Birchcliff Energy Ltd. (“
Birchcliff” or the
“
Corporation”) (TSX: BIR) is pleased to announce
its unaudited 2023 full-year and fourth quarter financial and
operational results and highlights from its independent reserves
evaluation effective December 31, 2023.
“In 2023, we delivered annual average production
of 75,699 boe/d and adjusted funds flow(1) of $306.8 million and
returned $224.8 million to shareholders through common share
dividends and share repurchases under our normal course issuer
bid,” commented Chris Carlsen, President and Chief Executive
Officer of Birchcliff. “We achieved a PDP F&D operating netback
recycle ratio(2) of 1.1x in a low commodity price environment,
notwithstanding $58.0 million of capital spent on strategic
priorities that did not add reserves or production in 2023. We
believe that there is significant intrinsic shareholder value
embedded in Birchcliff’s asset base that is not reflected in our
current share price, as demonstrated by our PDP reserves net asset
value per common share(2) of $8.22 and $18.38 and $23.60 per share
for our proved and proved plus probable reserves, respectively.(3)
In addition, our Elmworth asset consisting of approximately 140 net
sections of Montney lands is largely unbooked from a reserves
basis, providing us with significant inventory and a large
potential future development area.”
“We are excited about our 2024 capital program,
which utilizes our latest wellbore and completions design and
targets high rate-of-return wells with strong capital efficiencies
and attractive paybacks. Our 2024 capital budget reflects our
commitment to maintaining a strong balance sheet and capital
discipline, while focusing on sustainable shareholder returns and
the continued development of our world-class asset base. We are
closely monitoring commodity prices and the previously announced
deferral of 13 wells to the second half of the year provides us
with the flexibility to adjust our 2024 capital program if
necessary to achieve these priorities. As announced on January 17,
2024, our board of directors declared a cash dividend of $0.10 per
common share for the quarter ending March 31, 2024, which equates
to an annual base dividend of $0.40 per common share for 2024
(approximately $107 million in aggregate).”(4)
2023 Financial and Operational
Highlights
- Delivered annual average production of 75,699 boe/d (82%
natural gas and 18% liquids) in 2023 and quarterly average
production of 76,546 boe/d (81% natural gas and 19% liquids) in Q4
2023.
- Generated annual adjusted funds flow of $306.8 million in 2023
and quarterly adjusted funds flow of $76.2 million in Q4 2023. Cash
flow from operating activities was $320.5 million in 2023 and $79.0
million in Q4 2023.
- Reported annual net income to common shareholders of $9.8
million in 2023 and a quarterly net loss to common shareholders of
$5.5 million in Q4 2023.
- F&D capital expenditures were $304.6 million in 2023 and
$58.2 million in Q4 2023. Birchcliff drilled 30 (30.0 net) wells in
2023 and brought 32 (32.0 net) wells on production in 2023.
- Returned $213.3 million to shareholders in 2023 through its
base common share dividend. In addition, Birchcliff purchased an
aggregate of 1,427,868 common shares under its normal course issuer
bid.
2023 Reserves Highlights(5)
- Birchcliff delivered PDP F&D costs(6) of $13.16/boe and a
PDP F&D operating netback recycle ratio of 1.1x,
notwithstanding $58.0 million in F&D capital expenditures spent
on strategic priorities for which there was no production or
reserves assigned at year-end 2023.
- Proved and proved plus probable reserves increased by 3% and
1%, respectively, from December 31, 2022. Birchcliff’s proved
reserves totalled 691.9 MMboe at December 31, 2023, which reflects
an F&D reserves replacement of 144%. Birchcliff’s proved plus
probable reserves totalled 993.9 MMboe at December 31, 2023, which
reflects an F&D reserves replacement of 103%.
- Birchcliff’s PDP reserves totalled 220.5 MMboe at December 31,
2023. Birchcliff added 23.1 MMboe of PDP reserves on an F&D
basis in 2023, after adding back 2023 actual production of 27.6
MMboe(7).
- At December 31, 2023, the net present value of future net
revenue (before income taxes, discounted at 10%) was $2.6 billion
for Birchcliff’s PDP reserves, $5.4 billion for its proved reserves
and $6.8 billion for its proved plus probable reserves.
- Reserves life index(6) at December 31, 2023 of 8.0 years on a
PDP basis, 25.1 years on a proved basis and 36.0 years on a proved
plus probable basis.
- The net asset value per common share of Birchcliff’s PDP,
proved and proved plus probable reserves at December 31, 2023 was
$8.22, $18.38 and $23.60, respectively, which is 66%, 271% and 376%
higher than the closing price of its common shares on the TSX on
February 12, 2024 of $4.96.
Birchcliff anticipates filing its annual
information form and audited financial statements and related
management’s discussion and analysis for the year ended December
31, 2023 on March 13, 2024.
________________________
(1) Non-GAAP financial measure. See “Non-GAAP
and Other Financial Measures”.(2) Non-GAAP ratio. See “Non-GAAP and
Other Financial Measures”.(3) Net asset value per common share is
at December 31, 2023 and before income taxes (discounted at 10%).
See “2023 Year-End Reserves – Net Asset Value”.(4) Assumes that an
annual base dividend of $0.40 per common share is paid and that
there are 267 million common shares outstanding, with no special
dividends paid. The declaration of future dividends is subject to
the approval of the board of directors of the Corporation (the
“Board”) and is subject to change. (5)
Deloitte LLP (“Deloitte”) prepared an independent
evaluation of the Corporation’s reserves effective December 31,
2023 as contained in their report dated February 14, 2024 (the
“Deloitte Report”). The forecast commodity prices,
inflation and exchange rates utilized in the Deloitte Report were
computed using the average of forecasts from Deloitte, McDaniel
& Associates Consultants Ltd. (“McDaniel”),
GLJ Ltd. (“GLJ”) and Sproule Associates Limited
(“Sproule”) effective January 1, 2024 (the
“2023 Price Forecast”). See “2023 Year-End
Reserves” and “Presentation of Oil and Gas Reserves”. (6) See
“Advisories – Oil and Gas Metrics”. (7) Consists of 674.9
Mbbls of light oil, 1,898.7 Mbbls of condensate, 2,301.7 Mbbls of
NGLs and 136,529.0 MMcf of natural gas.
This press release contains forward-looking
statements and forward-looking information within the meaning of
applicable securities laws. For further information regarding the
forward-looking statements and forward-looking information
contained herein, see “Advisories – Forward-Looking Statements”.
