Coastal Energy Announces 2012 Year End Financial Results & Operations Update
March 28 2013 - 8:30AM
Coastal Energy Company (the "Company" or "Coastal Energy")
(TSX:CEN) (AIM:CEO), an independent exploration and production
company with assets in Southeast Asia, announces the financial
results for the year ended December 31, 2012. The functional and
reporting currency of the Company is the United States dollar.
2012 Financial Highlights
- Total Company production increased to 21,373 boe/d in the
fourth quarter of 2012 from 14,508 boe/d in the same period last
year. Year over year offshore production was bolstered by the
inclusion of a full quarter of production at the Bua Ban North A
platform. Sequential quarterly offshore production was impacted
downwardly in the fourth quarter due to a production facilities
swap out at Bua Ban North as well as downtime at the Bua Ban North
B platform while the second rig was mobilized to that location in
December. Average onshore production for the fourth quarter of 2012
was 2,419 boe/d compared to 1,122 boe/d in 2011. Total company
production for the full year 2012 increased to 21,912 boe/d, a 90%
increase from 2011 levels of 11,540 boe/d.
- EBITDAX for the full year of 2012 was $494.9 million, 145%
higher than the $201.7 million recorded in 2011. Revenue and
EBITDAX were driven higher by increased production and commodity
prices. Crude oil inventory was 503,594 barrels at year end, the
revenue from which will be recognized in 2013.
- The Company reported fully diluted EPS of $1.92, a 368%
increase from 2011 fully diluted EPS of $0.41.
- The Company reported fully diluted CFPS of $3.27, a 101%
increase from 2011 fully diluted CFPS of $1.63.
- Note: Per share calculations use weighted average fully diluted
shares outstanding for the period
- The Company released the results of its third-party reserve
evaluation report prepared by RPS Energy, Ltd. dated March 20, 2013
(effective date December 31, 2012). The Company reported
significant gains in its 1P, 2P and 3P reserve bases, with
volumetric increases of 9%, 40% and 78%, respectively. The
Company's 1P, 2P and 3P NAVs also increased significantly, rising
by 21%, 43% and 62%, respectively.
|
As of December 31, 2012
(mmboe) |
As of December 31, 2011
(mmboe) |
% Change |
After-Tax NPV 2012
(US$MM) |
After-Tax NPV 2011
(US$MM) |
% Change |
After-Tax NPV per Share 2012 (US$) |
Proved |
|
|
|
|
|
|
|
Offshore |
68.8 |
62.5 |
10% |
$1,832.1 |
$1,491.7 |
23% |
$15.64 |
Onshore |
7.3 |
7.4 |
-1% |
$120.5 |
$126.5 |
-5% |
$1.03 |
Total
1P |
76.1 |
69.9 |
9% |
$1,952.6 |
$1,618.2 |
21% |
$16.67 |
Proved + Probable |
|
|
|
|
|
|
|
Offshore |
120.4 |
80.0 |
51% |
$2,475.2 |
$1,668.0 |
48% |
$21.13 |
Onshore |
23.9 |
22.9 |
4% |
$237.9 |
$230.7 |
3% |
$2.03 |
Total
2P |
144.3 |
102.9 |
40% |
$2,713.1 |
$1,898.7 |
43% |
$23.16 |
Proved + Probable +
Possible |
|
|
|
|
|
|
|
Offshore |
168.5 |
87.1 |
93% |
$2,919.0 |
$1,742.0 |
68% |
$24.92 |
Onshore |
27.6 |
22.9 |
21% |
$275.9 |
$230.7 |
20% |
$2.36 |
Total
3P |
196.1 |
110.0 |
78% |
$3,194.9 |
$1,972.7 |
62% |
$27.27 |
|
Note: Reserve figures are shown
as net working interest before royalties (Thailand royalty regime
is discussed in the MD&A of the Company's Annual Report dated
December 31, 2012). After-tax NPV figures are defined as future net
revenues discounted at 10%. Reserve numbers taken from the
Company's competent person's report prepared by RPS Energy Ltd.
dated as of December 31, 2012 (prepared in accordance with NI
51-101 and the COGE Handbook) which may be found on the Company's
website at www.coastalenergy.com. Per share values are based
on fully diluted shares outstanding as of December 31, 2012 |
Q1 2013 Operations Update
The Company continued its development program at Bua Ban North
and Songkhla A and also completed its pilot hydraulic fracturing
program at Bua Ban South during the first quarter.
Bua Ban North B
The Company drilled a total of four development wells and one
water injection well at Bua Ban North B during the first quarter.
