Guide Exploration Ltd. Announces First Quarter 2012 Results

CALGARY, ALBERTA--(Marketwire - May 7, 2012) - Guide Exploration Ltd. (GO.TO - News) ("Guide" or the "Corporation") announces the financial results for the quarter ended March 31, 2012.

The unaudited consolidated financial statements of the Corporation for the periods ended March 31, 2012 and 2011 and the related management's discussion and analysis can be accessed on-line on SEDAR at or on the Corporation's website at


--  Revenue for the first quarter of 2012 (before realized financial

    derivatives) was $47.4 million, a decrease of 1.3% from $48.0 million in

    the first quarter of 2011. Funds flow from operations for the first

    quarter of 2012 was $18.8 million (0.19 per share diluted) a decrease of

    29.9% from the $26.8 million realized in the first quarter of 2011. 


--  Production for the first quarter of 2012 averaged 5,285 barrels per day

    of crude oil and natural gas liquids and 54.6 Mmcf/d of natural gas.

    This represents a 27.4% increase from crude oil and NGL production of

    4,148 barrels per day in the first quarter of 2011. Production of

    natural gas quarter over quarter increased by 2.2% from 53.4 Mmcf/d.

    Production included two months of natural gas sales from the Boyer

    property which was acquired on January 31, 2012. Including natural gas

    sales from Boyer, March 2012 production averaged 15,699 BOE/d comprised

    of 5,350 barrels per day of crude oil and NGLs and 62 Mmcf/d of natural

    gas. This represents a 22% increase over the 12,819 BOE/d produced in

    March 2011. 


--  Operating netbacks for the first quarter of 2012 averaged $16.68/BOE

    before realized gain on financial derivatives and $20.01/BOE after

    realized gain on financial derivatives. 


--  Funds flow was impacted by higher operating costs ($12.18/BOE) in the

    first quarter of 2012 as compared with $10.51/BOE in the first quarter

    of 2011. Operating costs were impacted by our increased focus on oil

    production and the corresponding higher operating costs for oil versus

    natural gas. 


--  The Corporation drilled 17 (14.2 net) wells resulting in 14 (11.7 net)

    oil wells and 1 (0.5 net) natural gas well and 2 (2.0 net) dry holes,

    for a success rate of 86% (net) during the quarter. 


--  Capital of $54.4 million was invested in exploration and development

    activities. In addition, $68.3 million was spent to acquire properties

    and $16.2 million was received on the sale of properties for net

    acquisitions of $52.1 million. Major areas of capital expenditure were

    $35.2 million in drilling and completions and $13.0 million in

    facilities. In addition, Guide spent $5.2 million on land acquisition

    and seismic in the first quarter of 2012. 


--  On January 24, 2012, 12,000,000 Class A Shares were issued at $3.05 per

    share for gross proceeds of $36.6 million. 


--  On January 31, 2012, the Corporation completed the acquisition of

    natural gas assets in the Boyer area of Alberta. Cash consideration of

    $62.0 million was paid including closing adjustments. 


--  At March 31, 2012 $182.1 million was drawn on available bank credit

    facilities of $250 million and the Corporation had a working capital

    deficiency of $42.1 million. 


--  At March 31, 2012, Guide had outstanding 104,407,135 Class A Shares,

    10,437,632 share options with an average exercise price of $3.47 and

    2,300,000 warrants. 


--  A loss of $12.2 million ($0.12) per basic share was recorded in first

    quarter 2012 compared to a loss of $13.3 million ($0.16 per share) in

    the first quarter of 2011. 


--  Subsequent to the end of the quarter, Guide renewed the credit facility

    of $250 million with a banking syndicate. The credit facility consists

    of a $225 million extendible 366 day revolving term facility to May 28,

    2013 and a $25 million non-revolving facility. 

2012 Operational Update

Exit production for the first quarter of 2012 was approximately 16,000 BOE/day including 5,600 barrels per day of oil and NGLs (35% liquids weighting). Subsequent to the end of the quarter, Guide has shut-in certain gas properties and will curtail natural gas production in other areas in response to the current spot AECO gas price. These shut-ins will impact approximately 10 to 15 percent of our natural gas production or approximately 6 to 9 Mmcf per day. Guide has hedges in place for the remainder of 2012 for approximately 31 Mmcf per day of natural gas at an average price of $5.09 /mcf AECO, thus the bulk of our gas production is protected from the current low gas price environment. At this time, Guide is not modifying its production guidance for 2012.