With respect to the disclosure of Birchcliff’s production contained
in this press release, see “Advisories – Production”. With respect
to the disclosure of Birchcliff’s reserves and related reserves
metrics contained in this press release, see “2023 Year-End
Reserves”, “Presentation of Oil and Gas Reserves” and “Advisories –
Oil and Gas Metrics”. In addition, this press release uses various
“non-GAAP financial measures”, “non-GAAP ratios” and “capital
management measures” as such terms are defined in National
Instrument 52-112 – Non-GAAP and Other Financial Measures
Disclosure (“NI 52-112”). Non-GAAP financial
measures and non-GAAP ratios are not standardized financial
measures under GAAP and might not be comparable to similar
financial measures disclosed by other issuers. For further
information regarding the non-GAAP and other financial measures
used in this press release, see “Non-GAAP and Other Financial
Measures”.
2023 UNAUDITED FINANCIAL AND OPERATIONAL
SUMMARY
|
|
Three months endedDecember
31, |
|
Twelve months endedDecember
31, |
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
OPERATING |
|
|
|
|
| Average production |
|
|
|
|
|
Light oil (bbls/d) |
1,649 |
|
2,413 |
|
1,849 |
|
2,223 |
|
|
Condensate (bbls/d) |
5,145 |
|
4,822 |
|
5,202 |
|
4,679 |
|
|
NGLs (bbls/d) |
7,653 |
|
7,963 |
|
6,306 |
|
7,471 |
|
|
Natural gas (Mcf/d) |
372,594 |
|
387,604 |
|
374,052 |
|
375,315 |
|
|
Total (boe/d) |
76,546 |
|
79,799 |
|
75,699 |
|
76,925 |
|
|
Average realized sales prices (CDN$)(1) |
|
|
|
|
|
Light oil(per bbl) |
100.07 |
|
115.24 |
|
99.07 |
|
119.78 |
|
|
Condensate(per bbl) |
103.80 |
|
114.32 |
|
103.76 |
|
122.27 |
|
|
NGLs(per bbl) |
26.95 |
|
35.80 |
|
26.92 |
|
41.09 |
|
|
Natural gas(per Mcf) |
2.92 |
|
6.11 |
|
3.03 |
|
6.73 |
|
|
Total(per boe) |
26.02 |
|
43.63 |
|
26.79 |
|
47.73 |
|
|
|
|
|
|
|
| NETBACK AND
COST ($/boe) |
|
|
|
|
|
Petroleum and natural gas revenue(1) |
26.03 |
|
43.64 |
|
26.80 |
|
47.73 |
|
|
Royalty expense |
(2.75 |
) |
(4.86 |
) |
(2.54 |
) |
(5.74 |
) |
|
Operating expense |
(3.81 |
) |
(4.06 |
) |
(3.83 |
) |
(3.62 |
) |
|
Transportation and other expense(2) |
(5.53 |
) |
(5.37 |
) |
(5.69 |
) |
(5.52 |
) |
|
Operating netback(2) |
13.94 |
|
29.35 |
|
14.74 |
|
32.85 |
|
|
G&A expense, net |
(1.80 |
) |
(1.82 |
) |
(1.52 |
) |
(1.27 |
) |
|
Interest expense |
(0.95 |
) |
(0.53 |
) |
(0.74 |
) |
(0.49 |
) |
|
Realized gain (loss) on financial instruments |
(0.38 |
) |
2.57 |
|
(1.35 |
) |
2.88 |
|
|
Other cash income (expense) |
0.01 |
|
- |
|
(0.03 |
) |
- |
|
|
Adjusted funds flow(2) |
10.82 |
|
29.57 |
|
11.10 |
|
33.97 |
|
|
Depletion and depreciation expense |
(8.44 |
) |
(7.97 |
) |
(8.20 |
) |
(7.61 |
) |
|
Unrealized gain (loss) on financial instruments |
(1.58 |
) |
(8.31 |
) |
(1.38 |
) |
4.67 |
|
|
Other expenses(3) |
(1.88 |
) |
(0.77 |
) |
(0.95 |
) |
(0.43 |
) |
|
Dividends on preferred shares |
- |
|
- |
|
- |
|
(0.18 |
) |
|
Deferred income tax recovery (expense) |
0.29 |
|
(3.06 |
) |
(0.22 |
) |
(7.14 |
) |
|
Net income (loss) to common shareholders |
(0.79 |
) |
9.46 |
|
0.35 |
|
23.28 |
|
|
|
|
|
|
|
|
FINANCIAL |
|
|
|
|
|
Petroleum and natural gas revenue ($000s)(1) |
183,295 |
|
320,358 |
|
740,359 |
|
1,340,180 |
|
|
Cash flow from operating activities ($000s) |
79,006 |
|
224,447 |
|
320,529 |
|
925,275 |
|
| Adjusted funds
flow($000s)(4) |
76,215 |
|
217,099 |
|
306,827 |
|
953,683 |
|
|
Per basic common share($)(2) |
0.29 |
|
0.82 |
|
1.15 |
|
3.59 |
|
| Free funds flow($000s)(4) |
18,049 |
|
110,337 |
|
2,190 |
|
589,062 |
|
|
Per basic common share($)(2) |
0.07 |
|
0.41 |
|
0.01 |
|
2.22 |
|
| Net income (loss) to common
shareholders ($000s) |
(5,533 |
) |
69,453 |
|
9,780 |
|
653,682 |
|
|
Per basic common share ($) |
(0.02 |
) |
0.26 |
|
0.04 |
|
2.46 |
|
|
End of period basic common shares (000s) |
267,156 |
|
266,047 |
|
267,156 |
|
266,047 |
|
| Weighted average basic common
shares (000s) |
266,667 |
|
265,922 |
|
266,465 |
|
265,548 |
|
|
Dividends on common shares ($000s) |
53,390 |
|
58,503 |
|
213,344 |
|
71,788 |
|
|
Dividends on preferred shares ($000s) |
- |
|
- |
|
- |
|
5,162 |
|
|
F&D capital expenditures ($000s)(5) |
58,166 |
|
106,762 |
|
304,637 |
|
364,621 |
|
| Total capital
expenditures ($000s)(4) |
59,541 |
|
107,471 |
|
307,916 |
|
368,230 |
|
| Revolving term credit
facilities ($000s) |
372,097 |
|
131,981 |
|
372,097 |
|
131,981 |
|
| Total
debt ($000s)(6) |
382,306 |
|
138,549 |
|
382,306 |
|
138,549 |
|
(1) Excludes the effects of financial
instruments but includes the effects of physical delivery
contracts. (2) Non-GAAP ratio. See “Non-GAAP and Other Financial
Measures”.(3) Includes non-cash items such as compensation,
accretion, amortization of deferred financing fees and other gains
and losses.(4) Non-GAAP financial measure. See “Non-GAAP and Other
Financial Measures”.(5) See “Advisories – F&D Capital
Expenditures”.(6) Capital management measure. See “Non-GAAP and
Other Financial Measures”.
