CUT BANK, MT, April 23, 2014 /CNW/ - Mountainview Energy Ltd.
("Mountainview" or the "Company") (TSXV: MVW) is pleased to announce
its operating and financial results for the year ended December 31,
2013. The Company also announces that its audited financial statements
and management's discussion and analysis for the year ended December
31, 2013, is available on SEDAR at www.sedar.com, and on Mountainview's website at www.mountainviewenergy.com.
During 2013, Mountainview continued to build its production and reserve
base through the drill bit, which resulted in an increase in revenue
and funds flow from operations.
Highlights of Mountainview's successful 2013 are as follows:
-
Completed an organic capital program of $46.9 million, including the
drilling of 8 gross (4.8 net) wells at a 100% success rate.
-
Increased average Q4 production by 510% to 1,183 boe/d, while increasing
the oil & liquids weighting to 88% from 74% in the prior period
quarter.
-
Funds flow from operations increased by a multiple of 30.3 times year
over year, with $6.5 million for the year ended December 31, 2013, as
compared to ($0.2) for the year ended December 31, 2012.
-
Generated operating netbacks of $38.84 per boe in 2013, an increase of
23% when compared to $29.14 per boe in 2012.
Certain selected financial and operational information for the three and
twelve months ended December 31, 2013 and 2012 is outlined below and
should be read in conjunction with Mountainview's audited financial
statements for the years ended December 31, 2013 and 2012 and the
accompanying management discussion and analysis filed with the Canadian
securities regulatory authorities which may be accessed through the
SEDAR website (www.sedar.com) and also on the Company's website: www.mountainviewenergy.com.
|
|
Three months ended December 31
|
Twelve months ended December 31
|
| |
2013
|
2012
|
% Change
|
2013
|
2012
|
% Change
|
|
Financial (US $ 000's, except per share amounts)
|
|
|
|
|
|
|
|
Petroleum and natural gas sales
|
7,418
|
690
|
975%
|
20,527
|
3,560
|
477%
|
|
Funds flow from operations (1)
|
2,085
|
150
|
1290%
|
6,453
|
(220)
|
-3033%
|
|
Per share basic
|
0.02
|
nil
|
N/A
|
0.07
|
nil
|
N/A
|
|
Per share diluted
|
0.02
|
nil
|
N/A
|
0.06
|
nil
|
N/A
|
|
Net income (loss)
|
(3,141)
|
(7,345)
|
-57%
|
(5,974)
|
(8,397)
|
-29%
|
|
Per share basic
|
(0.04)
|
(0.08)
|
-58%
|
(0.07)
|
(0.10)
|
-29%
|
|
Per share diluted (2)
|
(0.04)
|
(0.08)
|
-49%
|
(0.07)
|
(0.10)
|
-30%
|
|
Capital expenditures (3)
|
16,584
|
6,296
|
163%
|
48,707
|
10,365
|
370%
|
|
Net debt (4)
|
59,244
|
19,804
|
199%
|
59,244
|
19,804
|
199%
|
|
Operating
|
|
|
|
|
|
|
|
Average daily production
|
|
|
|
|
|
|
|
Light crude oil (bbl per day)
|
1,039
|
143
|
627%
|
644
|
147
|
338%
|
|
Natural gas (Mcf per day)
|
864
|
306
|
182%
|
632
|
285
|
122%
|
|
Barrels of oil equivalent (boe per day, 6:1)
|
1,183
|
194
|
510%
|
749
|
195
|
285%
|
|
% Oil and NGLs
|
88%
|
74%
|
123%
|
86%
|
76%
|
119%
|
|
Average sales price
|
|
|
|
|
|
|
|
Light crude oil ($ per bbl)
|
77.02
|
52.26
|
47%
|
86.20
|
63.06
|
37%
|
|
Natural gas ($ per Mcf)
|
2.94
|
3.45
|
-15%
|
2.98
|
1.59
|
87%
|
|
Barrels of oil equivalent ($ per boe, 6:1)
|
68.16
|
44.55
|
53%
|
75.08
|
49.63
|
51%
|
|
Operating netback ($ per boe) (5)
|
|
|
|
|
|
|
|
Petroleum and natural gas sales
|
68.16
|
44.55
|
53%
|
75.08
|
49.63
|
51%
|
|
Royalties
|
(13.49)
|
(5.88)
|
-129%
|
(12.18)
|
(4.21)
|
-189%
|
|
Operating expenses
|
(20.08)
|
(39.33)
|
49%
|
(24.06)
|
(25.09)
|
4%
|
|
Operating netback
|
34.59
|
(0.66)
|
-5341%
|
38.84
|
20.33
