Operational and Financial Summary
Three months ended | |||
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Operating | |||
Average daily production | |||
Heavy crude oil (bbls/d) | 496 | 468 | 667 |
Light crude & medium crude oil (bbls/d) | - | - | 8 |
Natural gas (Mcf/d) | 2,356 | 2,402 | 2,926 |
NGLs (bbls/d) | 53 | 48 | 87 |
Total (boe/d) | 942 | 916 | 1,250 |
Total boe/d per million shares – diluted | 8.6 | 8.4 | 11.5 |
Average realized prices | |||
Heavy crude oil ($/bbl) | 56.92 | 44.45 | 33.06 |
Natural gas ($/Mcf) | 3.30 | 2.87 | 2.20 |
NGLs ($/bbl) | 41.50 | 25.72 | 22.02 |
Average realized price ($/boe) | 40.59 | 31.56 | 24.46 |
($/boe) | |||
Petroleum and natural gas sales | 40.59 | 31.56 | 24.46 |
Royalties | (4.45) | (2.61) | (1.96) |
Operating expenses | (13.16) | (12.75) | (12.19) |
Transportation expenses | (1.96) | (1.93) | (2.49) |
Operating netback(1) | 21.02 | 14.27 | 7.82 |
Realized gain (loss) on financial instruments | (4.75) | 1.48 | 5.53 |
Operating netback after realized gain (loss) on financial instruments(1) | 16.27 | 15.75 | 13.35 |
General and administrative | (5.49) | (4.66) | (3.50) |
Interest and financing expense | (1.23) | (1.39) | (0.17) |
Adjusted funds flow per boe(1) | 9.55 | 9.70 | 9.68 |
Financial ( | |||
Petroleum and natural gas sales | 3,440 | 2,659 | 2,783 |
Cash flow from operating activities | 827 | 206 | 1,183 |
Adjusted funds flow(1) | 809 | 818 | 1,102 |
Per share – basic(1) | 0.01 | 0.01 | 0.01 |
Per share – diluted(1) | 0.01 | 0.01 | 0.01 |
Net income (loss) | (908) | 10,823 | (31,529) |
Per share – basic | (0.01) | 0.10 | (0.29) |
Per share – diluted(2) | (0.01) | 0.10 | (0.29) |
Capital expenditures | 1,510 | 105 | 7,082 |
Property disposition | (438) | - | - |
Total capital expenditures, net | 1,072 | 105 | 7,082 |
Net debt(1) | 4,129 | 3,857 | 6,183 |
Common shares outstanding – basic (000) | 108,921 | 108,921 | 108,921 |
(1) | Adjusted funds flow, net debt, operating netback, and operating netback after realized gain (loss) on financial instruments are non-GAAP measures that do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. Refer to the heading entitled "Non-GAAP Measures" included in the "Advisories" section at the end of the MD&A. |
(2) | Basic weighted average shares are used to calculate diluted per share amounts when the Corporation is in a loss position. |
FIRST QUARTER 2021 REVIEW
In the quarter, Altura completed its 102/16-14-049-26W4 Rex horizontal well ("16-14") (89% working interest) that was drilled in
Altura invested
The Corporation closed a previously announced asset disposition on
Production volumes averaged 942 boe per day in the first quarter, up three percent from the fourth quarter of 2020 due to new production from the 16-14 well that was placed on production in late February.
Altura's realized heavy oil price increased 28% to
Operating expenses in the first quarter were
The Corporation's operating netback1 averaged
Adjusted funds flow1 was
Altura recorded a net loss of
Altura's net debt1 was
PRODUCTION UPDATE
The Corporation's one (0.9 net) well that was shut-in in
OUTLOOK
Management is excited to get back to drilling in the Rex pool and plans to drill two (1.8 net) new wells at Leduc-Woodbend in the summer of 2021 with production additions in July and October, respectively. With added production from the two new wells, improving commodity prices and a more favorable hedge book, Altura is forecasting substantial adjusted funds flow1 growth in the second half of 2021 and a decrease in net debt1.
