CALGARY, Alberta, Aug. 08, 2018 (GLOBE NEWSWIRE) -- Bonterra Energy Corp. (www.bonterraenergy.com) (TSX: BNE) (“Bonterra” or the “Company”) is pleased to announce its
operating and financial results as at and for the three and six months ended June 30, 2018. The related unaudited condensed
financial statements and notes, as well as management’s discussion and analysis (“MD&A”), are available on SEDAR at www.sedar.com and on Bonterra’s website at www.bonterraenergy.com.
HIGHLIGHTS
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Three months ended |
Six months ended |
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As at and for the periods ended
($ 000s except for $ per share and $ per BOE) |
June 30,
2018 |
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June 30,
2017 |
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June 30,
2018 |
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June 30,
2017 |
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FINANCIAL |
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Revenue - realized oil and gas sales |
67,458 |
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52,695 |
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124,583 |
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102,025 |
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Funds flow (1) |
37,642 |
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28,508 |
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65,601 |
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53,751 |
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Per share - basic and diluted |
1.13 |
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0.86 |
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1.97 |
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1.61 |
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Dividend payout ratio |
27 |
% |
35 |
% |
30 |
% |
37 |
% |
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Cash flow from operations |
31,908 |
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27,370 |
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61,785 |
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51,910 |
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Per share - basic and diluted |
0.96 |
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0.82 |
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1.85 |
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1.56 |
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Dividend payout ratio |
31 |
% |
37 |
% |
32 |
% |
38 |
% |
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Cash dividends per share |
0.30 |
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0.30 |
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0.60 |
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0.60 |
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Net earnings (loss) |
8,925 |
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2,978 |
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12,320 |
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3,453 |
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Per share - basic and diluted |
0.27 |
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0.09 |
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0.37 |
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0.10 |
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Capital expenditures, net of dispositions |
18,970 |
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19,416 |
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55,138 |
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49,545 |
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Total assets |
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1,147,501 |
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1,173,936 |
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Working capital deficiency |
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27,069 |
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29,759 |
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Long-term debt |
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303,413 |
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341,070 |
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Shareholders' equity |
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503,979 |
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529,844 |
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OPERATIONS |
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Oil -barrels per day |
8,743 |
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8,287 |
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8,391 |
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7,912 |
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-average price ($ per barrel) |
76.51 |
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58.27 |
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72.35 |
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59.39 |
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NGLs -barrels per day |
984 |
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843 |
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942 |
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828 |
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-average price ($ per barrel) |
43.69 |
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27.48 |
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41.32 |
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29.19 |
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Natural gas - MCF per day |
25,317 |
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24,138 |
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25,011 |
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23,196 |
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- average price ($ per MCF) |
1.16 |
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3.03 |
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1.69 |
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3.00 |
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Total barrels of oil equivalent per day (BOE)
(2) |
13,946 |
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13,153 |
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13,501 |
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12,606 |
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(1) Funds flow is not a recognized measure under IFRS. For these purposes, the Company
defines funds flow as funds provided by operations including proceeds from sale of investments and investment income received
excluding the effects of changes in non-cash working capital items and decommissioning expenditures settled.
(2) BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 MCF: 1
bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at
the wellhead.
During the second quarter of 2018, Bonterra continued to focus on the development of its high quality, light oil
weighted assets focused in Alberta’s Pembina Cardium area and achieved production of 13,946 BOE per day representing one of the
Company’s strongest quarters in over four years. The vastly improved oil and natural gas liquids (“NGLs”) price environment
that prevailed through the first half of the year, combined with the higher production volumes, contributed to strong quarterly
funds flow of $37.6 million ($1.13 per share). This enabled Bonterra to reduce net debt, maintain a dividend and invest
capital into its attractive asset base. During the first six months of 2018, the Company drilled 20 gross (19.9 net) wells,
of which 18 gross (17.9 net) wells were completed, tied-in and placed on production.
