Paramount Resources Ltd. (TSX:POU)
SECOND QUARTER OVERVIEW
Oil and Gas Operations
-- Average sales volumes increased 30 percent to 21,474 Boe/d in the second
quarter of 2012 compared to 16,572 Boe/d in the same period in 2011;
NGLs volumes increased by 31 percent.
-- The Company's wholly-owned Musreau 45 MMcf/d refrigeration facility (the
"Musreau Refrig Facility") has been operating near capacity since re-
commissioning in March.
-- Operating expenses per Boe decreased 21 percent to $8.20 from $10.40 in
the second quarter of 2011 with higher Kaybob production, the re-
commissioning of the Mureau Refrig Facility and the sale of higher cost
US properties.
-- Regulatory approval was received for the Musreau 200 MMcf/d deep cut
facility and site preparation work has commenced.
-- Advance drilling for the deep cut facility expansions at Musreau and
Smoky continued. The Company currently has an inventory of 21 net wells
with estimated first month deliverability of 34,700 Boe/d and average
first year deliverability of 17,300 Boe/d.
-- In May, Paramount's wholly-owned subsidiary, Summit Resources, Inc.,
closed the sale of all of its operated properties in North Dakota and
all of its Montana properties for cash proceeds of approximately US$70
million. The Company is continuing to pursue the disposition of the
remaining US properties.
Strategic Investments
-- The Company is currently evaluating drilling plans for its Liard Basin
Besa River shale gas lands for the 2012 / 2013 winter drilling season.
Industry test results from prolific shale gas wells adjacent to
Paramount's lands support the Company's internal resource estimates.
-- Cavalier Energy Inc. continued to focus on finalizing its regulatory
application for the first 10,000 Bbl/d phase at the Hoole property,
anticipated to be submitted in the fourth quarter of 2012.
-- Fox Drilling Inc. continued the construction of two new triple-sized
walking drilling rigs, expected to be operational in late-2012.
Corporate
-- The revolving period and maturity date of the Company's $300 million
bank credit facility (the "Existing Facility") were extended to October
31, 2012 and October 31, 2013, respectively, to provide for the
evaluation of an unsolicited proposal for an expanded committed credit
facility (the "Proposed Facility") from one of Paramount's lenders.
-- The Proposed Facility would have a term extending into 2014 and provide
additional funding capacity to complete construction of the Musreau deep
cut facility and to drill additional wells.
-- Corporate general and administrative costs per Boe decreased 13 percent
in the second quarter to $2.09 from $2.40 in 2011.
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Financial and Operating Highlights(1,2)
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($ millions, except as noted)
Three months ended June 30 Six months ended June 30
2012 2011 % Change 2012 2011 % Change
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Financial
Petroleum and
natural gas
sales 46.5 61.1 (24) 101.2 107.9 (6)
Funds flow from
operations 12.1 23.4 (48) 25.0 37.3 (33)
Per share -
diluted
($/share) 0.15 0.29 (48) 0.28 0.48 (42)
Net income (loss) - 12.2 (100) 124.5 0.3 100
Per share -
basic
($/share) - 0.16 (100) 1.46 - 100
Per share -
diluted
($/share)(3) - (0.02) 100 1.43 - 100
Exploration and
development
expenditures 66.4 54.5 22 208.6 214.6 (3)
Investments in
other entities -
market value(4) 611.4 783.1 (22)
Total assets 1,777.3 1,714.5 4
Net debt(5) 472.8 514.1 (8)
Common shares
outstanding
(thousands) 85,573 79,051 8
Operating
Sales volumes
Natural gas
(MMcf/d) 106.2 77.7 37 97.4 68.3 43
NGLs (Bbl/d) 1,973 1,504 31 1,813 1,237 47
Oil (Bbl/d) 1,808 2,110 (14) 2,097 2,231 (6)
Total (Boe/d) 21,474 16,572 30 20,144 14,844 36
Average realized
price
Natural gas
($/Mcf) 2.09 4.36 (52) 2.40 4.26 (44)
NGLs ($/Bbl) 69.63 81.95 (15) 73.71 79.47 (7)
Oil ($/Bbl) 78.65 94.58 (17) 84.66 87.65 (3)
Net wells drilled
(excluding oil
sands
evaluation) 8 8 - 19 20 (5)
Net oil sands
evaluation wells
drilled - 1 (100) 1 27 (96)
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(1) Readers are referred to the advisories concerning non-GAAP measures and
oil and gas definitions in the "Advisories" section of this document.
