FINANCIAL AND OPERATIONAL HIGHLIGHTS
As at and for the year ended |
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FINANCIAL | |||||||
Revenue - realized oil and gas sales | 319,517 | 384,197 | 251,616 | ||||
Funds flow(1) | 147,305 | 185,583 | 104,843 | ||||
Per share - basic | 3.96 | 5.16 | 3.11 | ||||
Per share - diluted | 3.95 | 4.98 | 3.02 | ||||
Cash flow from operations | 140,183 | 183,553 | 96,103 | ||||
Per share - basic | 3.77 | 5.10 | 2.85 | ||||
Per share - diluted | 3.76 | 4.92 | 2.76 | ||||
Net earnings(2) | 44,943 | 79,023 | 179,299 | ||||
Per share - basic | 1.21 | 2.20 | 5.32 | ||||
Per share - diluted | 1.20 | 2.12 | 5.16 | ||||
Capital expenditures | 126,478 | 79,769 | 67,282 | ||||
Total assets | 967,870 | 919,682 | 945,721 | ||||
Net debt(3) | 140,400 | 149,831 | 267,179 | ||||
Bank debt | 14,822 | 17,601 | 162,945 | ||||
Shareholders' equity | 528,258 | 479,839 | 392,019 | ||||
OPERATIONS | |||||||
Light oil | -bbl per day | 7,209 | 7,095 | 7,204 | |||
-average price ($ per bbl) | 97.58 | 113.93 | 74.53 | ||||
NGLs | -bbl per day | 1,359 | 1,141 | 1,013 | |||
-average price ($ per bbl) | 48.80 | 66.00 | 43.86 | ||||
Conventional natural gas | -MCF per day | 33,814 | 31,023 | 27,176 | |||
-average price ($ per MCF) | 3.12 | 5.44 | 3.97 | ||||
Total barrels of oil equivalent per day (BOE)(4) | 14,204 | 13,407 | 12,747 | ||||
(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) | The Company recorded a |
(3) | Net debt is not a recognized measure under IFRS. The Company defines net debt as current liabilities less current assets plus long-term bank debt, subordinated debentures and subordinated term debt. |
(4) | 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. |
FINANCIAL & OPERATING HIGHLIGHTS
- Production in 2023 averaged 14,204 BOE per day, six percent higher than in 2022, while fourth quarter volumes averaged 15,128 BOE per day, 16 percent above the same period last year, reflecting Bonterra's efficient deployment of capital, high-quality asset base and the outperformance of new wells brought onstream in 2023.
- Funds flow1 totaled
$147.3 million ($3.95 per fully diluted share) in 2023, while funds flow1 in Q4 2023 totaled$40.4 million ($1.08 per fully diluted share). - Free funds flow1, defined as funds flow1 net of development capital and decommissioning expenditures settled, was
$12.5 million in 2023 and$22.4 million in Q4 2023, and was directed primarily to reducing net debt, helping further advance the Company's goal of reinstating a sustainable return of capital framework. - Net earnings in 2023 demonstrated full cycle profitability, totaling
$44.9 million ($1.20 per diluted share), while in Q4 2023, net earnings totaled$15.0 million ($0.40 per diluted share). - Field netbacks1 averaged
$37.01 per BOE in 2023 and$35.85 per BOE in Q4 2023, while cash netbacks averaged$28.42 per BOE in 2023 and$29.06 per BOE in Q4 2023, with both reflecting lower commodity prices in 2023 compared to the prior year, partially offset by gains on realized risk management contracts, and lower per unit production and royalty costs. - Production costs declined by 17 percent in Q4 2023 over Q4 2022, averaging approximately
$13.37 per BOE in Q4 2023, while annual average production costs were eight percent lower than 2022 at$16.02 per BOE, reflecting Bonterra's continued focus on cost control, operational enhancements and facility upgrades. - Capital expenditures totaled
$126.5 million during 2023, and$14.0 million in Q4 2023, including the drilling and completion of an unbudgeted exploratoryMontney well, described below.$91.6 million of 2023 capital was directed to drilling 41 gross (39.2 net) operated wells, bringing 37 gross (35.6 net) wells onto production following their completion, equip and tie-in;$31.2 million was directed to related infrastructure, recompletions and non-operated capital, including the first explorationMontney well, as detailed further below; and$3.7 million was directed to the expansion of a wholly owned gas plant to alleviate processing capacity limitations.
- Net debt1 totaled
$140.4 million at year-end, representing a six percent decline from the end of 2022 and a significant 47 percent decline from year end 2021. Bank debt decreased by 16 percent over 2022 to total$14.8 million at year-end 2023, reflecting the positive impact on free funds flow from increased production and an ongoing focus on cost reductions. - Responsible operations throughout 2023 remained a priority for Bonterra, with
$9.1 million invested in abandonment and reclamation activities, higher than the anticipated$5 to$6 million . The Company is pleased to confirm completion of its third Sustainability Report which is now available on Bonterra's website. - Established a complementary new core area in
Charlie Lake subsequent to year-end, as outlined in the Company'sMarch 4, 2024 press release, with an agreement to acquire 79 net sections of land inBonanza, Alberta that is prospective for light oil (the "Acquisition").
