Renegade Petroleum Ltd. Announces Second Quarter 2013 Results and Operational Update
August 08 2013 - 8:55PM
Marketwired Canada
Renegade Petroleum Ltd. ("Renegade" or the "Company") (TSX VENTURE:RPL), a light
oil focused exploration and production company with assets located in
Saskatchewan, Alberta, Manitoba and North Dakota, is pleased to announce it has
filed its condensed interim consolidated financial statements ("Financial
Statements") and related management's discussion and analysis ("MD&A") for the
for the three and six month periods ended June 30, 2013 on SEDAR. Selected
financial and operational information is outlined below and should be read in
conjunction with the Financial Statements and related MD&A which are available
for review at www.renegadepetroleum.com or www.sedar.com.
SECOND QUARTER 2013 RESULTS
-- Achieved average production of 7,111 boe per day ("boe/d") for the three
months ended June 30, 2013, up 92 percent from the comparable quarter of
2012. Production consisted of 94 percent light oil and 6 percent natural
gas and natural gas liquids;
-- Increased funds flow from operations by 57 percent to $22.2 million in
the second quarter of 2013 from $14.2 million in the second quarter of
2012;
-- Paid cash dividends of $11.7 million, or $0.01917 per Renegade share per
month;
-- Increased the credit facility to $335 million from $325 million;
-- Drilled a total of 3 gross (1.8 net) wells in southeast Saskatchewan;
and
-- Subsequent to the quarter end, on July 11, 2013, disposed of certain
non-core petroleum and natural gas properties for gross proceeds of
approximately $19.0 million.
FINANCIAL HIGHLIGHTS
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Three months ended Six months ended
June 30, June 30,
------------------------------------------------
% %
2013 2012 change 2013 2012 change
------------------------------------------------
Financial (000's except per
share amounts)
Petroleum and natural gas
sales 55,567 25,852 115 112,431 53,539 110
Funds flow from
operations(1) 22,233 14,187 57 49,594 28,553 74
Per share - basic 0.11 0.16 (31) 0.24 0.34 (29)
Per share - diluted 0.11 0.16 (31) 0.24 0.33 (27)
Net income (loss) (4,088) 8,042 (151) (9,425) 8,278 (214)
Per share - basic and
diluted(2) (0.02) 0.09 (122) (0.05) 0.10 (150)
Dividends declared 11,682 - n/a 23,363 - n/a
Per share 0.06 - n/a 0.12 - n/a
Development capital
expenditures 6,133 19,077 (68) 40,977 62,615 (35)
Acquisitions (corporate and
property) 8 799 (99) 290 17,016 (98)
Property dispositions (435) (357) 22 (13,239) (357) 3,608
Net debt(3) 292,134 80,036 265 292,134 80,036 265
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Weighted average shares
outstanding(2)
Basic 203,147 89,635 127 203,122 83,644 143
Diluted 203,147 91,520 122 203,122 86,108 136
Shares outstanding, end of
period
Basic 203,147 89,635 127 203,147 89,635 127
Diluted 210,457 98,794 113 210,457 98,794 113
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Operating
Average daily production
Crude oil (bbls/d) 6,712 3,545 89 7,059 3,520 101
Natural gas (Mcf/d) 1,560 738 111 1,585 698 127
Natural gas liquids
(bbls/d) 139 44 216 139 42 231
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Total (boe/d) (4) 7,111 3,712 92 7,461 3,678 103
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Average realized price
Crude oil and natural gas
liquids ($/bbl) 88.51 78.87 12 85.71 82.29 4
Natural gas ($/mcf) 2.72 1.38 97 2.68 1.55 73
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Total ($/boe) (4) 85.87 76.53 12 83.25 79.99 4
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Netback ($/boe)
Oil and gas sales 85.87 76.53 12 83.25 79.99 4
Royalties (14.97) (11.92) 26 (13.72) (12.14) 13
Operating expenses (18.41) (13.22) 39 (17.72) (13.50) 31
Transportation (1.83) (2.92) (37) (1.79) (2.93) (39)
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Operating netback prior to
realized derivative
contracts 50.66 48.47 5 50.02 51.42 (3)
Realized gain on
derivative contracts (2.02) 2.56 (179) (1.54) 0.80 (293)
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Operating netback(4) 48.64 51.03 (5) 48.48 52.22 (7)
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(1) "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 Renegade'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. Renegade 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.
(2) Due to the anti-dilutive effect of Renegade's net loss for the three
and six months ended June 30, 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.
(3) Current assets less current liabilities, excluding derivative
contracts.
(4) A conversion ratio of 1 barrel of oil equivalent ("boe"): 6 Mcf has
been used, which is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not necessarily
represent a value equivalency at the wellhead. Boes may be misleading,
particularly if used in isolation.
OPERATIONAL UPDATE
During the second quarter of 2013, Renegade drilled a total of 3 gross (1.8 net)
wells with a 100% success rate. Activity was focused in southeast Saskatchewan
as drilling in the west central Saskatchewan Viking program did not commence
until early July. The first southeast Saskatchewan well, in the Crystal Hill
area, was brought on-stream in late June while the remaining two wells in the
Queensdale area were completed and placed on production in July.
