Clearview Resources Ltd. reports year end results
April 28, 20209:29 PM CNW
CALGARY – Clearview Resources Ltd. (“Clearview” or the “Company”) is pleased to announce its financial and operational results for the twelve months ended December 31, 2019. Change in Year End During the prior year, the Board of Directors approved changing the Company’s fiscal year end from March 31 to December 31. Consequently, this press release is a review of the financial position and results of operations of the Company for the three months ended December 31, 2019 as compared to the three months ended December 31, 2018 for quarterly comparisons and the twelve months ended December 31, 2019 as compared to the nine months ended December 31, 2018 for yearly comparisons. HIGHLIGHTS
Incurred minimal field capital and abandonment expenditures of $0.4 million in the fourth quarter of 2019 to deploy excess adjusted funds flow of $0.9 million towards the reduction of net debt;
Reduced net debt by $2.8 million in the twelve months ended December 31, 2019, applying the excess of adjusted funds flow over capital and abandonment expenditures of $2.3 million against working capital and bank debt. At December 31, 2019, the Company’s net debt to adjusted funds flow ratio was 2.8:1.
Generated adjusted funds flow of $5.5 million in the twelve months ended December 31, 2019, up 197% from the comparative period, as a result of a 58% increase in total revenue. Cash flow from operations was $5.0 million in the twelve months ended December 31, 2019 versus cash flow from operations of $1.1 million in the comparative nine month period;
On February 22, 2019, the Company closed the acquisition of producing oil and gas assets and undeveloped land from a private oil and gas producer (“Private Co”) for cash consideration of $0.6 million and the issuance to Private Co of 1,361,542 voting common shares of Clearview from treasury;
Oil production increased 20% to 684 barrels per day (“bbl/d”) in the twelve month period ended December 31, 2018, from the comparative nine month period ended December 31, 2018 through successful drilling completed in the prior period and the acquisition of assets completed in the first quarter of 2019;
Total production increased 9% to 2,425 barrels of oil equivalent per day (“boe/d”) in the three months ended December 31, 2019 versus the comparative period and increased 14% to 2,421 boe/d for the twelve months ended December 31, 2019 versus the comparative prior period;
Realized sales price was $29.08 per barrel of oil equivalent (“boe”) for the twelve months ended December 31, 2019 compared to $27.82 per boe in the prior period, an increase of 5%, while the last quarter of 2019 was up 31% to $29.18 per boe from $22.36 per boe in the comparative quarter.
Total revenue increased by 42% in the three months ended December 31, 2019 versus the comparative period due to higher production volumes for natural gas and natural gas liquids and higher oil and natural gas prices. Total revenue for the twelve months ended December 31, 2019 increased by 58% to $25.7 million due to higher production volumes for all products, higher oil and natural gas prices and an additional three months of production in the current fiscal year; and
Operating costs per boe increased 1% to $15.93 per boe for the three months ended December 31, 2019, versus the comparative period. For the twelve months ended December 31, 2019, operating costs were $14.88 per boe, down 5% versus the comparative period.
FINANCIAL and OPERATIONAL RESULTS Production for the year ended December 31, 2019 was up 14% to 2,421 boe/d versus the comparative period of 2018 and had been relatively constant at approximately 2,400 boe/d in each quarter of the current fiscal year. Production of oil increased 20% to 684 bbl/d in the current year versus the comparative period due to the new wells drilled in the prior period and an acquisition of assets undertaken in the first quarter of the current fiscal year. During the current fiscal year, Clearview’s realized price per boe was higher by 5% than the comparative period of 2018, largely due to higher crude oil prices by 10% and higher natural gas prices by 27%. Natural gas liquids prices were down 29% as propane and butane prices suffered due to an oversupply of these products. The Company reduced its operating costs per boe by 5%, royalties per boe were lower by 6% while general and administrative expenses per boe increased by 3%. These factors and a significant positive change in realized gains on commodity contracts, resulted in the Company’s corporate netback increasing by 24% to $10.19 per boe for 2019 versus $8.22 per boe in the comparative period of 2018. Adjusted funds flow for the current fiscal year ended December 31, 2019 was $5.5 million. Capital expenditures and abandonment capital were $2.3 million which enabled the Company to reduce its net debt by $3.2 million during the year, which was partially offset by the addition of $0.4 million as a current portion of decommissioning obligations at year end. At December 31, 2019, the Company had net debt of $15.4 million with a net debt to adjusted funds flow ratio of 2.8:1. Financial and Operating Highlights FinancialThree months ended Dec. 31Twelve months ended Dec. 31Nine months ended Dec. 31($ 000’s except per share amounts)20192018% Change20192018% ChangeOil and natural gas sales6,5124,5854225,68716,27358Adjusted funds flow (1)1,2715111495,4941,852197Per share-basic and diluted0.110.051200.480.18167Cash flow from operations1,1201,312(15)4,9801,088358Per share-basic and diluted0.100.13(23)0.430.11291Net earnings (loss)(5,527)(2,083)165(8,768)(4,832)81Per share–basic and diluted(0.48)(0.20)140(0.76)(0.48)58Net