Canada NewsWire
CALGARY, Aug. 1, 2018
CALGARY, Aug. 1, 2018 /CNW/ - Crew Energy Inc. (TSX: CR) ("Crew" or the "Company") is pleased to announce our operating and financial results for the three and six month periods ended June 30, 2018. Our Financial Statements and Notes, as well as Management's Discussion and Analysis ("MD&A") for the three and six month periods ended June 30, 2018 are available on Crew's website and filed on SEDAR.
HIGHLIGHTS
FINANCIAL & OPERATING HIGHLIGHTS
FINANCIAL ($ thousands, except per share amounts) |
Three months June 30, 2018 |
Three months June 30, 2017 |
Six months June 30, 2018 |
Six months June 30, 2017 | ||
Petroleum and natural gas sales |
54,040 |
48,886 |
113,467 |
106,184 | ||
Adjusted Funds Flow(1) |
21,804 |
21,353 |
48,177 |
49,072 | ||
Per share |
- basic |
0.14 |
0.14 |
0.32 |
0.33 | |
- diluted |
0.14 |
0.14 |
0.32 |
0.32 | ||
Net (loss) / income |
(9,181) |
21,880 |
(5,033) |
29,936 | ||
Per share |
- basic |
(0.06) |
0.15 |
(0.03) |
0.20 | |
- diluted |
(0.06) |
0.14 |
(0.03) |
0.20 | ||
Exploration and Development expenditures |
12,468 |
36,656 |
46,389 |
111,820 | ||
Property acquisitions (net of dispositions) |
17 |
(45,701) |
(9,990) |
(46,053) | ||
Net capital expenditures |
12,485 |
(9,045) |
36,399 |
65,767 | ||
Capital Structure ($ thousands) |
As at June 30, 2018 |
As at Dec. 31, 2017 | ||||
Working capital (surplus) / deficiency(2) |
(19,954) |
29,143 | ||||
Bank loan |
54,803 |
21,977 | ||||
34,849 |
51,120 | |||||
Senior Unsecured Notes |
294,380 |
293,862 | ||||
Total Net Debt |
329,229 |
344,982 | ||||
Current Debt Capacity(3) |
535,000 |
535,000 | ||||
Common Shares Outstanding (thousands) |
151,708 |
149,328 |
Notes: | |
(1) |
Adjusted funds flow is calculated as cash provided by operating activities, adding the change in non-cash working capital, decommissioning obligation expenditures and accretion of |
(2) |
Working capital (surplus) / deficiency includes cash and cash equivalents plus accounts receivable less accounts payable and accrued liabilities. |
(3) |
Current Debt Capacity reflects the bank facility of $235 million plus $300 million in senior unsecured notes outstanding. |
Operations |
Three months June 30, 2018 |
Three months June 30, 2017 |
Six months June 30, 2018 |
Six months June 30, 2017 | |
Daily production |
|||||
Light crude oil (bbl/d) |
261 |
499 |
288 |
514 | |
Heavy crude oil (bbl/d) |
1,930 |
1,778 |
1,839 |
1,817 | |
Condensate (bbl/d) |
2,304 |
1,550 |
2,500 |
1,731 | |
Other natural gas liquids (bbl/d) |
1,710 |
1,336 |
1,751 |
1,392 | |
Natural gas (mcf/d) |
104,269 |
91,828 |
110,257 |
98,321 | |
Total (boe/d @ 6:1) |
23,583 |
20,468 |
24,754 |
21,841 | |
Average prices (1) |
|||||
Light crude oil ($/bbl) |
75.72 |
58.14 |
71.62 |
58.96 | |
Heavy crude oil ($/bbl) |
55.65 |
45.05 |
46.41 |
43.98 | |
Condensate ($/bbl) |
82.73 |
59.90 |
77.95 |
61.94 | |
Other natural gas liquids ($/bbl) |
25.63 |
14.03 |
25.21 |
18.19 | |
Natural gas ($/mcf) |
2.23 |
3.45 |
2.56 |
3.50 | |
Oil equivalent ($/boe) |
25.18 |
26.25 |
25.32 |
26.86 |
Notes: | |
(1) |
Average prices are before deduction of transportation costs and do not include gains and losses on financial instruments. |
Three months June 30, 2018 |