The Company has completed two horizontal wells with new "swelling
packers" which are expected to minimize water production and
increase ultimate recovery. This new completion methodology takes
longer to initially come onstream than previous methods, however,
provides greater long term benefits for production. One of these
wells is currently producing and the other is expected to come
onstream within the next three weeks. Two additional vertical
development wells were drilled on the northeastern flank of Bua Ban
North B.
Bua Ban South
The Company has completed its pilot hydraulic fracturing program
of two wells at Bua Ban South. The Bua Ban South A-01 well was
completed with a three stage frac in the Lower Oligocene and
produced at an initial rate of 1,200 bopd and has stabilized at a
rate of approximately 450 bopd for the past five weeks. The Bua Ban
South A-03 well was completed with a six stage frac in the Eocene
and initially produced at a rate of 1,450 bopd and has produced
approximately at that level for two weeks. Initial production from
these wells was delayed following the initial fracture stimulation
due to mechanical issues with the retrievable bridge plugs used
during the stimulation and completion process. The Company has
identified an alternative completion methodology that should
eliminate similar delays in future well stimulations.
The A-04 Miocene producer has been completed and tied into
production. The Company is going to reperforate the A-05 Miocene
well and bring it onstream in the next two weeks.
Songkhla A
Two exploration wells were drilled into two previously untested
fault blocks on the western side of the Songkhla A platform. The
A-15 exploration well encountered 40 feet of net pay in the Eocene
interval with 12% average porosity and the A-16 exploration well
encountered 14 feet of net pay in the Lower Oligocene interval with
18% average porosity and 13 feet of net pay in the Eocene interval
with 14% average porosity in a separate western fault block. The
A-16 well has been fracked and will begin testing soon and the A-15
well is scheduled to be fracked once the frac equipment returns to
the field in the third quarter. Additionally, two development wells
and three water injection wells were drilled at Songkhla A during
the quarter. The drilling rig that was at Songkhla A has mobilized
to the Songkhla M prospect and will spud the M-01 exploration well
by the end of this week.
The Company has determined that to fully develop the
northeastern fault block discovered by the A-13 well, an additional
satellite platform will be required. Consequently, no appraisal or
development wells have been drilled in this fault block subsequent
to the A-13 discovery well. The Company's year-end 2012 2P reserves
include 4.0 million barrels in this fault block.
The A-10 producer was down for the majority of the first quarter
awaiting pump replacement until the rig was moved off
location.
The Company's current offshore production rate is approximately
23,000 bopd. Total Company production, including onshore gas, is
approximately 25,500 boepd.
Randy Bartley, President and CEO of Coastal Energy,
commented:
"Coastal delivered record production and cash flow for the
fourth year in a row. We also delivered another solid year of
reserves increases with offshore 2P reserves increasing by 50% and
total Company 2P reserves increasing by 40%. The Company realized
substantial additions to its 3P reserve base as well, adding 41.0
mmbbl of offshore Possible reserves. We anticipate that some
of those offshore Possible reserves will be reclassified to 2P
following additional development drilling in 2013. In 2012
Coastal expanded its horizons by signing a contract to develop a
cluster of three oil fields offshore Malaysia.
"Coastal is poised for 2013 to be a solid year as well. We have
added a second drilling rig so that we can continue our development
programs at our existing fields while continuing to explore the
prolific Songkhla basin. Two high-impact exploration prospects, the
Bua Ban Terrace and Benjarong South, are scheduled to be tested in
the second half of 2013.
"We are very excited by the results of the pilot hydraulic
fracturing program at Bua Ban South. Both wells have tested at
stabilized production rates which are commercial. Our post
frac analysis indicates there is room for optimization in our frac
design and we believe we can improve both production rates and
reduce frac costs. Following these excellent results we plan
to move forward aggressively with our frac program to continue
unlocking the potential of this substantial resource."
The following financial statements for the Company are
abbreviated versions. The Company's complete financial statements
for the three and twelve months ended December 31, 2012 with the
notes thereto and the related Management Discussion and Analysis
can be found either on Coastal's website at www.CoastalEnergy.com
or on SEDAR at www.sedar.com. All amounts are in US$ thousands,
except share and per share amounts.