debt (1)15,35818,186(16)Capital expenditures – net (2)3543,364(89)1,9556,172(68)Weighted average sharesBasic and diluted (000’s)11,67110,2911311,47210,02214 (1)See non-GAAP measures(2)Cash additions and acquisitions net of proceeds of dispositions ProductionThree months ended Dec. 31Twelve months ended Dec.31Nine months ended Dec. 3120192018% Change20192018% ChangeOil – bbl/d621668(7)68456820Natural gas liquids – bbl/d494437134814458Total liquids – bbl/d1,1151,10511,1651,01315Natural gas – mcf/d7,8596,745177,5376,68213Total – boe/d2,4252,22992,4212,12714Realized sales pricesThree months ended Dec. 31Twelve months ended Dec. 31Nine months ended Dec. 3120192018% Change20192018% ChangeOil – $/bbl64.0336.207764.6958.8710NGLs – $/bbl23.8731.14(23)25.6936.26(29)Natural gas – $/mcf2.441.79361.831.4427Total – $/boe29.1822.363129.0827.825 Netback analysis (1)Three months ended Dec. 31% PositiveTwelve months ended Dec. 31Nine months ended Dec. 31% PositiveBarrel of oil equivalent ($/boe)20192018 (Negative)20192018 (Negative)Realized sales price29.1822.363129.0827.825Royalties(2.86)(1.72)(66)(3.18)(3.39)6Processing income0.870.50740.790.80(1)Transportation(1.53)(1.42)(8)(1.62)(1.32)(23)Operating(15.93)(15.83)(1)(14.88)(15.69)5Operating netback (2)9.733.8915010.198.2224Realized gain (loss) on commodity contracts(0.35)2.16(116)0.06(1.29)105General & administrative(2.36)(2.18)(8)(2.59)(2.51)(3)Transaction costs(0.03)–(100)(0.13)(0.03)(333)Cash finance costs(1.29)(1.37)6(1.30)(1.22)(7)Corporate netback (2)5.702.501286.233.1797 (1)% Positive (Negative) is expressed as being positive (better performance in the category) or negative (reduced performance in the category) in relation to operating netback, corporate netback and net earnings.(2)See non-GAAP measures. OPERATIONS UPDATE On February 22, 2019, Clearview acquired producing oil and gas assets and undeveloped land from a private oil and gas producer (“Private Co”) for cash consideration of $0.6 million and the issuance to Private Co of 1,361,542 voting common shares of Clearview issued from treasury. The operations of the acquired assets have been included in Clearview’s results commencing on February 22, 2019. The total consideration paid by Clearview was approximately $9.1 million based on a share price for Clearview of $6.25 per share. The assets are located between Clearview’s existing core properties of Wilson Creek and Windfall along the light oil prone, deep basin trend of the Cardium and Bluesky formations. The assets are situated on 40,420 acres of land including 23,200 acres of undeveloped land. The properties are characterized by high (86%) working interests and operated production. The acquisition represents a 50% increase to Clearview’s existing undeveloped land base. Consistent with the Company’s strategy of transformation into an operated, growth-oriented producer, Clearview has closed the disposition of a non-operated, minor working interest, sour natural gas property in its Central Alberta Gas CGU and the disposition of a royalty interest in 1,257 natural gas wells. Proceeds from the dispositions were $29 thousand, after closing adjustments. Clearview has fulfilled its annual Area Based Closure (“ABC”) obligation with the Alberta Energy Regulator (“AER”) for 2019 by fully abandoning certain suspended pipelines for $156 thousand, which has been included in operating costs, and incurring abandonment expenditures on 10 gross (3.75 net) wells for approximately $229 thousand. OUTLOOK Subsequent to the Company’s year end of December 31, 2019, the COVID-19 outbreak was declared a pandemic by the World Health Organization. The events surrounding the COVID-19 pandemic are unprecedented resulting in a situation that is dynamic and unpredictable with governments (federal, provincial and municipal) worldwide, responding in different ways to combat the spread of the virus. These measures have caused material disruption to businesses resulting in a global economic slowdown. The economic slowdown caused by the pandemic and the resulting over supply in the global oil markets combined with a price war amongst OPEC and non-OPEC members has resulted in an unprecedented and precipitous drop in oil prices. Clearview is taking appropriate safety precautions to protect its valued employees and the communities in which they live and work. Clearview office staff are encouraged to work remotely from home and practice social distancing to keep people safe while ensuring business continuity. Field operations continue uninterrupted with all field staff ensuring contact-free interactions with each other and third-party services. Clearview has made significant reductions in its capital and operations to preserve cash flow from operations in these challenging times while at the same time not compromising on the core principles of environmental protection, health and safety and regulatory compliance. In April of 2020, the Company made the decision to shut-in approximately 50% of its production, comprising of primarily oil volumes and the associated natural gas. The Company has chosen to preserve the value of its reserves to be produced at a later date when better economic conditions and better pricing have returned. The potential impact of a prolonged low oil price environment on the Company’s future operations is discussed in more detail in the December 31, 2019 financial statements and in management’s discussion and analysis for the year ended December 31, 2019. Clearview’s annual December 31, 2019 financial statements and management’s discussion and analysis are available on the Company’s website at www.clearviewres.com and SEDAR at www.SEDAR.com. Advisories & Contact