CALGARY, Aug. 1, 2018 /CNW/ - Crew Energy Inc. (TSX:
CR) ("Crew" or the "Company") is pleased to announce our operating
and financial results for the three and six month periods ended
June 30, 2018. Our Financial
Statements and Notes, as well as Management's Discussion and
Analysis ("MD&A") for the three and six month periods ended
June 30, 2018 are available on Crew's
website and filed on SEDAR.
HIGHLIGHTS
- Production Ahead of Forecast: At 23,583 boe per day in
Q2, average production volumes were 15% above the Q2 2017 average
and 3% above the upper end of our quarterly guidance of 22,000 to
23,000 boe per day. First half production averaged 24,754 boe per
day, positioning Crew to meet our 2018 guidance of 23,500 to 24,500
boe per day. Greater Septimus production of 18,953 boe per day was
22% higher than the 15,558 boe per day produced in Q2 2017.
- Growing Montney Condensate Volumes Into Higher Pricing:
Q2 condensate volumes of 2,304 barrels ("bbls") per day were 49%
higher compared to Q2 2017 as Crew benefited from a 38% increase in
realized condensate pricing in the quarter, averaging $82.73 per barrel, compared to $59.90 per bbl in Q2 2017 and $73.82 per bbl compared to the previous
quarter.
- Diverse Marketing Strategy Leads to Price
Outperformance: Q2 average realized natural gas price of
$2.23 per mcf outperformed the AECO
5A benchmark by 89%, driven by Crew's high heat content natural gas
and exposure to diversified sales hubs and gas markets.
- Strong Performance from Heavy Oil Operations: Q2 heavy
oil volumes averaged 1,930 bbls per day, a 9% increase over the
same period of 2017 and a 10% increase over Q1 2018, despite
limited capital investment over the past 24 months.
- Adjusted Funds Flow ("AFF") Reflects Higher Volumes and
Strong Liquids Prices: Q2 AFF totaled $21.8 million or $0.14 per fully diluted share, in line with the
same period in 2017, reflecting an increased weighting to
higher-value liquids production, higher volumes and improved
liquids pricing, offset by lower realized natural gas prices and a
realized hedging loss.
- Modest Spending with Strong Capital Efficiencies: Net
exploration and development expenditures in Q2 were $12.5 million, with activity directed to the
completion of two (1.6 net) natural gas wells at our liquids-rich
Greater Septimus area and the recompletion of ten (9.5 net) heavy
oil wells in Lloydminster.
- Strong Balance Sheet Maintained: Quarter end net debt of
$329.2 million reflects a 3% decrease
over the previous quarter, and 5% lower than year-end 2017, and
includes $300 million of term debt
that has no financial covenants and no repayment required until
2024.
FINANCIAL & OPERATING HIGHLIGHTS
|
FINANCIAL
($ thousands, except
per share amounts)
|
Three months
ended
June 30,
2018
|
Three months
ended
June 30,
2017
|
Six months
ended
June 30,
2018
|
Six months
ended
June 30,
2017
|
Petroleum and
natural gas sales
|
54,040
|
48,886
|
113,467
|
106,184
|
Adjusted Funds
Flow(1)
|
21,804
|
21,353
|
48,177
|
49,072
|
|
Per
share
|
- basic
|
0.14
|
0.14
|
0.32
|
0.33
|
|
|
- diluted
|
0.14
|
0.14
|
0.32
|
0.32
|
Net (loss) /
income
|
(9,181)
|
21,880
|
(5,033)
|
29,936
|
|
Per
share
|
- basic
|
(0.06)
|
0.15
|
(0.03)
|
0.20
|
|
|
- diluted
|
(0.06)
|
0.14
|
(0.03)
|
0.20
|
|
|
|
|
|
Exploration and
Development expenditures
|
12,468
|
36,656
|
46,389
|
111,820
|
Property
acquisitions (net of dispositions)
|
17
|
(45,701)
|
(9,990)
|
(46,053)
|
Net capital
expenditures
|
12,485
|
(9,045)
|
36,399
|
65,767
|
|
|
|
|
|
Capital
Structure
($
thousands)
|
|
|
As
at
June 30,
2018
|
As at
Dec. 31,
2017
|
Working capital
(surplus) / deficiency(2)
|
|
|
(19,954)
|
29,143
|
Bank loan
|
|
|
54,803
|
21,977
|
|
|
|
34,849
|
51,120
|
Senior Unsecured
Notes
|
|
|
294,380
|
293,862
|
Total Net
Debt
|
|
|
329,229
|
344,982
|
|
|
|
|
|
Current Debt
Capacity(3)
|
|
|
535,000
|
535,000
|
|
|
|
|
|
Common Shares
Outstanding (thousands)
|
|
|
151,708
|
149,328
|
Notes:
|
(1)
|
Adjusted funds flow
is calculated as cash provided by operating activities, adding the
change in non-cash working capital, decommissioning obligation
expenditures and accretion of
deferred financing costs. Adjusted funds flow is used to
analyze the Company's operating performance and leverage.