In the first quarter of 2012, Guide drilled a total of 14.2 net wells. Our major area of focus was Montney oil in the Normandville/Girouxville area where we added 6 net wells and upgraded our Normandville oil facility to handle an additional 5,000 barrels of oil per day and associated gas.

During the remainder of 2012, Guide plans to drill an additional 24 wells (22 net) including 19 wells (19 net) planned in the Normandville/Girouxville Montney fairway. Plans also include the construction of a 5,000 barrels per day capacity oil facility at Girouxville.

Work is continuing on our Duvernay prospect near Grande Prairie, Alberta. We anticipate spudding this well in the third quarter of 2012.

Average production was 14,382 BOE/d during Q1 2012, 10% higher than the average production of 13,048 BOE/d in Q1 2011. By product, production volumes increased over Q1 2011 as follows: light oil production by 36%, heavy oil production by 4%, natural gas liquids production by 20% and natural gas production by 2%.

In the first quarter of 2012 crude oil and NGLs accounted for 37% of average daily production compared with 32% in Q1 2011.

The average production reflects an effective date for the Boyer natural gas acquisition of January 31, 2012. With Boyer included, Guide's average production for March was 15,699 BOE/d of which 5,350 barrels per day (34%) was crude oil and NGLs.

Prices realized in the first quarter of 2012 were lower for all products than those realized in the first quarter of 2011, with the exception of heavy oil, which increased by 9%. Light oil prices decreased by 5%, NGL prices decreased by 3%, and the average price received for natural gas decreased by 45%.

On January 31, 2012, Guide completed the acquisition of the Boyer gas property in Northwestern Alberta. This low decline dry shallow gas property added an average of 21.0 Mmcf/d of sales gas production in February and March 2012. Guide transacted a financial contract for the period March 1 through December 31, 2012 on 10,000 GJ/d at CDN $4.50/GJ.

During the three months ended March 31, 2012 differentials widened in Alberta and the average light oil price received by Guide was approximately $14.00/Bbl lower than the weighted average posted Edmonton light oil par price. By comparison, during Q1 2011, the average light oil prices received by the Corporation were approximately $5.00/Bbl lower than the weighted average posted Edmonton light oil par price. Heavy crude differentials were effectively flat at $23.00/Bbl in Q1 2012 as compared to $24.00/Bbl in Q1 2011.

Guide's policy to hedge a portion of its crude oil and natural gas production impacted funds flow in the first quarter of 2012 as follows. For natural gas, Guide's financial contracts increased the average realized price by $1.23/Mcf from $2.19/Mcf to $3.42/Mcf. Note that the 10,000 GJ/d hedge put in place for the Boyer acquisition was effective only during the final month of the quarter. This financial contract is expected to improve Guide's realized price for the remainder of 2012. Guide's crude oil hedges decreased the average realized price by $4.01/Bbl from $76.84 to $72.83 per barrel.

Crude Oil Prices                                                            


Three months ended March 31              2012                  2011         


                                     $000s      $/Bbl      $000s      $/Bbl 

Crude oil                           33,866      76.84     26,674      78.41 

Realized financial contracts        (1,769)     (4.01)    (1,154)     (3.39)

Transportation                      (1,036)     (2.35)      (655)     (1.93)


Net crude oil                       31,061      70.48     24,865      73.09 




Natural Gas Prices                                                          


Three months ended March 31              2012                  2011         


                                     $000s      $/Mcf      $000s      $/Mcf 

Natural gas                         10,875       2.19     19,121       3.98 

Realized financial contracts         6,133       1.23      5,915       1.23 

Transportation                      (1,246)     (0.25)    (1,535)     (0.32)


