accordingly, these estimates are
not to be relied upon as indicative of future results. Except as
required by applicable securities laws, the Corporation undertakes
no obligation to update such financial outlook. The financial
outlook contained in this press release was made as of the date of
this press release and was provided for the purpose of providing
further information about the Corporation's potential future
business operations. Readers are cautioned that the financial
outlook contained in this press release is not conclusive and is
subject to change.
Barrels of oil equivalent (boe) and thousand cubic feet of
natural gas equivalent (mcfe) may be misleading, particularly if
used in isolation. Boe and mcfe conversion ratios have been
calculated using a conversion rate of six thousand cubic feet of
natural gas equivalent to one barrel of oil. A boe and mcfe
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. 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, utilizing a conversion on a 6:1 basis may be misleading as
an indication of value.
Specified Financial
Measures
Throughout this news release, Advantage discloses certain
measures to analyze financial performance, financial position, and
cash flow. These non-GAAP 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-GAAP and other financial measures should not be considered
to be more meaningful than GAAP measures which are determined in
accordance with IFRS, such as net income (loss) and comprehensive
income (loss), cash provided by operating activities, and cash used
in investing activities, as indicators of Advantage's
performance.
Non-GAAP Financial
Measures
Adjusted Funds Flow
The Corporation considers adjusted funds flow to be a useful
measure of Advantage's ability to generate cash from the production
of natural gas and liquids, which may be used to settle outstanding
debt and obligations, support future capital expenditures plans, or
return capital to shareholders. Changes in non-cash working capital
are excluded from adjusted funds flow as they may vary
significantly between periods and are not considered to be
indicative of the Corporation's operating performance as they are a
function of the timeliness of collecting receivables and paying
payables. Expenditures on decommissioning liabilities are excluded
from the calculation as the amount and timing of these expenditures
are unrelated to current production and are partially discretionary
due to the nature of our low liability. A reconciliation of the
most directly comparable financial measure has been provided
below:
|
|
Three months
ended
March
31
|
($000)
|
|
|
2022
|
2021
|
Cash provided by
operating activities
|
|
|
109,157
|
51,566
|
Expenditures on decommissioning liability
|
|
|
451
|
14
|
Changes in
non-cash working capital
|
|
|
(730)
|
2,398
|
Adjusted funds
flow
|
|
|
108,878
|
53,978
|
Net Capital Expenditures
Net capital expenditures include total capital expenditures
related to property, plant and equipment, exploration and
evaluation assets and intangible assets. Management considers this
measure reflective of actual capital activity for the period as it
excludes changes in working capital related to other periods and
excludes cash receipts on government grants. A reconciliation of
the most directly comparable financial measure has been provided
below:
|
|
Three months
ended
March
31
|
($000)
|
|
|
2022
|
2021
|
Cash used in investing
activities
|
|
|
76,983
|
15,069
|
Changes in
non-cash working capital
|
|
|
9,026
|
2,116
|
Project
funding received
|
|
|
5
|
20,000
|
Net capital
expenditures
|
|
|
86,014
|
37,185
|
Free Cash Flow
Advantage computes free cash flow as adjusted funds flow less
net capital expenditures. Advantage uses free cash flow as an
indicator of the efficiency and liquidity of Advantage's business
by measuring its cash available after net capital expenditures to
settle outstanding debt and obligations and potentially return
capital to shareholders by paying dividends or buying back common
shares. A reconciliation of the most directly comparable financial
measure has been provided below:
|
|
Three months
ended
March
31
|
($000)
|
|
|
2022
|
2021
|
Cash provided by
operating activities
|
|
|
109,157
|
51,566
|
Cash used in investing
activities
|
|
|
(76,983)
|
(15,069)
|
Changes in non-cash working
capital
|
|
|
(9,756)
|
282
|
Expenditures on decommissioning
liability
|
|
|
451
|
14
|
Project
funding received
|
|
|
(5)
|
(20,000)
|
Free cash
flow
|
|
|
22,864
|
16,793
|
Operating Netback
Operating netback is comprised of sales revenue and realized
gains (losses) on derivatives, processing and other income, net
sales of purchased natural gas, net of expenses resulting from
field operations, including royalty expense, operating expense and
transportation expense. Operating netback provides Management and
users with a measure to compare the profitability of field
operations between companies, development areas and specific wells.