(2) Amounts include the results of discontinued operations. Refer to pages 6
and 7 of Paramount's Management's Discussion and Analysis for the three
and six months ended June 30, 2012.
(3) Per share - diluted ($/share) has been adjusted for the six months ended
June 30, 2011 as a result of changes to reflect discontinued operations
accounting. See Paramount's unaudited Interim Condensed Consolidated
Financial Statements for the three and six months ended June 30, 2012.
(4) Based on the period-end closing prices of publicly traded enterprises
and the book value of the remaining investments.
(5) Net debt is a non-GAAP measure, it is calculated and defined in the
Liquidity and Capital Resources section of Paramount's Management's
Discussion and Analysis for the three and six months ended June 30,
2012.
REVIEW OF OPERATIONS(1)
Second Quarter First Quarter
2012 2012 % Change
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Sales volumes
Natural gas (MMcf/d) 106.2 88.6 20
NGLs (Bbl/d) 1,973 1,652 19
Oil (Bbl/d) 1,808 2,386 (24)
--------------------------------
Total (Boe/d) 21,474 18,813 14
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Average realized prices
Natural gas ($/Mcf) 2.09 2.77 (25)
NGLs ($/Bbl) 69.63 78.57 (11)
Oil ($/Bbl) 78.65 89.21 (12)
--------------------------------
Total ($/Boe) 23.82 31.95 (25)
--------------------------------
Netbacks ($ millions) % Change
($/Boe) ($/Boe) in $/Boe
Petroleum and natural gas sales 46.5 23.82 54.7 31.95 (25)
Royalties (3.9) (2.00) (5.3) (3.09) (35)
Operating expense and production
tax (15.9) (8.20) (21.3) (12.45) (34)
Transportation (5.7) (2.90) (5.6) (3.29) (12)
--------------------------------
Netback 21.0 10.72 22.5 13.12 (18)
Financial commodity contract
settlements 0.4 0.23 (1.4) (0.84) 127
--------------------------------
Netback including financial
commodity contract settlements 21.4 10.95 21.1 12.28 (11)
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(1) Amounts include the results of discontinued operations. Refer to pages 6
and 7 of Paramount's Management's Discussion and Analysis for the three
and six months ended June 30, 2012.
Paramount's sales volumes averaged 21,474 Boe/d in the second
quarter of 2012 compared to 18,813 Boe/d in the first quarter, as
the Musreau Refrig Facility operated near capacity after being
re-commissioned in March. Valhalla production also increased
following the commissioning of additional compression capacity.
Second quarter NGLs sales volumes increased to 1,973 Bbl/d,
including 1,200 Bbl/d of condensate.
Sales volumes in April increased to 23,000 Boe/d, the highest
since Paramount spun-out Trilogy in 2005. Through May and June,
throughput at the Musreau Refrig Facility was temporarily reduced
to address increased liquids production from new wells brought-on
through the facility. Liquids yields have since stabilized and
liquids handling processes have been optimized, allowing processing
levels to return to normal. Sales volumes were also impacted by the
May disposition of United States properties producing approximately
900 Boe/d and by maintenance operations at a third party ethane
extraction facility, which shut-in approximately 2,000 Boe/d of
production at Valhalla for 15 days in May and reduced NGLs volumes
in May and June.
Petroleum and natural gas sales revenue decreased by $8.2
million quarter over quarter because of a 25 percent decline in
realized prices. Operating costs per Boe were 34 percent lower than
in the first quarter, primarily due to the elimination of third
party processing charges for volumes now processed through the
Musreau Refrig Facility and higher Kaybob COU production. The sale
of higher cost United States properties and higher first quarter
seasonal maintenance costs in the Northern COU also contributed to
the quarter over quarter decrease in operating costs.
Kaybob
Second Quarter First Quarter
2012 2012 % Change
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Sales Volumes
Natural gas (MMcf/d) 66.3 52.7 26
NGLs (Bbl/d) 1,132 821 38
Oil (Bbl/d) 61 65 (6)
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Total (Boe/d) 12,236 9,675 26
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Exploration and Development
Expenditures ($ millions)
Exploration, drilling,
completions and tie-ins 16.9 40.4 (58)
Facilities and gathering 23.0 31.1 (26)
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39.9 71.5 (44)
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Gross Net Gross Net
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Wells Drilled 7 4.7 6 4.5
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Second quarter sales volumes in the Kaybob COU averaged 12,236
Boe/d. The Musreau Refrig Facility was successfully re-commissioned
in March, with Paramount's working interest share of second quarter
volumes processed averaging approximately 60 percent. To date, the
majority of production routed through the facility has been from
horizontal Falher and earlier multi-zone Cretaceous vertical wells
in which Paramount has a 50 percent working interest.
