Razor Energy Corp. (“Razor” or the “Company”) (TSXV: RZE) announces
its fourth quarter and year end 2020 financial and operating
results. Selected financial, operational and reserves information
is outlined below and should be read in conjunction with Razor’s
audited consolidated financial statements, management’s discussion
and analysis and annual information form (“AIF”) for the year ended
December 31, 2020 which are available on SEDAR at www.sedar.com and
the Company’s website www.razor-energy.com.
2020 HIGHLIGHTS
Operating
- Production during the year averaged
3,783 boe/d, representing a decrease of 14% in comparison to 2019
when production averaged 4,387 boe/d. Decreased production volumes
are largely due to reduced spending on well reactivations and
repairs as well as natural base declines.
- Razor focused on cost control on
all expenditures within its operations and recognized a 7% decrease
in total operating costs for 2020 when compared to 2019.
Capital
- Progressed the South Swan Hills
co-produced geothermal power generation project, which will be
capable of generating 21 MW of grid connected power, of which up to
6MW will be sustainable clean power generation.
Innovation
- Continued operation of six natural
gas-powered generators which reduced the Company's reliance on grid
electric power and resulted in savings of $2.3 million in
electricity costs during 2020.
- Razor implemented cost saving
measures by internalization of certain oilfield services through
its subsidiary, Blade Energy Services Corp. ("Blade"), which
provides services such as crude oil hauling, earthworks and
environmental services. Blade conducted $2.0 million of services on
behalf of Razor during 2020 (2019 - $2.3 million).
- The Company received approval from
the Alberta Energy Regulator to repurpose certain facilities in
Virginia Hills to become a Waste Management Component employing
bioremediation to treat hydrocarbon-impacted soils. This Soil
Treatment Facility will use naturally occurring microbes to digest
hydrocarbons in soils and will be integral to Razor’s Area Based
Closure operations in the Virginia Hills area. The facility is
anticipated to be operational in the second quarter of 2021.
2021 OUTLOOKRazor continues to
look forward and plan for the future despite 2020 proving to be one
of the most challenging years for commodity prices and energy
companies due to the COVID-19 pandemic. The Company remained
focused on its long-term sustainability and, subsequent to year
end, in February 2021 Razor secured an extension to its Term Loan
with Alberta Investment Management Corporation, for an amended
principal amount of $50.1 million. On February 16, 2021 a
subsidiary of Razor entered into a Term Loan with Arena Investors,
LP (the “Arena Term Loan”) for a principal amount of US$11.0
million (CAD$14.0 million).
The majority of the proceeds from the Arena Term
Loan will be used to invest over $8 million in 2021 on well
reactivations to provide over 1,000 boepd to the year’s production
levels. The balance of work is related to repairs and will be
accounted for as operating expenses. The well reactivation activity
started in February 2021 and will continue into 2022. Razor has an
extensive opportunity set of high-quality wells requiring
reactivation. In aggregate, the annual base decline of these wells
is anticipated to be consistent with the
Company’s current corporate decline of approximately 12
percent. In its history the
Company has reactivated over 60 wells adding
approximately 2,000 boepd and it expects
that this program will result in similar favorable
outcomes.
The Company continues to focus on cost control
on its operated properties and the stabilizing effect of reduced
operating costs in each area. Outside of the well reactivation
program, Razor will take a cautious and case-by-case approach to
spending in 2021 and into 2022, focusing on low risk, low
investment capital opportunities to increase field and corporate
netbacks.
CORPORATE SUSTAINABILITY, ENVIRONMENT
& GOVERNANCERazor is committed to a strong
corporate sustainability program.
ENVIRONMENT
GHG Emissions
- Razor operates a natural
gas-powered electricity generation program which allows the Company
to reduce its reliance on coal-biased grid electricity and has
reduced GHG emissions by 6,000 tCO2 annually.
- Once constructed, Razor's
co-produced geothermal power generation project will reduce GHG
emissions by up to 31,000 tCO2 annually.
- Razor has opted all
assets/facilities into Alberta’s Technology Innovation and
Emissions Reduction (TIER) program and, as such, has catalogued all
GHG sources and is committed to following or exceeding guidelines
for GHG reductions in its oil and gas operations.
