Year End Results and Operation UpdateCALGARY, ALBERTA--(Marketwired - April 24, 2014) - Hyperion Exploration Corp. ("Hyperion" or the "Company") (TSX VENTURE:HYX) announces it has filed on SEDAR its audited annual financial statements, related Management's Discussion and Analysis ("MD&A) and Annual Information Form ("AIF") for the year ended December 31, 2013. The financial statements, MD&A and AIF will be available for review at www.sedar.com or www.hyperionexploration.com.
Financial and Operational Highlights
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
FINANCIAL ($000'S except per share amounts) |
|
|
|
|
|
|
|
|
Oil sales (net of financial contract settlements) |
3,296 |
|
5,938 |
|
17,032 |
|
23,432 |
|
NGL sales |
694 |
|
896 |
|
3,721 |
|
2,812 |
|
Natural gas sales |
915 |
|
1,106 |
|
2,788 |
|
2,970 |
|
Total Oil, NGL, & Natural gas |
4,905 |
|
7,940 |
|
23,541 |
|
29,214 |
|
Funds inflow (outflow) from operations3 |
1,696 |
|
4,313 |
|
10,208 |
|
15,255 |
|
|
Per common share basic & FD ($) |
0.03 |
|
0.08 |
|
0.19 |
|
0.28 |
|
Net earnings (loss) |
222 |
|
(13,348 |
) |
(13,560 |
) |
(11,945 |
) |
|
Per common share basic & FD ($) |
nm |
|
(0.25 |
) |
(0.25 |
) |
(0.22 |
) |
Capital expenditures (net of dispositions) |
364 |
|
5,929 |
|
8,157 |
|
43,386 |
|
Net debt 3 |
(31,840 |
) |
(33,871 |
) |
(31,840 |
) |
(33,871 |
) |
Unused credit facilities |
14,365 |
|
21,192 |
|
14,365 |
|
21,192 |
|
PRODUCTION |
|
|
|
|
|
|
|
|
Oil (bbls/day) |
409 |
|
738 |
|
520 |
|
761 |
|
NGL (bbls/day) |
142 |
|
195 |
|
150 |
|
156 |
|
Natural gas (mcf/day) |
2,651 |
|
3,430 |
|
3,029 |
|
3,147 |
|
Total (boe/day ) (6:1) |
993 |
|
1,505 |
|
1,175 |
|
1,442 |
|
|
Per 1 million common share basic & FD (boe/day )1 |
18.324 |
|
27.773 |
|
21.682 |
|
26.610 |
|
REALIZED PRICES (excluding financial contracts) |
|
|
|
|
|
|
|
|
Oil ($/bbl) |
89.42 |
|
82.26 |
|
91.06 |
|
83.01 |
|
NGL ($/bbl) |
53.04 |
|
49.98 |
|
50.82 |
|
49.38 |
|
Natural gas ($/mcf) |
3.75 |
|
3.51 |
|
3.37 |
|
2.58 |
|
Average ($/boe) |
53.69 |
|
54.81 |
|
54.90 |
|
54.80 |
|
OPERATING NETBACK ($'S/BOE)3 |
|
|
|
|
|
|
|
|
Oil, natural gas and NGL sales |
53.69 |
|
54.81 |
|
54.90 |
|
54.80 |
|
Royalties |
7.69 |
|
4.32 |
|
6.94 |
|
6.70 |
|
Operating and transportation expenses |
13.16 |
|
11.32 |
|
13.00 |
|
12.22 |
|
Operating netback |
32.84 |
|
39.17 |
|
34.96 |
|
35.88 |
|
COMMON SHARES (000'S) |
|
|
|
|
|
|
|
|
Basic and fully diluted common shares o/s, end of period2 |
54,190 |
|
54,190 |
|
54,190 |
|
54,190 |
|
Weighted average basic and fully diluted common shares o/s2 |
54,190 |
|
54,190 |
|
54,190 |
|
54,190 |
|
- Weighted average basic and fully diluted common share count used in calculation. Figures not adjusted for net debt.
- Basic and fully diluted common shares outstanding are equal as all dilutive instruments are considered anti-dilutive under IFRS.
- Certain financial measures such as "funds flow", "funds flow per boe", "funds flow per share", "operating netback", and "Net debt" do not have standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP"). Management believes that in addition to net income, funds flow from operations and netback are useful supplemental measures as they provide an indication of the results generated by the Corporation's principal business activities before the consideration of how those activities are financed or how the results are taxed. Investors are cautioned, however, that these measures should not be construed as alternatives to net income determined in accordance with IFRS, as an indication of Hyperion's performance. These financial measures do not have a standardized meaning prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other issuers. "Funds flow" is calculated based on cash flows from operating activities before changes in non-cash working capital, transaction costs from acquisitions and decommissioning expenditures incurred. "Operating netback" is calculated by deducting royalties, production expenses and transportation expenses from oil and gas revenue. "Funds flow from operations per share" is calculated using weighted average number of shares outstanding consistent with the net income (loss) per share calculation. "Net debt" represents bank debt and accounts payable and accrued liabilities less accounts receivable and prepaid expenses and deposits.
Operations Update and Outlook
As disclosed in July 2013, the Corporation engaged independent advisors to assist in a strategic process to explore opportunities to maximize shareholder value. During this process the Corporation has been focused on reducing its indebtedness. Accordingly, the Corporation has not drilled or completed any new wells since the third quarter of 2013 and minimal capital has been spent on production optimization and maintenance. This will continue to be the plan through the first half of 2014. The Corporation's free cash flow is being applied towards reducing its indebtedness.
The Corporation has further reduced indebtedness with the sale of the oil and natural gas assets at Chip Lake on January 31, 2014 for total cash consideration, net of adjustments, of $3.1 million. Post sale of Chip Lake and as disclosed in the April 2, 2014 press release, Hyperion has a Proved plus Probable Developed Producing reserves ("P+PDP") Net Asset Value ("NAV") of $0.86 per share with no future development capital ("FDC") required and total Proved plus Probable ("P+P") NAV of $1.44 per share with FDC of $54.3 million. These NAV calculations include management's estimates of value for undeveloped land ($11.6 million), proprietary seismic and other assets ($1.3 million).
The revolving credit facility was amended to $30 million as a result of the disposition and reduction in the borrowing base. However, there was no change to the unused acquisition/development facility of $10 million. The annual review of Hyperion's credit facilities is underway and will be completed in May. The Corporation estimates net debt at the end of the first quarter to be approximately $27 million. Production for the first quarter, based on field estimates, is estimated to be 820 boepd.
One option being evaluated as part of the strategic process is to identify sources of capital to advance the extended reach horizontal ("ERH") development drilling program at Niton/McLeod. Based on industry results, drilling an ERH well has the potential to more than double the initial production of a short reach horizontal ("SRH") well. The evolution to ERH wells in the Cardium at Niton/McLeod (29,030 net acres) is expected to improve capital efficiency in excess of 20% and accelerate capital payouts to less than 1.5 years. Based on lands currently captured, and with the successful implementation of an ERH development program, the Company has an unbooked inventory of 51.6 ERH and 31.0 SRH wells at Niton/McLeod. All wells at Niton/McLeod included in the reserves evaluated in the McDaniel Report were based upon SRH wells. Going forward the Company plans to convert wells currently booked as SRH to ERH where it has sufficient contiguous lands.