At current commodity prices, management believes that over the next five years the Corporation could double production at Leduc-Woodbend and completely eliminate debt while drilling only half of its booked locations4. Additionally, if conservative levels of debt continue to be utilized, management believes it has the economic inventory at Leduc-Woodbend to further accelerate production growth. See Altura's corporate presentation at www.alturaenergy.ca for further details on Altura's long-term plan.
Altura has increased its capital expenditure budget for 2021 from
- Altura will continue to improve its extended reach horizontal ("ERH") well design by increasing the lateral length in one of the proposed wells from 2,000 to 2,300 meters (a 15% increase). This extension will accommodate a commensurate increase in total frac stages from 74 to 85. Previous success with longer horizontal laterals and increased frac stages in the Rex pool illustrates improved production and reserve capture. This further optimization is expected to result in even greater well performance which will reduce the number of required wells and decrease the capital required to develop the remainder of the Rex pool.
- The Corporation is excited to implement a waterflood pilot project at Leduc-Woodbend. Success of the pilot would result in gas/oil ratio ("GOR") suppression, reservoir pressure maintenance and attenuated production declines which could add material upside to Altura's Rex oil pool reserve recoveries.
- In the first quarter of 2021, Altura modified the artificial lift system in three (2.7 net) Rex wells to a more robust rod string resulting in improved runtime efficiency which is expected to reduce future workover costs. The expanded budget will enable the conversion of an additional nine (7.9 net) wells in 2021.
Altura expects to close the final disposition of a 1.375% working interest for
While 2020 was primarily a defensive year of survival for many junior oil weighted producers, 2021 is looking to be a year of opportunity. Altura's Leduc-Woodbend asset has a large economic well inventory of 47 (36.6 net) booked locations4 and 104 (67 net) additional drilling opportunities4 and at current commodity prices can self-fund growth within cash flow while improving its strong balance sheet. The Altura team is very excited and poised to refocus efforts towards creating value for shareholders in 2021 and beyond.
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1 Adjusted funds flow, net debt and operating netback are non-GAAP measures that do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. Refer to the heading entitled "Non-GAAP Measures" contained within the "Advisories" section of Altura's MD&A |
2 Consists of 512 bbls/d of heavy crude oil, 65 bbls/d of NGLs and 2,400 Mcf/d of natural gas |
3 Consists of 40 bbls/d of heavy crude oil, 5 bbls/d of NGLs and 330 Mcf/d of natural gas |
4 See advisories on drilling locations in this news release |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG")
We believe that we can develop and produce oil and natural gas safely, responsibly and profitably, while making a positive contribution to society. We believe this sustainable approach is key to the long-term success of the Corporation. Altura has created a culture rooted in strong economic, environmental, social and governance performance which is the foundation for corporate sustainability. From senior leadership to our front-line consultants we focus on continuous improvement and leadership in all aspects of our business.
Altura has demonstrated operational strength and capital discipline while delivering on the safety performance commitment outlined in our Corporate Social Responsibility Policy. Our focus and commitment to hazard identification, emergency readiness and communication regarding safety standards and expectations has created a safety leadership culture that enables everyone to return home safely at the end of the day.
We have a vision of conservation and innovation to minimize environmental impacts and maximize value from the resources we produce. We have invested time and resources to reduce emissions and, although we are a small company, we believe the results have demonstrated leadership on this important objective. We also recognize the value of stakeholder feedback during this important transition phase in the energy industry and believe that disclosure of ESG topics provides a more in-depth picture of the sustainability of the Corporation.
Altura recognizes that to deliver consistent and long-term shareholder value we must operate in a safe, healthy, ethical, legal, and environmentally responsible manner. We look forward to stakeholder feedback as we find new and exciting ways to maximize value for all stakeholders.
