CUT BANK, MT,
May 30, 2014 /CNW/ - Mountainview
Energy Ltd. ("Mountainview" or the "Company") (TSXV: MVW) is
pleased to announce its operating and financial results for the
three months ended March 31,
2014.
Certain selected quarterly financial and
operational information is outlined below and should be read in
conjunction with Mountainview's reviewed unaudited interim
consolidated financial statements and management's discussion and
analysis ("MD&A") for the three months ended March 31, 2014 and the audited financial
statements for the years ended December 31,
2013 and 2012 and the accompanying management discussion and
analysis, which have been filed with the Canadian securities
regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com) and also on the Company's website:
www.mountainviewenergy.com.
Highlights
During the first quarter of 2014, Mountainview
continued to build its production base by completing the two wells
drilled at year end, 2013, which resulted in an increase in
revenue.
Highlights of Mountainview's successful Q1 2014
are as follows:
- Completed a capital program of $7.9
million, completing 2 gross (1.9 net) wells at a 100%
success rate.
- Average Q1 production of 898 boe/d, an increase of 230% over
the average of 390 boe/d for Q1 2013.
- Exited Q1 with 1,284 boe/d of production with oil weighting of
87%, compared to 510 boe/d with 79% oil weighting for the prior
period quarter.
- Funds flow from operations increased by 619% over the prior
period quarter, with $.3 million for
the quarter ended March 31, 2014, as
compared to ($0.2) for the quarter
ended March 31, 2013.
- Generated operating netbacks of $33.87 per boe in Q1 2014, an increase of 40%
when compared to $24.12 per boe in Q1
2013.
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| ($000's except per share amounts) |
|
Q1
2014 |
|
Q4
2013 |
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Q3
2013 |
|
Q2
2013 |
|
Q1
2013 |
|
Q4 2012 |
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Q3 2012 |
|
Q2 2012 |
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|
Average production (boe/d) |
|
898 |
|
1,183 |
|
711 |
|
703 |
|
391 |
|
194 |
|
190 |
|
157 |
|
Petroleum and natural gas sales |
|
6,108 |
|
7,418 |
|
5,993 |
|
5,107 |
|
2,009 |
|
778 |
|
933 |
|
739 |
|
Operating netback (per boe) |
|
33.87 |
|
34.39 |
|
26.13 |
|
24.98 |
|
24.12 |
|
(0.66) |
|
26.93 |
|
22.25 |
|
Funds flow from operations |
|
310 |
|
2,085 |
|
2,156 |
|
2,419 |
|
(207) |
|
150 |
|
(177) |
|
(72) |
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Per share
basic |
|
0.00 |
|
0.02 |
|
0.02 |
|
0.03 |
|
nil |
|
nil |
|
nil |
|
nil |
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Per share
diluted |
|
0.01 |
|
0.02 |
|
0.02 |
|
0.02 |
|
nil |
|
nil |
|
nil |
|
nil |
|
Net income (loss) |
|
(1,561) |
|
(3,141) |
|
(387) |
|
(1,065) |
|
(1,381) |
|
(7,344) |
|
(428) |
|
(362) |
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Per share
basic |
|
(0.02) |
|
(0.00) |
|
(0.01) |
|
(0.02) |
|
(0.02) |
|
(0.08) |
|
(0.00) |
|
(0.01) |
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Per share
diluted |
|
(0.02) |
|
(0.00) |
|
(0.01) |
|
(0.02) |
|
(0.02) |
|
(0.08) |
|
(0.00) |
|
(0.01) |
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Capital expenditures |
|
7,910 |
|
16,584 |
|
7,262 |
|
1,682 |
|
21,401 |
|
6,489 |
|
1,137 |
|
2,814 |
Total assets
|
|
90,214 |
|
84,744 |
|
74,265 |
|
67,253 |
|
65,131 |
|
49,056 |
|
49,360 |
|
47,945 |
| Net debt excluding financial
derivatives |
|
65,314 |
|
59,244 |
|
46,883 |
|
35,772 |
|
33,287 |
|
19,804 |
|
18,605 |
|
15,619 |
| (1) |
|
Operating netback is a non-GAAP measure calculated as the
average per boe of the Company's oil and gas sales plus realized
gains on derivatives, less royalties, operating and transportation
expenses. |
| (2) |
|
Funds flow from operations should not be considered an
alternative to, or more meaningful than, cash flow from operating
activities as determined in accordance with International Financial
Reporting Standards as an indicator of Mountainview's performance.
Funds flow from operations represents cash flow from operating
activities prior to changes in non-cash working capital,
transaction costs and decommissioning provision expenditures
incurred. Mountainview also presents funds flow from operations per
share whereby per share amounts are calculated using weighted
average shares outstanding consistent with the calculation of
earnings per share. |
| (3) |
|
Due to the anti-dilutive effect of Mountainview's net loss for
the three months ended March 31, 2014 and 2013, the diluted number
of shares is equal to the basic number of shares. Therefore,
diluted per share amounts of the net loss are equivalent to basic
per share amounts. |
| (4) |
|
Capital expenditures are a non-GAAP measure, calculated as the
purchase or sale price of an asset, plus development capital
expenditures added to PP&E. Corporate acquisitions are excluded
from this measure. |
| (5) |
|
Net debt is a non-GAAP measure representing the total of bank
indebtedness, accounts payables and accrued liabilities, less
accounts receivables, deposits and prepaid expenses. |
Corporate
As highlighted by the Company's quarter-end
financial and operational results, Mountainview exited the quarter
with increased production, offsetting natural declines from initial
production from wells drilled in the fourth quarter of 2013.