Adjusted funds flow does not have a standardized measure
prescribed by International Financial Reporting Standards and
therefore may not be comparable with the calculations of similar
measures for other companies. See "Non-IFRS
Measures" contained within Crew's MD&A.
|
(2)
|
Working capital
(surplus) / deficiency includes cash and cash equivalents plus
accounts receivable less accounts payable and accrued
liabilities.
|
(3)
|
Current Debt Capacity
reflects the bank facility of $235 million plus $300 million in
senior unsecured notes outstanding.
|
|
Operations
|
Three months
ended
June 30,
2018
|
Three months
ended
June 30,
2017
|
Six months
ended
June 30,
2018
|
Six months
ended
June 30,
2017
|
Daily
production
|
|
|
|
|
|
Light crude oil
(bbl/d)
|
261
|
499
|
288
|
514
|
|
Heavy crude oil
(bbl/d)
|
1,930
|
1,778
|
1,839
|
1,817
|
|
Condensate
(bbl/d)
|
2,304
|
1,550
|
2,500
|
1,731
|
|
Other natural gas
liquids (bbl/d)
|
1,710
|
1,336
|
1,751
|
1,392
|
|
Natural gas
(mcf/d)
|
104,269
|
91,828
|
110,257
|
98,321
|
|
Total (boe/d @
6:1)
|
23,583
|
20,468
|
24,754
|
21,841
|
Average prices
(1)
|
|
|
|
|
|
Light crude oil
($/bbl)
|
75.72
|
58.14
|
71.62
|
58.96
|
|
Heavy crude oil
($/bbl)
|
55.65
|
45.05
|
46.41
|
43.98
|
|
Condensate
($/bbl)
|
82.73
|
59.90
|
77.95
|
61.94
|
|
Other natural gas
liquids ($/bbl)
|
25.63
|
14.03
|
25.21
|
18.19
|
|
Natural gas
($/mcf)
|
2.23
|
3.45
|
2.56
|
3.50
|
|
Oil equivalent
($/boe)
|
25.18
|
26.25
|
25.32
|
26.86
|
Notes:
|
(1)
|
Average prices are
before deduction of transportation costs and do not include gains
and losses on financial instruments.
|
|
|
Three months
ended
June 30,
2018
|
Three months
ended
June 30,
2017
|
Six months
ended
June 30,
2018
|
Six months
ended
June 30,
2017
|
Netback
($/boe)
|
|
|
|
|
|
Revenue
|
25.18
|
26.25
|
25.32
|
26.86
|
|
Royalties
|
(1.83)
|
(2.06)
|
(1.77)
|
(2.12)
|
|
Realized commodity
(loss) / gain
|
(1.23)
|
0.64
|
(1.07)
|
0.10
|
|
Marketing income
(1)
|
0.28
|
-
|
0.28
|
-
|
|
Net operating
costs(2)
|
(6.56)
|
(6.15)
|
(6.42)
|
(5.74)
|
|
Transportation
costs
|
(1.78)
|
(2.75)
|
(1.95)
|
(2.51)
|
|
Operating netback
(3)
|
14.06
|
15.93
|
14.39
|
16.59
|
|
G&A
|
(1.23)
|
(1.52)
|
(1.31)
|
(1.51)
|
|
Other
income
|
-
|
-
|
0.22
|
-
|
|
Financing costs on
long-term debt
|
(2.67)
|
(2.93)
|
(2.55)
|
(2.66)
|
|
Adjusted funds
flow
|
10.16
|
11.48
|
10.75
|
12.42
|
|
|
|
|
|
Drilling
Activity
|
|
|
|
|
|
Gross
wells
|
0
|
7
|
0
|
22
|
|
Working interest
wells
|
0.0
|
7.0
|
0.0
|
22.0
|
|
Success rate, net
wells (%)
|
-
|
100%
|
-
|
95%
|
Notes:
|
(1)
|
Marketing income was
recognized from the monetization of forward physical sales
contracts offset by the cost of committed natural gas
transportation that was not available
during the period.