FULL-YEAR AND Q4 2023 UNAUDITED
FINANCIAL AND OPERATIONAL RESULTS
Production
- Birchcliff’s production averaged 75,699 boe/d in 2023, a 2%
decrease from 2022. Production averaged 76,546 boe/d in Q4 2023, a
4% decrease from Q4 2022.
- Birchcliff’s full-year production was negatively impacted by:
(i) an unplanned system outage on Pembina Pipeline’s Northern
Pipeline system that negatively impacted the Corporation’s NGLs
sales volumes in the first half of the year; (ii) the timing of
wells brought on production in 2023 as compared to 2022, which
resulted from the strategic decision to defer the drilling of nine
wells from Q2 2023 to Q3 2023; and (iii) natural production
declines. Birchcliff’s Q4 production was negatively impacted by
unplanned third-party outages, including a third-party compressor
outage that continued until the end of January 2024. Birchcliff’s
full-year and Q4 production was positively impacted by incremental
production volumes from the new Montney/Doig wells brought on
production in the year.
- Birchcliff’s full-year production in 2023 was below its
guidance of 77,000 boe/d, primarily due to the unplanned
third-party outages discussed above.
- Liquids accounted for 18% of Birchcliff’s total production in
2023 as compared to 19% in 2022, which was in line with
Birchcliff’s guidance. Liquids accounted for 19% of Birchcliff’s
total production in both Q4 2023 and Q4 2022.
Adjusted Funds Flow and Cash Flow From
Operating Activities
- Birchcliff generated adjusted funds flow of $306.8 million in
2023, or $1.15 per basic common share, both of which decreased by
68% from 2022. Adjusted funds flow was $76.2 million in Q4 2023, or
$0.29 per basic common share, both of which decreased by 65% from
Q4 2022.
- Birchcliff’s cash flow from operating activities was $320.5
million in 2023, a 65% decrease from 2022. Cash flow from operating
activities was $79.0 million in Q4 2023, a 65% decrease from Q4
2022.
- The decreases in adjusted funds flow and cash flow from
operating activities were primarily due to lower natural gas
revenue, which was largely the result of a 55% and 52% decrease in
the average realized sales price Birchcliff received for its
natural gas production in the full-year and Q4 2023, respectively,
as compared to 2022. Birchcliff’s adjusted funds flow and cash flow
from operating activities were also negatively impacted by a
realized loss on financial instruments of $37.3 million and $2.6
million in the full-year and Q4 2023, respectively, as compared to
a realized gain on financial instruments of $80.7 million and $18.8
million in 2022.
- Birchcliff’s full-year adjusted funds flow in 2023 was lower
than its guidance of $350 million, primarily due to a lower than
anticipated average realized natural gas sales price and lower
production.
Free Funds Flow
- Birchcliff generated free funds flow of $2.2 million in 2023,
or $0.01 per basic common share, both of which decreased by 100%
from 2022. Free funds flow was $18.0 million in Q4 2023, or $0.07
per basic common share, an 84% and 83% decrease, respectively, from
Q4 2022.
- The decreases in free funds flow were primarily due to lower
adjusted funds flow, partially offset by lower F&D capital
expenditures in the full-year and Q4 2023 as compared to 2022.
- Birchcliff’s full-year free funds flow in 2023 was lower than
its guidance of $50 million, primarily due to lower than
anticipated adjusted funds flow.
Net Income (Loss) to Common
Shareholders
- Birchcliff earned net income to common shareholders of $9.8
million in 2023, or $0.04 per basic common share, a 99% and 98%
decrease, respectively, from 2022. The decreases were primarily due
to lower adjusted funds flow and an unrealized mark-to-market loss
on financial instruments of $38.2 million in 2023 as compared to an
unrealized mark-to-market gain on financial instruments of $131.0
million in 2022, partially offset by a lower income tax expense in
2023.
- Birchcliff reported a net loss to common shareholders of $5.5
million in Q4 2023, or $0.02 per basic common share, as compared to
net income to common shareholders of $69.5 million and $0.26 per
basic common share in Q4 2022. The change to a net loss position
was primarily due to lower adjusted funds flow, partially offset by
a lower unrealized mark-to-market loss on financial instruments of
$11.1 million in Q4 2023 as compared to $61.0 million in Q4
2022.
Operating Netback and Selected Cash
Costs
- Birchcliff’s operating netback was $14.74/boe in 2023, a 55%
decrease from 2022. Operating netback was $13.94/boe in Q4 2023, a
53% decrease from Q4 2022. The decreases were primarily due to
lower per boe petroleum and natural gas revenue, partially offset
by lower per boe royalty expense in the full-year and Q4 2023.
- Birchcliff’s royalty expense was $2.54/boe in 2023, a 56%
decrease from 2022. Royalty expense was $2.75/boe in Q4 2023, a 43%
decrease from Q4 2022. The decreases were primarily due to a lower
average realized sales price received for Birchcliff’s production.
Birchcliff’s full-year royalty expense was in line with its
guidance of $2.55/boe to $2.75/boe.
- Birchcliff’s operating expense was $3.83/boe in 2023, a 6%
increase from 2022. The increase was primarily due to inflationary
pressures in service, labour and other supply costs used in
Birchcliff’s field operations, which together increased by 22% on a
per boe basis, and higher property taxes and regulatory fees.
Operating expense was $3.81/boe in Q4 2023, a 6% decrease from Q4
2022. The decrease was primarily due to lower power and fuel costs.
Birchcliff’s full-year operating expense was within its guidance of
$3.75/boe to $3.95/boe.
- Birchcliff’s transportation and other expense was $5.69/boe in
2023 and $5.53/boe in Q4 2023, both of which increased by 3% from
their comparable prior periods in 2022. The increases were
primarily due to a marketing loss on a propane supply arrangement
with a third-party producer of polypropylene. Birchcliff’s
full-year transportation and other expense was within its guidance
of $5.60/boe to $5.80/boe.
- Birchcliff’s G&A expense was $1.52/boe in 2023, a 20%
increase from 2022. The increase was primarily due to: (i)
increased incentive payments made to the Corporation’s employees;
and (ii) an increase to other general business expenditures,
largely driven by higher compliance, regulatory, advocacy,
corporate travel and employee-related costs. G&A expense was
$1.80/boe in Q4 2023, which was comparable to $1.82/boe in Q4
2022.
- Birchcliff’s interest expense was $0.74/boe in 2023, a 51%
increase from 2022. Interest expense was $0.95/boe in Q4 2023, a
79% increase from Q4 2022. The increases were primarily due to: (i)
a higher average effective interest rate on amounts drawn under the
Corporation’s extendible revolving term credit facilities (the
“Credit Facilities”); and (ii) a higher average
outstanding balance under the Credit Facilities in the full-year
and Q4 2023.