Production within the Kaybob COU remains constrained by
available processing capacity, pending completion of facilities
expansions at Musreau and Smoky. Paramount is working to increase
its working interest share of volumes produced through available
capacity by bringing on higher working interest wells. One (1.0
net) Montney formation well was brought-on production in
early-August and a second 100 percent working interest well is
planned to be brought-on later in the third quarter. Two (2.0 net)
Montney wells are scheduled to be brought-on in the fourth
quarter.
With the Musreau Refrig Facility on-stream throughout the second
quarter, the Kaybob COU's operating costs decreased to
approximately $5.00 per Boe, before accounting for the impact of
third party processing income. The new facility provides
significant savings to the Company through the elimination of third
party processing fees.
Paramount submitted a $6 million insurance claim in the first
quarter of 2012 related to the electrical failure at the Musreau
Refrig Facility in the fourth quarter of 2011. The Company expects
to receive a settlement in the second half of 2012.
Paramount received regulatory approval in July for its
wholly-owned 200 MMcf/d deep cut facility at Musreau (the "Musreau
Deep Cut Facility") and site preparation work has commenced. The
project is proceeding on-time and on-budget and the procurement of
major long lead-time equipment is complete. The Company has
incurred total costs of approximately $45 million to June 30, 2012
and anticipates spending an additional $70 million during the
second half of 2012. The facility is expected to be commissioned in
the second half of 2013 at an estimated total cost of $180 million.
The relatively minor incremental investment in deep cut facilities
when compared to the cost of a similar sized refrigeration facility
will add significant value to Paramount's natural gas production
due to the price premium realized from the sale of additional NGLs
volumes that would otherwise be sold as slightly higher heat
content natural gas.
The current configuration of Company-operated Montney wells
includes well site sweetening equipment and the use of chemicals to
address sour gas production. Paramount has initiated a project to
construct an amine processing train at the Musreau Deep Cut
Facility, which will provide the capability to treat sour gas
production at the plant instead of at well sites. This enhancement
is expected to reduce well site equipping costs by over $1 million
and reduce ongoing operating costs. The Company is currently
finalizing the design of the amine train and plans to begin
ordering long lead-time components later in 2012 for a planned
start-up in the first half of 2014. The addition of the amine train
will not impact the commissioning of the Musreau Deep Cut Facility
during the second half of 2013.
Paramount is also participating in the expansion of a
non-operated processing facility at Smoky (the "Smoky Deep Cut
Facility"), which is being upgraded to operate as a deep cut
liquids extraction plant. The Company will have a 20 percent
interest in the expanded facility, up from its 10 percent share of
the existing 100 MMcf/d dew point facility. The Smoky Deep Cut
Facility will initially have 200 MMcf/d of raw gas capacity upon
start-up, increasing to 300 MMcf/d through the later installation
of an incremental 100 MMcf/d of compression. As a plant owner,
Paramount has the option at any time to initiate the increase to
300 MMcf/d, which would bring the Company's total owned capacity in
the plant to 60 MMcf/d. Work has commenced on the initial expansion
/ upgrade with orders being placed for long lead-time equipment and
the establishment of a construction camp near the site.
During the second quarter, the Kaybob COU drilled four (2.7 net)
Falher formation wells, two (1.0 net) Montney formation wells and
one (1.0 net) directional multi-zone Cretaceous well. Three of
these wells have been fracture stimulated and results have been
consistent with expectations, further confirming the Company's well
performance profiles. The Company has achieved lower per-well
drilling costs in 2012 by optimizing drilling techniques, resulting
in fewer drilling days per well, and by drilling from multi-well
pads which reduces mobilization time and costs. Completion costs
have also been falling as a result of lower rates for fracturing
equipment.