Q2 2018 Highlights
- Generated funds flow of $37.6 million, or $1.13 per share, compared to $28.5 million in Q2 2017, or $0.86 per share;
- Paid out $0.30 per share in cash dividends to shareholders in the second quarter, representing a dividend payout ratio of 27
percent of funds flow;
- Averaged 13,946 BOE per day of production, six percent higher than 13,153 BOE per day in Q2 2017, and seven percent higher
than Q1 2018;
- Achieved a cash netback of $30.06 per BOE compared to $23.84 per BOE in Q2 2017;
- Realized an average crude oil price of $76.51 per barrel and an average overall product price of $53.15 per BOE in Q2 2018,
representing increases of 31 and 21 percent, respectively, compared to Q2 2017;
- Invested approximately $19 million in capital expenditures, representing approximately 25 percent of the Company’s $75
million capital budget for the year. The majority of Bonterra’s remaining 2018 capital budget is expected to be spent in the
third quarter;
- Drilled 20 gross (19.9 net) wells during the first six months of 2018, of which 18 gross (17.9 net) wells were completed,
tied-in and placed on production. The remaining two wells were brought on production in July 2018 and will contribute to Q3
volumes;
- Reduced production costs to $13.01 per BOE, compared to $14.49 per BOE in Q1 2018, a level that is more in line with
historical production costs;
- Reduced net debt, which at the end of Q2 2018 was $330.5 million, $8.1 million lower than Q1 2018 and $40.3 million less than
the end of Q2 2017; and
- Recorded net earnings of $8.9 million compared to net earnings of $3.0 million for Q2 2017.
The Company posted a strong quarter both financially and operationally, and generated funds flow that exceeded
capital spending and dividend payments, thereby allowing the Company to continue to reduce net debt, with capital spending of
approximately $19.0 million compared to funds flow of $37.6 million. Approximately 94 percent of the Company’s revenue in Q2 2018
was weighted towards higher value crude oil and NGLs. As demonstrated by its Q2 2018 financial results, Bonterra offers
significant torque to the upside in a rising and stable oil price environment. The Company also recorded positive second
quarter net earnings of $8.9 million compared to $3.0 million in the same period in 2017. The increase in net earnings was
primarily due to increased commodity prices for oil and NGLs coupled with stronger production volumes.
For many years, Bonterra has successfully stood out among peers by remaining a low-cost producer with a low
production decline rate of approximately 22 percent, significant exposure to the Pembina Cardium pool, and a sizeable inventory of
low-risk, highly economic undrilled locations. During the second quarter, Bonterra succeeded in bringing all-in cash costs
back to levels that are consistent with prior history, averaging $23.09 per BOE in Q2 2018 compared to $24.82 per BOE in the prior
quarter. Field netbacks in the second quarter increased significantly to $34.69 per BOE from $28.70 per BOE in Q2 2017 and $29.22
per BOE in Q1 2018. Bonterra’s net debt to funds flow ratio has also declined to approximately 2.2 times based on annualized
Q2 2018, which is in-line with the guided range of 2.1 to 2.5 times by year end 2018, and down from 3.0 times in Q1 2018.
Q3 and 2018 Outlook
Bonterra will continue to pursue a sustainable growth strategy focused on exercising financial discipline to
reduce debt, delivering on operational efficiencies and managing a stable dividend to create strong returns for shareholders.
Bonterra’s drilling and completions activities through the first quarter positioned the Company well in the second quarter to
produce record high volumes and take advantage of strong realized oil and liquids pricing.
With a continued focus on governance, Bonterra’s Board of Directors is pleased to announce the addition of Mr.
Dan Reuter, Managing Director of Oberndorf Enterprises, to Bonterra’s Board. Oberndorf Enterprises is a San Francisco-based
private fund, currently holding a significant 12 percent investment in Bonterra. As a shareholder representative, Mr. Reuter
brings a wealth of knowledge regarding capital allocation and corporate governance and will significantly contribute to overall
corporate strategy and direction while offering valuable insights into U.S. institutional shareholder perspectives. Bonterra
is pleased to welcome Mr. Reuter to the Board.
