Hyperion Exploration Corp. Announces Second Quarter Results CALGARY, ALBERTA--(Marketwired - Aug 15, 2014) - Hyperion Exploration Corp. ("Hyperion" or the "Company") (TSX VENTURE:HYX) announces it has filed on SEDAR its unaudited condensed interim financial statements and related Management's Discussion and Analysis ("MD&A) for the three and six months ended June 30, 2014. The financial statements and MD&A will be available for review at www.sedar.com or www.hyperionexploration.com.
Financial and Operational Highlights
18% increase in operating netback (Q2 2014 - $38.04/boe) quarter over quarter;
Management has completed the technical work, supported by industry results, to incorporate long reach horizontal well technology at its Niton/McLeod Cardium light oil play. This is expected to increase Tier 1 locations IRR (internal rate of return) to 100%; and
$1 million reduction in bank indebtedness.
Three months ended
June 30, Six months ended
June 30,
2014 2013 2014 2013
FINANCIAL ($000'S except per share amounts)
Oil sales 2,861 3,950 5,844 9,454
NGL sales 551 616 1,253 1,434
Natural gas sales 786 1,072 2,028 2,086
Total Oil, NGL, & Natural gas 4,186 5,638 9,125 12,974
Funds inflow (outflow) from operations3 1,474 2,263 3,596 6,280
Per common share basic & FD ($) 0.03 0.04 0.07 0.12
Net earnings (loss) 207 343 (124 ) (13,885 )
Per common share basic & FD ($) - 0.01 - (0.26 )
Capital expenditures (net of dispositions) 19 997 (2,922 ) 5,071
Net debt 3 (25,430 ) (31,838 ) (25,430 ) (31,838 )
PRODUCTION
Oil (bbls/day) 308 480 325 601
NGL (bbls/day) 109 147 113 159
Natural gas (mcf/day) 1,808 3,124 2,055 3,301
Total (boe/day ) (6:1) 718 1,148 781 1,310
Per 1 million common share basic & FD (boe/day )1 13.24 21.18 14.41 24.17
REALIZED PRICES (excluding financial contracts)
Oil ($/bbl) 102.09 90.37 99.27 86.93
NGL ($/bbl) 55.69 46.03 61.22 49.77
Natural gas ($/mcf) 4.78 3.77 5.45 3.49
Average ($/boe) 63.24 53.97 64.22 54.71
OPERATING NETBACK ($'S/BOE)3
Oil, natural gas and NGL sales 63.24 53.78 64.22 54.45
Royalties 9.07 9.05 9.16 6.58
Operating and transportation expenses 16.13 12.43 15.31 12.55
Operating netback 38.04 32.30 39.75 35.32
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
1Weighted average basic and fully diluted common share count used in calculation. Figures not adjusted for net debt.
2 Basic and fully diluted common shares outstanding are equal as all dilutive instruments are considered anti-dilutive under IFRS.
3 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 Company'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
The Company has further reduced indebtedness during the quarter. 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. All wells at Niton/McLeod included in the reserves evaluated in the McDaniel Report and included in the NAV were based upon short reach horizontal ("SRH") wells. Further drilling at Niton/McLeod will utilize extended reach horizontal ("ERH") wells which have the potential to significantly increase NAV per well compared to SRH wells. These NAV calculations include management's estimates of value for undeveloped land ($11.6 million), proprietary seismic and other assets ($1.3 million).
Hyperion continues to pursue opportunities to initiate its 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 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 un-booked inventory of 51.6 ERH and 31.0 SRH wells at Niton/McLeod. As noted above, all wells at Niton/McLeod included in the reserves evaluated in the McDaniel Report were based upon SRH wells. The Company plans to convert wells currently booked as SRH to ERH where it has sufficient contiguous lands.
Hyperion's credit facility is at $28 million and will be reduced to $26 million as at September 1, 2014. Hyperion's lender will also conduct an interim review of Hyperion's credit facility in September 2014.