TSX Venture Exchange: PRY
CALGARY,
April 9, 2014 /CNW/ - Pinecrest
Energy Inc. ("Pinecrest" or the "Company") announces it has filed
on SEDAR its audited annual financial statements, related
Management's Discussion and Analysis ("MD&A") and Annual
Information Form for the year ended December
31, 2013. The statements will be available for review
at www.sedar.com or www.pinecrestenergy.com.
December 31 |
Three months ended |
Year ended |
|
2013 |
2012 |
2013 |
2012 |
FINANCIAL |
|
|
|
|
Petroleum and natural gas sales
Funds flow from operations (1)
Per share - basic
Per share - diluted
Net income (loss)
Per share - basic
Per share - diluted
Capital expenditures, net of dispositions
Net debt and working capital deficit (2)
Common Shares Outstanding
Weighted average - basic
Weighted average - diluted |
19,549
7,824
$0.04
$0.04
(178,115)
$(0.82)
$(0.82)
1,730
(126,108)
217,212
222,151 |
26,581
20,663
$0.10
$0.09
12,527
$0.06
$0.05
80,320
(99,378)
214,311
238,543 |
108,872
55,160
$0.26
$0.25
(171,046)
$(0.79)
$(0.79)
81,491
(126,108)
216,104
217,773 |
98,204
71,779
$0.34
$0.30
32,129
$0.15
$0.13
212,800
(99,378)
210,482
238,373 |
OPERATING |
|
|
|
|
Number of days
Production
Crude oil (bbls/d)
Natural gas (mcf/d)
NGL (bbls/d)
Barrels of oil equivalent (boe/d-6:1)
Average realized price (3)
Crude oil ($/bbl)
Natural gas ($/mcf)
NGL ($/bbl)
Netback per boe ($)(1)
Petroleum and natural gas sales
Royalties
Production and transportation expenses
Field netback
Realized gain (loss) on derivative financial
instruments
Operating netback
Wells drilled
Gross
Net
Success rate (%) |
92
2,479
478
61
2,620
84.04
2.21
50.95
81.12
(10.36)
(23.66)
47.10
(5.94)
41.16
-
-
- |
92
3,484
93
10
3,510
82.72
3.18
40.59
82.31
(6.02)
(15.22)
61.07
4.64
65.71
16
15.3
100 |
365
3,210
445
48
3,332
91.79
2.76
49.57
89.51
(8.29)
(22.92)
58.30
(5.89)
52.41
15
14.3
100 |
366
3,124
62
8
3,142
85.73
2.36
48.33
85.41
(6.49)
(14.92)
64.00
2.01
66.01
39
37.7
100 |
(1) Non-GAAP measure
(2) Net debt and working
capital is defined as current assets minus current liabilities,
plus outstanding debt, excluding derivative financial
instruments
(3) Before the effects of
derivative financial instruments
Operations Update and Outlook
During the fourth quarter, the Company completed 1 (1.0 net) oil
well and placed 3 (3.0 net) wells on production. The Company
also completed the conversion of 7 (7.0 net) horizontal wells in
the Otter field to water injection along with the construction of
associated injection facilities and pipelines. Pinecrest
continues to review the performance of its waterflood projects as
well as the primary production profiles for all of its wells in
order to optimize production rates as well as ultimate
recovery.
During the first quarter of 2014, no new wells
were drilled or completed and minimal capital was spent on
production optimization and maintenance; this continues to be the
plan through the first half of 2014. An updated capital plan
will be provided later this year and, until such time, Pinecrest
will apply all of its free cash flow towards reducing its
indebtedness. In this regard, exit Q1 2014 net debt and
working capital is estimated to be approximately $120 million.
The Company's credit facility remains at
$165 million with its annual
valuation expected to be completed in May by its syndication of
Canadian chartered banks.
As previously disclosed, the Company entered
2014 producing 2,300 boed and current production, based on field
estimates, is 2,250 boed with 50 boed shut in due to routine
maintenance and field conditions. Based on field estimates,
Q1 2014 production was 2,130 boe per calendar day and 2,270 boe per
producing day. With minimal capital being spent on production
optimization and maintenance during Q1 2014, Pinecrest has been
able to maintain a relatively flat production profile throughout Q1
2014. Looking forward to Q2, Pinecrest anticipates that
overall production will be adversely affected by spring break-up in
the Red Earth area with every effort being undertaken to mitigate
the effects of additional downtime.
2013 Reserves
The following tables summarize certain information contained in the
independent reserves report prepared by Sproule Associates Ltd.
("Sproule") as at December 31,
2013. The report was prepared in accordance with
definitions, standards and procedures contained in the Canadian
Oil and Gas Evaluation Handbook ("COGE Handbook") and National
Instrument 51-101 Standards of Disclosure for Oil and Gas
Activities ("NI 51-101"). Additional reserves information
as required under NI 51-101 will be included in the Company's
Annual Information Form - a copy of which can be obtained under
Pinecrest's profile at www.sedar.com or at
www.pinecrestenergy.com.
