Bonterra Energy Corp. Announces First Quarter 2014 Results
May 14 2014 - 5:35PM
Marketwired Canada
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED
STATES.
Bonterra Energy Corp. (www.bonterraenergy.com) (TSX:BNE) is pleased to announce
its operating and financial results for the three months ended March 31, 2014.
The related unaudited condensed financial statements and notes, as well as
management's discussion and analysis, are available on the System for Electronic
Document Analysis and Retrieval (SEDAR) at www.sedar.com and on Bonterra's
website at www.bonterraenergy.com.
HIGHLIGHTS
As at and for the three month
periods ended March 31, December 31, March 31,
($ 000s except $ per share) 2014 2013 2013 (1)
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FINANCIAL
Revenue - realized oil and gas
sales 82,521 70,917 66,468
Funds flow (4) 54,414 43,359 40,726
Per share - basic 1.73 1.39 1.47
Per share - diluted 1.72 1.38 1.46
Payout ratio 50% 61% 53%
Cash flow from operations 49,094 47,772 40,726
Per share - basic 1.56 1.53 1.47
Per share - diluted 1.55 1.52 1.46
Payout ratio 56% 56% 53%
Cash dividends per share 0.87 0.85 0.80
Net earnings 23,041 15,254 12,695
Per share - basic 0.73 0.50 0.46
Per share - diluted 0.73 0.49 0.46
Capital expenditures and
acquisitions, net of
dispositions 54,236 25,965 39,506 (2)
Total assets 1,043,822 1,000,531 1,016,594
Working capital deficiency 62,488 35,895 31,519
Long-term debt 143,103 156,764 189,509
Shareholders' equity 678,224 667,641 658,062
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OPERATIONS
Oil - barrels per day 7,567 7,964 7,459
- average price ($
per barrel) 96.53 80.88 84.20
NGLs - barrels per day 721 691 732
- average price ($
per barrel) 67.81 56.48 53.75
Natural gas - MCF per day 22,307 22,802 22,176
- average price ($
per MCF) 6.16 3.85 3.21
Total barrels of oil equivalent
per day (BOE) (3) 12,006 12,456 11,887
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(1) Quarterly figures for Q1 2013 include the results of Spartan Oil Corp.
(Spartan) for the period of January 25, 2013 to March 31, 2013. Production
includes 65 days for Spartan and 90 days for Bonterra.
(2) Includes the Spartan acquisition that closed on January 25, 2013 that
included $10,000,000 of acquired cash that reduced capital expenditures from
$49,506,000.
(3) BOE may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 MCF: 1 bbl is based on an energy conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
(4) Funds flow is not a recognized measure under IFRS. For these purposes,
the Company defines funds flow as funds provided by operations including
proceeds from sale of investments and investment income received excluding
the effects of changes in non-cash working capital items and decommissioning
expenditures.
Q1 2014 HIGHLIGHTS
-- Production averaged 12,006 BOE per day for Q1 2014, with an exit rate at
March 31, 2014 of 13,100 BOE per day;
-- Generated record funds flow of $54.4 million ($1.73 per share) in Q1
2014 compared to $40.7 million ($1.47 per share) in Q1 2013 and $43.4
million ($1.39 per share) in Q4 2013;
-- Average Canadian dollar realized commodity prices were: crude oil $96.53
per barrel; natural gas liquids $67.81 per barrel and natural gas $6.16
per mcf;
-- Operating costs (excluding a non-recurring item) for Q1 2014 were $12.89
per BOE compared to $12.92 per BOE for Q1 2013 and $12.11 per BOE for Q4
2013;
-- Corporate netback increased to $50.37 per BOE compared to $37.76 per BOE
in Q1 2013 and $37.84 per BOE in Q4 2013;
-- Increased funds flow by approximately $10.2 million due to higher
realized netback compared to budget;
-- Paid out $0.87 per share in cash dividends in Q1 2014 compared to $0.80
in Q1 2013 and $0.85 in Q4 2013. This represents a payout ratio of 50%
in Q1 2014 on a funds flow basis which is the low end of the Company's
payout ratio guidance;
-- The Company's net debt to cash flow ratio was 1.05 to 1 times; and
-- Drilled 23 gross (17.2 net) horizontal wells with a 100 percent success
rate.