Debt and Credit Facilities
- Total debt at December 31, 2023 was $382.3 million, a 176%
increase from December 31, 2022. Birchcliff’s 2023 year-end total
debt was above its guidance of $330 million, primarily due to lower
than anticipated adjusted funds flow.
- At December 31, 2023, Birchcliff had a balance outstanding
under its Credit Facilities of $372.1 million (December 31, 2022:
$132.0 million) from available Credit Facilities of $850.0 million
(December 31, 2022: $850.0 million), leaving the Corporation with
$475.9 million of unutilized credit capacity after adjusting for
outstanding letters of credit and unamortized deferred financing
fees. This unutilized credit capacity provides Birchcliff with
significant financial flexibility and additional capital
resources.
-
The Credit Facilities do not contain any financial maintenance
covenants and do not mature until May 11, 2025.
Marketing and Natural Gas Market
Diversification
-
Birchcliff’s physical natural gas sales exposure primarily consists
of the AECO, Dawn and Alliance markets. In addition, the
Corporation has various financial instruments outstanding that
provide it with exposure to NYMEX HH pricing.
The following table sets forth Birchcliff’s
effective sales, production and average realized sales price for
natural gas and liquids for Q4 2023, after taking into account the
Corporation’s financial instruments:
|
Three months ended December 31, 2023 |
|
|
Effectivesales(CDN$000s) |
Percentage of total sales(%) |
Effectiveproduction(per day) |
Percentage oftotal natural gas
production(%) |
Percentage oftotal corporate
production(%) |
Effective average realizedsales
price(CDN$) |
|
Market |
|
|
|
|
|
|
|
AECO(1)(2)(3) |
17,731 |
9 |
71,261 Mcf |
19 |
15 |
2.70/Mcf |
|
Dawn(4) |
47,433 |
24 |
161,119 Mcf |
43 |
35 |
3.20/Mcf |
|
NYMEX HH(1)(2)(5) |
53,012 |
26 |
140,214 Mcf |
38 |
31 |
4.11/Mcf |
|
Total natural gas(1) |
118,176 |
59 |
372,594 Mcf |
100 |
81 |
3.45/Mcf |
|
Light oil |
15,180 |
8 |
1,649 bbls |
|
2 |
100.07/bbl |
|
Condensate |
49,135 |
24 |
5,145 bbls |
|
7 |
103.80/bbl |
|
NGLs |
18,977 |
9 |
7,653 bbls |
|
10 |
26.95/bbl |
|
Total liquids |
83,292 |
41 |
14,447 bbls |
|
19 |
62.67/bbl |
|
Total corporate(1) |
201,468 |
100 |
76,546 boe |
|
100 |
28.61/boe |
(1) Effective sales and effective average
realized sales price on a total natural gas and total corporate
basis and for the AECO and NYMEX HH markets are non-GAAP financial
measures and non-GAAP ratios, respectively. See “Non-GAAP and Other
Financial Measures”. (2) AECO sales and production that effectively
received NYMEX HH pricing under Birchcliff’s long-term physical
NYMEX HH/AECO 7A basis swap contracts have been included as
effective sales and production in the NYMEX HH market. Birchcliff
sold physical NYMEX HH/AECO 7A basis swap contracts for 5,000
MMBtu/d at an average contract price of NYMEX HH less
US$1.205/MMBtu during Q4 2023.(3) Birchcliff has short-term
physical sales agreements with third-party marketers to sell and
deliver into the Alliance pipeline system. All of Birchcliff’s
short-term physical Alliance sales and production during Q4 2023
received AECO premium pricing and have therefore been included as
effective sales and production in the AECO market. (4) Birchcliff
has agreements for the firm service transportation of an aggregate
of 175,000 GJ/d of natural gas on TransCanada PipeLines’ Canadian
Mainline, whereby natural gas is transported to the Dawn trading
hub in Southern Ontario.(5) NYMEX HH sales and production include
financial and physical NYMEX HH/AECO 7A basis swap contracts for an
aggregate of 152,000 MMBtu/d at an average contract price of NYMEX
HH less US$1.23/MMBtu during Q4 2023. Birchcliff’s effective
average realized sales price for NYMEX HH of CDN$4.11/Mcf
(US$2.76/MMBtu) was determined on a gross basis before giving
effect to the average NYMEX HH/AECO 7A fixed contract basis
differential price of CDN$1.83/Mcf (US$1.23/MMBtu) and includes any
realized gains and losses on financial NYMEX HH/AECO 7A basis swap
contracts during Q4 2023. After giving effect to the NYMEX HH/AECO
7A fixed contract basis differential price and including any
realized gains and losses on financial NYMEX HH/AECO 7A basis swap
contracts during Q4 2023, Birchcliff’s effective average realized
net sales price for NYMEX HH was CDN$2.28/Mcf (US$1.53/MMBtu) in Q4
2023.
The following table sets forth Birchcliff’s
physical sales, production, average realized sales price,
transportation costs and natural gas sales netback by natural gas
market for the periods indicated, before taking into account the
Corporation’s financial instruments:
|
Three months ended December 31, 2023 |
|
Natural gas market |
Natural
gassales(1)(CDN$000s) |
Percentage of natural gas sales(%) |
Natural gas production(Mcf/d) |
Percentage of natural gas production(%) |
Average realizednatural gas
salesprice(1)(CDN$/Mcf) |
Natural gas transportation costs(2)(CDN$/Mcf) |
Natural gas sales netback(3)(CDN$/Mcf) |
|
AECO |
50,508 |
51 |
203,024 |
55 |
2.72 |
0.38 |
2.33 |
|
Dawn |
47,433 |
47 |
161,119 |
43 |
3.20 |
1.42 |
1.78 |
|
Alliance(4) |
2,016 |
2 |
8,451 |
2 |
2.59 |
- |
2.59 |
|
Total |
99,957 |
100 |
372,594 |
100 |
2.92 |
0.83 |
2.09 |
|
Three months ended December 31, 2022 |
|
Natural gas market |
Natural
gassales(1)(CDN$000s) |
Percentage of natural gas sales(%) |
Natural gas production(Mcf/d) |
Percentage of natural gas production(%) |
Average realizednatural gas
salesprice(1)(CDN$/Mcf) |
Natural gas transportation costs(2)(CDN$/Mcf) |
Natural gas sales netback(3)(CDN$/Mcf) |
|
AECO |
101,194 |
46 |
208,042 |
53 |
5.29 |
0.39 |
4.90 |
|
Dawn |
106,494 |
49 |
161,671 |
42 |
7.16 |
1.41 |
5.75 |
|
Alliance(4) |
10,134 |
5 |
17,891 |
5 |
6.16 |
- |
6.16 |
|
Total |
217,822 |
100 |
387,604 |
100 |
6.11 |
0.80 |
5.31 |
(1) Excludes the effects of financial
instruments but includes the effects of physical delivery
contracts.(2) Reflects costs to transport natural gas from the
field receipt point to the delivery sales trading hub.(3) Natural
gas sales netback denotes the average realized natural gas sales
price less natural gas transportation costs.(4) Birchcliff has
short-term physical sales agreements with third-party marketers to
sell and deliver into the Alliance pipeline system. Alliance sales
are recorded net of transportation tolls.
