Selected financial and operational information is outlined below and should be read in conjunction with the audited financial statements and related MD&A for the year ended December 31, 2011 (collectively, the "Financial Statements") and the Company's 2011 Annual Information Form, which are available on the SEDAR website at www.sedar.com and on the Company's website at www.onln.ca.
-- Raised $14 million concurrent with the Company's reverse takeover of
Jomar Capital Corp. in January 2011 and an additional $4.2 million in
-- capital expenditures in 2011 were $15.4 million, primarily focused in
the greater Paddle River area. Activities in this area included four
property acquisitions, four work-overs, the drilling and completion of
one horizontal oil well and substantial mineral rights acquisitions;
-- year-end proved plus probable reserves were 1,444 Mboe (44% crude oil
and natural gas liquids) with a reserve value of $13.6 million (10%
discount, before tax), as evaluated by McDaniel and Associates
-- exited 2011 with over 86,000 net acres of land in the greater Paddle
River area focused on Viking, Ostracod, Ellerslie, Rock Creek and
Nordegg oil properties and liquids-rich gas projects involving the
Notikewin, Wilrich, Nordegg and Duvernay formations;
-- successfully drilled and fracture stimulated the 100% W.I. Paddle River
8-31-055-07W5M Ostracod horizontal oil well. This was the first Ostracod
horizontal well drilled in the greater Paddle River area and provides
the Company with a repeatable oil project on the Company's 38 net
sections of Ostracod rights;
-- fourth quarter production averaged 447 boe/d (32% oil and NGLs), an
increase of 110% over Q1 - 2011 production; and
-- exited 2011 with positive working capital of $2.1 million.
Financial and Operational Results
Three months ended
December 31 Year ended December 31
2011 2010 2011 2010
Financial (In Canadian
Petroleum and natural gas
sales 1,530,082 - 4,808,166 -
Net loss (621,698) (245,556) (2,458,340) (265,101)
Per share - basic and
diluted (0.02) (0.11) (0.07) (0.33)
Property, plant and
equipment 330,627 - 8,831,990 -
Exploration and evaluation 3,059,171 67,419 6,584,312 581,374
Working capital 2,052,412 9,800,428 2,052,412 9,800,428
Common shares 41,309,889 3,503,150 41,309,889 3,503,150
Stock options 3,988,333 - 3,988,333 -
Performance warrants 3,166,316 - 3,166,316 -
Average Daily Production
Natural gas - Mcf/d 1,810 - 1,304 -
Crude oil and condensate -
Bbls/d 56 - 40 -
NGLs - Bbls/d 89 - 81 -
Total - boe /d 447 - 338 -
Average Sales Prices
Natural gas - $/Mcf 3.25 - 3.64 -
Crude oil and condensate -
$/Bbl 86.55 - 84.78 -
NGLs - $/Bbl 65.92 - 61.91 -
Total - $/boe 37.19 - 38.90 -
Operating Netbacks $/boe 10.00 - 7.96 -
Gross - - 2.0 -
Net - - 2.0 -
(1) Refer to the "Non-GAAP Measurements" in Cautionary Statements.
(2) Refer to - "Oil, Natural Gas Liquids and Natural Gas Conversions to
boe's" in Cautionary Statements.
-- The 8-31 oil well went on-stream in mid-February;
-- a second 100% W.I. horizontal well on the Ostracod oil project, located
at 1-5-056-07W5M, was drilled in March and reached a total depth of
3,089m including a 1,254m horizontal trajectory. Completion operations,
including a multi-stage frac program, are planned for Q2 -2012;
-- established a $6 million credit facility with a Canadian chartered bank.
The credit facility consists of a revolving operating demand loan to a
maximum of $4.75 million and an acquisition / development demand loan to
a maximum of $1.25 million;
-- re-acted to sharply declining natural gas prices by temporarily
shutting-in two gas wells during Q1 - 2012. The Company will continue to
monitor the economics of its natural gas production and anticipates that
additional wells will be shut-in during Q2-2012. The Company's average
production forecast for Q1-2012 has been reduced by 25 boe/d to the
range of 425 - 450 boe/d (40% oil and liquids); and
-- raised approximately $1.2 million, in two separate closings on April 25,
2012, with a syndicate of agents pursuant to which the Company issued
2,716,700 common shares at a price of $0.26 per share and 1,541,500
common shares issued on a "flow-through" basis at a price of $0.30 per
Online has revised its 2012 capital budget to $7.4 million, which will be funded by year-end working capital of $2.1 million, the proceeds of the recently completed equity financing, cash flow and utilization of the credit facility.
The Company has successfully assembled an extensive land position of 136 net sections in the greater Paddle River area of west-central Alberta. This concentrated acreage position supports a large inventory of horizontal multi-frac well locations on a variety of resource plays including the Notikewin, Wilrich, Ostracod, Rock Creek, Nordegg and Duvernay formations. Online also maintains a growing inventory of low-risk vertical oil locations targeting the Viking and Ellerslie formations as well as a number of low-cost re-entry opportunities.
Interested parties are invited to view the Company's corporate presentation which is periodically updated on its website at www.onln.ca.
This press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Online. Undue reliance should not be placed on these forward-looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.
In the interest of providing Online shareholders and potential investors with information regarding the Company, including management's assessment of Online's future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on the Company's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. By its nature, such forward-looking information involves 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 statements. Online believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements contained throughout this press release should not be unduly relied upon. These statements speak only as of the date specified in the statements.
In particular, this press release may contain forward looking statements pertaining to the following:
-- the performance characteristics of the Company's oil and natural gas
-- oil and natural gas production levels;
-- capital expenditure programs;
-- the quantity of the Company's oil and natural gas reserves and
anticipated future cash flows from such reserves;
-- projections of commodity prices and costs;
-- supply and demand for oil and natural gas;
-- expectations regarding the ability to raise capital and to continually
add to reserves through acquisitions and development; and
-- treatment under governmental regulatory regimes.
The material assumptions in making these forward-looking statements include certain assumptions disclosed in the Company's most recent management's discussion and analysis included in the material available on this press release.
The Company's actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:
-- volatility in market prices for oil and natural gas;
-- liabilities inherent in oil and natural gas operations;
-- uncertainties associated with estimating oil and natural gas reserves;
-- competition for, among other things, capital, acquisitions of reserves,
undeveloped lands and skilled personnel;
-- incorrect assessments of the value of acquisitions and exploration and
-- geological, technical, drilling and processing problems;
-- fluctuations in foreign exchange or interest rates and stock market
-- failure to realize the anticipated benefits of acquisitions;
-- general business and market conditions; and
-- changes in income tax laws or changes in tax laws and incentive programs
relating to the oil and gas industry.
These factors should not be construed as exhaustive. Unless required by law, Online does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.
Estimated values contained in this press release do not represent fair market value.
This press release uses the term "netback" which is a term that does not have standardized meanings under GAAP and this non-GAAP measurement may not be comparable with the calculation of other entities. The Company uses this measure to analyze operating performance.
The term "netback", which is calculated as the average unit sales price, less royalties and operating expenses, represents the cash margin for every barrel of oil equivalent sold. The Company considers this a key measure as it demonstrates its profitability relative to current commodity prices. This term does not have any standardized meaning prescribed by GAAP and, therefore, might not be comparable with the calculation of a similar measure for other companies.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.