CUT BANK, MT, May 30, 2014 /CNW/ - Mountainview Energy Ltd.
("Mountainview" or the "Company") (TSXV: MVW) is pleased to announce
its operating and financial results for the three months ended March
31, 2014.
Certain selected quarterly financial and operational information is
outlined below and should be read in conjunction with Mountainview's
reviewed unaudited interim consolidated financial statements and
management's discussion and analysis ("MD&A") for the three months
ended March 31, 2014 and the audited financial statements for the years
ended December 31, 2013 and 2012 and the accompanying management
discussion and analysis, which have been filed with the Canadian
securities regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com) and also on the Company's website: www.mountainviewenergy.com.
Highlights
During the first quarter of 2014, Mountainview continued to build its
production base by completing the two wells drilled at year end, 2013,
which resulted in an increase in revenue.
Highlights of Mountainview's successful Q1 2014 are as follows:
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Completed a capital program of $7.9 million, completing 2 gross (1.9
net) wells at a 100% success rate.
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Average Q1 production of 898 boe/d, an increase of 230% over the average
of 390 boe/d for Q1 2013.
-
Exited Q1 with 1,284 boe/d of production with oil weighting of 87%,
compared to 510 boe/d with 79% oil weighting for the prior period
quarter.
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Funds flow from operations increased by 619% over the prior period
quarter, with $.3 million for the quarter ended March 31, 2014, as
compared to ($0.2) for the quarter ended March 31, 2013.
-
Generated operating netbacks of $33.87 per boe in Q1 2014, an increase
of 40% when compared to $24.12 per boe in Q1 2013.
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($000's except per share amounts)
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Q1 2014
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Q4 2013
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Q3 2013
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Q2 2013
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Q1 2013
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Q4 2012
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Q3 2012
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Q2 2012
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Average production (boe/d)
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898
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1,183
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711
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703
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391
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194
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190
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157
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Petroleum and natural gas sales
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6,108
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7,418
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5,993
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5,107
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2,009
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778
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933
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739
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Operating netback (per boe)
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33.87
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34.39
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26.13
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24.98
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24.12
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(0.66)
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26.93
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22.25
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Funds flow from operations
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310
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2,085
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2,156
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2,419
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(207)
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150
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(177)
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(72)
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Per share basic
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0.00
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0.02
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0.02
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0.03
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nil
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nil
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nil
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nil
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Per share diluted
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0.01
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0.02
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0.02
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0.02
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nil
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nil
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nil
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nil
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Net income (loss)
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(1,561)
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(3,141)
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(387)
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(1,065)
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(1,381)
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(7,344)
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(428)
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(362)
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Per share basic
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(0.02)
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(0.00)
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(0.01)
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(0.02)
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(0.02)
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(0.08)
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(0.00)
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(0.01)
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Per share diluted
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(0.02)
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(0.00)
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(0.01)
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(0.02)
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(0.02)
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(0.08)
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(0.00)
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(0.01)
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Capital expenditures
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7,910
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16,584
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7,262
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1,682
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21,401
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6,489
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1,137
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2,814
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Total assets
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90,214
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84,744
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74,265
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67,253
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65,131
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49,056
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49,360
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47,945
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Net debt excluding financial derivatives
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65,314
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59,244
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46,883
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35,772
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33,287
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19,804
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18,605
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15,619
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(1)
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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.
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(2)
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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.
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(3)
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Due to the anti-dilutive effect of Mountainview's net loss for the three
months ended March 31, 2014 and 2013, 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.
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(4)
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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.
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(5)
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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.
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Corporate
As highlighted by the Company's quarter-end financial and operational
results, Mountainview exited the quarter with increased production,
offsetting natural declines from initial production from wells drilled
in the fourth quarter of 2013. These declines resulted in lower
average production on a quarter over quarter basis which produced a 18%
decrease in oil and natural gas sales, while also showing a decrease in
funds flow from operations and per boe netbacks when compared to the
fourth quarter of 2013. The addition of production in late Q1 2014 is
the result of Mountainview's continued focus and successful
implementation of its capital plan in Divide County, ND.
Operationally, the Company continues to improve on its completion
technique and downhole assembly which is expected to increase initial
production rates and recoverable reserves while lowering operating
expenses. The results of the Q1 2014 capital plan further de-risked the
southern extent of the 12 Gage asset, adding an additional infill
drilling inventory with capital efficiencies associated with pad
drilling.
Mountainview expects to continue its strategic shift to drilling higher
working interest wells in 2014.
Financial
At quarter-end, Company net debt was $65.3 million and the Company had
$46.1 million drawn on its available credit facility of $51.2 million.
Funds flow from operations for Q1 2014 increased significantly from Q1
2013, reaching $0.3 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
$69.40 per barrel of oil in Q1 2013, to $85.28 per barrel of oil in Q1,
2014, the Company has entered into a financial hedging program
commencing in January, 2014. Mountainview had 50% 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 Q1 2014 capital plan, including all drilling operations,
was focused on its core 12 Gage asset in Divide County, N.D. The $7.9
million capital program in the quarter included the completion of 2
wells (1.9 net), with a 100% success rate. At year end 2013, these 2
wells (1.9 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/Torquay locations. Adding Bakken
potential, management believes that 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 organically grow production and reserves while being able 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.