Net natural gas                     15,762       3.17     23,501       4.89 




NGL Prices                                                  


Three months                                                

 ended March 31          2012                  2011         


                     $000s      $/Bbl      $000s      $/Bbl 

NGL                  2,643      65.71      2,247      67.84 

Transportation         (30)     (0.75)       (10)     (0.30)


Net NGL              2,613      64.96      2,237      67.54 



Production by Property

Three months ended March 31                                                 

                                2012                        2011            


                               Oil &                       Oil &            

                         Gas    NGLs     BOE         Gas    NGLs     BOE    

                      Mmcf/d   bbl/d   BOE/d   %  Mmcf/d   bbl/d   BOE/d   %


Peace                   25.0   3,449   7,612  53    30.3   2,242   7,298  56

Smoky                   11.2     447   2,319  16    15.9     575   3,227  25

Boyer (Note 1)          13.7       -   2,287  16       -       -       -   -

Cherhill                 2.3     621   1,011   7     2.1     662   1,017   8

Other Areas              2.4     768   1,153   8     5.1     669   1,506  11


Total                   54.6   5,285  14,382 100    53.4   4,148  13,048 100



Note 1 - Boyer was acquired on January 31, 2012. Monthly gas volume in February and March, 2012 averaged 21.0 Mmcf/d.

Peace Area - Includes Normandville, Girouxville, and Eaglesham

Peace Area production averaged 3,449 Bbl/d of oil and NGLs in the first quarter of 2012. This represents an increase of 54% in average daily oil and NGL production from 2,242 Bbl/d in the first quarter of 2011. During the same period, natural gas production decreased 17% from 30.3 Mmcf/d to 25 Mmcf/d. The area contributed 74% to total funds flow from operating activities in Q1 2012 based on 53% of production volumes.

Over the past 18 months, Guide confirmed the viability of oil in the Normandville/Girouxville Montney fairway and advanced this project into the development stage. During the first quarter of 2012, eight (8.0 net) wells were drilled in the Peace area and the Normandville oil facility was upgraded to handle an additional 5,000 barrels per day of oil and associated gas.

Up to a total of 19 (19.0 net) oil wells are planned in the Normandville/Girouxville Montney fairway during the remainder of the year. Plans also include the construction of a 5,000 barrels per day capacity oil facility at Girouxville.

Smoky Area - Includes Kakut

The Smoky area production averaged 447 Bbl/d of oil and NGLs and 11.2 Mmcf/d of natural gas during Q1 2012. During the same period in 2011, production averaged 575 Bbl/d of oil and NGLs and 15.9 Mmcf/d of natural gas. During the first quarter of 2012, the Smoky area contributed 12% of funds flow from operations and 16% of production volumes. Guide has suspended most of the short term development plans for the Smoky Area because of the current price of natural gas.

Two (1.5 net) wells were drilled within the Smoky area during the first quarter.

Boyer Area

On January 31, 2012, Guide completed the acquisition of the Boyer shallow gas property. This strategic acquisition provides Guide with a low decline dry gas property that can be further developed when gas prices recover. Guide commissioned a third party engineering firm to evaluate the Boyer assets effective December 31, 2011. The independent evaluator determined that the reserves attributable to the property were approximately 67.5 Bcf of proven gross natural gas reserves and 85.0 Bcf of proven plus probable gross natural gas reserves. In February and March, the Boyer property averaged gas production of 21.0 Mmcf/d, which is in line with both Guide's internal forecasts and the independent evaluation.

Cherhill Area - Includes Alexis and St Anne

Production in the Cherhill area averaged 621 Bbl/d of oil and NGLs and 2.3 Mmcf/d of natural gas during the first three months of 2012. During the same period in 2011, production averaged 662 Bbl/d of oil and NGLs and 2.1 Mmcf/d of natural gas. In Q1 2012, the Cherhill area contributed 10% of the funds flow from operations and 7% of production volumes.

Oil assets at Alexis and St. Anne continue to be exploited and optimized with two (0.4 net) wells drilled in this area during the first quarter.