|
91%
|
|
Wells drilled
|
|
|
|
|
|
|
|
Gross
|
2.0
|
-
|
-
|
8.0
|
9.0
|
-11%
|
|
Net
|
1.4
|
-
|
-
|
4.8
|
0.4
|
1100%
|
|
Success (%)
|
100
|
-
|
-
|
100
|
100
|
0%
|
|
Common Shares
|
|
|
|
|
|
|
|
Shares outstanding, end of period
|
87,820,443
|
87,245,443
|
1%
|
87,820,443
|
87,245,443
|
1%
|
| |
|
|
|
|
|
|
|
(1)
|
Funds flow from operations should not be considered an alternative to,
or more meaningful than, cash flow from operating activities as
determined in accordance with International Financial Reporting
Standards as an indicator of Mountainview's performance. Funds flow
from operations represents cash flow from operating activities prior to
changes in non-cash working capital, transaction costs and
decommissioning provision expenditures incurred. Mountainview also
presents funds flow from operations per share whereby per share amounts
are calculated using weighted average shares outstanding consistent
with the calculation of earnings per share.
|
|
(2)
|
Due to the anti-dilutive effect of Mountainview's net loss for the three
months and year ended December 31, 2013 and 2012, the diluted number of
shares is equal to the basic number of shares. Therefore, diluted per
share amounts of the net loss are equivalent to basic per share
amounts. (2) Capital expenditures is a non-GAAP measure calculated as the purchase or
sale price of an asset, plus development capital expenditures added to
PP&E. Corporate acquisitions are excluded from this measure.
|
|
(3)
|
Capital expenditures are a non-GAAP measure, calculated as the purchase
or sale price of an asset, plus development capital expenditures added
to PP&E. Corporate acquisitions are excluded from this measure.
|
|
(4)
|
Net debt is a non-GAAP measure representing the total of bank
indebtedness, accounts payables and accrued liabilities, less accounts
receivables, deposits and prepaid expenses.
|
|
(5)
|
Operating netback is a non-GAAP measure calculated as the average per
boe of the Company's oil and gas sales plus realized gains on
derivatives, less royalties, operating and transportation expenses.
|
Corporate
As highlighted by the Company's year-end financial and operational
results, Mountainview added significant production, resulting in
substantial growth in oil and natural gas sales, while also showing an
increase in funds flow from operations and per boe netbacks. This is
the result of strong financial discipline and a focused and successful
capital plan. The results of the 2013 capital plan further de-risked
the 12 Gage asset, adding a sizeable infill drilling inventory with
capital efficiencies associated with pad drilling.
Mountainview's strategic shift to drilling higher working interest wells
in 2013, versus lower working interest wells drilled in 2012, delivered
positive results evidenced by the growth in revenue and operating
netbacks.
Financial
At year-end 2013, Company net debt, was approximately $59.2 million and
the Company had $39.3 drawn on its available credit facility of $51.2
million. Funds flow from operations for 2013 increased significantly
from 2012, reaching $6.5 million.
In response to exposure to volatility of differentials from WTI and
industry concerns with respect to transportation restrictions in the
Williston Basin, which translated into realized prices ranging from
$71.27 per barrel of oil in Q1, to $90.61 per barrel of oil in Q3,
2013, the Company has entered into a financial hedging program
commencing in January, 2014. Mountainview has 30% of its production
hedged for Q1, 2014, with a floor of $85.00 and a ceiling of $97.70.