OPERATIONS
Bonterra spent $55,236,000 on its capital program, which is approximately 45
percent of the Company's anticipated capital program for 2014 primarily on 23
gross (17.2 net) wells. Currently, 37 gross (36.3 net) operated wells and 19
gross (4.7 net) non-operated horizontal wells are planned for 2014 in the
Pembina Cardium area, of which 26 gross (25.5 net) wells will be drilled in the
Carnwood area. Remaining capital will be directed to upgrading facilities,
compression and pipelines within Bonterra's Cardium land base.
The Company has scheduled six (5.9 net) drill locations to maintain its capital
drilling program through Q2 2014. This activity or other capital activities are
not usually possible in the second quarter because of spring break-up road bans
that temporarily prevents the Company from continuing its capital development
program. The drill locations selected for Q2 2014 are where existing road and
facility infrastructure is in place allowing the Company to drill, complete and
tie-in wells during this normal period of inactivity.
As the Company's operations continue to grow, Bonterra maintains its focus on
ensuring it has the necessary infrastructure in place to accommodate new
production. The Company has already increased its battery treating capacity in
the Carnwood area to 5,000 barrels of oil per day. In addition in April 2014 the
Company reactivated a wholly owned gas plant in the Keystone area. This gas
plant is expected to reduce operating costs and increase gas handling capacity
as it will allow the Company to redirect gas production from the Carnwood area
to this plant.
With the remaining 2014 drilling program and the March 31, 2014 exit rate of
13,100 BOE per day the Company is on track to reach or exceed its annual average
production guidance of 12,400 to 12,700 BOE per day.
FINANCIAL
Oil and natural gas prices continued to increase during the first quarter of
2014. The Company's average realized price for crude oil was $96.53 per barrel
in Q1 2014, an increase of 19 percent over the fourth quarter of 2013 and an
increase of 15 percent over the first quarter of 2013. Natural gas prices
averaged $6.16 per mcf for Q1 2014, $3.85 per mcf for Q4 2013 and $3.21 per mcf
for Q1 2013. As a result of this improved price environment, revenue and cash
flow from operations for the first three months of 2014 increased 24 percent and
21 percent, respectively, over the same period in 2013.
The Company's netback of $50.37 per BOE for Q1 2014 represents an increase of 33
percent over Q1 2013 and a 33 percent increase over Q4 2013.
Bonterra has maintained its focus on balance sheet strength and conservative
financial management. The Company believes it is vital to maintain its net debt
to cash flow ratio in the 1 to 1 to 1.5 to 1 times range. At March 31, 2014, the
Company was well within its guidance at 1.05 to 1 times and the Company will
continue to closely monitor this ratio by managing its cash flow, capital
expenditure ranges and dividend payment over the year to ensure that it remains
within its targeted guidance for the full year 2014.
OUTLOOK
Bonterra is very well-positioned for continued improvements in operational
performance and results well into the future. It has one of the largest
inventories of drilling locations in the industry. The Company looks forward to
maintaining its focus on the long-term development of its extensive and
high-quality Cardium assets and in the near-term, will execute on the Company's
highest economic return opportunities to maximize returns and enhance
shareholder value.
If production volumes and funds flow continue to increase the Board and
Management will give consideration to increasing the dividend, increasing
capital expenditures or reducing the debt or a combination of these options. The
Board and Management will continue to monitor the best combination of options to
increase shareholder value over the long term.
Bonterra Energy Corp. is a conventional oil and gas corporation with operations
in Alberta, Saskatchewan and British Columbia. The shares are listed on The
Toronto Stock Exchange under the symbol "BNE".
Cautionary Statement
This summarized news release should not be considered a suitable source of
information for readers who are unfamiliar with Bonterra Energy Corp. and should
not be considered in any way as a substitute for reading the full report.