Gross Company Reserves
December 31, 2013 |
Oil
(Mbbls) |
Net Present
Values Before
Tax ($M)
@ 0% Discount
Factor |
Net Present
Values Before
Tax ($M)
@ 10% Discount
Factor |
Proved developed producing
Proved developed non-producing
Proved undeveloped |
4,841.6
851.4
1,124.9 |
192,476
43,990
26,415 |
130,162
24,970
5,386 |
Total Proved
Probable |
6,817.9
4,736.2 |
262,880
186,893 |
160,518
69,342 |
Total Proved plus Probable |
11,554.1 |
449,773 |
229,860 |
At December 31,
2013, the Company has a reserve life index of 12.1 years for
the Proved plus Probable reserves, based on the 2013 fourth quarter
average production of 2,620 boe per day.
Decreases in the Company's reserves were
attributable to: the divestiture of the Viewfield assets in
southeast Saskatchewan, the
election to remove certain undeveloped reserves and corresponding
future development capital as they are not in the Company's near
term capital plans and decreased performance in some of the
Company's primary producing wells.
For further disclosure relative to the Company's
reserves please refer to the Company's Management's Discussion and
Analysis and the Annual Information Form for the year ended
December 31, 2013.
Net Asset Value
The following table summarizes the corporate Net Asset Value as at
December 31, 2013:
December 31, 2013 |
|
Present value of Proved plus Probable reserves,
discounted at 10% before tax
Undeveloped land (1)
Bank debt and working capital |
229,860
89,700
(126,108) |
NAV |
193,452 |
Common shares outstanding - basic (000's)
Common shares outstanding - diluted (000's) |
217,212
222,033 |
NAV per common share - basic
NAV per common share - diulted |
0.89
0.87 |
(1) Undeveloped
land value reflects an independent evaluation dated December 31, 2013 by Seaton-Jordon &
Associates Ltd.
Annual General and Special Meeting
Pinecrest's Annual General and Special Meeting is scheduled for
10:00am on Tuesday, June 10, 2014 at the Bow Valley
Conference Centre, Angus/Northcote Room, located at 300, 205 - 5th
Avenue S.W., Calgary. Alberta, T2P
2V7.
Advisory
The information in this press release
contains certain forward-looking statements. These statements
relate to future events or our future performance. 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 "seek", "anticipate",
"plan", "continue", "estimate", "expect", "may", "will", "project",
"predict", "potential", "targeting", "intend", "could", "might",
"should", "believe", "would" and similar expressions. In
particular, forward looking statements in this press release
includes, but is not limited to: Pinecrest's capital program and
2014 business objectives, oil recovery rates, drilling plans for
2014, expected production, expected oil to gas ratios, the effects
of waterfloods on recovery factors, anticipated receipt of AER
approvals, decline rates and type curves for wells, success in
drilling and waterflood activities, production rates, exit rates
for production and bank debt, downspacing opportunities, the
quantity of reserves, and projections of market prices, and costs.
These statements involve substantial known and unknown risks and
uncertainties, certain of which are beyond Pinecrest's control,
including: the impact of general economic conditions; industry
conditions; changes in laws and regulations including the adoption
of new environmental laws and regulations and changes in how they
are interpreted and enforced; fluctuations in commodity prices and
foreign exchange and interest rates; stock market volatility and
market valuations; volatility in market prices for oil and natural
gas; liabilities inherent in oil and natural gas operations;
uncertainties associated with estimating oil and natural gas
reserves; competition for, among other things, capital,
acquisitions, of reserves, undeveloped lands and skilled personnel;
incorrect assessments of the value of acquisitions; changes in
income tax laws or changes in tax laws and incentive programs
relating to the oil and gas industry; geological, technical,
drilling and processing problems and other difficulties in
producing petroleum reserves. Pinecrest's actual results,
performance or achievement could differ materially from those
expressed in, or implied by, such forward-looking statements and,
accordingly, no assurances can be given that any of the events
anticipated by the forward-looking statements will transpire or
occur or, if any of them do, what benefits that Pinecrest will
derive from them. Forward-looking statements are made as of the
date herein except as required by law, Pinecrest undertakes no
obligation to publicly update or revise any forward-looking
statements.
Statements relating to "reserves" or
"resources" are deemed to be forward-looking statements, as they
involve the implied assessment, based on certain estimates and
assumptions, that the resources or reserves described can be
profitably produced in the future.
The Corporation uses the following terms for
measurement within this press release that do not have a
standardized prescribed meaning under GAAP and these measurements
may differ from other companies and accordingly may not be
comparable to measures used by other companies. The terms "funds
from operations" and "operating netback" are not recognized
measures under the applicable GAAP. Management of the Corporation
believes that these terms are useful, in addition to profit and
loss and cash flow from operating activities as defined by GAAP,
for evaluating the Corporation's operating performance and
leverage. Funds from operations is expressed as cash flow from
operating activities before changes in non-cash working capital and
asset retirement expenditures. Operating netback is a measure of
operating margin used in capital allocation decisions. Pinecrest
defines operating netback as average realized price per boe, less
royalties per boe, less operating and transportation expenses per
boe, plus any realized gain or loss per boe on financial
instruments.
Barrels of Oil Equivalent ("boe") may be
misleading, particularly if used in isolation. A boe conversion
ratio of 6MCF:1bbl 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 from the energy equivalency
of 6:1, utilizing a conversion on a 6:1 basis 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.
SOURCE Pinecrest Energy Inc.