|
(2)
|
Net operating costs
are calculated as gross operating costs less processing
revenue.
|
(3)
|
Operating netback
equals petroleum and natural gas sales including realized hedging
gains and losses on commodity contracts less royalties, operating
costs and transportation costs
calculated on a boe basis. Operating netback and adjusted
funds flow netback do not have a standardized measure prescribed by
International Financial Reporting Standards and
therefore may not be comparable with the calculations of similar
measures for other companies. See "Non-IFRS Measures"
contained within Crew's MD&A
|
FINANCIAL OVERVIEW
Strong Second Quarter Production
- Q2 2018 volumes of 23,583 boe per day exceeded the upper range
of our quarterly guidance and were 15% higher than the same period
in 2017, reflecting limited break-up related downtime, management
of natural gas volumes within a volatile Canadian pricing
environment and a 9% increase in Lloydminster production stemming from
successful recompletions during the first half of 2018.
- Greater Septimus production averaged 18,953 boe per day, a 22%
increase over the same period in 2017 and a 7% decline from Q1 2018
as the Company managed production through the low Q2 natural gas
price environment.
- Second quarter natural gas production was curtailed to firm
processing and transportation commitments and the Company's firm
natural gas sales arrangements in order to avoid the extremely low
spot Canadian natural gas prices that were realized during certain
days throughout the quarter.
Adjusted Funds Flow Continued to Exceed Net Capital
Expenditures
- AFF in Q2 2018 totaled $21.8
million ($0.14 per diluted
share) and exceeded Crew's net capital expenditures for the second
consecutive period, while remaining consistent with absolute and
per share AFF generated in Q2 2017. Stronger realized pricing for
crude oil, condensate and other natural gas liquids ("ngl")
year-over-year contributed to AFF, however the decline in natural
gas prices offset the liquids price gain. AFF declined 17% compared
to Q1 2018 due to a 22% decline in realized natural gas prices and
lower production.
- Q2 2018 revenue grew 11% over Q2 2017 due to higher production
from liquids-weighted areas complemented by realized liquids prices
that were 64% stronger, on average, relative to the same period in
2017.
- Q2 2018 liquids revenue comprised 61% of Crew's total revenue,
a marked increase over the 50% and 41% in Q1 2018 and Q2 2017,
respectively; a reflection of Crew's focus on liquids and
condensate-rich targets in West Septimus, complemented by stronger
liquids pricing.
- Corporate operating netbacks of $14.06 per boe were 12% and 4% lower than Q2 2017
and Q1 2018, respectively, reflecting the impact of lower natural
gas prices, realized losses on the Company's risk management
program, and higher net operating costs. This was partially offset
by marketing income derived from strategic marketing initiatives,
combined with lower royalties and transportation costs.
- Corporate cash costs per boe were consistent with Q1 2018 and
declined 9% over Q2 2017, as lower royalties, transportation,
general and administrative and financing costs were offset by
higher net operating costs. Compared with Q2 2017 and Q1 2018,
higher net operating costs in the current quarter stemmed from
increased fixed processing fees at the expanded West Septimus
facility, higher volumes from Lloydminster, where operating costs are higher
relative to the corporate average, and lower third-party processing
revenue.
Rising Liquids Prices Helped Offset Weak Natural Gas
Prices
- Average realized price per boe in Q2 2018 was $25.18, a 4% decline from Q2 2017 and 1% lower
than Q1 2018. Liquids prices in Q2 2018 increased 36% to
$58.40 per boe over Q2 2017, and were
16% higher than Q1 2018, offset by realized natural gas prices that
were 35% and 22% lower compared to Q2 2017 and Q1 2018,
respectively.