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1 Non-IFRS measure. See advisories later in this press release. |
YEAR IN REVIEW
Bonterra's successful 2023 drilling and completions program drove strong production volumes, which averaged 14,204 BOE per day in 2023, exceeding the upper end of the Company's previously announced annual guidance range of 13,500 to 13,700 BOE per day and increasing six percent over 2022. In the fourth quarter, production averaged a record 15,128 BOE per day, increasing 16 percent over Q4 2022 without any contribution from the
Net debt declined to
Revenue, Netbacks and Funds Flow
The Company's higher value light oil and liquids production represented 88 percent of the Company's total realized oil and gas sales in 2023, helping offset downward pricing pressure from persistent global supply and demand imbalances for natural gas throughout the year. When combined with gains on risk management contracts resulting from the Company's hedging program, Bonterra's strategic production profile generated average field and cash netbacks1 of
Efficient Capital Program
Bonterra executed a highly successful capital program in 2023 that was largely directed to the continued development of its high-quality, light oil weighted asset base, with annual capital expenditures totaling
In addition to drilling and completions, Bonterra's 2023 capital program also invested in strategic infrastructure development, recompletions, and non-operated capital, including the successful expansion of a wholly-owned gas plant to alleviate processing capacity limitations, upgrading equipment to drive down per unit production costs, and the drilling of a Bonterra's first exploration
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1 Non-IFRS measure. See advisories later in this press release. |
Subsequent to year end, Bonterra established a new core area in the
See the Company's press release dated
Testing of First Montney Test Well
In the fourth quarter of 2023, Bonterra achieved a significant milestone with the completion of its first
Bonterra's
Ongoing Abandonment and Reclamation
The Company continued to responsibly pursue abandonment and reclamation efforts in 2023, having leveraged support from the Alberta Site Rehabilitation Program ("SRP"), which concluded in Q2 2023. The Company abandoned 84.1 net wells and 155 pipelines throughout the year, representing a total pipe length of 135.7 kilometers. By year-end 2024, approximately 75 percent of all wells previously identified as having no further economic potential are expected to be successfully abandoned.
OUTLOOK
Subsequent to year-end 2023, the Company has remained focused on executing its 2024 capital program, having drilled seven gross operated (6.5 net) wells to date, which are expected to be completed, equipped and placed on production by the end of the Q1 2024, along with four gross operated (3.6 net) wells that were drilled in Q4 2023. With the addition of the
Return Of Capital Strategy
Bonterra remains committed to prioritizing responsible free funds flow2 generation in 2024 which can be directed towards further balance sheet strengthening, achieving modest production growth, or the implementation of a return of capital model. Should low commodity prices persist, the Company intends to prioritize the continued management of the balance sheet and maintaining ongoing financial discipline.
Enhanced Stability Through Risk Management
In order to protect future cash flows, diversify the Company's commodity price exposure and add stability during periods of market volatility, hedges have been layered on approximately 30 percent of Bonterra's expected crude oil and natural gas production through Q3 2024. Through the next nine months, Bonterra has secured the following risk management contracts:
- WTI prices between
$50.00 USD to$93.75 USD per bbl on approximately 2,133 bbls per day; and - Natural gas prices between
$1.81 to$3.56 per GJ on approximately 13,662 GJ per day.
Bonterra remains committed to executing its focused business strategy, and responsibly developing its high-quality, oil-weighted asset base. The Company believes that it is strategically positioned to deliver long-term value to stakeholders and achieve sustainable profitability, strengthened by its recent core area addition which adds considerable value and development runway to Bonterra's existing portfolio.
About Bonterra
Cautionary Statements
This summarized news release should not be considered a suitable source of information for readers who are unfamiliar with
Non-IFRS and Other Financial Measures
Throughout this release the Company uses the terms "funds flow", "free funds flow", "net debt", "field netback" 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 defines funds flow as funds provided by operations including proceeds from sale of investments and investment income received excluding effects of changes in non-cash working capital items and decommissioning expenditures settled. Free funds flow is defined as funds flow less dividends paid to shareholders, capital and decommissioning expenditures settled. Net debt is defined as long-term subordinated term debt, subordinated debentures and bank debt plus working capital deficiency (current liabilities less current assets). Field netback is defined as revenue and realized risk management contract gain (loss) minus royalties and operating expenses divided by total BOEs for the period. EBITDA is defined as net earnings excluding deferred consideration, finance costs, provision for current and deferred taxes, depletion and depreciation, share-option compensation, gain or loss on sale of assets and unrealized gain or loss on risk management contracts. Net debt to EBITDA ratio is defined as net debt at the end of the period divided by EBITDA for the trailing twelve months.
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: estimated production; cash flow sensitivity to commodity price variables; earnings sensitivity to interest rates; abandonment and reclamation activities and targets; 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; maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; 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 may limit growth or operations within the oil and gas industry; the impact of climate-related financial disclosures on financial results; the ability of the Company to raise capital, maintain its syndicated bank facility and refinance indebtedness upon maturity; 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; credit risks; climate change risks; cyber security; 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, or if any of them do, what benefits will be derived therefrom. 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
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.
SOURCE
© Canada Newswire, source