Pine Cliff Energy Ltd. Announces Record Quarterly Results, 20% Increase in Monthly Dividend, Increase in 2022 Guidance and Operational Update
Calgary, Alberta--(Newsfile Corp. - August 3, 2022) - Pine Cliff Energy Ltd. (TSX: PNE) ("Pine Cliff" or the "Company") announces record second quarter financial and operating results, a 20% increase in its monthly dividend, an increase in production and CAPEX guidance and an operational update.
Second Quarter 2022 Highlights
Pine Cliff's adjusted funds flow of $55.8 million generated during the second quarter of 2022 was the highest quarterly adjusted funds flow for the Company since inception, surpassing the $32.3 million generated during the first quarter by 73%.
Highlights from the second quarter include:
- generated $55.8 million ($0.16 per basic and $0.15 per fully diluted share) and $88.1 million ($0.26 per basic and $0.25 per fully diluted share) of adjusted funds flow for the three and six months ended June 30, 2022, compared to $9.5 million ($0.03 per basic and fully diluted share) and $19.5 million ($0.06 per basic and fully diluted share) for comparable periods in 2021;
- generated net earnings of $50.2 million ($0.15 per basic and $0.14 per fully diluted share) and $65.6 million ($0.19 per basic and $0.18 per fully diluted share) for the three and six months ended June 30, 2022, compared to a net loss of $0.7 million (($0.00) per basic and fully diluted share) and a net loss of $1.4 million (($0.00) per basic and fully diluted share) for comparable periods in 2021;
- repaid $20.0 million of term debt and $12.0 million of insider debt during the quarter, to be debt free on June 30, 2022;
- paid the first monthly dividend in the Company's history on June 30, 2022;
- production averaged 21,331 Boe/d and 20,866 Boe/d for the three and six months ended June 30, 2022, 18% and 15% higher respectively than comparable periods in 2021; and
- commenced a summer drilling program that will see Pine Cliff drill, complete and tie-in four gross (2.8 net) operated Pekisko oil wells before the end of the third quarter.
The Company's Board of Directors (the "Board") has approved the declaration and payment of a 20% increase in the monthly dividend to an amount of $0.01 per common share payable August 31, 2022, to shareholders of record on August 15, 2022.
Dividends paid on Pine Cliff's common shares will be designated as "eligible dividends" for Canadian federal income tax purposes. The declaration of dividends is at the sole discretion of the Board and will be evaluated on a regular basis.
2022 Production and CAPEX Guidance Update
Pine Cliff's Board of Directors has approved an increase in the 2022 capital expenditure budget from $25.5 million to $29.5 million. The increase reflects the expansion of facilities at the North Twining Unit (the "Unit") to accommodate incremental production volumes from the drilling of Pekisko wells in the Unit, the drilling of an additional one gross (0.15 net) Edson area natural gas well and inflationary costs in the sector. The Company also expects to spend approximately $8.1 million in government funded abandonment and reclamation projects in the second half of 2022.
Pine Cliff has increased and narrowed its 2022 annual production guidance from a range of 20,000 to 21,000 Boe per day to a range of 20,750 to 21,250 Boe per day, weighted 87% to natural gas.
Pine Cliff drilled one (0.7 net) Pekisko oil well in the Unit in June that was completed, tied-in and on production by the end of July. Two (1.4 net) additional Pekisko Unit wells were drilled in July and are scheduled to be completed and tied-in by the end of August. A fourth (0.7 net) Pekisko Unit well is scheduled to be drilled, completed and tied-in prior to the end of the third quarter.
Pine Cliff expects five gross (0.7 net) non-operated wells in the Edson area will be drilled during the third quarter.
Pine Cliff's abandonment and reclamation expenditures in the six months ended June 30, 2022 totaled $5.0 million ($2.1 million from government grants).
On July 21, 2022, the Company's demand operating loan facility was increased to $8.0 million from $5.0 million.