|
|
|
Years Ended December
31, |
2012 |
2011 |
|
|
|
Revenues and Other
Income |
|
|
Oil sales |
746,853 |
347,783 |
Royalties |
(79,280) |
(29,113) |
Oil sales, net of
royalties |
667,573 |
318,670 |
Reimbursement of expenses under
Malaysia risk service contract (Note 3) |
4,099 |
-- |
Other income (Note
16) |
(4,770) |
(21,566) |
|
666,902 |
297,104 |
|
|
|
Expenses |
|
|
Production |
149,999 |
99,263 |
Malaysia risk service contract
(Note 3) |
4,099 |
-- |
Depreciation and depletion
(Note 8) |
70,139 |
61,136 |
Net profits interest (Note
18) |
1,041 |
-- |
General and administrative |
39,696 |
31,453 |
Exploration (Note 7) |
7,477 |
8,374 |
Debt financing fees |
2,165 |
796 |
Finance (Note 15) |
4,715 |
4,825 |
Gains on disposal of
property, plant and equipment |
(252) |
(873) |
|
279,079 |
204,974 |
|
|
|
Net income before income taxes and
share of |
|
|
earnings from Apico LLC |
387,823 |
92,130 |
|
|
|
Share of earnings from
Apico LLC (Note 9) |
19,110 |
14,527 |
|
|
|
Net income before income
taxes |
406,933 |
106,657 |
|
|
|
Income taxes (Note 21) |
|
|
Current |
150,329 |
135 |
Deferred |
28,656 |
57,882 |
|
178,985 |
58,017 |
|
|
|
Net loss from discontinued operations
(Note 18) |
|
|
|
|
|
Net income and comprehensive
income |
227,948 |
48,640 |
|
|
|
|
|
|
Net income and comprehensive income
attributable to: |
|
|
Shareholders of Coastal
Energy |
224,403 |
47,359 |
Non-controlling
interests |
3,545 |
1,281 |
|
227,948 |
48,640 |
|
|
|
|
|
|
Net income per share: |
|
|
Basic (Note 19) |
1.98 |
0.42 |
Diluted (Note 19) |
1.92 |
0.41 |
|
|
|
The accompanying notes are an
integral part of these consolidated financial statements. |
|
|
|
|
|
|
|
December
31, |
December 31, |
As at |
2012 |
2011 |
|
$ |
$ |
|
|
|
Assets |
|
|
Current
Assets |
|
|
Cash |
63,897 |
22,995 |
Restricted cash (Note 4) |
6,452 |
28,447 |
Accounts receivable (Note
5) |
56,848 |
16,939 |
Derivative asset (Note 12) |
132 |
59 |
Inventories (Note 6) |
20,856 |
14,161 |
Prepaids and other
current assets |
628 |
1,094 |
Total current assets |
148,813 |
83,695 |
|
|
|
Non-Current
Assets |
|
|
Exploration and evaluation
assets (Note 7) |
123,574 |
31,881 |
Property, plant and equipment
(Note 8) |
555,269 |
355,052 |
Investment in and advances to
Apico LLC (Note 9) |
60,266 |
47,698 |
Deposits and other
assets |
6,271 |
405 |
Total non-current
assets |
745,380 |
435,036 |
Total Assets |
894,193 |
518,731 |
|
|
|
Liabilities |
|
|
Current
Liabilities |
|
|
Accounts payable and accrued
liabilities (Note 10) |
131,005 |
59,392 |
Income taxes payable (Note
21) |
86,752 |
79 |
Current portion of long-term
debt (Note 12) |
34 |
55,662 |
Current portion of
derivative liabilities (Note 12) |
1,372 |
14,557 |
Total current liabilities |
219,163 |
129,690 |
|
|
|
Non-Current
Liabilities |
|
|
Long-term debt (Note 12) |
95,066 |
22,156 |
Derivative liabilities (Note
12) |
502 |
1,274 |
Derivative liability - Warrants
(Note 11) |
3,784 |
2,853 |
Deferred tax liabilities |
98,423 |
69,767 |
Decommissioning
liabilities (Note 13) |
46,726 |
42,124 |
Total Non-Current
Liabilities |
244,501 |
138,174 |
|
|
|
Shareholders' Equity (Note
19) |
|
|
Common shares |
213,260 |
211,554 |
Contributed surplus |
18,940 |
16,401 |
Warrants |
|
-- |
Retained earnings |
193,877 |
17,630 |
Total Shareholders' Equity |
426,077 |
245,585 |
Non-controlling
interests |
4,452 |
5,282 |
Total
equity |
430,529 |
250,867 |
Total liabilities and
equity |
894,193 |
518,731 |
|
|
|
Commitments and contingencies (Note 20) |
|
|
|
|
|
The accompanying notes are an
integral part of these consolidated financial statements. |
|
|
|
|
|
|
Years Ended December 31, |
2012 |
2011 |
|
|
|
Operating activities |
|
|
Net income |
227,948 |
48,640 |
Adjustments: |
|
|
Share of earnings from Apico
LLC |
(19,110) |
(14,527) |
Unrealized gain on derivative
financial instruments |
(14,030) |
(843) |
Depletion and depreciation |
70,139 |
61,136 |
Finance expense |