Following its approval by the ESG Committee of Altura's Board of Directors, the Corporation has posted its 2021 Sustainability Report on its website at www.alturaenergy.ca.
ANNUAL GENERAL MEETING
The Annual General Meeting ("AGM") of shareholders will be held at the Corporation's offices at 2500,
A link to a live audio webcast of the AGM will be available on the Corporation's website at www.alturaenergy.ca. Following the formal business of the AGM, the Corporation is planning a brief presentation by management which will also be available on Altura's website following the AGM.
ABOUT
Altura is a junior oil and gas exploration, development and production company with operations in central
READER ADVISORIES
Forward-looking Information and Statements
This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "budget", "forecast", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "strategy" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this press release contains forward-looking information and statements pertaining to:
- the 2021 capital expenditure budget including plans to bring two (1.8 net) new wells on production in July and
October 2021 ; - Altura's forecast of substantial adjusted funds flow growth in the second half of 2021, while reducing net debt;
- management's belief over the next five years the Corporation could double production at Leduc-Woodbend and eliminate its debt while drilling only half of its booked locations and could further accelerate production growth at Leduc-Woodbend by utilizing conservative debt levels;
- management's expectation that further ERH well optimization could result in even greater well performance which will reduce the number of required wells and decrease the capital required to develop the remainder of the Rex pool;
- the success of a waterflood pilot project including GOR suppression, reservoir pressure maintenance and attenuated production declines which could add material upside to Altura's Rex oil pool reserve recoveries; and
- plans to close the final stage of the previously announced asset disposition on
June 30, 2021 . - The forward-looking information and statements contained in this press release reflect several material factors and expectations and assumptions of Altura including, without limitation:
- the continued performance of Altura's oil and gas properties in a manner consistent with its past experiences
- that Altura will continue to conduct its operations in a manner consistent with past operations;
- the general continuance of current industry conditions;
- the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty and regulatory regimes;
- the accuracy of the estimates of Altura's reserves and resource volumes;
- certain commodity price and other cost assumptions;
- the continued availability of oilfield services; and
- the continued availability of adequate debt and equity financing and cash flow from operations to fund its planned expenditures.
Altura believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable but no assurance can be given that these factors, expectations and assumptions will prove to be correct. To the extent that any forward-looking information contained herein may be considered future oriented financial information or a financial outlook, such information has been included to provide readers with an understanding of management's assumptions used for budgeted and developing future plans and readers are cautioned that the information may not be appropriate for other purposes.
The forward-looking information and statements included in this press release report are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation:
- changes in commodity prices;
- changes in the demand for or supply of Altura's products;
- unanticipated operating results or production declines;
- changes in tax or environmental laws, royalty rates or other regulatory matters;
- changes in development plans of Altura or by third party operators of Altura's properties,
- increased debt levels or debt service requirements;
- inaccurate estimation of Altura's oil and gas reserve and resource volumes;
- limited, unfavorable or a lack of access to capital markets;
- increased costs;
- a lack of adequate insurance coverage;
- the impact of competitors; and
- certain other risks detailed from time to time in Altura's public documents.
The forward-looking information and statements contained in this press release speak only as of the date of this press release, and Altura does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.
Oil and Gas Advisories
Barrels of Oil Equivalent
The term barrels of oil equivalent ("Boe") may be misleading, particularly if used in isolation. Per Boe amounts have been calculated by using the conversion ratio of six thousand cubic feet (6 mcf) of natural gas to one barrel (1 bbl) of crude oil. The Boe conversion ratio of 6 mcf to 1 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 equivalent of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
Drilling Locations
This news release discloses drilling locations in three categories: (i) proved locations; (ii) probable locations; and (iii) potential drilling opportunities. Proved locations and probable locations, which are sometimes collectively referred to as "booked locations", are derived from the Corporation's most recent independent reserves evaluation as of
Neither the
SOURCE
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