Traverse Energy Announces 2013 Third Quarter Results
CALGARY, ALBERTA--(Marketwired - Nov 12, 2013) - Traverse Energy Ltd. ("Traverse" or "the Company") (TSX VENTURE:TVL) presents financial and operating results for the nine months ended September 30, 2013.
Three months ended Sept. 30, | Nine months ended Sept. 30, | ||||
2013 | 2012 | 2013 | 2012 | ||
Financial ($ thousands, except per share amounts) | |||||
Petroleum and natural gas revenue | 3,976 | 1,294 | 7,455 | 3,012 | |
Royalty income | 843 | 818 | 3,163 | 2,358 | |
Cash provided by operations | 3,789 | 1,132 | 7,871 | 3,394 | |
Funds from operations (1) | 3,796 | 1,602 | 7,279 | 3,809 | |
Per share - basic and diluted | 0.08 | 0.04 | 0.17 | 0.09 | |
Net income | 1,636 | 32 | 3,217 | 427 | |
Per share - basic and diluted | 0.03 | 0.00 | 0.07 | 0.01 | |
Capital expenditures, net of dispositions | 4,957 | 3,041 | 9,393 | 5,954 | |
Total assets | 26,489 | 21,154 | 26,489 | 21,154 | |
Working capital | 3,015 | 1,727 | 3,015 | 1,727 | |
Common shares | |||||
Outstanding (millions) | 49.5 | 44.3 | 49.5 | 44.3 | |
Weighted average (millions) | 49.5 | 44.1 | 48.1 | 42.8 | |
Operations (Units as noted) | |||||
Average production | |||||
Natural gas (Mcf/day) | 1,560 | 1,064 | 1,536 | 822 | |
Oil and NGL (bbls/ day) | 505 | 266 | 389 | 221 | |
Total (BOE/day) | 765 | 444 | 644 | 358 | |
Average sales price | |||||
Natural gas ($/Mcf) | 3.06 | 2.36 | 3.42 | 2.25 | |
Oil and NGL ($/bbl) | 94.25 | 76.77 | 86.61 | 80.32 | |
Operating Netback ($/BOE) (2) | |||||
Petroleum and natural gas revenue | 67.83 | 51.56 | 56.63 | 50.85 | |
Realized gain on financial derivatives | 0.23 | 0.00 | 0.13 | 0.00 | |
Royalties | 7.21 | 4.56 | 5.19 | 3.33 | |
Operating and transportation costs | 9.13 | 10.78 | 11.24 | 12.74 | |
Working interest netback | 51.72 | 36.22 | 40.33 | 34.78 | |
Royalty netback | 71.56 | 52.02 | 71.43 | 60.72 | |
Operating netback | 55.04 | 42.31 | 48.16 | 45.05 | |
Funds from operations is calculated as cash provided by operating activities before changes in non-cash working capital. Funds from operations does not have a standardized measure prescribed by IFRS and therefore may not be comparable with the calculation of similar measures for other companies.
Operating netback equals petroleum and natural gas revenue, royalty income and realized gain on financial derivatives, less royalties, operating and transportation costs and is calculated on a per unit basis. Working interest netback is calculated as petroleum and natural gas revenue and realized gain on financial derivatives, less royalties, operating and transportation costs and is calculated on a per unit basis. Royalty netback is royalty income and is calculated on a per unit basis. Operating netback, working interest netback and royalty netback do not have a standardized measure prescribed by IFRS and therefore may not be comparable with the calculation of similar measures by other companies.
Operations Review
In the third quarter of 2013 Traverse drilled 4 wells (100% working interest) in the Coyote area of east central Alberta resulting in 3 oil wells. The 4th well appears to be uneconomic and is being evaluated as a potential water injection well. The 4 wells were drilled as a follow up to the initial Coyote well which was drilled in March and placed on production in June, 2013. The 3 additional wells were placed on production later in the third quarter. Production from the Coyote area for the third quarter averaged 308 BOE per day (85% oil). Other activities included the acquisition of seismic data and the purchase of additional acreage in east central Alberta.