Financial and Operating Results
|Three months ended June 30,||Six months ended June 30,|
|($000s, unless otherwise indicated)|
|Commodity sales (before royalty expense)||90,426||34,163||156,606||69,682|
|Cash flow from operating activities||50,532||8,171||74,403||16,642|
|Adjusted funds flow1||55,816||9,494||88,123||19,494|
|Per share - Basic ($/share)1||0.16||0.03||0.26||0.06|
|Per share - Diluted ($/share)1||0.15||0.03||0.25||0.06|
|Per share - Basic ($/share)1||0.15||(0.00||)||0.19||(0.00||)|
|Per share - Diluted ($/share)1||0.14||(0.00||)||0.18||(0.00||)|
|Positive net cash (net debt)1||22,496||(45,292||)||22,496||(45,292||)|
|Percentage natural gas (%)||87%||92%||88%||91%|
|Weighted-average common shares outstanding (000s)|
|Combined sales price ($/Boe)||46.59||20.75||41.47||21.15|
|Operating netback ($/Boe)1||30.40||7.50||25.07||7.69|
|Corporate netback ($/Boe)1||28.76||5.77||23.35||5.92|
|Operating netback ($ per Mcfe)1||5.07||1.25||4.18||1.28|
|Corporate netback ($ per Mcfe)1||4.79||0.96||3.89||0.99|
1 This is a non-GAAP measure, see "NON-GAAP Measures" for additional information.
About Pine Cliff
Pine Cliff is a natural gas and oil company with a long-term view of creating shareholder value. Pine Cliff's current focus is on acquiring, developing and operating long life assets that generate adjusted funds flow that allows for capital to be returned to shareholders in the form of a dividend. Further information relating to Pine Cliff may be found on www.sedar.com as well as on Pine Cliff's website at www.pinecliffenergy.com
For further information, please contact:
Philip B. Hodge - President and CEO
Alan MacDonald - CFO and Corporate Secretary
Telephone: (403) 269-2289
Fax: (403) 265-7488
Certain statements contained in this news release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, statements relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about developments, 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 news release includes, but is not limited to: future capital expenditures, including the amount and nature thereof; future acquisition opportunities including Pine Cliff's ability to execute on those opportunities; future drilling opportunities and Pine Cliff's ability to generate reserves and production from the undrilled locations; oil and natural gas prices and demand; expansion and other development trends of the oil and natural gas industry; business strategy and guidance; expansion and growth of our business and operations; maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; risks; Pine Cliff's ability to generate adjusted funds flow; Pine Cliff's ability to pay a dividend; 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 provided by operating activities 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. The foregoing factors are not exhaustive.
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 including the reduction in municipal taxes and surface land rentals, or if any of them do, what benefits will be derived there from. Except as required by law, Pine Cliff disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
Natural gas liquids and oil volumes are recorded in barrels of oil ("Bbl") and are converted to a thousand cubic feet equivalent ("Mcfe") using a ratio of one (1) Bbl to six (6) thousand cubic feet. Natural gas volumes recorded in thousand cubic feet ("Mcf") are converted to barrels of oil equivalent ("Boe") using the ratio of six (6) thousand cubic feet to one (1) Bbl. This conversion ratio is based on energy equivalence primarily at the burner tip and does not represent a value equivalency at the wellhead. The terms Boe or Mcfe may be misleading, particularly if used in isolation.
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 oil, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
The forward-looking information contained in this news release is expressly qualified by this cautionary statement.
This press release uses the terms "adjusted funds flow", "operating netbacks", "corporate netbacks" and "positive net cash (net debt)" which are not recognized under International Financial Reporting Standards ("IFRS") and may not be comparable to similar measures presented by other companies. These measures should not be considered as an alternative to, or more meaningful than, IFRS measures including net income (loss), cash provided by operating activities, or total liabilities. The Company uses these measures to evaluate its performance, leverage and liquidity. Adjusted funds flow is a non-Generally Accepted Accounting Principles ("non-GAAP") measure that represents the total of funds provided by operating activities, before adjusting for changes in non-cash working capital, and decommissioning obligations settled. Positive net cash (net debt) is a non-GAAP measure calculated as the sum of cash, trade and other receivables, investments and prepaid expenses and deposits less term debt, promissory notes at the principal amount, amounts due to related party and trade and other payables. Operating netback is a non-GAAP measure calculated as the Company's total revenue, less royalties, operating expenses and transportation expenses, divided by the Boe production of the Company. Corporate netback is a non-GAAP measure calculated as the Company's operating netback, less general and administrative expenses and interest and bank charges, divided by the Boe production of the Company. Please refer to the Annual Report for additional details regarding non-GAAP measures and their calculation.
The TSX does not accept responsibility for the accuracy of this release.
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