Capital Expenditures                                                        


Exploration and evaluation assets, property and                             

 equipment, net                                                      ($000s)


Balance at December 31, 2011                                        617,543 

Additions                                                            55,145 

Acquisitions                                                         92,480 

Disposals                                                           (17,970)

Derecognition expense                                                (2,235)

Depletion and depreciation                                          (23,328)


Balance at March 31, 2012                                           721,635 




Three months                                                                

 ended March 31            2012                          2011               


($000s)                                      %                             %

Land                      3,997              7          8,056             17

Geological and                                                              

 geophysical              1,179              2            647              1

Drilling and                                                                

 completion              35,276             65         34,012             71

Plant and                                                                   

 facilities              12,979             24          4,868             10

Inventory                   493              1            523              1

Other assets                486              1             15              -


Exploration &                                                               



 property &                                                                 



 activity                54,410            100         48,121            100



Capital expenditures during the first three months of 2012 were $54.4 million. Drilling and completions expenditures comprised 65% of capital activity. The Corporation drilled 17 (14.2 net) wells, resulting in 14 (11.7 net) oil wells, 1 (0.5 net) natural gas well, and 2 (2.0 net) dry & abandoned wells, for a success rate of 88% (85.9% net) during the quarter.

During the three months of 2012, the Corporation purchased interests in certain natural gas properties in the Boyer area of Alberta for cash consideration of $62.0 million, as well as interests in petroleum and natural gas properties in the Peace area of Alberta for cash consideration of $6.1 million.

On March 30, 2012, properties in the Senex area of Alberta were disposed of for net proceeds of $16.2 million, with no gain or loss recognized on disposal.


Liquidity and Capital Resources                                             



As at March 31                                      2012                2011



Bank debt                                        182,073             146,025

Working capital deficiency (1)                    42,071              27,515


Total net debt (2)                               224,144             173,540



(1) Excludes fair value of financial derivatives and other liability

(2)See "Non-GAAP Measurements"


Funding of Capital Program                                                  



Three months ended March 31                       2012                 2011 



Acquisition of properties                      (68,282)                (119)

Disposals of properties                         16,211                  800 

Funds flow from operations (1)                  18,818               26,842 

Issuance of Class A shares, net of                                          

 costs                                          34,545                    - 

Repurchase of Class A shares                      (891)                   - 

Change in bank debt                             43,825               10,343 

Change in working capital and                                               

 other                                          10,184               10,255 


Exploration & evaluation assets,                                            

 property & equipment investing                                             

 activity                                       54,410               48,121 



(1)See "Non-GAAP Measurements"

On January 24, 2012, the Corporation issued 12,000,000 Class A shares at $3.05 per share for gross proceeds of $36.6 million, or $34.5 million net of issuance costs.

During the quarter ended March 31, 2012, under the Normal Course Issuer Bid, the Corporation purchased 394,000 Class A shares for $891,000. The shares were cancelled subsequent to March 31, 2012.

As at March 31, 2012, the Corporation had $250 million in credit facilities available, consisting of a $225 million extendible 364 day revolving term facility and a $25 million non-revolving facility. The $25 million facility is available subject to mutual approval of the banking syndicate and the Corporation, including repayment terms. Collateral for the facilities consists of a demand debenture for $500 million collateralized by a first floating charge over all of the property, plant and equipment of the Corporation. At March 31, 2012, an amount of $182.1 million was drawn against the revolving credit facility (December 31, 2011 - $138.2 million).

The facilities bear interest at the bank's prime or banker's acceptance rates plus a rate margin. The margins ranged from 1.25% per annum to 5.25% per annum, based upon the Corporation's debt to cash flow ratio. For the three months ended March 31, 2012, the effective interest rate was 4.8% (March 31, 2011 - 5.2%).

The level of the borrowing base is determined by the bank syndicate based upon their review of, among other things, the Corporation's reserves and the value thereof, utilizing commodity prices determined by the bank syndicate which will be different than that utilized by the Corporation's independent reserve evaluator.

Subsequent to March 31, 2012, the Corporation renewed its credit facilities. The available amounts under the credit facilities were maintained at a $225 million extendible 366 day revolving term facility to May 28, 2013 and a $25 million non-revolving facility. The $25 million non-revolving facility is available subject to mutual approval of the banking syndicate and the Corporation, including repayment terms. The renewed facilities bear interest at the bank's prime or banker's acceptance rates plus a rate margin. The margins range from 1.25% per annum to 5.00% per annum, based upon the Corporation's debt to cash flow ratio.