As a result of the Company’s strong performance in the second quarter, Bonterra remains on target to meet annual
production guidance of 13,200 to 13,500 BOE per day with a net debt to funds flow target range between 2.1 to 2.5 times at year end
2018. Production for the third quarter will be impacted by a major plant turnaround that occurred in July and restricted
volumes for close to seven days. Regardless, given the Company’s strong first half 2018 results, full year guidance remains
intact with Bonterra tracking to achieve production near the high end of forecasts. Bonterra’s long-term model of sustainable
growth plus dividend continues to be a focus with a future view towards a measured approach to dividend increases with a sustained
recovery in the oil price environment.
Bonterra Energy Corp. is a conventional oil and gas corporation with operations in Alberta, Saskatchewan and
British Columbia. The shares are listed on The Toronto Stock Exchange under the symbol "BNE".
For further information please contact:
George F. Fink, Chairman and CEO
Robb D. Thompson, CFO
Adrian Neumann, COO
Telephone: (403) 262-5307
Fax: (403) 265-7488
Email: info@bonterraenergy.com
Cautionary Statements
This summarized news release should not be considered a suitable source of information for readers who are
unfamiliar with Bonterra Energy Corp. and should not be considered in any way as a substitute for reading the full report.
For the full report, please go to www.bonterraenergy.com
Use of Non-IFRS Financial Measures
Throughout this release the Company uses the terms "payout ratio" and "cash netback" to analyze operating
performance, which are not standardized measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS.
These measures are commonly utilized in the oil and gas industry and are considered informative by management, shareholders and
analysts. These measures may differ from those made by other companies and accordingly may not be comparable to such measures as
reported by other companies.
The Company calculates payout ratio by dividing cash dividends paid to shareholders by cash flow from operating
activities, both of which are measures prescribed by IFRS which appear on our statements of cash flows. We calculate cash netback
by dividing various financial statement items as determined by IFRS by total production for the period on a barrel of oil
equivalent basis.
Forward Looking Information
Certain statements contained in this release include statements which contain words such as "anticipate",
"could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, relating to matters that
are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events
which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian
securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions.
Forward-looking information in this release includes, but is not limited to: expected cash provided by continuing operations; cash
dividends; future capital expenditures, including the amount and nature thereof; oil and natural gas prices and demand; expansion
and other development trends of the oil and gas industry; business strategy and outlook; expansion and growth of our business and
operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit
risks; and other such matters.
All such forward-looking information is based on certain assumptions and analyses made by us in light of our
experience and perception of historical trends, current conditions and expected future developments, as well as other factors we
believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect
operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary
costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and
regulations as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas companies to
raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil
and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from
operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or
pursued by us; and other factors, many of which are beyond our control.
Actual results, performance or achievements could differ materially from those expressed in, or implied by, this
forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking
information will transpire or occur, or if any of them do, what benefits will be derived there from. Except as required by law,
Bonterra disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new
information, future events or otherwise.
The forward-looking information contained herein is expressly qualified by this cautionary statement.
Frequently recurring terms
Bonterra uses the following frequently recurring terms in this press release: “WTI” refers to West Texas
Intermediate, a grade of light sweet crude oil used as benchmark pricing in the United States; “MSW Stream Index” or “Edmonton Par”
refers to the mixed sweet blend that is the benchmark price for conventionally produced light sweet crude oil in Western Canada;
“AECO” refers to Alberta Energy Company, a grade or heating content of natural gas used as benchmark pricing in Alberta, Canada;
“bbl” refers to barrel; “NGL” refers to Natural gas liquids; “MCF” refers to thousand cubic feet; “MMBTU” refers to million British
Thermal Units; “GJ” refers to gigajoule; and “BOE” refers to barrels of oil equivalent. Disclosure provided herein in respect
of a BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 MCF: 1 bbl is based on an energy
conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Numerical Amounts
The reporting and the functional currency of the Company is the Canadian dollar.
The TSX does not accept responsibility for the accuracy of this release.