Leucrotta Announces Q1 2020 Financial and Operating Results
May 27, 20204:00 AM Newsfile
Calgary, Alberta – LEUCROTTA EXPLORATION INC. (TSXV: LXE) (“Leucrotta” or the “Company”) is pleased to announce its financial and operating results for the three months ended March 31, 2020. All dollar figures are Canadian dollars unless otherwise noted.
Drilled, completed and tied-in a second Montney well at Two Rivers.
Completed construction of the Two Rivers facility and commenced production of the two Montney wells.
Subsequent to March 31, 2020, disposed of certain non-core facility assets for proceeds of $2.2 million.
FINANCIAL RESULTSThree Months Ended March 31($000s, except per share amounts)2020 2019% Change Oil and natural gas sales5,791 8,102(29) Cash flow from operating activities1,405 3,729(62) Per share – basic and diluted0.01 0.02(50) Adjusted funds flow (1)760 4,108(81) Per share – basic and diluted– 0.02(100) Net (loss) earnings (89,444)2,674(3,445) Per share – basic and diluted(0.45)0.01(4,600) Capital expenditures12,012 4,954142 Proceeds on sale of equipment (2)– 3,142(100) Working capital (deficiency)(5,223)2,675(295) Common shares outstanding (000s) Weighted average – basic200,525 200,525– Weighted average – diluted200,525 200,939– End of period – basic200,525 200,525– End of period – fully diluted226,392 227,082–
(1) See “Non-GAAP Measures” section
(2) The sale of equipment for proceeds of $3.1 million in Q1 2019 is exclusive of $2.7 million deposit received in Q4 2018.
OPERATING RESULTS (1)Three Months Ended March 3120202019% ChangeDaily production Oil and NGLs (bbls/d)8628245 Natural gas (mcf/d)12,35414,049(12) Oil equivalent (boe/d)2,9213,166(8)Oil and natural gas sales Oil and NGLs ($/bbl)39.0251.84(25) Natural gas ($/mcf)2.433.37(28) Oil equivalent ($/boe)21.7828.44(23)Royalties Oil and NGLs ($/bbl)0.87–100 Natural gas ($/mcf)0.01–100 Oil equivalent ($/boe)0.31–100Net operating expenses (2) Oil and NGLs ($/bbl)9.956.3756 Natural gas ($/mcf)0.870.7516 Oil equivalent ($/boe)6.605.0032Net transportation and marketing expenses (2) Oil and NGLs ($/bbl)1.461.51(3) Natural gas ($/mcf) (3)1.780.9882 Oil equivalent ($/boe)7.974.7468Operating netback (2) Oil and NGLs ($/bbl)26.7443.96(39) Natural gas ($/mcf)(0.23)1.64(114) Oil equivalent ($/boe)6.9018.70(63)Depletion and depreciation ($/boe)(8.40)(9.58)(12)Asset impairment ($/boe)(330.59)–100General and administrative expenses ($/boe)(3.97)(4.10)(3)Share based compensation ($/boe)(0.14)(0.75)(81)Gain on sale of equipment ($/boe)–5.46(100)Finance expense ($/boe)(0.26)(0.35)(26)Net (loss) earnings ($/boe)(336.46)9.38(3,687)
(1) See “Frequently Recurring Terms” section.
(2) See “Non-GAAP Measures” section.
(3) Includes $0.59/mcf of unutilized firm transportation expenses for Q1 2020.
Selected financial and operational information outlined in this news release should be read in conjunction with Leucrotta’s unaudited condensed interim financial statements and related Management’s Discussion and Analysis (“MD&A”) for the three months ended March 31, 2020, which are available for review at www.sedar.com.
In Q1 2020, Leucrotta’s capital was spent primarily on the Two Rivers facility and drilling and completing a second Montney well. $6.0 million was reclassified as assets held for sale relating to funds received subsequent to the end of Q1 2020 as part of a prior agreement with our partner at Two Rivers.
Production remained relatively stable at 2,921 boe/d for the quarter as wells continue to outperform expectations. Production increased in late March with the start-up of the Two Rivers facility and is estimated to average approximately 3,000 boe/d for 2020.
Leucrotta had $5.2 million of debt at the end of Q1 2020 and will look to reduce this through 2020 by eliminating all discretionary capital and continuing to sell non-core assets and equipment. In Q2 2020, Leucrotta sold a non-core disposal well for $2.2 million as part of ongoing initiatives to maintain balance sheet strength.
We look forward to reporting on further business developments in the near future.
FREQUENTLY RECURRING TERMS
The Company uses the following frequently recurring industry terms in this news release: “bbls” refers to barrels, “mcf” refers to thousand cubic feet, and “boe” refers to barrel of oil equivalent. Disclosure provided herein in respect of a boe may be misleading, particularly if used in isolation. A boe conversion rate of six thousand cubic feet of natural gas to one barrel of oil equivalent has been used for the calculation of boe amounts in this news release. This boe conversion rate is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
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