Capital Activities and
Investment
- F&D capital expenditures were $304.6 million in 2023, as
compared to Birchcliff’s guidance of $300 million.
- Birchcliff was able to efficiently execute on its 2023 capital
program in its core area of Pouce Coupe and Gordondale, as well as
in the Elmworth area where the Corporation drilled two horizontal
wells for land retention purposes.
The following table sets forth the number of
wells Birchcliff drilled and brought on production in 2023:
|
|
Total # of wells drilled in 2023 |
|
Total # of wells brought on production in
2023 |
|
Pouce Coupe |
|
|
|
|
|
Basal Doig/Upper Montney |
4 |
|
4 |
|
|
Montney D2 |
3 |
|
5 |
|
|
Montney D1 |
15 |
|
16 |
|
|
Montney C |
4 |
|
5 |
|
|
Total |
26 |
|
30 |
|
|
|
|
|
|
|
Gordondale |
|
|
|
|
|
Montney D2 |
1 |
|
1 |
|
|
Montney D1 |
1 |
|
1 |
|
|
Total |
2 |
|
2 |
|
|
|
|
|
|
|
Elmworth |
Montney |
2 |
|
N/A |
|
|
|
|
|
|
|
TOTAL |
30 |
|
32(1) |
(1) Does not include 2 (0.375 net) Charlie Lake
horizontal oil wells that the Corporation participated in during
2022, with production coming onstream in Q1 2023.
In 2023, Birchcliff successfully developed
multiple zones in the Lower and Upper Montney targeting brownfield
and greenfield reservoir areas in both Pouce Coupe and Gordondale.
The Corporation is excited to build on the momentum and learnings
from its 2023 results as it continues to execute its 2024 capital
program.
OPERATIONAL UPDATE
As disclosed in Birchcliff’s January 17, 2024
press release, the Board approved a disciplined F&D capital
budget of $240 million to $260 million for 2024. As part of the
capital program, Birchcliff expects to bring 29 wells on production
in 2024. Birchcliff is delaying the drilling of 13 wells until late
Q2 and into Q3 2024, with these wells expected to come on
production in Q4 2024, aligned with the anticipated improvement in
commodity prices.
The Corporation successfully completed drilling
its 5-well 04-30 pad in Pouce Coupe in December 2023. Initial
production and flowback operations commenced in late January 2024
and the wells are expected to be turned over to production through
Birchcliff’s permanent facilities later in February 2024. The pad
was drilled in the Lower Montney targeting high-rate natural
gas.
Birchcliff has completed the drilling of its
5-well 16-17 pad in Pouce Coupe utilizing two drilling rigs. Well
completions operations are scheduled to commence later in February
2024 and the wells are anticipated to be brought on production in
late Q1 2024. The pad is targeting condensate-rich natural gas,
with three wells in the Lower Montney and two wells in the Upper
Montney.
Birchcliff currently has two drilling rigs at
work in the Gordondale area, with one rig drilling on the 2-well
02-27 pad and one rig drilling on the 4-well 01-10 pad. Both pads
are targeting wells in the Lower Montney, which are anticipated to
be brought on production in Q2 2024. Following the drilling of
these two pads, the 2024 drilling program will be on hold until
late Q2 2024 to finish the drilling of the remaining 13 wells.
2023 YEAR-END RESERVES
The reserves data set forth below at December
31, 2023 is based upon the Deloitte Report, which has been prepared
in accordance with the standards contained in the Canadian Oil and
Gas Evaluation Handbook (the “COGE Handbook”) and
National Instrument 51-101 – Standards of Disclosure for Oil and
Gas Activities (“NI 51-101”).
The reserves data provided in this press release
presents only a portion of the disclosure required under NI 51-101.
The disclosure required under NI 51-101 will be contained in
Birchcliff’s annual information form for the year ended December
31, 2023, which is expected to be filed on SEDAR+
(www.sedarplus.ca) on March 13, 2024.
In certain of the tables below, numbers may not
add due to rounding. The estimates of future net revenue contained
herein do not represent fair market value. For additional
information regarding the presentation of Birchcliff’s reserves
disclosure contained herein, see “Presentation of Oil and Gas
Reserves” and “Advisories” in this press release.
Reserves Summary
The following table summarizes the estimates of
Birchcliff’s gross reserves at December 31, 2023 and December
31, 2022, estimated using the forecast price and cost assumptions
in effect as at the effective date of the applicable reserves
evaluation:
|
Reserves Category |
December 31, 2023(Mboe) |
December 31, 2022(1)(Mboe) |
% Change |
|
Proved Developed Producing |
220,536 |
224,826 |
(2) |
|
Total Proved |
691,886 |
668,545 |
3 |
|
Total Proved Plus Probable |
993,897 |
986,412 |
1 |
(1) Deloitte prepared an independent evaluation
of the Corporation’s reserves effective December 31, 2022 as
contained in their report dated February 15, 2023 (the
“2022 Deloitte Report”). The forecast commodity
prices, inflation and exchange rates utilized in the 2022 Deloitte
Report were computed using the average of forecasts from Deloitte,
McDaniel, GLJ and Sproule effective January 1, 2023 (the
“2022 Price Forecast”).
The following table sets forth Birchcliff’s
light crude oil and medium crude oil, conventional natural gas,
shale gas and NGLs reserves at December 31, 2023, estimated
using the 2023 Price Forecast:
|
Reserves Category |
Light Crude Oil and Medium Crude Oil |
ConventionalNatural Gas |
Shale Gas |
NGLs(1) |
Total Oil Equivalent |
|
Gross(Mbbls) |
Net(Mbbls) |
Gross(MMcf) |
Net(MMcf) |
Gross(MMcf) |
Net(MMcf) |
Gross(Mbbls) |
Net(Mbbls) |
Gross(Mboe) |
Net(Mboe) |
|
Proved |
|
|
|
|
|
|
|
|
|
|
|
Developed Producing |
5,131 |
4,158 |
7,391 |
6,983 |
1,063,766 |
971,025 |
36,879 |
29,119 |
220,536 |
196,278 |
| |
Developed Non-Producing |
9 |
9 |
0 |
0 |
4,064 |
3,794 |
147 |
122 |
833 |
763 |
|
|
Undeveloped |
9,320 |
7,564 |
2,860 |
2,598 |
2,425,192 |
2,162,833 |
56,522 |
44,277 |
470,517 |
412,746 |
|
Total Proved |
14,460 |
11,731 |
10,251 |
9,581 |
3,493,022 |
3,137,653 |
93,547 |
73,517 |
691,886 |
609,787 |
|
Total Probable |
10,088 |
7,688 |
5,666 |
5,273 |
1,438,587 |
1,248,201 |
51,213 |
38,810 |
302,011 |
255,410 |
|
Total Proved Plus Probable |
24,549 |
19,419 |
15,917 |
14,854 |
4,931,609 |
4,385,854 |
144,760 |
112,327 |
993,897 |
865,197 |
(1) NGLs includes condensate.