GUIDE EXPLORATION LTD.                                                      

Consolidated Statements of Financial Position                               


                                                               December 31, 

($000s) (unaudited)                          March 31, 2012            2011 






 Accounts receivable                                 23,040          21,259 

 Deposits and prepaid expenses                        2,816           9,258 

 Fair value of financial derivatives                 28,881          22,997 


                                                     54,737          53,514 


Exploration and evaluation assets                    12,476          10,145 

Property and equipment                              709,159         607,398 


                                                    776,372         671,057 






 Accounts payable and accrued liabilities            67,927          62,163 

 Bank loan                                          182,073         138,248 

 Other liability                                      1,738           3,554 

 Fair value of financial derivatives                 14,214           2,250 


                                                    265,952         206,215 


Decommissioning liabilities                          71,913          48,055 

Fair value of financial derivatives                  21,125          21,797 


                                                    358,990         276,067 



SHAREHOLDERS' EQUITY                                                        


Share capital                                       638,380         606,256 

Contributed surplus                                  51,167          48,742 

Retained earnings (deficit)                        (272,165)       (260,008)


                                                    417,382         394,990 


                                                    776,372         671,057 




GUIDE EXPLORATION LTD.                                                      

Consolidated Statements of Earnings (Loss) and Comprehensive Income (Loss)  


                                                Three months ended March 31 

($000s, except per share amounts)                                           

 (unaudited)                                      2012                 2011 





Petroleum and natural gas revenue               47,384               48,042 

Royalties, net of gas cost                                                  

 allowance                                      (7,296)              (6,139)

Realized gain on financial                                                  

 derivatives                                     4,363                4,771 

Unrealized loss on financial                                                

 derivatives                                    (5,408)             (18,959)

Other income                                         -                  123 


                                                39,043               27,838 



Operating                                       15,946               12,342 

Transportation                                   2,312                2,200 

General and administration                       4,791                3,156 

Share-based compensation                           600                  599 

Interest                                         2,105                1,857 

Exploration expenses                               413                  215 

Accretion                                        1,220                  810 

Derecognition expenses                           2,235                3,400 

Depletion and depreciation                      23,328               20,746 


                                                52,950               45,325 


Loss before taxes                              (13,907)             (17,487)


Income taxes                                                                


Capital and other taxes                             66                   62 

Deferred income tax recovery                    (1,816)              (4,252)


                                                (1,750)              (4,190)



NET LOSS AND COMPREHENSIVE LOSS                (12,157)             (13,297)






NET LOSS AND COMPREHENSIVE                                                  

LOSS PER SHARE                                                              


Basic                                            (0.12)               (0.16)

Diluted                                          (0.12)               (0.16)

Weighted average Class A shares -                                           

 basic                                     101,339,531           83,980,083 

- diluted                                  101,339,531           83,980,083 


GUIDE EXPLORATION LTD.                                                      

Consolidated Statement of                                                   

 Changes in Equity                                                          




                               Share       Contributed  Earnings            

($000s) (unaudited)          Capital           Surplus  (Deficit)     Total 



Balance, January 1, 2011     586,626            40,581   (47,201)   580,006 


Share-based compensation           -             3,514         -      3,514 

Tax deduction of share                                                      

 issue costs                    (197)                -         -       (197)

Issue of common shares        26,891                 -         -     26,891 

Shares purchased and                                                        

 cancelled                    (7,064)            4,647         -     (2,417)

Comprehensive loss                 -                 -  (212,807)  (212,807)



Balance, December 31, 2011   606,256            48,742  (260,008)   394,990 


Share-based compensation           -               895         -        895 

Issue of common shares        34,545                 -         -     34,545 

Shares purchased for                                                        

 cancellation                 (2,421)            1,530         -       (891)

Comprehensive loss                 -                 -   (12,157)   (12,157)



Balance, March 31, 2012      638,380            51,167  (272,165)   417,382 






GUIDE EXPLORATION LTD.                                                      