Three months June 30, 2017 |
Six months June 30, 2018 |
Six months June 30, 2017 | ||
Netback ($/boe) |
|||||
Revenue |
25.18 |
26.25 |
25.32 |
26.86 | |
Royalties |
(1.83) |
(2.06) |
(1.77) |
(2.12) | |
Realized commodity (loss) / gain |
(1.23) |
0.64 |
(1.07) |
0.10 | |
Marketing income (1) |
0.28 |
- |
0.28 |
- | |
Net operating costs(2) |
(6.56) |
(6.15) |
(6.42) |
(5.74) | |
Transportation costs |
(1.78) |
(2.75) |
(1.95) |
(2.51) | |
Operating netback (3) |
14.06 |
15.93 |
14.39 |
16.59 | |
G&A |
(1.23) |
(1.52) |
(1.31) |
(1.51) | |
Other income |
- |
- |
0.22 |
- | |
Financing costs on long-term debt |
(2.67) |
(2.93) |
(2.55) |
(2.66) | |
Adjusted funds flow |
10.16 |
11.48 |
10.75 |
12.42 | |
Drilling Activity |
|||||
Gross wells |
0 |
7 |
0 |
22 | |
Working interest wells |
0.0 |
7.0 |
0.0 |
22.0 | |
Success rate, net wells (%) |
- |
100% |
- |
95% |
Notes: | |
(1) |
Marketing income was recognized from the monetization of forward physical sales contracts offset by the cost of committed natural gas transportation that was not available |
(2) |
Net operating costs are calculated as gross operating costs less processing revenue. |
(3) |
Operating netback equals petroleum and natural gas sales including realized hedging gains and losses on commodity contracts less royalties, operating costs and transportation costs |
FINANCIAL OVERVIEW
Strong Second Quarter Production
Adjusted Funds Flow Continued to Exceed Net Capital Expenditures
Rising Liquids Prices Helped Offset Weak Natural Gas Prices
Modest Capital Expenditure Reflects Value Preservation
Declining Net Debt and Continued Balance Sheet Strength
TRANSPORTATION, MARKETING & HEDGING
Natural Gas & Liquids Hedging
OPERATIONS & AREA Overview
NE BC Montney - Greater Septimus
Greater Septimus
Production & Drilling |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 | |
Average daily production (boe/d) |
18,953 |
20,467 |
20,193 |
18,154 |
15,558 | |
Wells drilled (gross / net) |
- |
- |
5 / 3.9 |
13 / 12.3 |
5 / 5.0 | |
Wells completed (gross / net) |
2 / 1.6 |
9 / 7.7 |
3 / 3.0 |
14 / 14.0 |
9 / 9.0 | |
Operating Netback |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 | |
Revenue |
22.70 |
25.40 |
24.43 |
20.05 |
24.51 | |
Royalties |
(1.35) |
(1.50) |
(1.19) |
(0.89) |
(1.57) | |
Realized commodity hedge (loss) / gain |
(1.32) |
(1.01) |
1.74 |
2.97 |
0.77 | |
Marketing income |
0.34 |
0.37 |
- |
- |
- | |
Net operating costs(1) |
(4.71) |
(4.45) |
(3.67) |
(3.38) |
(4.10) | |
Transportation costs |
(1.40) |
(1.51) |
(1.51) |
(1.65) |
(2.03) | |
Operating netback(2) |
14.26 |
17.30 |
19.80 |
17.10 |
17.58 |
(1) |
Net operating costs are calculated as gross operating costs less processing revenue. |
(2) |
Operating netback equals petroleum and natural gas sales including realized hedging gains and losses on commodity contracts less royalties, operating costs and transportation costs |
Other NE BC Montney
AB / SK Heavy Oil - Lloydminster
OUTLOOK
Second Half 2018 Operations Focused on Condensate Growth
2018 Guidance Remains on Target
We would like to thank our employees and Board of Directors for their contribution and commitment to Crew, as well as our shareholders and bondholders for their ongoing support.