Net Present Values of Future Net
Revenue
The following table sets forth the net present
values of future net revenue attributable to Birchcliff’s reserves
at December 31, 2023, estimated using the 2023 Price Forecast,
before deducting future income tax expenses and calculated at
various discount rates:
|
Reserves Category |
Before Income Taxes Discounted At (%/year) |
|
Unit ValueDiscounted at 10%/year($/boe)(1) |
|
0($000s) |
5($000s) |
10($000s) |
15($000s) |
20($000s) |
|
Proved |
|
|
|
|
|
|
|
Developed Producing |
4,481,835 |
3,353,987 |
2,620,064 |
2,140,711 |
1,810,682 |
13.35 |
|
Developed Non-Producing |
17,265 |
12,118 |
9,029 |
7,027 |
5,650 |
11.83 |
|
Undeveloped |
8,818,786 |
4,755,389 |
2,776,525 |
1,701,682 |
1,068,585 |
6.73 |
|
Total Proved |
13,317,886 |
8,121,493 |
5,405,617 |
3,849,420 |
2,884,917 |
8.86 |
|
Total Probable |
7,274,926 |
2,993,370 |
1,429,800 |
765,411 |
447,752 |
5.60 |
|
Total Proved Plus Probable |
20,592,812 |
11,114,863 |
6,835,417 |
4,614,831 |
3,332,669 |
7.90 |
(1) Unit values are based on net reserves
volumes.
Net Asset Value
Net asset value is a snapshot in time as at
year-end and is primarily impacted by the net present value (before
income taxes, discounted at 10%) of the Corporation’s reserves as
evaluated by Deloitte using forecast prices and costs. The net
present value of the Corporation’s reserves can vary significantly
depending on the oil and natural gas price assumptions used by
Deloitte and assumes only the reserves identified in the applicable
reserves report, with no further acquisitions or incremental
development.
The following table sets forth Birchcliff’s net
asset value for its PDP, total proved and total proved plus
probable reserves at December 31, 2023:
|
|
Proved Developed Producing |
Total Proved |
Total Proved Plus Probable |
|
($000s, except per share amounts) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Reserves, NPV10%(1) |
|
2,620,064 |
|
|
3,270,335 |
|
|
5,405,617 |
|
|
6,454,201 |
|
|
6,835,417 |
|
|
8,155,976 |
|
| Total debt(2) |
|
(382,306 |
) |
|
(138,549 |
) |
|
(382,306 |
) |
|
(138,549 |
) |
|
(382,306 |
) |
|
(138,549 |
) |
|
Unexercised securities(3) |
|
16,717 |
|
|
110,136 |
|
|
16,717 |
|
|
110,136 |
|
|
16,717 |
|
|
110,136 |
|
|
Net asset value(4)(5) |
|
2,254,475 |
|
|
3,241,922 |
|
|
5,040,028 |
|
|
6,425,788 |
|
|
6,469,828 |
|
|
8,127,563 |
|
|
Net asset value (per common
share)(4)(5)(6) |
$8.22 |
|
$11.32 |
|
$18.38 |
|
$22.43 |
|
$23.60 |
|
$28.37 |
|
(1) Represents the net present value of the
future net revenue (before income taxes, discounted at 10%) of
Birchcliff’s PDP, total proved and total proved plus probable
reserves, as applicable, as estimated by Deloitte effective
December 31, 2023 and December 31, 2022, using forecast prices and
costs.(2) Capital management measure. See“Non-GAAP and Other
Financial Measures”.(3) Represents the value of unexercised
in-the-money stock options and performance warrants outstanding at
the end of the period. The closing trading price on the TSX of
Birchcliff’s common shares on December 29, 2023 and December 30,
2022 was $5.78 and $9.43, respectively.(4) Excludes any value from
undeveloped land and seismic.(5) Net asset value is a non-GAAP
financial measure and net asset value per common share is a
non-GAAP ratio. See “Non-GAAP and Other Financial
Measures”.(6) For 2023, based on 274.2 million common shares, which
includes 267.2 million basic common shares outstanding at December
31, 2023 and 7.0 million dilutive common shares from unexercised
in-the-money stock options and performance warrants outstanding at
December 31, 2023. For 2022, based on 286.4 million common shares,
which includes 266.0 million basic common shares outstanding at
December 31, 2022 and 20.4 million dilutive common shares from
unexercised in-the-money stock options and performance warrants
outstanding at December 31, 2022.