The following table summarizes the current status of Kaybob Deep
Basin wells that have been drilled and are awaiting production, the
estimated remaining capital required to complete these wells, and
their anticipated production and sales volumes:
Total
Remaining Estimated Estimated
Capital Net Raw Gas Net Sales
Wells (net) Production Volumes(1)
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First First First First
Month Year Month Year
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Gross Net ($ millions) (MMcf/d) (MMcf/d) (Boe/d) (Boe/d)
Tied-in, capable
of producing 5 2 - 14 7 3,000 1,400
Completed,
awaiting tie-in 8 7 11 48 24 12,500 6,500
Drilled, awaiting
completion 16 12 65 80 38 19,200 9,400
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29 21 76 142 69 34,700 17,300
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(1) Based on processing through a deep cut facility
The Company plans to drill up to an additional 15 wells for the
remainder of 2012, with more wells to be drilled in 2013 to
continue building behind pipe production in advance of the
completion of facilities expansions at Musreau and Smoky. Paramount
continues to utilize its own facilities and third party processing
capacity to maximize production while these expansions are in
progress. In the interim, behind pipe wells will be produced where
capacity is available.
Grande Prairie
Second Quarter First Quarter %
2012 2012 Change
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Sales Volumes
Natural gas (MMcf/d) 21.5 16.8 28
NGLs (Bbl/d) 658 596 10
Oil (Bbl/d) 269 391 (31)
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Total (Boe/d) 4,514 3,792 19
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Exploration and Development
Expenditures ($ millions)
Exploration, drilling, completions
and tie-ins 12.3 31.4 (61)
Facilities and gathering 6.5 12.5 (48)
--------------------------------
18.8 43.9 (57)
--------------------------------
Gross Net Gross Net
--------------------------------
Wells Drilled 3 2.1 5 3.4
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Second quarter sales volumes in the Grande Prairie COU increased
19 percent to 4,514 Boe/d compared to 3,792 Boe/d in the first
quarter, as additional wells were brought-on production at Valhalla
following the commissioning of the gathering and compression system
expansion. Sales volumes were impacted by a disruption at a
downstream third party ethane extraction facility, resulting in a
15 day shut-in at Valhalla and reduced NGLs volumes in May and
June. The Company was able to partially mitigate the impact of the
disruption by re-routing production through alternate facilities
for a portion of the outage. The third party disruption was
resolved at the end of June and production has been fully
restored.
The Company drilled two (2.0 net) wells at Valhalla during the
second quarter and expects to complete these wells in the second
half of 2012. These wells, along with an additional four (2.3 net)
wells drilled in the first quarter, are expected to be brought-on
production in the second half of 2012.
At Karr-Gold Creek, surface equipment that had been ordered as
part of a well performance enhancement program was delivered and
installed on two (2.0 net) wells that had previously been completed
but not placed on production. The wells were brought-on in April
and the Company is continuing to evaluate the results.
Southern
Second Quarter First Quarter %
2012 2012 Change
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Sales Volumes(1)
Natural gas (MMcf/d) 9.8 11.0 (11)
NGLs (Bbl/d) 169 217 (22)
Oil (Bbl/d) 1,250 1,663 (25)
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Total (Boe/d) 3,059 3,718 (18)
--------------------------------
Exploration and Development
Expenditures(1) ($ millions)
Exploration, drilling, completions
and tie-ins 1.9 4.4 (57)
Facilities and gathering 0.7 1.4 (50)
--------------------------------
2.6 5.8 (55)
--------------------------------
Gross Net Gross Net
--------------------------------
Wells Drilled - - 1 0.5
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(1) Amounts include the results of discontinued operations. Refer to page 6
and 7 of Paramount's Management's Discussion and Analysis for the three
and six months ended June 30, 2012.
In May 2012, Paramount's wholly-owned subsidiary, Summit
Resources, Inc. ("Summit"), closed the sale of all of its operated
properties in North Dakota and all of its Montana properties for
cash proceeds of approximately US$70 million. The disposition
included approximately 900 Boe/d of production and approximately
38,000 (27,000 net) acres of land.
The transaction did not include Summit's Bakken / Three Forks
lands in North Dakota with production of approximately 200 Boe/d
and joint venture exploratory acreage. The Company is continuing to
pursue the disposition of the remaining US properties.
Second quarter sales volumes in the Southern COU decreased
mainly because of the US property disposition.
The Southern COU plans to drill three (2.5 net) wells in
Harmattan in Southern Alberta during the second half of 2012
targeting liquids-rich natural gas.