Cautionary Statements
Information Regarding Disclosure on Oil and Gas and Operational Information and Non-IFRS Measures
This press release contains metrics commonly used in the oil and natural gas industry, such as "adjusted funds flow" and "operating netbacks". These terms are not defined in IFRS and do not have standardized meanings or standardized methods of calculation and therefore may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons. Such metrics have been included herein to provide readers with additional information to evaluate the Company's performance, however such metrics should not be unduly relied upon. Management uses oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare Crew's operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this press release, should not be relied upon for investment or other purposes. See "Non-IFRS Measures" contained within Crew's MD&A for applicable calculations and reconciliations.
Forward-Looking Information and Statements
This news release contains certain forward–looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" "forecast" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this news release contains forward-looking information and statements pertaining to the following: the estimated volumes, including shut-ins, and product mix of Crew's oil and gas production; production estimates including Q3 and 2018 average production forecasts; commodity price expectations including Crew's estimates of natural gas pricing exposure; Crew's commodity risk management programs; marketing, transportation and natural gas egress plans; future liquidity and financial capacity; future results from operations and operating metrics; potential for lower costs and efficiencies going forward; future development, exploration, acquisition and disposition activities (including drilling, completion and infrastructure plans and methodology and associated timing and cost estimates); the amount and timing of capital projects; Q3 and 2018 capital expenditure and operational plans; and Crew's 2018 budget and methods of funding our capital program.
In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of Crew which have been used to develop such statements and information but which may prove to be incorrect. Although Crew believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Crew can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: that Crew will continue to conduct its operations in a manner consistent with past operations; results from drilling and development activities consistent with past operations; the quality of the reservoirs in which Crew operates and continued performance from existing wells; the continued and timely development of infrastructure in areas of new production; the accuracy of the estimates of Crew's reserve volumes; certain commodity price and other cost assumptions; continued availability of debt and equity financing and cash flow to fund Crew's current and future plans and expenditures; the impact of increasing competition; the general stability of the economic and political environment in which Crew operates; the general continuance of current industry conditions; the timely receipt of any required regulatory approvals; the ability of Crew to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which Crew has an interest in to operate the field in a safe, efficient and effective manner; the ability of Crew to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Crew to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Crew operates; and the ability of Crew to successfully market its oil and natural gas products.
The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; changes in the demand for or supply of Crew's products, the early stage of development of some of the evaluated areas and zones the potential for variation in the quality of the Montney formation; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Crew or by third party operators of Crew's properties, increased debt levels or debt service requirements; inaccurate estimation of Crew's oil and gas reserve volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in Crew's public disclosure documents (including, without limitation, those risks identified in this news release and Crew's Annual Information Form).
The forward-looking information and statements contained in this news release speak only as of the date of this news release, and Crew does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Test Results and Initial Production Rates
A pressure transient analysis or well-test interpretation has not been carried out and thus certain of the test results provided herein should be considered to be preliminary until such analysis or interpretation has been completed. Test results and initial production rates disclosed herein, particularly those short in duration, may not necessarily be indicative of long term performance or of ultimate recovery.
BOE equivalent
Barrel of oil equivalents or BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of 6:1, utilizing the 6:1 conversion ratio may be misleading as an indication of value.
Crew is a growth-oriented oil and natural gas producer, committed to pursuing sustainable per share growth through a balanced mix of financially responsible exploration and development complemented by strategic acquisitions. The Company's operations are primarily focused in the vast Montney resource, situated in northeast British Columbia, and include a large contiguous land base. Crew's liquids-rich Septimus and West Septimus areas ("Greater Septimus") along with Groundbirch and the light oil area at Tower in British Columbia offer significant development potential over the long-term. The Company has access to diversified markets with operated infrastructure and access to multiple pipeline egress options. Crew's common shares are listed for trading on the Toronto Stock Exchange ("TSX") under the symbol "CR".
Financial statements and MD&A for the three and six month periods ended June 30, 2018 and 2017 are filed on SEDAR at www.sedar.com and are available on the Company's website at www.crewenergy.com.
Dale Shwed, President and C.E.O. |
Phone: (403) 266-2088 | ||
John Leach, Senior Vice President and C.F.O. |
Email: [email protected] |
SOURCE Crew Energy Inc.
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