RedWater Announces Financial and Operating Results for the Three and Twelve Months Ended December 31, 2013
May 01 2014 - 8:48AM
Marketwired
RedWater Announces Financial and Operating Results for the Three
and Twelve Months Ended December 31, 2013
OKOTOKS, ALBERTA--(Marketwired - May 1, 2014) - RedWater Energy
Corp. ("RedWater") (TSX-VENTURE:RED) is pleased to report financial
and operating results for the three and twelve month periods ended
December 31, 2013. RedWater's audited financial statements and
related management's discussion and analysis for the three and
twelve months ended December 31, 2013 have been filed and are
available on the SEDAR website at www.sedar.com and may also be
obtained on RedWater's website at www.redwaterenergy.com.
Highlights
- Increased average production to 270 boepd, an increase of 82%
over the comparable fourth quarter of 2012
- Improved average oil production to 154 bbls/d, an increase 48%
over the fourth quarter of 2012
- Total revenue (net of royalties) increased 72% to $3,785,963
for the 12 months ended December 31, 2013 versus $2,196,769 for the
12 months ended December 31, 2012.
- Significantly increased reserves
- Proved reserves increased 220% to approximately $18.2 million @
NPV 10%
- Proved and Probable reserves increased 163% to approximately
$25.7 million @ NPV 10%
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
Operations |
|
|
|
|
|
|
|
|
|
|
|
Production |
|
|
|
|
|
|
|
|
|
|
|
|
Oil (bbls/d) |
|
154 |
|
|
104 |
|
|
129 |
|
|
88 |
|
Natural Gas (Mcf/d) |
|
698 |
|
|
263 |
|
|
635 |
|
|
188 |
|
BOEPD |
|
270 |
|
|
148 |
|
|
235 |
|
|
119 |
|
|
|
|
|
|
|
|
|
|
|
|
Average Selling Price |
|
|
|
|
|
|
|
|
|
|
|
|
Oil ($/bbls) |
$ |
70.64 |
|
$ |
71.23 |
|
$ |
78.98 |
|
$ |
71.36 |
|
Natural Gas ($/Mcf) |
|
3.35 |
|
|
3.07 |
|
|
3.14 |
|
|
2.47 |
|
BOE ($/BOE) |
$ |
49.00 |
|
$ |
55.61 |
|
$ |
51.93 |
|
$ |
56.49 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Netback ($/BOE) |
$ |
5.39 |
|
$ |
15.68 |
|
$ |
15.96 |
|
$ |
16.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Three Months Ended December 31, |
|
|
Twelve Months Ended December 31, |
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
Financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Petroleum and Natural Gas Revenues, net of
royalties |
976,206 |
|
|
686,889 |
|
|
3,785,662 |
|
|
2,196,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Flow from Operations |
(211,650 |
) |
|
(87,272 |
) |
|
(89,774 |
) |
|
(332,493 |
) |
|
Per Share, Basic & Diluted |
(0.01 |
) |
|
0.00 |
|
|
0.00 |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) |
(785,738 |
) |
|
(292,416 |
) |
|
(1,528,667 |
) |
|
(921,650 |
) |
|
Per Share, Basic & Diluted |
(0.02 |
) |
|
(0.01 |
) |
|
(0.04 |
) |
|
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
972,813 |
|
|
1,926,739 |
|
|
4,609,889 |
|
|
3,730,798 |
|
Total Assets |
19,576,162 |
|
|
14,707,325 |
|
|
19,576,162 |
|
|
14,707,325 |
|
Shareholders' Equity |
6,717,310 |
|
|
7,566,686 |
|
|
6,717,310 |
|
|
7,566,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
40,233,250 |
|
|
34,840,152 |
|
|
40,233,250 |
|
|
34,840,152 |
|
Diluted |
40,233,250 |
|
|
34,840,152 |
|
|
40,233,250 |
|
|
34,840,152 |
|
|
|
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|
Share Trading |
|
|
|
|
|
|
|
|
|
|
|
|
High |
0.13 |
|
|
0.20 |
|
|
0.19 |
|
|
0.32 |
|
|
Low |
0.07 |
|
|
0.11 |
|
|
0.07 |
|
|
0.11 |
|
|
Close |
0.08 |
|
|
0.15 |
|
|
0.08 |
|
|
0.15 |
|
Trading Volume |
1,074,430 |
|
|
643,115 |
|
|
5,596,730 |
|
|
2,945,537 |
|
Reserves
RedWater significantly increased proved and probable reserves
over the previous year. Proved reserves increased 220% while proved
and probable reserves increased by 163%. The additions are the
result of new discoveries, production optimization and an
acquisition at Norris.