Pricing Assumptions
The following table sets forth the 2023 Price
Forecast used in the Deloitte Report:
|
Year |
Crude Oil |
|
Natural Gas(1) |
|
NGLs |
Currency Exchange Rate(US$/CDN$) |
Price and Cost Inflation Rates(%) |
|
WTI at Cushing Oklahoma(US$/bbl) |
Edmonton City Gate(CDN$/bbl) |
Alberta AECOAverage
Price(CDN$/Mcf) |
Ontario DawnReference
Point(CDN$/Mcf) |
NYMEX Henry Hub(US$/Mcf) |
Edmonton Ethane(CDN$/bbl) |
Edmonton Propane(CDN$/bbl) |
Edmonton Butane(CDN$/bbl) |
Edmonton Pentanes + Condensate(CDN$/bbl) |
|
2024 |
$73.25 |
|
$92.66 |
|
$2.24 |
|
$3.47 |
|
$2.75 |
|
$6.81 |
|
$30.27 |
|
$46.11 |
|
$95.57 |
|
0.75 |
0.0 |
|
2025 |
$74.09 |
|
$93.47 |
|
$3.36 |
|
$4.61 |
|
$3.62 |
|
$10.40 |
|
$35.22 |
|
$47.71 |
|
$96.25 |
|
0.76 |
2.0 |
|
2026 |
$74.79 |
|
$93.19 |
|
$4.01 |
|
$5.11 |
|
$4.05 |
|
$12.60 |
|
$35.03 |
|
$47.59 |
|
$96.67 |
|
0.76 |
2.0 |
|
2027 |
$76.28 |
|
$95.04 |
|
$4.10 |
|
$5.21 |
|
$4.14 |
|
$12.87 |
|
$35.73 |
|
$48.55 |
|
$98.59 |
|
0.77 |
2.0 |
|
2028 |
$77.81 |
|
$96.95 |
|
$4.17 |
|
$5.32 |
|
$4.23 |
|
$13.12 |
|
$36.45 |
|
$49.51 |
|
$100.57 |
|
0.76 |
2.0 |
|
2029 |
$79.37 |
|
$98.88 |
|
$4.26 |
|
$5.42 |
|
$4.30 |
|
$13.40 |
|
$37.18 |
|
$50.51 |
|
$102.58 |
|
0.77 |
2.0 |
|
2030 |
$80.96 |
|
$100.86 |
|
$4.34 |
|
$5.54 |
|
$4.39 |
|
$13.66 |
|
$37.91 |
|
$51.52 |
|
$104.63 |
|
0.77 |
2.0 |
|
2031 |
$82.57 |
|
$102.89 |
|
$4.43 |
|
$5.64 |
|
$4.48 |
|
$13.95 |
|
$38.68 |
|
$52.55 |
|
$106.73 |
|
0.77 |
2.0 |
|
2032 |
$84.22 |
|
$104.94 |
|
$4.52 |
|
$5.75 |
|
$4.57 |
|
$14.23 |
|
$39.45 |
|
$53.60 |
|
$108.86 |
|
0.77 |
2.0 |
|
2033 |
$85.91 |
|
$107.04 |
|
$4.61 |
|
$5.88 |
|
$4.66 |
|
$14.52 |
|
$40.24 |
|
$54.67 |
|
$111.03 |
|
0.77 |
2.0 |
|
2034 |
$87.63 |
|
$109.18 |
|
$4.70 |
|
$6.00 |
|
$4.76 |
|
$14.81 |
|
$41.04 |
|
$55.76 |
|
$113.25 |
|
0.77 |
2.0 |
|
2035 |
$89.38 |
|
$111.36 |
|
$4.79 |
|
$6.11 |
|
$4.84 |
|
$15.10 |
|
$41.86 |
|
$56.88 |
|
$115.51 |
|
0.77 |
2.0 |
|
2036 |
$91.17 |
|
$113.59 |
|
$4.89 |
|
$6.22 |
|
$4.94 |
|
$15.40 |
|
$42.69 |
|
$58.01 |
|
$117.82 |
|
0.77 |
2.0 |
|
2037 |
$92.99 |
|
$115.86 |
|
$4.99 |
|
$6.36 |
|
$5.04 |
|
$15.72 |
|
$43.55 |
|
$59.18 |
|
$120.18 |
|
0.77 |
2.0 |
|
2038 |
$94.85 |
|
$118.18 |
|
$5.09 |
|
$6.47 |
|
$5.15 |
|
$16.03 |
|
$44.43 |
|
$60.36 |
|
$122.58 |
|
0.77 |
2.0 |
|
2039 |
$96.75 |
|
$120.54 |
|
$5.19 |
|
$6.61 |
|
$5.25 |
|
$16.35 |
|
$45.31 |
|
$61.56 |
|
$125.03 |
|
0.77 |
2.0 |
|
2040 |
$98.69 |
|
$122.96 |
|
$5.29 |
|
$6.73 |
|
$5.35 |
|
$16.67 |
|
$46.21 |
|
$62.79 |
|
$127.54 |
|
0.77 |
2.0 |
|
2041 |
$100.66 |
|
$125.41 |
|
$5.40 |
|
$6.87 |
|
$5.46 |
|
$17.01 |
|
$47.14 |
|
$64.05 |
|
$130.08 |
|
0.77 |
2.0 |
|
2042 |
$102.67 |
|
$127.92 |
|
$5.51 |
|
$7.01 |
|
$5.56 |
|
$17.35 |
|
$48.08 |
|
$65.33 |
|
$132.69 |
|
0.77 |
2.0 |
|
2043 |
$104.72 |
|
$130.47 |
|
$5.62 |
|
$7.15 |
|
$5.69 |
|
$17.70 |
|
$49.05 |
|
$66.63 |
|
$135.34 |
|
0.77 |
2.0 |
|
2043+ |
2.0% |
|
2.0% |
|
2.0% |
|
2.0% |
|
2.0% |
|
2.0% |
|
2.0% |
|
2.0% |
|
2.0% |
|
0.77 |
2.0 |
(1) 1 Mcf = 1 MMBtu.
Reconciliation of Changes in
Reserves
The following table sets forth the
reconciliation of Birchcliff’s gross reserves at December 31,
2023 as set forth in the Deloitte Report, estimated using the 2023
Price Forecast, to Birchcliff’s gross reserves at December 31,
2022:
|
Factors |
Light Crude Oil andMedium Crude
Oil(Mbbls) |
Conventional Natural Gas(MMcf) |
Shale Gas(MMcf) |
NGLs(8)(Mbbls) |
Oil Equivalent(Mboe) |
|
GROSS TOTAL PROVED |
|
|
|
|
|
|
Opening balance December 31, 2022 |
15,666 |
|
9,434 |
|
3,378,435 |
|
88,234 |
|
668,545 |
|
|
Extensions and Improved Recovery(1) |
234 |
|
212 |
|
260,018 |
|
5,909 |
|
49,515 |
|
|
Technical Revisions(2) |
(756 |
) |
1,984 |
|
(64,561 |
) |
2,799 |
|
(8,387 |
) |
|
Discoveries(3) |
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
Acquisitions(4) |
0 |
|
0 |
|
98,254 |
|
1,380 |
|
17,756 |
|
|
Dispositions(5) |
0 |
|
0 |
|
(37,427 |
) |
(419 |
) |
(6,657 |
) |
|
Economic Factors(6) |
(9 |
) |
(355 |
) |
(6,193 |
) |
(156 |
) |
(1,257 |
) |
|
Production(7) |
(675 |
) |
(1,024 |
) |
(135,506 |
) |
(4,201 |
) |
(27,630 |
) |
|
Closing balance December 31, 2023 |
14,460 |
|
10,251 |
|
3,493,022 |
|
93,547 |
|
691,886 |
|
|
GROSS TOTAL PROBABLE |
| Opening balance
December 31, 2022 |
10,354 |
|
5,267 |
|
1,535,665 |
|
50,691 |
|
317,867 |
|
|
Extensions and Improved Recovery(1) |
50 |
|
53 |
|
(38,829 |
) |
(491 |
) |
(6,903 |
) |
|
Technical Revisions(2) |
(314 |
) |
339 |
|
(32,220 |
) |
1,512 |
|
(4,115 |
) |
|
Discoveries(3) |
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
Acquisitions(4) |
0 |
|
0 |
|
12,052 |
|
170 |
|
2,179 |
|
|
Dispositions(5) |
0 |
|
0 |
|
(35,851 |
) |
(615 |
) |
(6,590 |
) |
|
Economic Factors(6) |
(1 |
) |
8 |
|
(2,230 |
) |
(55 |
) |
(426 |
) |
|
Production(7) |
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
Closing balance December 31, 2023 |
10,088 |
|
5,666 |
|
1,438,587 |
|
51,213 |
|
302,011 |
|
| GROSS
TOTAL PROVED PLUS PROBABLE |
| Opening balance
December 31, 2022 |
26,020 |
|
14,701 |
|
4,914,100 |
|
138,925 |
|
986,412 |
|
|
Extensions and Improved Recovery(1) |
284 |
|
264 |
|
221,189 |
|
5,419 |
|
42,612 |
|
|
Technical Revisions(2) |
(1,070 |
) |
2,322 |
|
(96,780 |
) |
4,311 |
|
(12,502 |
) |
|
Discoveries(3) |
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
Acquisitions(4) |
0 |
|
0 |
|
110,306 |
|
1,551 |
|
19,935 |
|
|
Dispositions(5) |
0 |
|
0 |
|
(73,278 |
) |
(1,034 |
) |
(13,246 |
) |
|
Economic Factors(6) |
(11 |
) |
(347 |
) |
(8,422 |
) |
(211 |
) |
(1,683 |
) |
|
Production(7) |
(675 |
) |
(1,024 |
) |
(135,506 |
) |