These declines resulted in lower average production on a quarter
over quarter basis which produced a 18% decrease in oil and natural
gas sales, while also showing a decrease in funds flow from
operations and per boe netbacks when compared to the fourth quarter
of 2013. The addition of production in late Q1 2014 is the
result of Mountainview's continued focus and successful
implementation of its capital plan in Divide County, ND. Operationally, the
Company continues to improve on its completion technique and
downhole assembly which is expected to increase initial production
rates and recoverable reserves while lowering operating expenses.
The results of the Q1 2014 capital plan further de-risked the
southern extent of the 12 Gage asset, adding an additional infill
drilling inventory with capital efficiencies associated with pad
drilling.
Mountainview expects to continue its strategic
shift to drilling higher working interest wells in 2014.
Financial
At quarter-end, Company net debt was
$65.3 million and the Company had
$46.1 million drawn on its available
credit facility of $51.2
million. Funds flow from operations for Q1 2014
increased significantly from Q1 2013, reaching $0.3 million.
In response to exposure to volatility of
differentials from WTI and industry concerns with respect to
transportation restrictions in the Williston Basin, which translated into
realized prices ranging from $69.40
per barrel of oil in Q1 2013, to $85.28 per barrel of oil in Q1, 2014, the Company
has entered into a financial hedging program commencing in January,
2014. Mountainview had 50% of its production hedged for Q1,
2014, with a floor of $85.00 and a
ceiling of $97.70. The Company
plans to actively manage its hedging program as its production base
grows.
Operations
The Company's Q1 2014 capital plan, including
all drilling operations, was focused on its core 12 Gage asset in
Divide County, N.D. The
$7.9 million capital program in the
quarter included the completion of 2 wells (1.9 net), with a 100%
success rate. At year end 2013, these 2 wells (1.9 net) that
had been drilled and were awaiting completion. The Company
has selectively increased its working interest in its assets
whenever appropriate as it has become more experienced
operationally. This experience has resulted in decreased
capital costs on a per well basis from $8.3
million per well to $6.3
million per well.
Outlook
Mountainview has continued to deliver on its
strategy of production and reserve growth. With anticipated
2014 funds flow from operations in excess of $8 million, and available credit on its existing
credit facility, Mountainview will continue to focus on the
development of its core 12 Gage asset in Divide County, N.D.
The Company will continue to pursue an
aggressive growth strategy using a combination of cash flow and
available credit. Recent positive movement in both oil
pricing and the WTI oil differentials, combined with the Company's
new hedge position, allows Mountainview to remain confident in the
long term sustainability of the 2014 capital plan.
With the de-risking of the 12 Gage drilling
inventory, Mountainview has identified 72 infill Three Forks/Torquay locations. Adding Bakken
potential, management believes that there are an additional 80
drilling locations, all on the 12 Gage acreage. With 152
potential drilling locations on the 12 Gage acreage, Mountainview
is strongly positioned to organically grow production and reserves
while being able to review acquisition opportunities to further
diversify and enhance the Company's commodity and play type
risk.
About Mountainview
Mountainview Energy Ltd. is a public oil and gas
company listed on the TSX Venture Exchange, with a primary focus on
the exploration, production and development of the Bakken and Three
Forks Shale in the Williston Basin
and the South Alberta Bakken.
Forward-Looking Statements
Certain information contained in this press
release constitutes forward-looking statements. Statements
relating to "reserves" are deemed to be forward-looking statements
as they involve the implied assessment, based on certain estimates
and assumptions, that the reserves described exist in the
quantities predicted or estimated and can be profitably produced in
the future. By their nature, forward-looking statements are subject
to numerous risks and uncertainties, some of which are beyond the
Company's control including the impact of general economic
conditions, industry conditions, volatility of commodity prices,
currency fluctuations, environmental risks, competition from other
industry participants, the lack of availability of qualified
service providers, personnel or management, stock market volatility
and ability to access sufficient capital from internal and external
sources, inability to meet or continue to meet listing
requirements, the inability to obtain required consents, permits or
approvals and the risk that actual results will vary from the
results forecasted and such variations may be material.
Readers are cautioned that the assumptions used in the preparation
of such information, although considered reasonable at the time of
preparation may prove to be imprecise and, as such, undue reliance
should not be placed on forward-looking statements. The Company's
actual results, performance or achievement could differ materially
from those expressed in or implied by, these forward-looking
statements and, accordingly, no assurance can be given that any of
the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what benefits the
Company will derive therefrom.
The forward-looking statements contained in
this press release are made as of the date of this press
release. Mountainview disclaims any intention and assumes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by applicable securities laws. Additionally,
Mountainview undertakes no obligation to comment on the
expectations of, or statements made by, third parties in respect of
the matters discussed above.
Barrels of Oil Equivalent
The term barrels of oil equivalent ("boe")
may be misleading, particularly if used in isolation. A boe
conversion ratio of six thousand cubic feet of natural gas to one
barrel of oil equivalent (6 mcf/bbl) 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. All boe conversions in
this report are derived from converting gas to oil in the ratio of
six thousand cubic feet of gas to one barrel of oil.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
SOURCE Mountainview Energy Ltd.