- Global crude oil prices continued to rise through Q2 2018,
fueled by shrinking world crude inventories brought on by
increasing world demand and concerns over supply interruptions
resulting from U.S.-led trade embargos against Iran and political unrest in Venezuela and Libya. Late in the quarter, the Organization
of Petroleum Exporting Countries ("OPEC") authorized an output
increase that was lower than market expectations which further
contributed to rising crude oil benchmark prices.
- Canadian dollar denominated West Texas Intermediate ("WTI") oil
benchmark increased 35% in Q2 2018 compared to Q2 2017 and
increased 10% over Q1 2018. This increase supported an increase in
Crew's average Q2 2018 liquids prices of 39% and 16% compared to Q2
2017 and Q1 2018, respectively.
- Crew's diversified marketing portfolio and higher heat content
natural gas (higher liquids content) resulted in Crew's gas price
outperforming the Canadian benchmark by 89%. Canadian natural gas
prices continued to be volatile as bottlenecks in our natural gas
pipeline egress system has limited access to markets outside of
Canada. This was enhanced in Q2
2018 as maintenance on TransCanada Pipeline infrastructure further
limited movement of gas outside of Western Canada and into local storage
facilities. This decrease in demand resulted in the benchmark AECO
5A price averaging $1.18 per mcf, a
drop of 58% over Q2 2017, and a drop of 43% over Q1 2018. Crew's Q2
2018 natural gas sales price averaged $2.23 per mcf, a 35% decrease over Q2 2017 and
22% lower than Q1 2018.
Modest Capital Expenditure Reflects Value
Preservation
- Q2 2018 exploration and development expenditures totaled
$12.5 million. Of the total,
$6.8 million, or 54%, was directed to
activities related to drilling and completions, $2.9 million to well site development, facilities
and pipelines and $2.8 million to
land, seismic and other miscellaneous items.
- Activity in the quarter included the completion and tie-in of
two (1.6 net) liquids-rich natural gas wells in West Septimus and
the recompletion of ten (9.5 net) heavy oil wells in Lloydminster.
Declining Net Debt and Continued Balance Sheet
Strength
- Net debt declined to $329.2
million at the end of Q2 2018. Crew's debt is largely
termed-out, with $300 million of term
debt that has no financial covenants and no repayment required
until 2024.
TRANSPORTATION, MARKETING & HEDGING
- Natural Gas Pricing Exposure: Approximately 37% Chicago
City Gate, 24% AECO 5A, 15% AECO 7A, 17% Alliance ATP, 4% Sumas and
3% Station 2 through Q2 2018 and forecast through Q3 2018. This
market diversification resulted in Crew's realized natural gas
sales price exceeding the Canadian AECO 5A benchmark by 89%.
- Clear Value Focus: In Q1 2018, Crew took steps to
monetize the inherent value in our Dawn and Malin market exposure
for Q2 and Q3, 2018. As a result, we recognized $1.5 million of marketing revenue in Q2, with an
equivalent amount expected to be recognized in Q3 2018.
- New Natural Gas Sales Exposure: Construction on the
strategic pipeline from the West Septimus facility through our
Groundbirch acreage connecting into the existing TCPL Saturn meter
station is anticipated to be finalized by the end of Q3. This will
complete Crew's goal of accessing all three major export pipelines
in BC, allowing the Company to benefit from additional natural gas
sales exposure, including Nymex, which complements our
long-standing market diversification strategy.
Natural Gas & Liquids Hedging
- Approximately 23% of budgeted 2018 natural gas volumes are
hedged at an average of $2.50 per GJ
or approximately $2.64 per mcf which
increases to approximately $3.10 per
mcf after adjusting for Crew's heat conversion.
- Through 2018, 2,750 bbls per day of WTI is hedged at a minimum
average price of C$72.57 per bbl, 750
bbls per day of Western Canadian Select ("WCS") for the second half
of 2018 at an average price of C$56.62 per bbl and 400 bbls per day of OPIS
Conway propane hedged at US$0.7863
per gallon or US$33.03 per bbl.
- Crew's 2019 risk management program currently has 1,625 barrels
per day of WTI hedged at an average price of C$73.72 per barrel and 250 barrels per day of WCS
for the first half of 2019 at an average price of C$52.10 per bbl. As a result of the weak forward
pricing for natural gas, we have elected to hedge cautiously with
7,500 mmbtu per day of Chicago City Gate gas at C$3.19 per mmbtu and 2,500 mmbtu per day of Dawn
gas at C$3.30 per mmbtu.