Abandonment, Reclamation, and
Remediation
- Starting in 2020, Razor has opted
to participate in the Alberta Energy Regulators (“AER”) Area Based
Closure (“ABC”) program, to further reduce our footprint on the
environment. Planned work consists of well, facility and pipeline
abandonment, site remediation and reclamation. Razor’s liability
reduction target is $3.0 million in 2021.
- The Company has been successful in
obtaining approved applications under the Alberta Site
Rehabilitation Program (“SRP”) to assist with its abandonment and
reclamation activities. The total value of approved applications is
$1.5 million. Funds will be used primarily in Razor’s Chin Coulee
and Virginia Hills areas, progressing approximately 70 wells
towards reclamation certificates.
- In 2020, the Company settled $538
thousand of decommissioning obligations which included $198
thousand related to government grants earned for well site
rehabilitation through the SRP.
- Since inception, Razor has spent
$7.3 million on end-of-life activities, including deconstruction of
the Virginia Hills Production Complex, and received 18 reclamation
certificates from the AER which confirm that the land has been
reclaimed to its natural state in accordance with regulations.
- In addition to Razor’s annual
abandonment and reclamation program, Razor also paid $292 thousand
in 2020 into the industry-wide Alberta Orphan Well Fund.
GOVERNANCE
- Razor is committed to diversity and
equality in the workplace.
- Razor is committed to conducting
our operations safely and with proper policies, procedures,
standards, training, equipment and emergency response procedures in
accordance with all government regulations and industry
practices.
- Razor maintains a complete series
of documented Corporate policies and requires an annual review and
sign off from all employees, consultants, management, executive and
directors. Corporate policies include code of conduct, corporate
disclosure and whistleblower guidance.
NEAR AND MEDIUM-TERM
OBJECTIVES
- Reduce net debt through continued
optimization of capital spending and increased efficiencies to
reduce operating and general and administrative costs.
- Actively identify and consider
business combinations with other oil and gas producers as well as
service companies.
- Continued focus on implementing a
technically viable and commercially sustainable solution to recover
geothermal waste heat to power.
- Further analyze ancillary
opportunities including power generating projects, oil blending,
and services integration.
SELECT QUARTERLY AND ANNUAL
HIGHLIGHTSThe following tables summarizes key financial
and operating highlights associated with the Company’s financial
performance.
|
Three Months Ended Dec 31, |
|
Twelve Months Ended Dec 31, |
|
($000's, except for per share amounts and production) |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Production |
|
|
|
|
Crude oil (bbl/d) |
2,023 |
|
2,839 |
|
2,176 |
|
2,712 |
|
Natural gas (mcf/d) 1 |
5,165 |
|
4,962 |
|
4,695 |
|
4,635 |
|
NGL (boe/d) |
701 |
|
1,011 |
|
824 |
|
903 |
|
Total (boe/d) |
3,585 |
|
4,677 |
|
3,783 |
|
4,387 |
|
Sales volumes |
|
|
|
|
Crude oil (bbl/d) |
2,024 |
|
2,862 |
|
2,179 |
|
2,783 |
|
Natural gas (mcf/d) |
4,461 |
|
3,563 |
|
3,767 |
|
3,501 |
|
NGL (bbl/d) |
701 |
|
1,011 |
|
824 |
|
903 |
|
Total (boe/d) |
3,469 |
|
4,467 |
|
3,631 |
|
4,269 |
|
Oil inventory volumes (bbls) |
8,203 |
|
9,251 |
|
8,203 |
|
9,251 |
|
Revenue |
|
|
|
|
Oil and NGLs sales |
11,011 |
|
