CALGARY, Alberta, May 11, 2017 (GLOBE NEWSWIRE) -- Traverse Energy Ltd. (“Traverse” or “the Company”) (TSX Venture:TVL) presents financial and operating results for the three months ended March 31, 2017.
| Three Months Ended | ||||||||||||||
| Highlights (unaudited) | March 31, 2017 | December 31, 2016 | March 31, 2016 | |||||||||||
| Financial ($ thousands, except per share amounts) | ||||||||||||||
| Petroleum and natural gas revenue | 3,025 | 1,828 | 1,635 | |||||||||||
| Cash provided by operations | 1,102 | 238 | 612 | |||||||||||
| Funds from operations (1) | 1,441 | 404 | 389 | |||||||||||
| Per share – basic and diluted | 0.02 | 0.01 | 0.01 | |||||||||||
| Net loss | (371 | ) | (856 | ) | (671 | ) | ||||||||
| Per share – basic and diluted | (0.00 | ) | (0.01 | ) | (0.01 | ) | ||||||||
| Capital expenditures, net of dispositions | 3,890 | 2,874 | 998 | |||||||||||
| Total assets | 41,569 | 41,610 | 37,288 | |||||||||||
| Working capital (deficiency) | (766 | ) | 1,717 | 126 | ||||||||||
| Common shares | ||||||||||||||
| Outstanding (millions) | 86.6 | 86.6 | 71.9 | |||||||||||
| Weighted average (millions) | 86.6 | 80.1 | 71.9 | |||||||||||
| Operations (Units as noted) | ||||||||||||||
| Average production | ||||||||||||||
| Natural gas (Mcf/day) | 2,426 | 2,075 | 2,203 | |||||||||||
| Oil and NGL (bbls/day) | 467 | 259 | 409 | |||||||||||
| Total (BOE/day) | 871 | 605 | 776 | |||||||||||
| Average sales price | ||||||||||||||
| Natural gas ($/Mcf) | 3.00 | 2.99 | 2.21 | |||||||||||
| Oil and NGL ($/bbl) | 56.37 | 52.77 | 32.01 | |||||||||||
| Netback ($/BOE) | ||||||||||||||
| Petroleum and natural gas revenue | 38.58 | 32.86 | 23.15 | |||||||||||
| Royalties | (1.54 | ) | (0.84 | ) | (0.84 | ) | ||||||||
| Operating costs | (13.09 | ) | (18.47 | ) | (11.31 | ) | ||||||||
| Transportation costs | (1.84 | ) | (1.57 | ) | (1.77 | ) | ||||||||
| Operating netback (2) | 22.11 | 11.98 | 9.23 | |||||||||||
| General and administrative | (3.61 | ) | (4.60 | ) | (3.59 | ) | ||||||||
| Finance expense (3) | (0.12 | ) | (0.12 | ) | (0.14 | ) | ||||||||
| Funds from operations (1) | 18.38 | 7.26 | 5.50 | |||||||||||
(1) Funds from operations represents net cash from operating activities prior to changes in non-cash working capital and settlement of decommissioning obligations. Funds from operations per BOE is funds from operations divided by barrels of oil equivalent production volumes for the applicable period.
(2) Operating netback represents revenue, less royalties, operating and transportation expenses. Operating netback per BOE is the operating netback divided by barrels of oil equivalent production volumes for the applicable period.
(3) Excludes non-cash accretion.
Operations Review
In the first quarter of 2017, Traverse added production at Coyote, Watts and Turin, increasing production to 871 BOE/day from 605 BOE/day in the final quarter of 2016. This increased production resulted in funds from operations of $1.4 million for the first quarter, an increase of $1.0 million over the fourth quarter of 2016. Traverse drilled 3 wells (100% interest) during the quarter, resulting in capital expenditures of $3.9 million.