The composition of operating netback is as follows:
|
|
Three months
ended
March
31
|
($000)
|
|
|
2022
|
2021
|
Natural gas and liquids
sales
|
|
|
177,569
|
99,373
|
Realized losses on
derivatives
|
|
|
(10,443)
|
(3,901)
|
Processing and other
income
|
|
|
1,438
|
-
|
Net sales of purchased
natural gas
|
|
|
70
|
-
|
Royalty
expense
|
|
|
(16,297)
|
(5,087)
|
Operating
expense
|
|
|
(13,293)
|
(10,985)
|
Transportation
expense
|
|
|
(20,753)
|
(16,000)
|
Operating
netback
|
|
|
118,291
|
63,400
|
Non-GAAP Ratios
Adjusted Funds Flow per Share
Adjusted funds flow per share is derived by dividing adjusted
funds flow by the basic weighted average shares outstanding of the
Corporation. Management believes that adjusted funds flow per share
provides investors an indicator of funds generated from the
business that could be allocated to each shareholder's equity
position.
|
|
Three months
ended
March
31
|
($000, except as
otherwise indicated)
|
|
|
2022
|
2021
|
Adjusted funds
flow
|
|
|
108,878
|
53,978
|
Weighted average shares
outstanding (000)
|
|
|
190,829
|
188,113
|
Adjusted funds flow per
share ($/share)
|
|
|
0.57
|
0.29
|
Adjusted Funds Flow per BOE
Adjusted funds flow per boe is derived by dividing adjusted
funds flow by the total production in boe for the reporting
period. Adjusted funds flow per boe is a useful ratio that
allows users to compare the Corporation's adjusted funds flow
against other competitor corporations with different rates of
production.
|
|
Three months
ended
March
31
|
($000, except as
otherwise indicated)
|
|
|
2022
|
2021
|
Adjusted funds
flow
|
|
|
108,878
|
53,978
|
|
|
|
|
|
Total production
(boe/d)
|
|
|
52,946
|
49,819
|
Days in
period
|
|
|
90
|
90
|
Total production (000
boe)
|
|
|
4,765
|
4,484
|
Adjusted funds flow per
BOE ($/boe)
|
|
|
22.85
|
12.04
|
Operating netback per BOE
Operating netback per boe is derived by dividing each
component of the operating netback by the total production in boe
for the reporting period. Operating netback per boe provides
Management and users with a measure to compare the profitability of
field operations between companies, development areas and specific
wells against other competitor corporations with different rates of
production.
|
|
Three months
ended
March
31
|
($000, except as
otherwise indicated)
|
|
|
2022
|
2021
|
Operating
netback
|
|
|
118,291
|
63,400
|
|
|
|
|
|
Total production
(boe/d)
|
|
|
52,946
|
49,819
|
Days in
period
|
|
|
90
|
90
|
Total production (000
boe)
|
|
|
4,765
|
4,484
|
Operating
netback per BOE ($/boe)
|
|
|
24.81
|
14.14
|
Payout Ratio
Payout ratio is calculated by dividing net capital
expenditures by adjusted funds flow. Advantage uses payout ratio as
an indicator of the efficiency and liquidity of Advantage's
business by measuring its cash available after net capital
expenditures to settle outstanding debt and obligations and
potentially return capital to shareholders by paying dividends or
buying back common shares.
|
|
Three months
ended
March
31
|
($000, except as
otherwise indicated)
|
|
|
2022
|
2021
|
Net capital
expenditures
|
|
|
86,014
|
37,185
|
Adjusted funds
flow
|
|
|
108,878
|
53,978
|
Payout
ratio
|
|
|
0.8
|
0.7
|
Net Debt to Adjusted Funds Flow Ratio
Net debt to adjusted funds flow is calculated by dividing net
debt by adjusted fund flow for the previous four quarters. Net debt
to adjusted funds flow is a coverage ratio that provides Management
and users the ability to determine how long it would take the
Corporation to repay its bank indebtedness if it devoted all its
adjusted funds flow to debt repayment.
|
|
|
($000, except as
otherwise indicated)
|
|
|
March
31
2022
|
March
31
2021
|
Net Debt
|
|
|
136,673
|
212,912
|
Adjusted funds flow
(prior four quarters)
|
|
|
289,724
|
126,546
|
Net debt to adjusted
funds flow ratio
|
|
|
0.5
|
1.7
|
Capital Management
Measures
Working Capital
Working capital is a capital management financial measure
that provides Management and users with a measure of the
Corporation's short-term operating liquidity. By excluding short
term derivatives and the current portion of provision and other
liabilities, Management and users can determine if the
Corporation's energy operations are sufficient to cover the
short-term operating requirements. Working capital is not a
standardized measure and therefore may not be comparable with the
calculation of similar measures by other entities. Effective
March 31, 2022, the Corporation
reclassified deferred share units which were previously included in
trade and other accrued liabilities, to provisions and other
liabilities. Management determined that by reclassifying the
deferred share units to provisions and other liabilities, users can
better determine the Corporation's short-term operating
requirements. Comparative figures have been restated to reflect the
reclassification.
