Pine Cliff Energy Ltd. Announces Second Quarter 2017 Results
CALGARY, Alberta, Aug. 09, 2017 (GLOBE NEWSWIRE) — Pine Cliff Energy Ltd. (“Pine Cliff” or the “Company”) (TSX:PNE) is pleased to announce the filing of its second quarter financial and operating results. Included in the filings were Pine Cliff’s unaudited condensed consolidated interim financial statements and related management’s discussion and analysis for the three and six months ended June 30, 2017 (the “Q2-Report”). Selected highlights are shown below and should be read in conjunction with the Q2-Report.
Second Quarter and First Half of 2017 Highlights
Significant highlights from the second quarter of 2017 were as follows:
- generated $35.4 million of total revenue, 71% higher than the $20.7 million of total revenue generated in the second quarter of 2016 and the second highest quarterly revenue total in Pine Cliff history;
- for the six months ended June 30, 2017, total revenue increased by 47% to $70.5 million compared to $47.9 million in the six months ended June 30, 2016;
- generated $10.8 million ($0.04 per basic share) of funds flow from operations, compared to $3.7 million of funds flow used in operations ($0.01 per basic share) in the second quarter of 2016;
- generated $22.1 million ($0.07 per basic share) of funds flow from operations in the six months ended June 30, 2017, compared to $2.3 million of funds flow used in operations ($0.01 per basic share) in the six months ended June 30, 2016;
- achieved production of 21,077 Boe/d (94% natural gas), only 7% lower than the 22,647 Boe/d in the second quarter of 2016, despite having sold over 600 Boe/d of production late in 2016, which impacted 2017 production volumes, and short-term production curtailments of approximately 400 Boe/d in the second quarter of 2017;
- reduced bank debt by $8.8 million, ending the quarter with $10.7 million in bank debt, which is $110.4 million less than the second quarter of 2016 amount of $121.1 million. The reduction in bank debt resulted in reduced interest and bank expenses to $0.52 per Boe in the second quarter of 2017, 42% lower than the $0.89 per Boe in the second quarter of 2016; and
- reduced net debt by $7.6 million, ending the quarter with $51.4 million in net debt, which is 1.2 times annualized second quarter 2017 cash flow and $70.7 million less than the second quarter of 2016 net debt level of $122.0 million.
For the 21st of the past 22 quarters, Pine Cliff again generated positive cash flow, with $10.8 million of funds flow from operations while only spending $3.3 million in capital expenditures. Pine Cliff continued to selectively choose drilling and optimization well locations in the second quarter, as the level of gas prices did not justify more aggressive use of its free cash flow on capital expenditures.
Outlook
The North American natural gas market is much “tighter” than last year which means there is less gas in storage than the previous summer at this time. Pine Cliff’s long range view of natural gas continues to be bolstered by the increasing LNG export facilities being built in the United States and the fact that U.S. dry natural gas production has declined for 15 consecutive months compared with previous year periods, but the short term natural gas prices will still largely be impacted by weather.
Pine Cliff’s management and Board is actively considering the best uses of the free cash flow its assets are generating. The 2016 focus of reducing bank debt has now been replaced with a discussion of the merits of organic growth, acquisitions, implementing a dividend or buying back shares. Pine Cliff will be making these capital decisions with the sole goal of optimizing value for its shareholders.
Financial and Operating Results1
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||
| ($000s, unless otherwise indicated) | |||||||||||||
| Oil and gas sales (before royalty expense) | 35,378 | 20,695 | 70,526 | 47,925 | |||||||||
| Cash flow from (used in) operating activities | 10,007 | (4,371 | ) | 23,842 | 5,251 | ||||||||
| Funds flow from (used in) operations2 | 10,834 | (3,655 | ) | 22,067 | (2,257 | ) | |||||||
| Per share – Basic and Diluted ($/share)2 | 0.04 | (0.01 | ) | 0.07 | (0.01 | ) | |||||||
| Loss | (2,118 | ) | (25,862 | ) | (4,654 | ) | (42,039 | ) | |||||
| Per share – Basic and Diluted ($/share) | (0.01 | ) | (0.08 | ) | (0.02 | ) | (0.14 | ) | |||||
| Capital expenditures | 3,267 | 749 | 7,068 | 4,366 | |||||||||
| Acquisitions | (97 | ) | 240 | (97 | ) | 825 | |||||||
| Proceeds on dispositions | (216 | ) | (24,702 | ) | (216 | ) | (24,702 | ) | |||||
| Net Debt2 | 51,372 | 122,032 | 51,372 | 122,032 | |||||||||
| Production (Boe/d) | 21,077 | 22,647 | 21,145 | 22,971 | |||||||||
| Weighted-average common shares outstanding (000s) | |||||||||||||
| Basic and diluted | 307,076 | 305,928 | 307,076 | 305,720 | |||||||||
| Combined sales price ($/Boe) | 18.45 | 10.04 | 18.43 | 11.46 | |||||||||
| Operating netback ($/Boe)2 | 7.41 | (0.02 | ) | 7.28 | 1.35 | ||||||||
| Corporate netback ($/Boe)2 | 5.65 | (1.76 | ) | 5.78 | (0.54 | ) | |||||||
| Operating netback ($ per Mcfe)2 | 1.24 | 0.00 | 1.21 | 0.23 | |||||||||
| Corporate netback ($ per Mcfe)2 | 0.94 | (0.29 | ) | 0.96 | (0.09 | ) | |||||||
| 1 Includes results for acquisitions and excludes results for dispositions from the closing dates. 2 This is a non-IFRS measure, see NON-IFRS MEASURES for additional information. |
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About Pine Cliff
Pine Cliff is an Alberta based natural gas company that is focused on acquiring and developing long life assets that are cash flow positive even in a low commodity price environment. Further information relating to Pine Cliff, including the Q2-Report, may be found on www.sedar.com as well as on Pine Cliff’s website at www.pinecliffenergy.com. To request a printed copy, free of charge, please send an email to.