OPERATIONS & AREA Overview
NE BC Montney - Greater
Septimus
- During Q2, Crew flowed back a total of eight wells, including
all six that were completed by the end of Q1 2018, and two wells
completed during Q2. These wells targeted three distinct
stratigraphic intervals in the Upper Montney and are being
flow-restricted in order to optimize condensate recoveries. Over
the first 30 days on production, these eight wells averaged sales
of 4.0 mmcf per day of gas and 220 bbls per day of ngl (64%
condensate) at an average flowing casing pressure of 1,765 psi.
Based on the successful test spacing of this program, a future
development spacing of 15 wells per section in the Upper Montney is
supported in this area.
- Early in Q3 2018, Crew commenced drilling a five well pad in
the ultra-condensate rich ("UCR") Montney area with lateral lengths that are
30-50% longer than previous wells. We plan to utilize a revised
cased-hole plug and perf completion design expected to optimize
condensate recovery.
- Crew now has over 70 mmcf per day of excess natural gas
processing capacity to accommodate future growth. After completion
of the Groundbirch to Saturn meter station pipeline later in Q3,
the Company will have access to all three export pipelines in
northeast BC.
Greater Septimus
|
Production &
Drilling
|
Q2
2018
|
Q1
2018
|
Q4
2017
|
Q3
2017
|
Q2
2017
|
|
Average daily
production (boe/d)
|
18,953
|
20,467
|
20,193
|
18,154
|
15,558
|
|
Wells drilled (gross
/ net)
|
-
|
-
|
5 / 3.9
|
13 / 12.3
|
5 / 5.0
|
|
Wells completed
(gross / net)
|
2 /
1.6
|
9 / 7.7
|
3 / 3.0
|
14 / 14.0
|
9 / 9.0
|
|
|
|
|
|
|
Operating
Netback
($ per boe)
|
Q2
2018
|
Q1
2018
|
Q4
2017
|
Q3
2017
|
Q2
2017
|
|
Revenue
|
22.70
|
25.40
|
24.43
|
20.05
|
24.51
|
|
Royalties
|
(1.35)
|
(1.50)
|
(1.19)
|
(0.89)
|
(1.57)
|
|
Realized commodity
hedge (loss) / gain
|
(1.32)
|
(1.01)
|
1.74
|
2.97
|
0.77
|
|
Marketing
income
|
0.34
|
0.37
|
-
|
-
|
-
|
|
Net operating
costs(1)
|
(4.71)
|
(4.45)
|
(3.67)
|
(3.38)
|
(4.10)
|
|
Transportation
costs
|
(1.40)
|
(1.51)
|
(1.51)
|
(1.65)
|
(2.03)
|
|
Operating
netback(2)
|
14.26
|
17.30
|
19.80
|
17.10
|
17.58
|
|
(1)
|
Net operating costs
are calculated as gross operating costs less processing
revenue.
|
(2)
|
Operating netback
equals petroleum and natural gas sales including realized hedging
gains and losses on commodity contracts less royalties, operating
costs and transportation costs
calculated on a boe basis. Operating netback and adjusted funds
flow netback do not have a standardized measure prescribed by
International Financial Reporting Standards and
therefore may not be comparable with the calculations of similar
measures for other companies. See "Non-IFRS Measures"
contained within Crew's MD&A.
|
Other NE BC Montney
- Tower: Production in the Tower area averaged 875
boe per day in Q2 2018. Crew continues to evaluate the
relative economics of Tower development as well as the encouraging
early results from our peers in the Lower Montney. Production
rates and gas condensate ratios from nearby wells have generally
exceeded those of the Upper Montney in the area. Crew plans to
reinitiate drilling in this area in 2019.
- Attachie: Crew owns 97 sections of land in this
area with approximately 45 sections in the liquids-rich hydrocarbon
window. An offsetting operator has been actively testing wells with
condensate rates of over 1,000 bbls per day. Crew plans on drilling
one well in this area in 2019 to retain land.
- Oak / Flatrock: Crew has over 60 sections of land
in this area where drilling activity is gaining momentum for
liquids-rich gas. We will continue to monitor well results
and consider this an asset Crew could monetize.
- Inga: Crew has eight sections of Montney rights in this area, which is
prospective for highly liquids-rich gas. Montney rights have recently sold for
approximately $4,000 to $6,000 per acre in close proximity to our
lands.
