Advantage Announces Fourth Quarter and Year End 2019 Results
February 27, 20207:05 PM CNW
CALGARY, Feb. 27, 2020 /CNW/ – Advantage Oil & Gas Ltd. (“Advantage” or the “Corporation”) is pleased to announce its 2019 results, including considerable progress on liquids growth, continued operational excellence of our low-cost natural gas foundation, and solid performance on our 2019 objectives. With modern, low emissions-intensity assets and our Glacier Carbon Sequestration project, the Corporation continues to proudly deliver clean and sustainable energy, contributing to a reduction in global emissions by displacing high-carbon fuels.We are proud of our Team’s 2019 achievements and thank Advantage’s Board of Directors and our shareholders for their support. We look forward to reporting on our progress as the Team continues to execute on our liquids-focused development plan.Accomplishments during 2019 included:Record annual production of 44,334 boe/d, an increase of 6% (250 mmcf/d natural gas and 2,700 bbls/d liquids).Record quarterly natural gas production of 266 mmcf/d in the fourth quarter of 2019 during a period of elevated AECO prices.Increased liquids production by 81% to average 2,700 bbls/d in the fourth quarter of 2019. Liquids comprised 18% of total revenue.Discovery of a light oil pool at Progress, elevating the asset to a top tier investment priority. Production began in the first quarter of 2020 above management expectations.Commissioned a 40 mmcf/d and 2,000 bbls/d liquids hub at our Valhalla asset, which alleviated a facility restriction.Initial production from our first well at Pipestone/Wembley in the fourth quarter of 2019.Achieved hedging and market diversification gains of $32 million.Increased CO2e sequestration credits by 59% to 90,500 tonnes.Achieved operating costs of $1.98/boe.Delivered on 2019 plan with capital spending reduced from $225 million to $185 million.2019 Operating and Financial Results SummaryAnnual 2019 cash provided by operating activities of $156 million and adjusted funds flow(a) of $155 million or $0.83/share.Year-end net debt(a) was $304 million on a $400 million bank credit facility, resulting in a net debt to adjusted funds flow(a) ratio of 2.0. Financial HighlightsThree months endedDecember 31Year endedDecember 31($000, except as otherwise indicated)2019201820192018Financial Statement HighlightsSales including realized derivatives (3)$76,921$73,979$275,237$250,604Net income (loss) and comprehensive income (loss)$(1,844)$25,162$(24,654)$11,119per basic share (2)$(0.01)$0.14$(0.13)$0.06Cash provided by operating activities (4)$39,965$41,627$156,063$149,240Cash provided by financing activities (4)$20,037$11,739$24,317$63,937Cash used in investing activities$50,365$50,723$173,640$213,734Basic weighted average shares (000)186,911185,942186,659186,040Other Financial HighlightsAdjusted funds flow (1)$44,452$46,301$155,180$150,378per boe (1)$10.20$11.02$9.59$9.89per basic share (1)(2)$0.23$0.25$0.83$0.81Net capital expenditures (1)$59,609$51,187$184,922$201,086Working capital deficit (1)$7,996$1,912$7,996$1,912Bank indebtedness$295,624$270,918$295,624$270,918Net debt (1)$303,620$272,830$303,620$272,830 (1)Non-GAAP measure which may not be comparable to similar non-GAAP measures used by other entities. Please see “Non-GAAP Measures”.(2)Based on basic weighted average shares outstanding.(3)Excludes net sales of natural gas purchased from third parties.(4)Cash provided by operating activities and cash provided by financing activities for the three months and year ended December 31, 2018 has been adjusted to conform to the presentation adopted for the periods ended December 31, 2019. Operating HighlightsThree months endedDecember 31Year endedDecember 312019201820192018OperatingDaily ProductionNatural gas (mcf/d)266,035262,269249,802240,959Liquids (bbls/d)3,0311,9742,7001,491Total production (mcfe/d)284,221274,113266,002249,905Total production (boe/d)47,37045,68644,33441,651Average realized prices (including realized derivatives)Natural gas ($/mcf) (2)$2.58$2.69$2.49$2.47Liquids ($/bbl)$49.09$49.23$49.14$62.12Operating Netback ($/boe)Sales of natural gas and liquids from production$17.69$16.86$15.53$14.62Net sales of natural gas purchased from third parties (1)0.000.00(0.09)0.07Realized gains (losses) on derivatives(0.04)0.741.481.86Royalty expense(0.51)(0.39)(0.29)(0.17)Operating expense(1.89)(1.73)(1.98)(1.82)Transportation expense(3.46)(3.18)(3.50)(3.33)Operating netback (1)$11.79$12.30$11.15$11.23 (1)Non-GAAP measure which may not be comparable to similar non-GAAP measures used by other entities. Please see “Non-GAAP Measures”.(2)Excludes net sales of natural gas purchased from third parties.The Corporation’s audited consolidated financial statements for the fiscal year ended December 31, 2019 together with the notes thereto, and Management’s Discussion and Analysis for the year ended December 31, 2019 have been filed on SEDAR and are available on the Corporation’s website at http://www.advantageog.com/investors/financial-reports/financial-reports-2019. The Corporation’s audited consolidated financial statements for the fiscal year ended December 31, 2018 are also available on the Corporation’s website via the same webpage. Upon request, Advantage will provide a hard copy of any financial reports free of charge.