Mountainview Energy Ltd. announces 2013 year-end financial results
CUT BANK, MT, April 23, 2014 /PRNewswire/ - 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.
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