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Toscana Energy Announces First Quarter 2020 Results

CALGARY, Alberta, June 26, 2020 (GLOBE NEWSWIRE) -- Toscana Energy Income Corporation ("Toscana" or the "Corporation") (TEI.TO) announces financial and operating results for the first quarter ended March 31, 2020.

Financial and operating results:

This news release summarizes information contained in the Condensed Consolidated Interim Financial Statements (unaudited) and Management’s Discussion and Analysis (“MD&A”) for the three months ended March 31, 2020. This news release should not be considered a substitute for reading the full disclosure documents, which are available under the Corporation’s profile on SEDAR at www.sedar.com and on the Corporation’s website at www.toscanaenergy.ca.

  Three months ended March 31
  2020   2019 Change  
OPERATIONAL      
Average daily production (boe/d) 881   1,123 (22 %)
Natural Gas (Mcf/d) 2,019   2,664 (24 %)
Oil (bbl/d) 493   597 (17 %)
NGL (bbl/d) 51   82 (38 %)
       
Average prices received ($/boe) 31.76   41.22 (23 %)
Natural Gas ($/Mcf) 1.90   2.25 (16 %)
Oil ($/bbl) 46.16   63.21 (27 %)
NGL ($/bbl) 26.65   31.13 (14 %)
       
FINANCIAL      
Petroleum and natural gas revenue, net of royalty expense ($) 2,313,277   3,931,178 (41 %)
Total revenues and other income ($) 4,273,057   2,810,984 52 %
       
Netback ($)(1) (253,181 ) 1,213,066 >100 %
Netback per boe ($/boe)(1) (3.16 ) 12.00 >100 %
       
Adjusted funds flow from (used-in) operations ($)(1) (1,609,384 ) 44,134 >100 %

Notes:
(1)     Non – IFRS measure (see Non -IFRS Measures section in this MD&A).

Outlook

As a result of the world wide COVID-19 pandemic and continued over-supply of oil by OPEC countries and other producing countries, global oil prices have declined significantly. The Corporation has shut-in its low netback oil wells and minimized future spending on all of its assets. Lower oil prices and the full effect of reduced average daily production volumes, due to shut-in oil wells, persisted into the second quarter of 2020 and continued to negatively impact the Corporation’s cash flows from operations. The COVID-19 pandemic is an evolving situation that is expected to continue to have widespread implications on the Corporation’s business, results of operations, financial condition and the environment in which it operates.

Non-IFRS measures:

Management uses “netback”, “Adjusted funds flow from operations”, to analyze operating performance and to determine the Corporation’s ability to fund future capital investment.  These terms, as presented, do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and therefore may not be comparable with the calculation of similar measures for other entities. Readers are cautioned regarding the reliability of such measures.

Netback typically equals (a) petroleum and natural gas revenue (including royalty revenues), net of royalty expense (b) realized gains and losses on risk management contracts and (c) less operating costs, net of processing income and is generally calculated on a per boe basis.  As a non-IFRS measure, operating netback is an indicator of the financial performance of the Corporation. The Corporation uses such term as an indicator of financial performance because such term is commonly utilized by investors to evaluate companies in the energy sector.  The Management of the Corporation believes that operating netback is a useful supplemental measure as it provides investors with information on operating margins per barrel of oil equivalent for such periods.

Management calculates Adjusted funds flow from operations as net earnings (loss) plus the addition of non-cash items (depletion, depreciation, accretion, share-based compensation, gains or losses on the sale of property and equipment and unrealized gains or losses on risk management contracts, gain on dentures amendments, etc.) and settlement of decommissioning liabilities. 

As a non-IFRS measure, these measures are an indicator of the financial performance as it demonstrates the Corporation’s ability to generate the cash necessary to fund future capital investments and to repay debt. The Corporation uses such term as an indicator of financial performance because such term is commonly utilized by investors to evaluate companies in the energy sector.  The Corporation believes that these measures are a useful supplemental measure as it provides investors with information of what cash is available in such periods.

Forward-Looking Statements:

This news release contains forwardlooking statements and forwardlooking information within the meaning of applicable securities laws. These statements relate to future events or future performance.  All statements other than statements of historical fact may be forwardlooking statements or information.  Forwardlooking statements and information are often, but not always, identified by the use of words such as "appear", "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions.

More particularly and without limitation, this news release contains forwardlooking statements and information such as growing oil production should provide for better operating netbacks; the forecasted weak natural gas prices and whether or not resolving natural gas pipeline constraints will generate a significant change in natural gas prices. Although management of the Corporation believes that the expectations and assumptions on which such forward looking statements and information are based are reasonable, undue reliance should not be placed on the forwardlooking statements and information since no assurance can be given that they will prove to be correct.

The forwardlooking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forwardlooking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the Toronto Stock Exchange.  The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.

About Toscana Energy Income Corporation

Toscana Energy Income Corporation is a conventional oil and gas producer with the mandate to acquire high quality, long life oil and gas assets.

For further information, please contact:
Ryan Heath, Chief Executive Officer
Tel: (403) 355-0455
Fax: (403) 444-0090
SOURCE: Toscana Energy Income Corporation