CALGARY, April 11, 2016 /CNW/ - Ironhorse Oil &
Gas Inc. ("Ironhorse" or the "Company") (TSX-V: IOG) announces its
fourth quarter and full year 2015 financial and operating results
and year-end reserves information.
The Company's year-end reserves evaluation with the effective
date of December 31, 2015 was
prepared by Sproule Associates Limited in accordance with
definitions, standards and procedures contained in the Canadian Oil
and Gas Evaluation Handbook ("COGE Handbook") and NI 51-101
"Standards of Disclosure for Oil & Gas Activities".
Reserves included herein are stated on a company gross basis
(working interest before deduction of royalties without including
any royalty interest) unless otherwise noted.
Highlights of 2015:
- Funds from operations decreased 57% to $228,000 for the year ended December 31, 2015 from $535,000 for the year ended December 2014.
- Annual production from Pembina increased over 300% compared to
2014 and averaged 185 boe/d net, despite restricted production
during 7-months of the current year.
- Realized net loss of $5.7 million
for 2015 primarily resulting from; $6.4
million impairment at Pembina, 67% decrease in operating
netbacks on a boe basis compared to 2014, partially offset by
$2 million non-cash deferred tax
recovery.
- General and administrative costs increased 45% to $688,000 compared to $473,000 for the year ended December 31, 2014, as the Company incurred
$270,000 in fourth quarter costs in
defense of the unsolicited take-over-bid by 1927297 Alberta Ltd.
initiated on November 4, 2015. The
bid expired on February 5, 2016 and
1927297 Alberta Ltd. did not take up any Ironhorse shares.
- The Company's proved plus probable reserve volumes are 80% oil
and natural gas liquids weighted, with 77% of reserve volumes being
proved.
- 2015 property impairments recorded were largely attributed to
the significant decline in estimated future commodity prices
provided by the Company's third party external reserve report
evaluators.
Outlook for 2016:
Production from the Nisku L2L
Pool (the "Pool"), the Company's primary source of cash flows, was
shut-in January 19, 2016 because
production is uneconomic under the current commodity price
environment. The Company believes that, with continued
downward pressure on commodity prices, a temporary shut-in of the
Pool production is a prudent decision that will preserve the value
of oil and natural gas reserves. The Company anticipates that
the Pool will remain shut-in until there is a recovery in commodity
prices.
Currently the Company does not have significant capital
commitments authorized for 2016 and is well positioned financially
to withstand the temporary shut-in of the Pool, with a positive
working capital balance of $2.9
million as at December 31,
2015.
SELECTED
INFORMATION
|
Three months ended
December 31
|
Year ended
December 31
|
($ thousands except
per share & unit amounts)
|
2015
|
2014
|
2015
|
2014
|
Financial
|
|
|
|
|
Petroleum and natural
gas revenues (1)
|
892
|
545
|
3,343
|
1,429
|
Funds from operations
(2)
|
(144)
|
123
|
228
|
535
|
Per
share – basic and diluted
|
(0.01)
|
0.01
|
0.01
|
0.02
|
Net (loss)
|
(2,076)
|
(331)
|
(5,719)
|
(221)
|
Per
share – basic and diluted
|
(0.07)
|
(0.01)
|
(0.21)
|
(0.01)
|
Capital expenditures
(3)
|
-
|
13
|
44
|
666
|
Operation
|
|
|
|
|
Production
|
|
|
|
|
Gas
(mcf/d)
|
202
|
150
|
192
|
129
|
Oil & NGL
(bbl/d)
|
197
|
77
|
164
|
40
|
Total
(boe/d)
|
231
|
102
|
196
|
62
|
Petroleum and natural
gas revenues ($/boe)
|
42.08
|
57.84
|
46.83
|
63.16
|
Royalties
($/boe)
|
18.00
|
17.86
|
17.62
|
10.00
|
Operating expenses
($/boe)
|
12.55
|
17.50
|
16.60
|
14.58
|
Operating netback
($/boe)
|
11.53
|
22.48
|
12.61
|
38.58
|
(1) Petroleum and natural gas revenues are
before royalty expense.
(2) Funds from
operations and net debt are non-GAAP measures as defined in the
Advisory section of the MD&A.
(3)
Capital expenditures are before acquisitions and
dispositions.