December 31, 2013 |
|
Company Share of Reserves (Net) (1) |
|
Company Share of Net Present Value (Before Income
Tax)(1) |
Reserves Category |
|
Oil Net Mbbl |
|
Heavy Oil Net Mbbl |
|
Natural Gas Net MMcf |
|
Total Net Mboe |
|
@10% ($M) |
|
@15% ($M) |
PROVED |
|
|
|
|
|
|
|
|
|
|
|
|
|
Producing |
|
127 |
|
154 |
|
908 |
|
432 |
|
8,693 |
|
7,895 |
|
Developed Nonproducing |
|
35 |
|
24 |
|
1,028 |
|
231 |
|
2,382 |
|
1,776 |
|
Undeveloped |
|
108 |
|
252 |
|
10 |
|
362 |
|
7,136 |
|
4,352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PROVED |
|
270 |
|
430 |
|
1,924 |
|
1,025 |
|
18,211 |
|
13,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PROBABLE |
|
94 |
|
165 |
|
824 |
|
396 |
|
7,518 |
|
5,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PROVED PLUS PROBABLE |
|
365 |
|
595 |
|
2,769 |
|
1,422 |
|
25,729 |
|
21,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012 |
|
Company Share of Reserves (Net) (1) |
|
Company Share of Net Present Value (Before Income
Tax)(1) |
Reserves Category |
|
Oil Net Mbbl |
|
Heavy Oil Net Mbbl |
|
Natural Gas Net MMcf |
|
Total Net Mboe |
|
@10% ($M) |
|
@15% ($M) |
PROVED |
|
|
|
|
|
|
|
|
|
|
|
|
|
Producing |
|
48 |
|
41 |
|
305 |
|
140 |
|
2,261 |
|
1,924 |
|
Developed Nonproducing |
|
33 |
|
0 |
|
508 |
|
119 |
|
1,533 |
|
1,273 |
|
Undeveloped |
|
120 |
|
70 |
|
0 |
|
190 |
|
1,896 |
|
1,002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PROVED |
|
201 |
|
111 |
|
814 |
|
449 |
|
5,690 |
|
4,199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PROBABLE |
|
191 |
|
40 |
|
397 |
|
298 |
|
4,090 |
|
2,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PROVED PLUS PROBABLE |
|
392 |
|
151 |
|
1,211 |
|
747 |
|
9,780 |
|
6,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
GLJ Petroleum Consultants (GLJ), Evaluation of Oil and Gas Reserves
Based on Forecast Prices and Costs as of December 31, 2013 |
|
Operational Review
2013 was a significant year for RedWater. RedWater exited the
fourth quarter with daily average production of 270 boepd.
Production was 57% oil weighted for the fourth quarter. Management
has continued to focus on optimizing daily production. We completed
the acquisition of the Norris properties on January 31, 2013 for
$2.3 million. In addition the Company drilled 2 wells and
re-completed 7 wells in 2013.
RedWater will continue to accelerate the development of its
existing properties in 2014, targeting those properties with the
highest risk/return profiles. We have identified a solid inventory
of near term drilling, tie-in and re-completion opportunities which
will be the focus in 2014. Management continues to review
acquisition opportunities that fit within our core areas of
Redwater and Westlock.
Business of RedWater Energy Corp.
RedWater Energy Corp. is an emerging oil and gas exploration and
development company. RedWater is engaged in the acquisition,
enhancement and exploration of conventional oil and gas projects in
Western Canada with a focus on developing high working interest
light oil opportunities. RedWater's core properties are located in
Redwater, Norris, Westlock, Fairydell-Bon Accord and Panny areas of
Alberta. www.redwaterenergy.com.
Cautionary Statements
Forward-looking information and statements
This news release contains certain forward-looking
information and statements within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "may", "will", "project",
"should", "believe", "plans", "intends" and similar expressions are
intended to identify forward-looking information or statements. In
particular, but without limiting the forgoing, this news release
contains forward-looking information and statements pertaining to
the following; the timing for completion and equipping of wells;
the volume and product mix of RedWater's oil and gas production and
its ability to develop RedWater's oil resource properties, the use
of the RedWater's cash flow from operations and expanded credit
facilities; the number of wells to be drilled and potential
development drilling and number of potential oil development
locations.