For the full report, please go to www.bonterraenergy.com
Use of Non-IFRS Financial Measures
Throughout this press release, the Company uses the terms "payout ratio", "cash
netback" and "net debt" to analyze operating performance, which are not
standardized measures recognized under IFRS and do not have a standardized
meaning prescribed by IFRS. These measures are commonly used in the oil and gas
industry and are considered informative by management, shareholders and
analysts. These measures may differ from those made by other companies and
accordingly may not be comparable to such measures as reported by other
companies.
The Company calculates payout ratio by dividing cash dividends paid to
shareholders by cash flow from operating activities, both of which are measures
prescribed by IFRS which appear on our statements of cash flows. We calculate
cash netback by dividing various financial statement items as determined by IFRS
by total production for the period on a barrel of oil equivalent basis.
Frequently recurring terms
Bonterra uses the following frequently recurring terms in this press release:
"WTI" refers to West Texas Intermediate, a grade of light sweet crude oil used
as benchmark pricing in the United States; "MSW Stream Index" refers to the
mixed sweet blend that is the benchmark price for conventionally produced light
sweet crude oil in Western Canada; "bbl" refers to barrel; "NGL" refers to
Natural gas liquids; "MCF" refers to thousand cubic feet; "MMBTU" refers to
million British Thermal Units; and "BOE" refers to barrels of oil equivalent.
Disclosure provided herein in respect of a BOE may be misleading, particularly
if used in isolation. A BOE conversion ratio of 6 MCF: 1 bbl is based on an
energy conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.
Numerical Amounts
The reporting and the functional currency of the Company is the Canadian dollar.
Forward-Looking Information
Certain statements contained in this press release include statements which
contain words such as "anticipate", "could", "should", "expect", "seek", "may",
"intend", "likely", "will", "believe" and similar expressions, relating to
matters that are not historical facts, and such statements of our beliefs,
intentions and expectations about development, results and events which will or
may occur in the future, constitute "forward-looking information" within the
meaning of applicable Canadian securities legislation and are based on certain
assumptions and analysis made by us derived from our experience and perceptions.
Forward-looking information in this press release includes, but is not limited
to: expected cash provided by continuing operations; cash dividends; future
capital expenditures, including the amount and nature thereof; oil and natural
gas prices and demand; expansion and other development trends of the oil and gas
industry; business strategy and outlook; expansion and growth of our business
and operations; and maintenance of existing customer, supplier and partner
relationships; supply channels; accounting policies; credit risks; and other
such matters.
All such forward-looking information is based on certain assumptions and
analyses made by us in light of our experience and perception of historical
trends, current conditions and expected future developments, as well as other
factors we believe are appropriate in the circumstances. The risks,
uncertainties, and assumptions are difficult to predict and may affect
operations, and may include, without limitation: foreign exchange fluctuations;
equipment and labour shortages and inflationary costs; general economic
conditions; industry conditions; changes in applicable environmental, taxation
and other laws and regulations as well as how such laws and regulations are
interpreted and enforced; the ability of oil and natural gas companies to raise
capital; the effect of weather conditions on operations and facilities; the
existence of operating risks; volatility of oil and natural gas prices; oil and
gas product supply and demand; risks inherent in the ability to generate
sufficient cash flow from operations to meet current and future obligations;
increased competition; stock market volatility; opportunities available to or
pursued by us; and other factors, many of which are beyond our control. The
foregoing factors are not exhaustive.
Actual results, performance or achievements could differ materially from those
expressed in, or implied by, this forward-looking information and, accordingly,
no assurance can be given that any of the events anticipated by the
forward-looking information will transpire or occur, or if any of them do, what
benefits will be derived there from. Except as required by law, Bonterra
disclaims any intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events or otherwise.
The forward-looking information contained herein is expressly qualified by this
cautionary statement.
The TSX does not accept responsibility for the accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Bonterra Energy Corp.
George F. Fink
CEO and Chairman of the Board
(403) 262-5307
Bonterra Energy Corp.
Robb D. Thompson
CFO and Secretary
(403) 262-5307
(403) 265-7488 (FAX)
info@bonterraenergy.com
www.bonterraenergy.com
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