4,715 |
4,825 |
Amortisation of debt financing
fees |
1,322 |
786 |
Share-based compensation |
14,190 |
15,185 |
Deferred income taxes |
28,656 |
57,882 |
Unrealized foreign exchange
(gain) loss |
(885) |
388 |
Exploration expense |
7,477 |
8,374 |
Gains on disposal of property,
plant and equipment |
(252) |
(873) |
Income taxes paid |
(63,656) |
(86) |
Interest received |
39 |
6 |
Interest paid |
(2,994) |
(4,022) |
Dividends received from Apico LLC |
15,792 |
15,536 |
|
|
|
Change in non-cash working capital: |
|
|
Accounts receivable |
(39,909) |
(6,640) |
Inventory |
(6,695) |
(1,378) |
Prepaids and other curent
assets |
466 |
(488) |
Accounts payable and accrued
liabilities |
71,574 |
4,899 |
Current income taxes
payable |
86,673 |
48 |
Cash flow provided by operating
activities |
381,460 |
188,848 |
|
|
|
Financing Activities |
|
|
Issuance of common shares, net
of issuance costs |
3,314 |
7,907 |
Repurchase of common
shares |
(18,753) |
-- |
Cash settlement of stock
options |
(31,136) |
-- |
Cash settlement of restricted
stock units |
(663) |
-- |
Borrowings under long-term
debt |
50,000 |
6,275 |
Repayment of long-term
debt |
(30,000) |
-- |
Debt financing fees |
(4,074) |
(594) |
Payments to non-controlling
interest |
(4,375) |
(2,558) |
Other |
-- |
(506) |
Cash flow (used) provided by financing
activities |
(35,687) |
10,524 |
|
|
|
Investing Activities |
|
|
Decrease (increase) in
restricted cash |
21,995 |
(12,078) |
Purchase of property, plant and
equipment |
(309,599) |
(165,099) |
Acquisition of increased
ownership interest in Apico LLC |
(9,250) |
-- |
Advances to Apico LLC |
-- |
(1,446) |
Proceeds from disposal of
property, plant and equipment |
352 |
250 |
Deposits and other assets -
Payments |
(6,000) |
(116) |
Deposits and other assets
- Refunds |
134 |
-- |
Cash flow used in investing
activities |
(302,368) |
(178,489) |
|
|
|
Effect of exchange rate changes on cash |
(2,503) |
(1,772) |
|
|
|
Increase in cash |
40,902 |
19,111 |
Cash - Beginning of year |
22,995 |
3,884 |
Cash - End of
year |
63,897 |
22,995 |
|
|
|
The accompanying notes are an
integral part of these consolidated financial statements. |
Randy Bartley, President and Chief Executive Officer of the
Company and a member of the Society of Petroleum Engineering and
Jerry Moon, Vice President, Technical & Business Development, a
member of the American Association of Petroleum Geologists, a
Licensed Professional Geoscientist and a Certified Petroleum
Geologist in the state of Texas, have reviewed the contents of this
announcement.
Additional information, including the Company's complete
competent person's report may be found on the Company's website at
www.CoastalEnergy.com or may be found in documents filed on SEDAR
at www.sedar.com.
This statement contains 'forward-looking statements' as defined
by the applicable securities legislation. Statements relating to
current and future drilling results, existence and recoverability
of potential hydrocarbon reserves, production amounts or
revenues, forward capital expenditures, operation costs, oil and
gas price forecasts and similar matters are based on current data
and information and should be viewed as forward-looking statements.
Such statements are not guarantees of future results and are
subject to risks and uncertainties beyond Coastal Energy's control.
Actual results may differ substantially from the forward-looking
statements.
Enquiries: |
|
Coastal Energy
Company |
|
Email: investor@CoastalEnergy.com |
+1 (713) 877-6793 |
|
|
Strand Hanson Limited
(Nominated Adviser) |
+44 (0) 20 7409 3494 |
Rory Murphy / Andrew Emmott |
|
|
|
Macquarie Capital (Europe)
Limited (Broker) |
+44 (0) 20 3037 2000 |
Paul Connolly / Jeffrey Auld |
|
|
|
FirstEnergy Capital LLP
(Broker) |
|
Hugh Sanderson / Travis Inlow |
+44 (0) 20 7448 0200 |
|
|
Buchanan |
|
Tim Thompson / Ben Romney |
+44 (0) 20 7466 5000 |
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