Northern
Second Quarter First Quarter %
2012 2012 Change
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Sales Volumes
Natural gas (MMcf/d) 8.6 8.1 6
NGLs (Bbl/d) 14 18 (22)
Oil (Bbl/d) 228 267 (15)
--------------------------------
Total (Boe/d) 1,665 1,628 2
--------------------------------
Exploration and Development
Expenditures ($ millions)
Exploration, drilling, completions
and tie-ins 0.6 18.5 (97)
Facilities and gathering 1.9 2.3 (17)
--------------------------------
2.5 20.8 (88)
--------------------------------
Gross Net Gross Net
--------------------------------
Wells Drilled - - 2 2.0
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Second quarter sales volumes in the Northern COU were unchanged
from the first quarter of 2012. Processing disruptions at the
Bistcho plant impacted second quarter volumes.
Paramount's first well at Birch in Northeast British Columbia
was brought-on production in the second quarter and subsequently
shut-in due to higher than expected liquids production.
Modifications to surface equipment are underway and the well is
expected to be re-started in the third quarter. The Company has 3
MMcf/d of raw gas processing capacity at Birch and will bring on
two (2.0 net) additional wells as production from the initial well
moderates. Production results from these wells will be evaluated
over the coming months.
STRATEGIC INVESTMENTS
Cavalier Energy Inc. ("Cavalier") continued to build its
management team during the second quarter of 2012. The team's
efforts are focused on finalizing the regulatory application for
the first phase of development at the Hoole property, a 10,000
Bbl/d project targeting the Grand Rapids formation using proven
SAGD technologies. Cavalier remains on schedule to submit this
application in the fourth quarter of 2012 and anticipates first
steam commencing as early as the second half of 2015. Longer-term
plans for Hoole include three additional 30,000 Bbl/d phases that
would increase production to 100,000 Bbl/d by 2024.
SHALE GAS
Paramount's Besa River shale gas holdings are focused in the
Liard Basin in Northeast British Columbia and the Northwest
Territories. The Company began drilling a vertical evaluation well
at a winter access location at Dunedin in the first quarter before
suspending operations due to warm weather. Paramount is evaluating
further drilling plans for its shale gas lands for the 2012 / 2013
winter drilling season. Recently announced industry test results
from prolific shale gas wells adjacent to Paramount's lands support
the Company's internal estimates of the resource.
To view the Besa River Shale Gas map, please visit the following
link: http://media3.marketwire.com/docs/808pou_image.jpg.
CORPORATE
In the course of renewing its $300 million Existing Facility in
the second quarter, the Company received an unsolicited proposal
from one of its lenders to provide an expanded committed credit
facility that would replace the Existing Facility.
The Proposed Facility would have a term extending into 2014 and
provide additional funding capacity to complete construction of the
Musreau deep cut facility and to drill additional wells.
In order to provide sufficient time for Paramount and its
lenders to perform due diligence and negotiate the terms of the
Proposed Facility, the revolving period and maturity date of the
Existing Facility were extended to October 31, 2012 and October 31,
2013, respectively. All other terms of the Existing Facility remain
unchanged.
OUTLOOK
Paramount's annual 2012 capital spending budget (excluding land,
acquisitions and capitalized interest) remains at $535 million,
with $475 million allocated to exploration and development spending
in the Company's core producing areas and $60 million allocated to
Strategic Investment spending. The Company has more than sufficient
capacity to fund its 2012 capital program with its Existing
Facility and retains flexibility within its current capital plan to
vary spending depending upon future economic conditions, among
other factors.
Year-to-date exploration and development spending is
approximately $210 million. Planned spending of $265 million for
the remainder of the year will be focused in the Kaybob Deep Basin
development, where $85 million will be invested in the Musreau and
Smoky deep cut facilities and drilling will continue in order to
build an inventory of wells to feed the expansions. By year-end
2012, Paramount expects to have an inventory of approximately 34
wells awaiting the commissioning of these new facilities.
Strategic Investment spending for the remainder of the year will
be directed to completing the construction of two walking drilling
rigs.
Sales volumes are expected to increase during the remainder of
the year as new wells are brought-on production and Paramount's
working interest share of volumes produced through available
capacity in the Kaybob COU increases. The Company expects its 2012
exit rate will be approximately 26,000 Boe/d and that sales volumes
thereafter will range between 25,000 Boe/d and 27,000 Boe/d until
the Musreau Deep Cut Facility is fully commissioned in the second
half of 2013. Sales volumes are expected to more than double once
the Musreau Deep Cut Facility and the Smoky Deep Cut Facility are
fully operational in 2014.
