Operational and Financial Summary
Three months ended | |||
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Operating | |||
Average daily production | |||
Heavy oil (bbls/d) | 667 | 881 | 1,404 |
Light & medium oil (bbls/d) | 8 | - | 68 |
Natural gas (Mcf/d) | 2,926 | 3,406 | 2,510 |
NGLs (bbls/d) | 87 | 113 | 47 |
Total (boe/d) | 1,250 | 1,561 | 1,939 |
Total boe/d per million shares – diluted | 11.5 | 14.3 | 17.6 |
Average realized prices | |||
Heavy oil ($/bbl) | 33.06 | 54.40 | 51.62 |
Light & medium oil ($/bbl) | 20.85 | - | 48.97 |
Natural gas ($/Mcf) | 2.20 | 2.70 | 2.06 |
NGLs ($/bbl) | 22.02 | 26.64 | 37.16 |
Total ($/boe) | 24.46 | 38.50 | 42.71 |
($/boe) | |||
Petroleum and natural gas sales | 24.46 | 38.50 | 42.71 |
Realized gain (loss) on financial instruments | 5.53 | 0.53 | - |
Royalties | (1.96) | (4.43) | (3.98) |
Operating | (12.19) | (8.63) | (8.18) |
Transportation | (2.49) | (2.45) | (3.70) |
Operating netback(1) | 13.35 | 23.52 | 26.85 |
General and administrative | (3.50) | (2.52) | (2.64) |
Exploration expense | - | - | (0.12) |
Interest and financing expense (cash) | (0.17) | (0.37) | (0.29) |
Adjusted funds flow per boe(1) | 9.68 | 20.63 | 23.80 |
Financial ( | |||
Petroleum and natural gas sales | 2,783 | 5,531 | 7,453 |
Cash flow from operating activities | 1,183 | 3,955 | 2,290 |
Per share – diluted | 0.01 | 0.04 | 0.02 |
Adjusted funds flow(1) | 1,102 | 2,963 | 4,153 |
Per share – diluted(1) | 0.01 | 0.03 | 0.04 |
Net income (loss) | (31,529) | (56) | 929 |
Per share – basic | (0.29) | - | 0.01 |
Per share – diluted(2) | (0.29) | - | 0.01 |
Capital expenditures | 7,082 | 1,528 | 1,453 |
Property acquisitions (dispositions), net | - | (3,508) | - |
Total capital expenditures, net | 7,082 | (1,980) | 1,453 |
Net debt(1) | 6,183 | 563 | 2,105 |
Common shares outstanding (000) | |||
End of period – basic | 108,921 | 108,921 | 108,921 |
Weighted average for the period – basic(2) | 108,921 | 108,921 | 108,921 |
Weighted average for the period – diluted(2) | 108,936 | 109,097 | 110,430 |
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. | Basic weighted average shares are used to calculate diluted per share amounts when the Corporation is in a loss position. |
FIRST QUARTER 2020 REVIEW
The crude oil demand destruction caused by the COVID-19 global pandemic and the actions of
In the first quarter, prior to the COVID-19 pandemic, Altura invested
In
Production volumes averaged 1,250 boe per day in the first quarter, a 20% decrease from the fourth quarter of 2019. Production in the quarter was impacted by natural declines, well down time from repairs and maintenance, the 7.0% working interest disposition that closed on
Altura's Entice well was equipped with artificial lift and temporary facilities on
Altura's realized heavy oil price decreased 39% to
The Corporation realized a gain on financial instruments of
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
HEDGING
Altura had the following crude oil contracts at
Period | Commodity | Type of | Quantity | Pricing Point | Contract |
Apr 1/20ꟷJun 30/20 | Crude Oil | Fixed | 300 bbls/d | WTI | CAD |
Apr 1/20ꟷJun 30/20 | Crude Oil | Fixed | 300 bbls/d | WCS-WTI Differential | CAD ( |
Jul 1/20ꟷSep 30/20 | Crude Oil | Fixed | 300 bbls/d | WCS | CAD |
Oct 1/20ꟷDec 31/20 | Crude Oil | Fixed | 300 bbls/d | WTI | CAD |
Oct 1/20ꟷDec 31/20 | Crude Oil | Fixed | 300 bbls/d | WCS-WTI Differential | CAD ( |
Subsequent to
OUTLOOK
Altura eliminated all discretionary capital spending for the remainder of the year and voluntarily curtailed production volumes in
Since shutting in production at the beginning of May, there has been some optimism in respect to the global crude oil supply/demand balance and oil prices have improved significantly. Given this improvement in prices, Altura is planning to restart production and sell crude oil into the spot market beginning in June.
Further to the
In
The Corporation is focused on protecting balance sheet strength during the current volatile commodity price environment.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG")
Altura's Board of Directors has established an ESG Committee to assist the Board in carrying out its responsibilities by having responsible persons ensure that Altura's activities are conducted in an environmentally responsible manner and that the Corporation maintains the integrity of its social and governance policies. Altura has posted its ESG Committee Mandate, Corporate Social Responsibility Policy and 2019 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. A recording of the webcast will be available on Altura's website following the AGM.
On behalf of the Board of Directors and the Altura management team, we would like to thank our shareholders for their ongoing support during these very difficult times.
ABOUT
Altura is a junior oil and gas exploration, development and production company with operations in central Alberta. Altura predominantly produces from the Rex member in the Upper Mannville group and is focused on delivering per share growth and attractive shareholder returns through a combination of organic growth and strategic acquisitions.
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:
- uncertainty about the COVID-19 pandemic and the impact it will have on Altura's operations, the demand for Altura's products, and economic activity in general;
- plans to continue the Entice production test when oil prices improve;
- management's belief that the reserve evaluators' forward oil price forecasts will increase over time which could result in impairment reversals in the future;
- the credit facility renewal date of
June 30, 2020 ; - forecasted hedging gains in 2020;
- plans to restart production and sell oil into the sport market in June;
- plans to close the second transaction of the
December 4, 2019 definitive agreement in the second half of 2020; - plans to drill a horizontal well in the Entice or the Leduc-Woodbend areas before
December 31, 2020 , with no anticipated net capital outlay by Altura; and - Altura's AGM date of
June 4, 2020 and plans to host a live webcast of the event.
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 return of industry conditions to pre-COVID-19 levels;
- 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, among other things, fund its planned expenditures.
Altura believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable based on prior operating history but no assurance can be given that these factors, expectations and assumptions will prove to be correct particularly in the current operating environment which is unprecedented by any standard. 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 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:
- the COVID-19 pandemic and related disruptions in oil and gas markets, including the duration and impacts thereof;
- changes in commodity prices including, without limitation, as a result of COVID-19 pandemic;
- changes in commodity prices including, without limitation, as a result of the COVID-19 pandemic and related disruptions in oil and gas markets;
- unanticipated operating results or production declines;
- public health crises, such as the recent outbreak of COVID-19 and the related economic disruption that can result in volatility in financial markets, disruption to global supply chains, and the ability to directly and indirectly staff the Corporation's day to day operations;
- 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 or debt 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.
Initial Production Rates
Any references in this press release to initial production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. Oil and gas formations are inherently unpredictable, particularly in the early stage of their development. Readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Corporation.
Neither the
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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. |
SOURCE
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