In the Coyote area, a Mannville horizontal oil well was drilled, completed and tied-in. Production from the well commenced in mid-February. In late April, after delays resulting from spring road bans, the well was equipped with artificial lift and resumed production. One additional horizontal well is planned for the Coyote area in the second half of 2017. At Coyote west an exploration well was drilled and production tested. The well tested low rates of gas and oil and will not be tied-in for production at this time. One additional well is planned for mid-year in the Coyote west area.
In the Watts area, an oil well drilled in 2016 was placed on production in early February. An exploratory well was drilled and will be fracture treated to evaluate productivity after road bans in the area are removed. Additional seismic will be acquired and shot in the area to delineate further exploratory and development drilling. One exploratory well is planned for this area in the second half of 2017.
Undeveloped land holdings in Alberta at March 31, 2017 were 172,900 gross (172,000 net) acres. At March 31, 2017, the Company had a working capital deficiency of approximately $766,000 and unutilized credit facilities, which were renewed subsequent to quarter end. On April 26, 2017, the Company announced a non-brokered private placement of up to 5 million common shares and 2,375,000 warrants for gross proceeds of up to $2.0 million. The closing of the offering is expected to occur on or about May 17, 2017.
Forward-looking information
This news release contains forward-looking information which is not comprised of historical fact. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes the Company’s statements with respect to additional drilling in the Coyote and Coyote west areas; the timing and evaluation of a well at Watts; additional seismic and further exploratory and development drilling at Watts; and the closing of the non-brokered private placement. This forward looking information is subject to a variety of substantial known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward looking information. The Company’s Annual Information Form filed on April 11, 2017 with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describes the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference.
Although the Company believes that the material assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur. The Company disclaims any intention or obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
Non-IFRS financial measures
In this release references are made to certain financial measures (such as funds from operations and operating netback) which do not have standardized meanings prescribed by IFRS and therefore may not be comparable to the calculation of similar measures by other entities. Management uses certain industry benchmarks such as operating netback to analyze financial and operating performance. There are no comparable measures in accordance with IFRS for operating netback. Management believes that in addition to net income (loss), the non-IFRS measures set forth below are useful supplemental measures as they assist in the determination of the Company's operating performance, leverage and liquidity. Investors should be cautioned however, that these measures should not be construed as an alternative to both net income (loss) and net cash from operating activities, which are determined in accordance with IFRS, as indicators of the Company's performance.
Funds from operations
Funds from operations represents net cash from operating activities prior to changes in non-cash working capital and settlement of decommissioning obligations as detailed below:
| Unaudited | Three months ended | |||||||||||
| ($) | March 31, 2017 | December 31, 2016 | March 31, 2016 | |||||||||
| Net cash from operating activities | 1,102,351 | 238,406 | 611,760 | |||||||||
| Decommissioning expenditures | 33,758 | 32,412 | 33,758 | |||||||||
| Change in non-cash working capital | 305,095 | 133,350 | (255,458 | ) | ||||||||
| Funds from operations | 1,441,204 | 404,168 | 388,807 |
Funds from operations per BOE is funds from operations divided by barrels of oil equivalent production volumes for the applicable period. Funds from operations per share is calculated based on the weighted average number of common shares outstanding consistent with the calculation of net income (loss) per share.
Operating netback
Operating netback represents revenue less royalties, operating and transportation costs. Operating netback per BOE is the operating netback divided by barrels of oil equivalent production volume for the applicable period. The calculation of Traverse's operating netback is detailed under the heading "Operating netback" within the Company’s management’s discussion and analysis for the period ended March 31, 2017.
BOE equivalent
The term “BOE” or barrels of oil equivalent 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: 1 bbl) is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the wellhead. Additionally, 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 ratio of 6:1 may be misleading as an indication of value.
Further details on the Company including the 2016 year end audited financial statements, the related management’s discussion and analysis and Annual Information Form are available on the Company’s website (www.traverseenergy.com) and SEDAR.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of the content of this release.