In the Turin area production was interrupted by a 5 week shutdown of a third party owned pipeline which transports Traverse's natural gas to market. During the shutdown, Traverse tested and confirmed the integrity of the pipeline. Traverse subsequently purchased an interest in the pipeline and became the pipeline operator. Normal production operations have resumed. Additional drilling (2 wells) is planned for the first quarter of 2014.
In the Brazeau area of West Central Alberta, Traverse has a gross overriding royalty interest in 10 sections of land (6,400 acres). A total of 20 horizontal Cardium wells are producing from the property. Net production to the Company for the third quarter of 2013 averaged 121 BOE per day (oil and NGL component of 75%).
At September 30, 2013 undeveloped land holdings totaled 141,400 gross (136,800 net) acres with an average working interest of 98%. Additional drilling (3 wells) and the shooting of a 3D seismic program are planned in the Coyote area prior to year end.
The Board of Directors has approved an initial exploration and development program and budget of $17 million for 2014. This budget is to be financed from working capital, cash flow, new equity issues and debt where appropriate. The program includes the drilling of 12 wells located on Company owned lands in the Turin and Coyote areas and on other properties located in east central Alberta.
Non-IFRS measures
Funds from operations
Funds from operations is a measure not defined in IFRS that is commonly used in the oil and gas industry. Funds from operations is calculated as cash provided by operating activities before non-cash working capital as detailed under the heading "Cash and funds from operations and net income" within the Company's management's discussion and analysis for the nine months ended September 30, 2013. The Company believes that in addition to net income, funds from operations is a useful supplemental measure as it provides an indication of Traverse's operating performance. Funds from operations should not be considered as an alternative to or more meaningful than cash provided by operating activities as determined in accordance with IFRS. Traverse's determination of funds from operations may not be comparable to that reported by other companies. Traverse also presents funds from operations per share whereby share amounts are calculated using weighted average shares outstanding consistent with the calculation of income per share.
Operating netback
Management uses certain industry benchmarks such as operating netback to analyze financial and operating performance. This benchmark as presented does not have any standardized meaning prescribed by IFRS and therefore may not be comparable with the calculation of similar measures for other entities. Operating netback reflects petroleum and natural gas revenue, royalty income and realized gain on financial derivatives, less royalties, operating and transportation costs and is calculated on a per unit basis. Working interest netback is calculated as petroleum and natural gas revenue and realized gain on financial derivatives, less royalties, operating and transportation costs and is calculated on a per unit basis. Royalty netback is royalty income and is calculated on a per unit basis. The calculation of Traverse's netbacks is detailed under the heading "Operating netback" within the Company's management's discussion and analysis for the nine months ended September 30, 2013.
BOE equivalent
Unless otherwise stated, the volume conversion of natural gas to barrel of oil equivalent (BOE) is presented on the basis of 6 thousand cubic feet of natural gas being equal to 1 barrel of oil. This conversion ratio is based upon an energy equivalent conversion method primarily applicable at the burner tip and does not represent value equivalence at the wellhead. BOE figures may be misleading, particularly if used in isolation.
Forward-looking information
This news release contains forward-looking information which is not comprised of historical fact. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes the Company's statements with respect to planned additional drilling at Turin, Coyote and east central Alberta; planned seismic at Coyote and intentions for funding capital expenditures during 2013 and 2014. This forward looking information is subject to a variety of substantial known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward looking information. The Company's Annual Information Form filed on April 17, 2013 with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describes the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference.
Although the Company believes that the material assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur. The Company disclaims any intention or obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
Further details on the Company including the 2012 year end audited financial statements, the related management's discussion and analysis and Annual Information Form are available on the Company's website (www.traverseenergy.com) and SEDAR.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of the content of this release.
