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CALGARY, Alberta, Nov. 15, 2018 (GLOBE NEWSWIRE) — Traverse Energy Ltd. (“Traverse” or “the Company”) (TSX Venture: TVL) presents financial and operating results for the three and nine months ended September 30, 2018.
| Three months ended Sept. 30, | Nine months ended Sept. 30, | |||||||
| Highlights (unaudited) | 2018 | 2017 | 2018 | 2017 | ||||
| Financial ($ thousands, except per share amounts) | ||||||||
| Petroleum and natural gas revenue | 1,769 | 2,173 | 5,526 | 7,814 | ||||
| Cash from operating activities | 638 | 1,081 | 2,262 | 3,573 | ||||
| Adjusted funds flow (1) | 567 | 769 | 1,600 | 3,357 | ||||
| Per share – basic and diluted | 0.01 | 0.01 | 0.02 | 0.04 | ||||
| Net loss | (458 | ) | (538 | ) | (8,761 | ) | (2,039 | ) |
| Per share – basic and diluted | (0.00 | ) | (0.01 | ) | (0.08 | ) | (0.02 | ) |
| Capital expenditures | 556 | 2,024 | 2,545 | 7,116 | ||||
| Total assets | 37,238 | 40,516 | 37,238 | 40,516 | ||||
| Working capital deficiency | (6,041 | ) | (286 | ) | (6,041 | ) | (286 | ) |
| Common shares | ||||||||
| Outstanding (millions) | 103.5 | 91.7 | 103.5 | 91.7 | ||||
| Weighted average (millions) | 103.5 | 91.7 | 103.5 | 89.1 | ||||
| Operations (Units as noted) | ||||||||
| Average production | ||||||||
| Natural gas (Mcf/day) | 1,264 | 2,289 | 1,685 | 2,338 | ||||
| Oil and NGL (bbls/day) | 242 | 347 | 267 | 399 | ||||
| Total (BOE/day) | 452 | 729 | 548 | 789 | ||||
| Average sales price | ||||||||
| Natural gas ($/Mcf) | 1.62 | 2.25 | 1.80 | 2.79 | ||||
| Oil and NGL ($/bbl) | 71.08 | 53.27 | 64.49 | 55.40 | ||||
| Netback ($/BOE) | ||||||||
| Petroleum and natural gas revenue | 42.50 | 32.42 | 36.95 | 36.29 | ||||
| Royalties | (2.81 | ) | (0.82 | ) | (1.85 | ) | (1.32 | ) |
| Operating and transportation expenses | (18.18 | ) | (16.52 | ) | (17.92 | ) | (15.76 | ) |
| Operating netback (2) | 21.51 | 15.08 | 17.18 | 19.21 | ||||
| General and administrative | (5.93 | ) | (3.44 | ) | (5.16 | ) | (3.46 | ) |
| Finance income and expense (3) | (1.95 | ) | (0.17 | ) | (1.32 | ) | (0.16 | ) |
| Corporate netback (4) | 13.63 | 11.47 | 10.70 | 15.59 | ||||
(1) Adjusted funds flow represents cash from operating activities prior to changes in non-cash working capital and settlement of decommissioning obligations.
(2) Operating netback represents revenue, less royalties, operating and transportation expenses. Operating netback per BOE is the operating netback divided by barrels of oil equivalent production volumes for the applicable period.
(3) Excludes non-cash accretion.
(4) Corporate netback represents the operating netback less general and administrative costs and finance income and expense before accretion. Corporate netback per BOE is the corporate netback divided by barrels of oil equivalent production volume for the applicable period.
Operations Review
Traverse’s production averaged 452 BOE per day (54% oil and NGL) during the third quarter of 2018, a decrease of 13% from the second quarter of 2018. Production declined as no new production has been added in 2018 and low natural gas pricing resulted in the shut-in of natural gas wells throughout the quarter. Adjusted funds flow increased 35% from the second quarter of 2018 due mainly to an increase in realized oil and NGL prices. Capital expenditures in the third quarter related mainly to land acquisition and production testing and equipment at Chigwell.
At September 30, 2018 Traverse holds approximately 98,000 net acres in the Duvernay shale basin. Traverse’s Duvernay oil well at Chigwell, placed on production in December 2017, has recovered 104,500 barrels of water to October 31, 2018, which is 40% of the fluids utilized during completion of the well. Water cuts remain unchanged and Traverse will continue to produce the well and evaluate results.
Early in the fourth quarter, as part of the strategy to optimize existing assets, Traverse performed several minor well operations to return previously suspended and shut-in wells to production. This included natural gas wells previously shut-in due to low natural gas pricing, which has improved for the winter heating season. The price environment for light oil has deteriorated substantially due to historically high differentials caused by lack of take away capacity and pipeline constraints. In this current oil price environment, industry activity and financing opportunities have been reduced. Traverse will continue to evaluate alternatives for Duvernay development and optimization of its asset base.
Undeveloped land holdings in Alberta at September 30, 2018 were 202,700 gross (202,100 net) acres. At September 30, 2018 the Company had a working capital deficiency of approximately $6.0 million and credit facilities of $9.0 million. The Company’s 2018 capital budget has been reduced to $3.0 million while the assessment of assets and evaluation of the Chigwell Duvernay well continues.
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