At Crystal Hill, Renegade drilled 1 gross (0.5 net) well and achieved a 30 day
IP rate of 170 bbls/d. In addition, the Company has now drilled and completed
the first 2 gross (1.3 net) wells on the acquired Queensdale trend. The first
well has been on production for 25 days and has a 25 day IP rate of 237 bbl/d
with a current casing pressure of 3,700 kPa. The second well has been on
production for 15 days and has a 15 day IP rate of 320 bbl/d with a casing
pressure of 5,000 kPa. Both wells are expected to have significant optimization
potential, as the rates are currently being restricted as casing pressure
builds. These successful results have exceeded management's expectations and
reinforce the quality of assets Renegade has accumulated in southeast
Saskatchewan.
The Company began its Viking drilling program in west central Saskatchewan in
early July. Renegade has recently completed the drilling of a 14 gross (13.5
net) well summer program and has fracture stimulated 5.5 net wells that are at
various stages of being brought on production. The Company plans to have all
13.5 net wells on-stream within the third quarter. Early results show that these
wells are in line with management's expectations.
2013 PRODUCTION GUIDANCE AND OUTLOOK
Renegade's current production is approximately 7,400 boe/d and Renegade confirms
its previously announced 2013 average production guidance of 7,400 to 7,700
boe/d.
Renegade remains active in southeast Saskatchewan and will have one rig
operating in the area throughout the third and fourth quarter. The remaining
wells in the 2013 drilling program will continue to be focused along the
acquired Queensdale trend and its analog pools in Silverton and Gainsborough.
"We are excited and encouraged by the initial drilling results on the recently
acquired Queensdale asset base. The first few wells have outperformed
management's expectations to date. Renegade has assembled a strong asset base of
high quality, light oil focused drilling locations with an inventory for several
years. We look forward to the continued development of the Company's south east
Saskatchewan and west central Saskatchewan assets throughout the remainder of
2013 and into 2014," said Mr. Michael Erickson, President and CEO.
STRATEGIC REVIEW PROCESS ON-GOING
The Company's strategic review process is ongoing and the Company will provide
further updates as appropriate.
READER ADVISORIES
Forward-Looking Statements
Statements in this document may contain forward-looking statements or
information within the meaning of applicable securities laws, including
management's assessment of future plans and operations including capital
expenditures, drilling results, locations and plans, management's expectations
with respect to the quality of the Company's assets, areas of activity, the
Company's plans with respect to optimization operations and the results thereof,
expectations with respect to production rates, decline rates and type curves,
operational plans, the timing of bringing certain production on-stream,
production guidance, matters related to the strategic plans of the Company and
the timing of updates to be made by the Special Committee. The reader is
cautioned that assumptions used in the preparation of such information may prove
to be incorrect. Events or circumstances may cause actual results to differ
materially from those predicted, as a result of numerous known and unknown
risks, uncertainties, and other factors, many of which are beyond the control of
the Company. These risks include, but are not limited to: the risks associated
with the oil and gas industry; commodity prices and exchange rate changes;
operational risks inherent in exploration, development and production
activities; delays or changes in plans; risks associated to the uncertainty of
reserve estimates; health and safety risks; and the uncertainty of estimates and
projections of production, costs and expenses.
In addition, forward-looking statements or information are based on a number of
factors and assumptions which have been used to develop such statements and
information but which may prove to be incorrect. Although the Company 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 the Company 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: the impact of increasing competition; the general
stability of the economic and political environment in which the Company
operates; the timely receipt of any required regulatory approvals; the ability
of the Company to obtain qualified staff, equipment and services in a timely and
cost efficient manner; drilling results; the ability of the operator of the
projects which the Company has an interest in to operate the field in a safe,
efficient and effective manner; the ability of the Company 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 costs of pipeline, storage and facility
construction and expansion and the ability of the Company to secure adequate
product transportation; future commodity prices; currency, exchange and interest
rates; the timing of operations; the regulatory framework regarding royalties,
taxes and environmental matters in the jurisdictions in which the Company
operates; and the ability of the Company to successfully market its oil and
natural gas products. Readers are cautioned that the foregoing lists of factors
and assumptions are not exhaustive. Additional information on these and other
factors that could affect the Company's operations and financial results are
included in the Company's filings with Canadian securities regulatory
authorities, including the Company's annual information form, and may be
accessed through the SEDAR website (www.sedar.com), at the Company's website
(www.renegadepetroleum.com).
The forward-looking statements contained in this news release are made as at the
date of this news release and the Company does not undertake any obligation to
update publicly or to revise any of the included forward-looking statements,
whether as a result of new information, future events or otherwise, except as
may be required by applicable securities laws.
Certain Oil & Gas Matters
Any references in this news release to IP rates are useful in confirming the
presence of hydrocarbons, however, such rates are not determinative of the rates
at which such wells will continue production and decline thereafter are not
necessarily indicative of long term performance or ultimately recovery. While
encouraging, readers are cautioned not to place reliance on such rates in
calculating the aggregate production for Renegade.
Conversion
The term "boe" may be misleading, particularly if used in isolation. A boe
conversion ratio of six thousand cubic feet of natural gas to one boe (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. 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. 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 release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Renegade Petroleum Ltd.
Michael Erickson
President & CEO
(403) 355-8922
www.renegadepetroleum.com
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