AB / SK Heavy Oil - Lloydminster
- An effective $1.4 million
recompletion program was executed at Lloydminster in Q2 2018, resulting in average
production volumes of 1,930 bbls per day, a 9% increase over the
same period in 2017 and a 10% increase over the prior quarter.
Rising oil prices and narrowing differentials contributed to strong
Lloydminster operating netbacks of
$26.48 per boe.
- Over the past three years, Crew has successfully disposed of
$61 million of assets at Lloydminster with less than 200 boe per day of
associated production. Despite a rigorous sales process, the lack
of available capital funding for companies in the Canadian energy
market has resulted in two potential buyers failing to close on
acquisitions for the balance of our heavy oil operations. At
current commodity prices, Crew plans on maintaining production in
this area and expects this property to continue generating free
cash flow that can be deployed to our Montney operations until a reasonable
valuation for the asset can be realized through a successful
disposition.
OUTLOOK
Second Half 2018 Operations Focused on Condensate
Growth
- Crew has benefited from stronger liquids production and pricing
which supports continued development of our liquids and
condensate-rich area at West Septimus. Our condensate operating
netbacks in Q2 were over $70 per
barrel illustrating our low-cost structure and premium realized
price for this commodity.
- The remainder of our 2018 capital spending will be focused on
our UCR area with a total of five wells at West Septimus. Three of
these wells are expected to be completed in 2018 and two in 2019,
with plans to implement additional water handling at West Septimus
to further enhance our produced water recycling program.
2018 Guidance Remains on Target
- Q3 2018 capital expenditures are expected to be $25 to $30 million,
with forecast production expected to average 23,000 to 24,000 boe
per day, which reflects additional planned maintenance on the TCPL
system and continued management of natural gas volumes during
summer price volatility. The Company continues to forecast annual
capital expenditures will approximate adjusted funds flow for
2018.
- Crew's diversified marketing strategy affords optionality to
reduce exposure to those markets with pricing that remains below
our returns threshold and the Company will continue adjusting
production levels to generate optimal returns.
- Production year-to-date has exceeded Crew's original forecast
and averaged 24,754 boe per day, positioning the Company to meet
our annual guidance of 23,500 to 24,500 boe per day.
We would like to thank our employees and Board of Directors for
their contribution and commitment to Crew, as well as our
shareholders and bondholders for their ongoing support.
Cautionary Statements
Information Regarding Disclosure on Oil and
Gas and Operational Information and Non-IFRS Measures
This press release contains metrics commonly used in the oil
and natural gas industry, such as "adjusted funds flow" and
"operating netbacks". These terms are not defined in IFRS and
do not have standardized meanings or standardized methods of
calculation and therefore may not be comparable to similar measures
presented by other companies, and therefore should not be used to
make such comparisons. Such metrics have been included herein
to provide readers with additional information to evaluate the
Company's performance, however such metrics should not be unduly
relied upon. Management uses oil and gas metrics for its own
performance measurements and to provide shareholders with measures
to compare Crew's operations over time. Readers are cautioned
that the information provided by these metrics, or that can be
derived from the metrics presented in this press release, should
not be relied upon for investment or other purposes. See "Non-IFRS
Measures" contained within Crew's MD&A for applicable
calculations and reconciliations.
Forward-Looking Information and Statements
This news release contains certain forward–looking
information and statements within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "may", "will", "project",
"should", "believe", "plans", "intends" "forecast" and similar
expressions are intended to identify forward-looking information or
statements. In particular, but without limiting the
foregoing, this news release contains forward-looking information
and statements pertaining to the following: the estimated volumes,
including shut-ins, and product mix of Crew's oil and gas
production; production estimates including Q3 and 2018
average production forecasts; commodity price expectations
including Crew's estimates of natural gas pricing exposure; Crew's
commodity risk management programs; marketing, transportation and
natural gas egress plans; future liquidity and financial capacity;
future results from operations and operating metrics;
potential for lower costs and efficiencies going forward;
future development, exploration, acquisition and disposition
activities (including drilling, completion and
infrastructure plans and methodology and associated timing and cost
estimates); the amount and timing of capital projects; Q3
and 2018 capital expenditure and operational plans; and
Crew's 2018 budget and methods of funding our capital
program.