In addition, forward-looking statements or information are
based on a number of material factors, expectations or assumptions
of RedWater which have been used to develop such statements and
information but which may prove to be incorrect. Although RedWater
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 RedWater can give
no assurance that such expectations will prove to be correct. In
addition to other factors and assumptions which may be identified
herein, assumptions have been made regarding, among other things:
results from drilling and development activities consistent with
past operations; the continued and timely development of
infrastructure in areas of new production; continued availability
of debt and equity financing and cash flow to fund RedWater's
current and future plans and expenditures; the impact of increasing
competition; the general stability of the economic and political
environment in which RedWater operates; the timely receipt of any
required regulatory approvals; the ability of RedWater to obtain
qualified staff, equipment and services in a timely and cost
efficient manner; drilling results; the ability of the operator of
the projects in which RedWater has an interest in to operate the
field in a safe, efficient and effective manner; the ability of
RedWater to obtain financing on acceptable terms; field production
rates and decline rates; the ability to replace and expand oil and
natural gas reserves through acquisition, development and
exploration; the timing and cost of pipeline, storage and facility
construction and expansion and the ability of RedWater to secure
adequate product transportation; future commodity prices; currency,
exchange and interest rates; regulatory framework regarding
royalties, taxes and environmental matters in the jurisdictions in
which RedWater operates; the ability of RedWater to successfully
market its oil and natural gas products that all necessary
regulatory approvals will be obtained as and when required, that
there will be no material adverse change in RedWater's affairs or
laws, rules or regulations relating to RedWater, its securities or
business, there will be no regulatory proceedings involving
RedWater or any of its directors or officers, or any cease trade or
other order prohibiting or restricting trading in RedWater's
securities, no major national or international event will have
occurred that has or would reasonably be expected to have a
material adverse effect on financial markets or the business,
operations or affairs of RedWater.
The forward-looking information and statements included in
this news release are not guarantees of future performance and
should not be unduly relied upon. Such information and statement,
including the assumptions made in respect thereof, involve known
and unknown risks, uncertainties and other factors that may cause
actual results or events to defer materially from those anticipated
in such forward-looking information or statements including,
without limitation: changes in commodity prices; changes in the
demand for or supply of RedWater's products; unanticipated
operating results or production declines; changes in tax or
environmental laws, royalty rates or other regulatory matters;
changes in development plans of RedWater or by third party
operators of RedWater's properties, increased debt levels or debt
service requirements; inaccurate estimation of RedWater's oil and
gas reserve and resource volumes; limited, unfavorable or a lack of
access to capital markets; increased costs; a lack of adequate
insurance coverage; the impact of competitors; and certain other
risks detailed from time-to-time in RedWater's public disclosure
documents, (including, without limitation, those risks identified
in this news release and RedWater's public company documents filed
on SEDAR).
The forward-looking information and statements contained in
this news release speak only as of the date of this news release,
and RedWater does not assume any obligation to publicly update or
revise any of the included forward-looking statements or
information, whether as a result of new information, future events
or otherwise, except as may be expressly required by applicable
securities laws.
Funds flow from operations are not measures that have any
standardized meaning prescribed by IFRS or Canadian GAAP and
accordingly are referred to as non - GAAP measures. Therefore,
these measures may not be comparable to similar measures presented
by other issuers. These measures have been described and presented
here and in our MD&A in order to provide shareholders and
potential investors with additional information regarding
Redwater's liquidity and its ability to generate funds to finance
its operations. Management utilizes "Funds flow from operations" as
a key measure to assess the ability of RedWater to finance
operating activities and capital activities. All references to
funds flow from operations throughout this report are calculated
based on cash flows from operating activities before changes in
non-cash working capital. Cash flows from operating activities are
the closest comparable figure which is calculated in accordance
with IFRS and Canadian GAAP.
BOE Equivalent
Barrel of oil equivalents or BOEs may be misleading,
particularly if used in isolation. A BOE conversion ratio of 6
mcf:1 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.
RedWater Energy Corp.Gary WatersPresident & CEO(403)
995-0465gwaters@redwaterenergy.comwww.redwaterenergy.com