ADDITIONAL INFORMATION
A copy of Paramount's complete results for the three and six
months ended June 30, 2012, including Management's Discussion and
Analysis and the unaudited Interim Condensed Consolidated Financial
Statements for the three and six months ended June 30, 2012 can be
found at http://media3.marketwire.com/docs/808pou_report.pdf. This
information will also be made available through Paramount's website
at www.paramountres.com and SEDAR at www.sedar.com.
ABOUT PARAMOUNT
Paramount Resources Ltd. is a Canadian oil and natural gas
exploration, development and production company with operations
focused in Western Canada. Paramount's common shares are listed on
the Toronto Stock Exchange under the symbol "POU".
ADVISORIES
FORWARD-LOOKING INFORMATION
Certain statements in this document constitute forward-looking
information under applicable securities legislation.
Forward-looking information typically contains statements with
words such as "anticipate", "believe", "estimate", "expect",
"plan", "intend", "propose", or similar words suggesting future
outcomes or an outlook. Forward looking information in this
document includes, but is not limited to:
-- expected production and sales volumes and the timing thereof;
-- planned exploration and development expenditures and strategic
investment expenditures and the timing thereof;
-- exploration and development potential, plans and strategies and the
anticipated costs, timing and results thereof;
-- budget allocations and capital spending flexibility;
-- availability of facilities to process and transport natural gas
production;
-- the anticipated costs, scope and timing of proposed new facilities and
expansions to existing facilities and the expected capacity and
utilization of such facilities;
-- the anticipated incremental benefit provided by a deep cut facility over
a refrigeration facility;
-- the timing of the anticipated development of Paramount's oil sands,
carbonate bitumen and shale gas assets;
-- ability to fulfill future pipeline transportation commitments;
-- the anticipated costs and completion date of the two new triple-sized
walking drilling rigs;
-- business strategies and objectives;
-- sources of and plans for financing;
-- the outcome of diligence reviews and negotiations concerning the
Proposed Facility, including the size, timing and terms thereof;
-- acquisition and disposition plans;
-- operating and other costs;
-- regulatory applications and the anticipated scope, timing and results
thereof;
-- expected drilling programs, completions, well tie-ins, facilities
construction and expansions and the timing thereof; and
-- the outcome and timing of any legal claims, insurance claims, audits,
assessments, regulatory matters and proceedings.
Such forward-looking information is based on a number of
assumptions which may prove to be incorrect. The following
assumptions have been made, in addition to any other assumptions
identified in this document:
-- future crude oil, bitumen, natural gas and NGLs prices and general
economic, business and market conditions;
-- the ability of Paramount to obtain required capital to finance its
exploration and development activities;
-- the ability of Paramount to obtain equipment, services, supplies and
personnel in a timely manner and at an acceptable cost to carry out its
activities;
-- the ability of Paramount to market its oil, natural gas and NGLs
successfully to current and new customers;
-- the ability of Paramount to close expected property sales and the timing
thereof;
-- the ability of Paramount to secure adequate product processing,
transportation and storage;
-- the ability of Paramount and its industry partners to obtain drilling
success consistent with expectations, including liquids yields;
-- the timely receipt of required regulatory approvals;
-- expected timelines being met in respect of facility development and
construction projects;
-- access to capital markets and other sources of funding;
-- well economics relative to other projects; and
-- currency exchange and interest rates.
Although Paramount believes that the expectations reflected in
such forward looking information is reasonable, undue reliance
should not be placed on it as Paramount can give no assurance that
such expectations will prove to be correct. Forward-looking
information is based on current expectations, estimates and
projections that involve a number of risks and uncertainties which
could cause actual results to differ materially from those
anticipated by Paramount and described in the forward looking
information. These risks and uncertainties include, but are not
limited to:
-- fluctuations in crude oil, bitumen, natural gas and NGLs prices, foreign
currency exchange rates and interest rates;
-- the uncertainty of estimates and projections relating to future revenue,
future production, liquids yields, costs and expenses and the timing
thereof;
-- the ability to secure adequate product processing, transportation and
storage;
-- the uncertainty of exploration, development and drilling activities;
-- operational risks in exploring for, developing and producing crude oil
and natural gas, and the timing thereof;
-- the ability to obtain equipment, services, supplies and personnel in a
timely manner and at an acceptable cost;
-- potential disruptions or unexpected technical difficulties in designing,
developing or operating new, expanded or existing facilities including
third party facilities;
-- risks and uncertainties involving the geology of oil and gas deposits;
-- the uncertainty of reserves and resource estimates;
-- the ability to generate sufficient cash flow from operations and other
sources of financing at an acceptable cost to fund exploration,
development and operational activities and meet current and future
obligations, including costs of anticipated projects;
-- changes to the status or interpretation of laws, regulations or
policies;
-- changes in environmental laws including emission reduction obligations;
-- the receipt, timing, and scope of governmental or regulatory approvals;
-- changes in economic, business and market conditions;
-- uncertainty regarding aboriginal land claims and co-existing with local
populations;
-- the effects of weather;
-- the timing and cost of future abandonment and reclamation activities;
-- cleanup costs or business interruptions due to environmental damage and
contamination;
-- the ability to enter into or continue leases;
-- existing and potential lawsuits and regulatory actions; and
-- other risks and uncertainties described elsewhere in this document and
in Paramount's other filings with Canadian securities authorities,
including its Annual Information Form.