Reserves Summary – Oil Equivalent (Mboe)
(Mboe)
|
Proved
Producing
|
Proved
Developed
Non-Producing
|
Proved
Undeveloped
|
Total
Proved
|
Total
Probable
|
Proved plus
Probable
|
2014
|
556
|
68
|
-
|
624
|
176
|
799
|
2015
|
483
|
89
|
-
|
572
|
175
|
747
|
Net Present Value Summary(1)
($
thousands)
|
Proved
Producing
|
Proved
Developed
Non-Producing
|
Proved
Undeveloped
|
Total
Proved
|
Total
Probable
|
Total
Proved plus
Probable
|
10%
|
7,427
|
588
|
-
|
8,015
|
2,523
|
10,538
|
15%
|
6,543
|
411
|
-
|
6,954
|
2,396
|
9,350
|
(1) Net present value summary is
before income taxes
Reserves Reconciliation - Oil Equivalent (Mboe)
(Mboe)
|
Total
Proved
|
Total
Probable
|
Total
Proved plus
Probable
|
December 31,
2014
|
624
|
176
|
799
|
Technical
Revisions
|
20
|
(1)
|
19
|
Dispositions
|
-
|
-
|
-
|
Economic
Factors
|
(0.1)
|
0.1
|
-
|
Production
|
(72)
|
-
|
(72)
|
December 31,
2015
|
572
|
175
|
747
|
Net Asset Value ("NAV") before income tax – Discounted at
10%
($ thousands except
share and per share data)
|
|
December 31,
2015
|
December 31,
2014
|
Net present
value-proved and probable
|
|
10,538
|
18,383
|
Net working capital
(1)
|
|
2,915
|
2,731
|
Net asset
value
|
|
13,453
|
21,114
|
Common shares
outstanding
|
|
27,885,824
|
27,885,824
|
NAV per share,
December 31
|
|
0.48
|
0.76
|
Sproule Price Forecasts as of December
31, 2015 (1)
Year
|
|
Canadian Light
Sweet Oil Price At Edmonton
40o
API
($Cdn/bbl)
|
AECO/NIT
Spot Gas
Price
($Cdn/Mmbtu)
|
2016
|
|
55.20
|
2.25
|
2017
|
|
69.00
|
2.95
|
2018
|
|
78.43
|
3.42
|
2019
|
|
89.41
|
3.91
|
2020
|
|
91.71
|
4.20
|
2021
|
|
93.08
|
4.28
|
2022
|
|
94.48
|
4.35
|
2023
|
|
95.90
|
4.43
|
2024
|
|
97.34
|
4.51
|
2025
|
|
98.80
|
4.59
|
2026
|
|
100.28
|
4.67
|
Thereafter
|
|
+1.5%/year
|
+1.5%/year
|
(1) This summary table identifies
benchmark reference pricing schedules that might apply to a
reporting issuer.
Additional Information
Ironhorse's complete results for the year ended December 31, 2015, including audited financial
statements and the management's discussion and analysis, statement
of reserves data and other oil and gas information are available on
SEDAR or the Company's web site at www.ihorse.ca.
About Ironhorse:
Ironhorse Oil & Gas Inc. is a Calgary-based junior oil and natural gas
production company trading on the TSX Venture Exchange under the
symbol "IOG."
Forward-looking statements:
Statements throughout this release that are not historical
facts may be considered to be "forward looking statements." These
forward looking statements sometimes include words to the effect
that management believes or expects a stated condition or result.
All estimates and statements that describe the Company's
objectives, goals, or future plans, including management's
assessment of future plans and operations, drilling plans and
timing thereof, expected production rates and additions and the
expected levels of activities may constitute forward-looking
statements under applicable securities laws and necessarily involve
risks including, without limitation, risks associated with oil and
gas exploration, development, exploitation, production, marketing
and transportation, volatility of commodity prices, imprecision of
reserve estimates, environmental risks, competition from other
producers, incorrect assessment of the value of acquisitions,
failure to complete and/or realize the anticipated benefits of
acquisitions, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from
internal and external sources and changes in the regulatory and
taxation environment. As a consequence, the Company's actual
results may differ materially from those expressed in, or implied
by, the forward-looking statements. Forward-looking statements or
information are based on a number of factors and assumptions which
have been used to develop such statements and information but which
may prove to be incorrect. Although the Company 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 the Company can give no
assurance that such expectations will prove to be correct. In
addition to other factors and assumptions which may be identified
in this document, assumptions have been made regarding, among other
things: the ability of the Company to obtain equipment and services
in a timely and cost efficient manner; drilling results; the
ability of the operator of the projects which the Company has an
interest in to operate the field in a safe, efficient and effective
manor; and field production rates and decline rates. Readers are
cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could affect
the Company's operations and financial results are included
elsewhere herein and in reports on file with Canadian securities
regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com). Furthermore, the forward-looking
statements contained in this release are made as at the date of
this release.
Boe Conversion – Certain natural gas volumes have been
converted to barrels of oil equivalent ("boe") whereby six thousand
cubic feet (mcf) of natural gas is equal to one barrel (bbl) of
oil. This conversion ratio is based on an energy equivalency
conversion applicable at the burner tip and does not represent a
value equivalency at the wellhead.
"Neither 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 release."
SOURCE Ironhorse Oil & Gas Inc.