20,013 |
|
42,728 |
|
78,365 |
|
Natural gas sales |
1,048 |
|
774 |
|
3,126 |
|
2,438 |
|
Sale of commodities purchased from third parties 4 |
- |
|
(25 |
) |
- |
|
8,551 |
|
Blending and processing income |
1,456 |
|
1,874 |
|
5,416 |
|
8,842 |
|
Other revenue |
761 |
|
119 |
|
1,677 |
|
1,976 |
|
Total
revenue |
14,276 |
|
22,755 |
|
52,947 |
|
100,172 |
|
Cash flows from operating
activities |
356 |
|
3,894 |
|
4,193 |
|
16,210 |
|
Per share -basic and diluted |
0.02 |
|
0.19 |
|
0.20 |
|
0.96 |
|
Funds flow 2 |
(126 |
) |
9 |
|
3,798 |
|
7,691 |
|
Per share -basic and diluted |
(0.01 |
) |
- |
|
0.18 |
|
0.45 |
|
Adjusted funds flow 2 |
(120 |
) |
277 |
|
4,138 |
|
7,931 |
|
Per share -basic and diluted |
(0.01 |
) |
0.01 |
|
0.20 |
|
0.47 |
|
Net (loss) |
(6,048 |
) |
(11,853 |
) |
(46,197 |
) |
(29,573 |
) |
Per share - basic and diluted |
(0.29 |
) |
(0.56 |
) |
(2.19 |
) |
(1.75 |
) |
Dividend paid |
- |
|
790 |
|
263 |
|
2,564 |
|
Dividends per share |
- |
|
0.04 |
|
0.01 |
|
0.15 |
|
Weighted average number of shares outstanding (basic and
diluted) |
21,064 |
|
21,057 |
|
21,064 |
|
16,926 |
|
Gross Capital expenditures |
428 |
|
2,378 |
|
1,929 |
|
13,590 |
|
Government Grants |
- |
|
(1,669 |
) |
(1,121 |
) |
(6,105 |
|
Netback
($/boe) |
|
|
|
|
|
|
Oil and gas sales 3 |
36.56 |
|
48.31 |
|
33.12 |
|
50.46 |
|
Royalties |
(4.44 |
) |
(10.85 |
) |
(3.19 |
) |
(8.86 |
) |
Operating expenses |
(30.44 |
) |
(30.05 |
) |
(27.77 |
) |
(32.32 |
) |
Transportation and treating |
(2.93 |
) |
(2.38 |
) |
(2.16 |
) |
(2.25 |
) |
Operating netback 2 |
(1.25 |
) |
5.03 |
|
0.00 |
|
7.03 |
|
Gain/ (Loss) on sale of commodities purchased from third
parties4 |
- |
|
(0.05 |
) |
- |
|
(0.01 |
) |
Net blending and processing income 2 |
2.65 |
|
2.76 |
|
2.89 |
|
3.40 |
|
Realized loss on commodity contracts settlement 3 |
0.12 |
|
0.46 |
|
(1.04 |
) |
(1.64 |
) |
Other revenue and income |
2.93 |
|
0.28 |
|
4.80 |
|
1.23 |
|
General and administrative |
(3.14 |
) |
(4.54 |
) |
(3.26 |
) |
(3.95 |
) |
Other expenses |
0.08 |
|
(3.14 |
) |
0.02 |
|
(0.84 |
) |
Impairment |
0.10 |
|
(9.30 |
) |
(17.87 |
) |
(2.50 |
) |
Acquisition and transaction costs |
(1.02 |
) |
- |
|
(0.24 |
) |
(0.13 |
) |
Interest |
(7.04 |
) |
(2.89 |
) |
(4.78 |
) |
(3.06 |
) |
Corporate netback 2 |
(6.57 |
) |
(11.40 |
) |
(19.48 |
) |
(0.47 |
) |
|
|
|
|
|
|
|
|
|
1) Natural gas production includes internally
consumed natural gas primarily used in power generation.2) Refer to
"Non-IFRS measures".3) Excludes the effects of financial risk
management contracts but includes the effects of fixed price
physical delivery contracts.4) From time to time, Razor purchases
commodity products from third parties to fulfill sales commitments,
and subsequently sells these products to its customers.
SELECT QUARTERLY AND ANNUAL HIGHLIGHTS
(continued)
|
December 31, |
|
December 31, |
|
($000's, except for share amounts) |
2020 |
|
2019 |
|
Total assets |
163,709 |
|
189,158 |
|
Cash |
1,098 |
|
1,905 |
|
Long-term debt
(principal) |
50,145 |
|
45,874 |
|
Minimum lease obligation |
3,469 |
|
5,329 |
|
Net debt 1 |
72,789 |
|
66,911 |
|
Number
of shares outstanding |
21,064,466 |
|
21,064,466 |
|
|
|
|
|
|
1) Refer to "Non-IFRS measures.”
2020 YEAR-END RESERVES
For 2020, the net present value of before tax
cash flows discounted at 10% ("NPV10") for each reserve category
disclosed below includes all abandonment, decommissioning and
reclamation costs, and inactive well costs totaling $65.5
million.