The foregoing list of risks is not exhaustive. Additional
information concerning these and other factors which could impact
Paramount are included in Paramount's most recent Annual
Information Form. The forward-looking information contained in this
document is made as of the date hereof and, except as required by
applicable securities law, Paramount 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.
NON-GAAP MEASURES
In this document "Funds flow from operations", "Funds flow from
operations per share - diluted", "Netback", "Netback including
financial commodity contract settlements", "Net Debt", "Exploration
and development expenditures" and "Investments in other entities -
market value", collectively the "Non-GAAP measures", are used and
do not have any standardized meanings as prescribed by Generally
Accepted Accounting Principles in Canada ("GAAP").
Funds flow from operations refers to cash from operating
activities before net changes in operating non-cash working
capital, geological and geophysical expenses and asset retirement
obligation settlements. Funds flow from operations is commonly used
in the oil and gas industry to assist management and investors in
measuring the Company's ability to fund capital programs and meet
financial obligations.
Netback equals petroleum and natural gas sales less royalties,
operating costs, production taxes and transportation costs. Netback
is commonly used by management and investors to compare the results
of the Company's oil and gas operations between periods. Net Debt
is a measure of the Company's overall debt position after adjusting
for certain working capital amounts and is used by management to
assess the Company's overall leverage position. Refer to the
calculation of Net Debt in the liquidity and capital resources
section of Management's Discussion and Analysis. Exploration and
development expenditures refer to capital expenditures and
geological and geophysical costs incurred by the Company's COUs
(excluding land and acquisitions). The exploration and development
expenditure measure provides management and investors with
information regarding the Company's Principal Property spending on
drilling and infrastructure projects, separate from land
acquisition activity.
Investments in other entities - market value reflects the
Company's investments in enterprises whose securities trade on a
public stock exchange at their period end closing price (e.g.
Trilogy, MEG Energy, MGM Energy and others), and investments in all
other entities at book value. Paramount provides this information
because the market values of equity-accounted investments, which
are significant assets of the Company, are often materially
different than their carrying values.
Non-GAAP measures should not be considered in isolation or
construed as alternatives to their most directly comparable measure
calculated in accordance with GAAP, or other measures of financial
performance calculated in accordance with GAAP. The Non-GAAP
measures are unlikely to be comparable to similar measures
presented by other issuers.
OIL AND GAS MEASURES AND DEFINITIONS
This document contains disclosures expressed as "Boe", "Boe/d"
and "$/Boe". All oil and natural gas equivalency volumes have been
derived using the ratio of six thousand cubic feet of natural gas
to one barrel of oil. Equivalency measures may be misleading,
particularly if used in isolation. A conversion ratio of six
thousand cubic feet of natural gas to one barrel of oil is based on
an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the well
head. The term "liquids" is used to represent oil and natural gas
liquids.
During the second quarter of 2012, the value ratio between crude
oil and natural gas was approximately 38:1. This value ratio is
significantly different from the energy equivalency ratio of 6:1.
Using a 6:1 ratio would be misleading as an indication of
value.
Contacts: Paramount Resources Ltd. J.H.T. (Jim) Riddell
President and Chief Operating Officer (403) 290-3600 Paramount
Resources Ltd. B.K. (Bernie) Lee Chief Financial Officer (403)
290-3600 (403) 262-7994 (FAX) www.paramountres.com
Paramount Resources (TSX:POU)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Paramount Resources (TSX:POU)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024