The Company plans to actively manage its hedging program as its
production base grows.
Operations
The Company's 2013 capital plan, including all drilling operations, was
focused on its core 12 Gage asset in Divide County, N.D. The $46.9
million capital program in 2013 included the drilling of 8 wells (4.8
net), with a 100% success rate. At year end, there were 2 wells (1.8
net) that had been drilled and were awaiting completion. The Company
has selectively increased its working interest in its assets whenever
appropriate as it has become more experienced operationally. This
experience has resulted in decreased capital costs on a per well basis
from $8.3 million per well to $6.3 million per well.
Outlook
Mountainview has continued to deliver on its strategy of production and
reserve growth. With anticipated 2014 funds flow from operations in
excess of $8 million, and available credit on its existing credit
facility, Mountainview will continue to focus on the development of its
core 12 Gage asset in Divide County, N.D.
The Company will continue to pursue an aggressive growth strategy using
a combination of cash flow and available credit. Recent positive
movement in both oil pricing and the WTI oil differentials, combined
with the Company's new hedge position, allows Mountainview to remain
confident in the long term sustainability of the 2014 capital plan.
With the de-risking of the 12 Gage drilling inventory, Mountainview has
identified 72 infill Three Forks locations. Adding Bakken potential,
there are an additional 80 drilling locations, all on the 12 Gage
acreage. With 152 potential drilling locations on the 12 Gage
acreage, Mountainview is strongly positioned to review acquisition
opportunities to further diversify and enhance the Company's commodity
and play type risk.
About Mountainview
Mountainview Energy Ltd. is a public oil and gas company listed on the
TSX Venture Exchange, with a primary focus on the exploration,
production and development of the Bakken and Three Forks Shale in the
Williston Basin and the South Alberta Bakken.
Forward-Looking Statements
Certain information contained in this press release constitutes
forward-looking statements. Statements relating to "reserves" are
deemed to be forward-looking statements as they involve the implied
assessment, based on certain estimates and assumptions, that the
reserves described exist in the quantities predicted or estimated and
can be profitably produced in the future. By their nature,
forward-looking statements are subject to numerous risks and
uncertainties, some of which are beyond the Company's control including
the impact of general economic conditions, industry conditions,
volatility of commodity prices, currency fluctuations, environmental
risks, competition from other industry participants, the lack of
availability of qualified service providers, personnel or management,
stock market volatility and ability to access sufficient capital from
internal and external sources, inability to meet or continue to meet
listing requirements, the inability to obtain required consents,
permits or approvals and the risk that actual results will vary from
the results forecasted and such variations may be material. Readers
are cautioned that the assumptions used in the preparation of such
information, although considered reasonable at the time of preparation
may prove to be imprecise and, as such, undue reliance should not be
placed on forward-looking statements. The Company's actual results,
performance or achievement could differ materially from those expressed
in or implied by, these forward-looking statements and, accordingly, no
assurance can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of them
do so, what benefits the Company will derive therefrom.
The forward-looking statements contained in this press release are made
as of the date of this press release. Mountainview disclaims any
intention and assumes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable securities
laws. Additionally, Mountainview undertakes no obligation to comment on
the expectations of, or statements made by, third parties in respect of
the matters discussed above.
Barrels of Oil Equivalent
The term barrels of oil equivalent ("boe") may be misleading,
particularly if used in isolation. A boe conversion ratio of six
thousand cubic feet of natural gas to one barrel of oil equivalent (6
mcf/bbl) is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency
at the wellhead. Given that the value ratio based on the current price
of crude oil as compared to natural gas is significantly different from
the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis
may be misleading as an indication of value. All boe conversions in
this report are derived from converting gas to oil in the ratio of six
thousand cubic feet of gas to one barrel of oil.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
SOURCE Mountainview Energy Ltd.