Reserves Summary1 |
December 31, |
($000's unless otherwise stated) |
2020 |
|
2019 |
|
Proved developed producing (Mboe) |
7,416 |
|
11,144 |
|
Total Proved (Mboe) |
13,525 |
|
16,258 |
|
Total Proved plus probable (Mboe) |
17,319 |
|
20,750 |
|
Proved developed producing - NPV101 |
26,553 |
|
116,832 |
|
Proved developed non-producing - NPV101 |
49,199 |
|
39,409 |
|
Total Proved - NPV101 |
95,508 |
|
189,257 |
|
Total Proved plus probable - NPV101 |
133,216 |
|
242,719 |
|
|
|
|
|
|
1) The table summarizes the data contained in an
independent report of Razor’s gross reserves, as evaluated by
Sproule, qualified reserves evaluators, dated February 19, 2021.
The figures have been prepared in accordance with the standards
contained in the COGEH and the reserve definitions contained in
National Instrument 51-101-Standards of Disclosure for Oil and Gas
Activities. Gross reserves means the total working interest
(operating and non-operating) share of remaining recoverable
reserves owned by Razor before deductions of royalties payable to
others and without including any royalty interests owned by Razor.
Additional reserve information is included in the AIF.2) NPV 10 is
net present value of before tax cash flows discounted at 10%.
OPERATIONAL
UPDATE
During the fourth quarter of 2020, the Company
realized an operating loss of ($1.25)/boe, down from an operating
netback of $5.03/boe in the fourth quarter of 2019. Realized prices
decreased by $11.75/boe, however, the impact of decreased prices
was offset by royalty decreases of $6.41/boe due to significantly
lower oil prices and a slight increase in operating expenses of
$0.39/boe in comparison to the same period as in 2019. For the year
ended December 31, 2020, the operating netback was $0/boe compared
to $7.03/boe for the same period in 2019 mainly as a result of
lower realized prices which were down 34%, partially offset by 64%
lower royalty and 14% lower operating expenses.
Royalty rates averaged 12% in the fourth quarter
of 2020 as compared to 22% for the same period in 2019. This
decrease in royalties is mostly due to the decrease in commodity
prices and production volumes. For the year ended December 31,
2020, royalties averaged 10%, down 18% from the same period last
year, mostly due to lower commodity prices and production
volumes.
Operating expenses increased 1%, on a per boe
basis, in the fourth quarter of 2020 compared to the same period in
2019 and were down $2.9 million on a total dollar basis. The
Company had limited its well intervention activity in response to
the weak commodity price environment. Workovers and facility
expenses averaged $2.73/boe in the fourth quarter of 2020 compared
to $2.76/boe in the fourth quarter of 2019, while fuel and
electricity costs averaged $9.11/boe in the fourth quarter 2020 as
compared to $9.45/boe in 2019.
Other revenue and income received during the
twelve months ended December 31, 2020 was $6.6 million which
primarily consisted of $0.8 million of road use, $0.2 million of
disposal revenue, $0.2 SRP grant income and $4.7 million of
non-recurring insurance proceeds related to environmental clean-up
costs as a result of an injection line failure in 2019 as well as
proceeds from business interruption insurance related to a
non-operated pipeline being offline for repairs in 2019.During
2020, the Company received funds from Canada Emergency Wage Subsidy
of $1.5 million. These grants were recognized as a reduction to
general and administrative expense of $0.9 million and a reduction
of operating expenses of $0.6 million.
Razor has focused on cost control on all
expenditures within its operations by implementing a procurement
system, internalizing field services and producing its own
electricity.
The top cost drivers consisting of fuel and
electricity, labour, property taxes, facility repairs, chemicals
and accounted for 67% of total operating expenses in the fourth
quarter of 2020 (Q4 2019 – 69%). For the year ended 2020 these same
top cost drivers accounted for 70% of total operating expenses
(2019 – 68%).
The cost of electricity and fuel decreased 25%
in Q4 2020 as compared to the same quarter of last year mostly due
a 41% decrease in consumption, 3% decrease in average electricity
pool prices and a decreased reliance on non-operated fuel gas and
lower production levels.