A summary of working capital as at March 31, 2022 and December 31, 2021 is as follows:
|
|
March
31
2022
|
December
31
2021
|
Cash and cash
equivalents
|
|
6,643
|
25,238
|
Trade and other
receivables
|
|
58,297
|
54,769
|
Prepaid expenses and
deposits
|
|
4,143
|
3,483
|
Trade and other accrued
liabilities
|
|
(88,198)
|
(76,625)
|
Working capital
surplus (deficit)
|
|
(19,115)
|
6,865
|
Net Debt
Net debt is a capital management financial measure that
provides Management and users with a measure to assess the
Corporation's liquidity. Net debt is not a standardized measure and
therefore may not be comparable with the calculation of similar
measures by other entities. Comparative figures have been restated
to reflect the reclassification of deferred share units in trade
and other accrued liabilities which affects net debt.
A summary of the reconciliation of net debt as at
March 31, 2022 and December 31, 2021 is as follows:
|
|
March
31
2022
|
December
31
2021
|
Bank indebtedness
(non-current) (note 12)
|
|
117,558
|
167,345
|
Working capital
(surplus) deficit
|
|
19,115
|
(6,865)
|
Net
debt
|
|
136,673
|
160,480
|
Supplementary Financial
Measures
Average Realized Prices
The Corporation discloses multiple average realized prices
within the MD&A (see "Commodity Prices and Marketing"). The
determination of these prices are as follows:
"Natural gas excluding derivatives" is comprised of natural
gas sales, as determined in accordance with IFRS, divided by the
Corporation's natural gas production.
"Natural gas including derivatives" is comprised of natural
gas sales, including realized gains (losses) on natural gas
derivatives, as determined in accordance with IFRS, divided by the
Corporation's natural gas production.
"Crude Oil" is comprised of crude oil sales, as determined in
accordance with IFRS, divided by the Corporation's crude oil
production.
"Condensate" is comprised of condensate sales, as determined
in accordance with IFRS, divided by the Corporation's condensate
production.
"NGLs" is comprised of NGLs sales, as determined in
accordance with IFRS, divided by the Corporation's NGLs
production.
"Total liquids excluding derivatives" is
comprised of crude oil, condensate and NGLs sales, as determined in
accordance with IFRS, divided by the Corporation's crude oil,
condensate and NGLs production.
"Total liquids including derivatives" is
comprised of crude oil, condensate and NGLs sales, including
realized gains (losses) on crude oil derivatives as determined in
accordance with IFRS, divided by the Corporation's crude oil,
condensate and NGLs production.
Dollars per BOE figures
Throughout the MD&A, the Corporation presents certain
financial figures, in accordance with IFRS, stated in dollars per
boe. These figures are determined by dividing the applicable
financial figure as prescribed under IFRS by the Corporation's
total production for the respective period. Below is a list of
figures which have been presented in the MD&A in $ per
boe:
- Cash finance expense per boe
- Depreciation expense per boe
- Finance expense per boe
- General and administrative expense per boe
- Natural gas and liquids sales per boe
- Operating expense per boe
- Realized losses on derivatives per boe
- Royalty expense per boe
- Net sales of purchased natural gas per boe
- Processing and other income per boe
- Share-based compensation expense per boe
- Transportation expense per bo
The following abbreviations used in this press release
have the meanings set forth below:
bbl
|
one
barrel
|
bbls
|
barrels
|
bbls/d
|
barrels per
day
|
boe
|
barrels of oil
equivalent of natural gas, on the basis of one barrel of oil or
NGLs for six thousand cubic feet of natural gas
|
boe/d
|
barrels of oil
equivalent of natural gas per day
|
mbbl
|
thousand
barrels
|
mboe
|
thousand barrels of
oil equivalent of natural gas
|
mcf
|
thousand cubic
feet
|
mcf/d
|
thousand cubic feet
per day
|
mcfe
|
thousand cubic feet
equivalent on the basis of six thousand cubic feet of natural gas
for one barrel of oil or NGLs
|
mmcf
|
million cubic
feet
|
mmcf/d
|
million cubic feet
per day
|
mmbtu
|
million British
thermal units
|
mmcfe/d
|
million cubic feet
equivalent per day
|
tcf
|
trillion cubic
feet
|
tcfe
|
trillion cubic feet
equivalent
|
Liquids
|
Includes NGLs,
condensate and crude oil
|
NGLs and
condensate
|
Natural Gas Liquids
as defined in National Instrument 51-101
|
Natural
Gas
|
Conventional Natural
Gas as defined in National Instrument 51-101
|
Crude
Oil
|
Light Crude Oil and
Medium Crude Oil as defined in National Instrument
51-101
|
SOURCE Advantage Energy Ltd.