In addition, forward-looking statements or information
are based on a number of material factors, expectations or
assumptions of Crew which have been used to develop such statements
and information but which may prove to be incorrect. Although
Crew 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
Crew can give no assurance that such expectations will prove to be
correct. In addition to other factors and assumptions which
may be identified herein, assumptions have been made regarding,
among other things: that Crew will continue to conduct its
operations in a manner consistent with past operations; results
from drilling and development activities consistent with past
operations; the quality of the reservoirs in which Crew operates
and continued performance from existing wells; the continued and
timely development of infrastructure in areas of new production;
the accuracy of the estimates of Crew's reserve volumes; certain
commodity price and other cost assumptions; continued availability
of debt and equity financing and cash flow to fund Crew's current
and future plans and expenditures; the impact of increasing
competition; the general stability of the economic and political
environment in which Crew operates; the general continuance
of current industry conditions; the timely receipt of any
required regulatory approvals; the ability of Crew to obtain
qualified staff, equipment and services in a timely and cost
efficient manner; drilling results; the ability of the operator of
the projects in which Crew has an interest in to operate the field
in a safe, efficient and effective manner; the ability of Crew 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; the
timing and cost of pipeline, storage and facility construction and
expansion and the ability of Crew to secure adequate product
transportation; future commodity prices; currency, exchange and
interest rates; regulatory framework regarding royalties, taxes and
environmental matters in the jurisdictions in which Crew operates;
and the ability of Crew to successfully market its oil and natural
gas products.
The forward-looking information and statements included in
this news release are not guarantees of future performance and
should not be unduly relied upon. Such information and
statements, including the assumptions made in respect thereof,
involve known and unknown risks, uncertainties and other factors
that may cause actual results or events to defer materially from
those anticipated in such forward-looking information or statements
including, without limitation: changes in commodity prices;
changes in the demand for or supply of Crew's products, the
early stage of development of some of the evaluated areas and
zones the potential for variation in the quality of the
Montney formation; unanticipated
operating results or production declines; changes in tax or
environmental laws, royalty rates or other regulatory matters;
changes in development plans of Crew or by third party operators of
Crew's properties, increased debt levels or debt service
requirements; inaccurate estimation of Crew's oil and gas reserve
volumes; limited, unfavourable or a lack of access to capital
markets; increased costs; a lack of adequate insurance coverage;
the impact of competitors; and certain other risks detailed from
time-to-time in Crew's public disclosure documents (including,
without limitation, those risks identified in this news release and
Crew's Annual Information Form).
The forward-looking information and statements contained in
this news release speak only as of the date of this news release,
and Crew does not assume any obligation to publicly update or
revise any of the included forward-looking statements or
information, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities
laws.
Test Results and Initial Production Rates
A pressure transient analysis or well-test interpretation has
not been carried out and thus certain of the test results provided
herein should be considered to be preliminary until such analysis
or interpretation has been completed. Test results and
initial production rates disclosed herein, particularly those short
in duration, may not necessarily be indicative of long term
performance or of ultimate recovery.
BOE equivalent
Barrel of oil equivalents or BOEs 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 than the energy equivalency of 6:1,
utilizing the 6:1 conversion ratio may be misleading as an
indication of value.
Crew is a growth-oriented oil and natural gas producer,
committed to pursuing sustainable per share growth through a
balanced mix of financially responsible exploration and development
complemented by strategic acquisitions. The Company's
operations are primarily focused in the vast Montney resource, situated in northeast
British Columbia, and include a
large contiguous land base. Crew's liquids-rich Septimus and
West Septimus areas ("Greater Septimus") along with Groundbirch and
the light oil area at Tower in British
Columbia offer significant development potential over the
long-term. The Company has access to diversified markets with
operated infrastructure and access to multiple pipeline egress
options. Crew's common shares are listed for trading on the
Toronto Stock Exchange ("TSX") under the symbol "CR".
Financial statements and MD&A for the three and six month
periods ended June 30, 2018 and 2017
are filed on SEDAR at www.sedar.com and are available on the
Company's website at www.crewenergy.com.
Dale Shwed, President
and C.E.O.
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Phone: (403)
266-2088
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John Leach, Senior
Vice President and C.F.O.
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Email:
investor@crewenergy.com
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SOURCE Crew Energy Inc.