For the year ended 2020, the cost of electricity
and fuel decreased 14% as compared to the same period of last year,
with average electricity pool prices decreasing by 19% and with
usage decreasing by 11%. The Company continues to operate its
natural gas-powered generation 9 MW facility which reduced its
reliance on grid electric power and resulted in savings of $0.5
million in Q4 2020 (Q3 2019 - $0.7 million). For the year ended
2020, the Company achieved electricity savings of $2.3 million
(2019 - $2.2 million).
CAPITAL
PROGRAM
During the fourth quarter of 2020, Razor
invested $0.2 million on its South Swan Hills Co-Produced
Geothermal Natural Gas power project. Since inception, Razor
has received $5.9 million in government grants to support this
power generation project. The Company projects the capital cost of
the project to be $37 million, which will generate 21 MW of grid
connected power, of which up to 6MW will emerge from sustainable
clean power generation.
During 2020, due to the volatile commodity price
environment, the Company did not initiate any projects related to
finding and development capital and minimal capital reactivations
were conducted during this period.
Operated capital investment for the year ended
2020 consisted primarily of $1.1 million on the Razor’s Co-Produced
Geothermal Natural Gas power project, $0.5 million on field
equipment and a variety of project cost adjustments from prior
periods, offset by government grants of $1.1 million.
RAZOR'S RESPONSE TO
COVID-19
Razor is dedicated to ensuring the health,
safety and security of its employees, contractors, partners and
residents within all of its operating areas and communities. The
Company has implemented business procedures that comply with
Alberta Health Guidelines to protect the well-being of all
stakeholders. Razor has successfully transitioned the majority of
its corporate staff required for operational effectiveness back to
its head office and the field sites continue to take site specific
precautionary measures related to COVID-19.
ABOUT RAZOR
Razor is a publicly traded junior oil and gas
development and production company headquartered in Calgary,
Alberta, concentrated on acquiring, and subsequently enhancing, and
producing oil and gas from properties primarily in Alberta. The
Company is led by experienced management and a strong, committed
Board of Directors, with a long-term vision of growth focused on
efficiency and cost control in all areas of the business. Razor
currently trades on TSX Venture Exchange under the ticker
“RZE.V”.
For additional
information
please
contact: |
Doug BaileyPresident and Chief Executive Officer |
|
Kevin BraunChief Financial Officer |
|
|
|
Razor Energy Corp.800, 500-5th Ave SW Calgary, Alberta T2P
3L5Telephone: (403)
262-0242www.razor-energy.com |
|
|
|
|
|
READER
ADVISORIES
FORWARD-LOOKING STATEMENTS:
This press release may contain certain statements that may be
deemed to be forward-looking statements. Such statements relate to
possible future events, including, but not limited to, the
Company’s ability to continue to operate in accordance with
developing public health efforts to contain COVID-19, the Company’s
objectives, including the Company’s capital program and other
activities, including ancillary opportunities such as power
generation, oil blending and services integration, restarting
wells, future rates of production, anticipated abandonment,
reclamation and remediation costs for 2021, possible business
combination transactions, assistance from government programs
including under the SRP and Canadian Emergency Wage Subsidy,
commitments under the ABC program and energy management program and
other environmental, social and governance initiatives. 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”, “believe”, "expect", “plan”, “estimate”, “potential”,
“will”, “should”, “continue”, “may”, “objective” and similar
expressions. The forward-looking statements are based on certain
key expectations and assumptions made by the Company, including but
not limited to expectations and assumptions concerning the
availability of capital, current legislation, receipt of required
regulatory approvals, the timely performance by third-parties of
contractual obligation, the success of future drilling and
development activities, the performance of existing wells, the
performance of new wells, the Company’s growth strategy, general
economic conditions, availability of required equipment and
services prevailing commodity prices, price volatility, price
differentials and the actual prices received for the Company's
products. Although the Company believes that the expectations and
assumptions on which the forward-looking statements are based are
reasonable, undue reliance should not be placed on the
forward-looking statements because the Company can give no
assurance that they will prove to be correct. Since forward-looking
statements address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risks. These include, but are not
limited to, risks associated with the oil and gas industry and
geothermal electricity projects in general (e.g., operational risks
in development, exploration and production; delays or changes in
plans with respect to exploration or development projects or
capital expenditures; variability in geothermal resources; as the
uncertainty of reserve estimates; the uncertainty of estimates and
projections relating to production, costs and expenses, and health,
safety and environmental risks), electricity and commodity price
and exchange rate fluctuations, changes in legislation affecting
the oil and gas and geothermal industries and uncertainties
resulting from potential delays or changes in plans with respect to
exploration or development projects or capital expenditures. In
addition, the Company cautions that COVID-19 may continue to have a
material adverse effect on global economic activity and worldwide
demand for certain commodities, including crude oil, natural gas
and NGL, and may continue to result in volatility and disruption to
global supply chains, operations, mobility of people and the
financial markets, which could continue to affect commodity prices,
interest rates, credit ratings, credit risk, inflation, business,
financial conditions, results of operations and other factors
relevant to the Company. The duration of the current commodity
price volatility is uncertain. Please refer to the risk factors
identified in the annual information form and management discussion
and analysis of the Company which are available on SEDAR at
www.sedar.com. The forward-looking statements contained in this
press release are made as of the date hereof and the Company
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws.