Consolidated Statement of Changes in Equity                                 




                                Share      Contributed  Earnings            

($000s) (unaudited)           Capital          Surplus  (Deficit)     Total 


Balance, December 31, 2010    586,626           40,581   (47,201)   580,006 


Share-based compensation            -              820         -        820 

Comprehensive loss                  -                -   (13,297)   (13,297)



Balance, March 31, 2011       586,626           41,401   (60,498)   567,529 





GUIDE EXPLORATION LTD.                                                      

Consolidated Statements of Cash Flows                                       

                                                Three months ended March 31 

($000s) (unaudited)                               2012                 2011 




Cash provided by (used in):                                                 


OPERATING ACTIVITIES                                                        

 Net loss                                      (12,157)             (13,297)

 Items not requiring cash:                                                  

  Deferred income tax recovery                  (1,816)              (4,252)

  Depletion and depreciation                    23,328               20,746 

  Derecognition expenses                         2,235                3,400 

  Accretion                                      1,220                  810 

  Share-based compensation                         600                  599 

  Other income                                       -                 (123)

  Unrealized loss on financial                                              

   derivatives                                   5,408               18,959 

 Abandonment costs                                (241)                 (81)

 Change in non-cash working                                                 

  capital                                        2,277                1,172 


                                                20,854               27,933 



FINANCING ACTIVITIES                                                        

 Issue of common shares, net of                                             

  costs                                         34,545                    - 

 Repurchase of common shares                      (891)                   - 

 Bank loan                                      43,825               10,343 


                                                77,479               10,343 



INVESTING ACTIVITIES                                                        

 Exploration and evaluation                                                 

  expenditures                                  (6,430)                   - 

 Additions to property and                                                  

  equipment                                    (47,980)             (48,121)

 Acquisitions of oil and gas                                                

  properties                                   (68,282)                (119)

 Disposals of oil and gas                                                   

  properties                                    16,211                  800 

 Change in non-cash working                                                 

  capital                                        8,148                9,164 


                                               (98,333)             (38,276)



CHANGE IN CASH                                       -                    - 

CASH, BEGINNING AND END OF PERIOD                    -                    - 





SUPPLEMENTAL INFORMATION                                                    


 Cash interest paid                              2,002                1,847 

 Cash taxes paid                                    75                   62 


Guide has approximately 102.6 million Class A shares issued and outstanding which trade on the Toronto Stock Exchange under the symbol "GO".


Forward Looking Statements:

Certain information regarding Guide Exploration Ltd. in this news release including management's assessment of future plans and operations, drilling plans, and facility construction plans, production estimates and commodity mix, plans to curtail production and expected impact, and capital expenditures are forward looking statements. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, wells not performing as expected, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.

Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Corporation believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Corporation can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which the Corporation operates; the timely receipt of any required regulatory approvals; the ability of the Corporation to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration results; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Corporation to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Corporation operates; and the ability of the Corporation to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list of factors and assumptions is not exhaustive. Additional information on these and other factors that could affect Guide's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (, at Guide's website ( Furthermore, the forward looking statements contained in this news release are made as at the date of this news release and Guide does not undertake any obligation to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Non-GAAP Measurements:

This news release contains terms commonly used in the oil and gas industry, such as funds flow from operations, funds flow from operations per share, and operating netback. These terms are not defined by Generally Accepted Accounting Principles ("GAAP") and should not be considered an alternative to, or more meaningful than, cash provided by operating activities or net earnings as determined in accordance with GAAP as an indicator of Guide's performance. Management believes that in addition to net earnings, funds flow from operations is a useful financial measurement which assists in demonstrating the Corporation's ability to fund capital expenditures necessary for future growth or to repay debt. Guide's determination of funds flow from operations may not be comparable to that reported by other companies. All references to funds flow from operations throughout this news release are based on cash flow from operating activities before changes in non-cash working capital and abandonment expenditures. The Corporation calculates funds flow from operations per share by dividing funds flow from operations by the weighted average number of Class A shares outstanding. Guide uses the term net debt. This measure does not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies.


Disclosure provided herein in respect of barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 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 equivalency of 6:1; utilizing a conversion on a 6:1 basis may be misleading as an indication of value.