This press release contains future-oriented
financial information and financial outlook information
(collectively, "FOFI") about Razor's prospective results of
operations, sales volumes, including sale of inventory volumes,
production and production efficiency, balance sheet, capital
spending, cost and net debt reductions, operating efficiencies,
investment infrastructure and components thereof, all of which are
subject to the same assumptions, risk factors, limitations, and
qualifications as a set forth in the above paragraph. FOFI
contained in this document was approved by management as of the
date of this document and was provided for the purpose of providing
further information about Razor's future business operations. Razor
disclaims any intention or obligation to update or revise any FOFI
contained in this document, whether as a result of new information,
future events or otherwise, unless required pursuant to applicable
law. Readers are cautioned that the FOFI contained in this document
should not be used for purposes other than for which it is
disclosed herein.
NON-IFRS MEASURES: This press
release contains the terms "funds flow", "adjusted funds flow",
"net blending and processing income", "net debt", "income (loss) on
sale of commodities purchased from third parties", "operating
netback" and "corporate netback", which do not have standardized
meanings prescribed by International Financial Reporting Standards
("IFRS") and therefore may not be comparable with the calculation
of similar measures by other companies. Funds flow represents cash
generated from operating activities before changes in non-cash
working capital. Adjusted funds flow represents cash flow from
operating activities before changes in non-cash working capital and
decommissioning obligation expenditures incurred. Management uses
funds flow and adjusted funds flow to analyze operating performance
and leverage, and considers funds flow and adjusted funds flow from
operating activities to be key measures as it demonstrates the
Company's ability to generate cash necessary to fund future capital
investments and repay debt. Net blending and processing income is
calculated by adding blending and processing income and deducting
blending and processing expense. Net debt is calculated as the sum
of the long-term debt and lease obligations, less working capital
(or plus working capital deficiency), with working capital
excluding mark-to-market risk management contracts. Razor believes
that net debt is a useful supplemental measure of the total amount
of current and long-term debt of the Company. Income (loss) on sale
of commodities purchased from third parties is calculated by adding
sales of commodities purchased from third parties and deducting
commodities purchased from third parties. Income (loss) on sale of
commodities purchased from third parties may not be comparable to
similar measures used by other companies. Operating netback equals
total petroleum and natural gas sales less royalties and operating
costs calculated on a boe basis. Razor considers operating netback
as an important measure to evaluate its operational performance as
it demonstrates its field level profitability relative to current
commodity prices. Corporate netback is calculated by deducting
general & administration, acquisition and transaction costs,
and interest from operating netback. Razor considers corporate
netback as an important measure to evaluate its overall corporate
performance.
ADVISORY PRODUCTION
INFORMATION: Unless otherwise indicated herein, all
production information presented herein is presented on a gross
basis, which is the Company's working interest prior to deduction
of royalties and without including any royalty interests.
BARRELS OF OIL EQUIVALENT: The
term "boe" or barrels of oil equivalent may be misleading,
particularly if used in isolation. A boe conversion ratio of six
thousand cubic feet of natural gas to one barrel of oil equivalent
(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. Additionally, 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 ratio of 6:1 may be misleading as an
indication of value.
Neither the
TSX
Venture
Exchange
nor its
Regulation
Services
Provider
(as that
term is
defined in the
policies of the
TSX
Venture
Exchange)
accepts
responsibility for the adequacy
or accuracy of this
news release.
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