(4,201 |
) |
(27,630 |
) |
|
Closing balance December 31, 2023 |
24,549 |
|
15,917 |
|
4,931,609 |
|
144,760 |
|
993,897 |
|
(1) Additions to volumes resulting from capital
expenditures for: (i) step-out drilling in previously discovered
reservoirs; (ii) infill drilling in previously discovered
reservoirs that were not drilled as part of an enhanced recovery
scheme; and (iii) the installation of improved recovery schemes.(2)
Positive or negative volume revisions to an estimate resulting from
new technical data or revised interpretations on previously
assigned volumes, performance and operating
costs.(3) Additions to volumes in reservoirs where no reserves
were previously booked.(4) Positive additions to volume estimates
because of purchasing interests in oil and gas properties.(5)
Reductions in volume estimates because of selling all or a portion
of an interest in oil and gas properties.(6) Changes to volumes
resulting from different price forecasts, inflation rates and
regulatory changes.(7) Reductions in the volume estimates due
to actual production.(8) NGLs includes condensate.
Key highlights include the following:
-
Extensions and Improved Recovery
-
Reserves were added from 31 wells brought on production pursuant to
the Corporation’s successful 2023 capital program, which also
resulted in the assignment of reserves to potential future drilling
locations offsetting the new wells. In addition, potential future
drilling locations that were not included in 2022 Deloitte Report
were added based on available infrastructure capacity, superior
economics and COGE Handbook development guidelines.
-
Technical Revisions
-
The technical revisions in all reserves categories for light and
medium crude oil were primarily the result of: (i) higher
gas-to-oil ratios for existing producing oil wells in the southeast
area in Gordondale; and (ii) potential future drilling location
adjustments based on offsetting well performance.
-
The technical revisions in all reserves categories for conventional
natural gas were primarily the result of: (i) the reactivation of
several wells during 2023; and (ii) existing well performance.
-
The technical revisions in all reserves categories for shale gas
were primarily the result of: (i) an updated reserves forecast for
existing wells based on historic performance; (ii) an updated
full-field development plan, which included the combining or
removing of multiple proved and probable potential future drilling
locations, resulting in the removal of five proved undeveloped
locations and one probable location; and (iii) an increase in well
performance for potential future drilling locations in the Upper
Montney intervals in Pouce Coupe supported by existing well
performance.
-
The technical revisions in all reserves categories for NGLs were
primarily the result of improved C3+ recoveries at the
Corporation’s 100% owned and operated natural gas processing plant
in Pouce Coupe (the “Pouce Coupe Gas Plant”),
notwithstanding a reduction in associated shale gas volumes.
-
Acquisitions
-
Changes were the result of various accretive acquisitions completed
by Birchcliff in the Pouce Coupe area in 2023.
-
Dispositions
-
Changes were the result of various minor dispositions completed by
Birchcliff in the Pouce Coupe area in 2023.
-
Economic Factors
-
The forecast prices for each product type were generally lower in
the 2023 Price Forecast than the 2022 Price Forecast, which
resulted in the economic limit at the end of a well’s life being
achieved earlier and therefore a reduction of the reserves volumes
in all reserves categories.
Future Development Costs
Future development costs
(“FDC”) reflect Deloitte’s best estimate of what
it will cost to bring the proved and proved plus probable reserves
on production. Changes in forecast FDC occur annually as a result
of development activities, acquisition and disposition activities
and capital cost estimates. The following table sets forth
development costs deducted in the estimation of Birchcliff’s future
net revenue attributable to the reserves categories noted below,
estimated using the 2023 Price Forecast:
|
Year |
Proved($000s) |
Proved Plus Probable($000s) |
|
2024 |
219,040 |
222,265 |
| 2025 |
647,236 |
666,643 |
| 2026 |
412,308 |
412,308 |
| 2027 |
899,140 |
899,140 |
| 2028 |
517,731 |
549,055 |
|
Thereafter |
761,525 |
2,224,621 |
|
Total undiscounted |
3,456,981 |
4,974,033 |
FDC for proved reserves on an FD&A basis
increased by $397.9 million to $3.46 billion at December 31, 2023
from $3.06 billion at December 31, 2022. FDC for proved plus
probable reserves on an FD&A basis increased by $431.7 million
to $4.97 billion at December 31, 2023 from $4.54 billion at
December 31, 2022. The increases in FDC year-over-year for both
proved and proved plus probable reserves primarily reflect cost
escalation as a result of inflation and were largely attributable
to: (i) an increase in the drill, case, complete, equip and tie-in
(“DCCET”) costs for future locations in Pouce
Coupe and Gordondale to $5.9 million per well from $5.3 million per
well at December 31, 2022; and (ii) an increase in future
facilities infrastructure capital in Pouce Coupe at December 31,
2023.
The FDC for both proved and proved plus probable
reserves are primarily the capital costs required to drill, case,
complete, equip and tie-in the net undeveloped locations. The
estimates of FDC on a proved and proved plus probable basis also
include approximately $320.0 million (unescalated) for the
continued expansion of the Pouce Coupe Gas Plant facilities from
the existing 340 MMcf/d to 660 MMcf/d of total throughput. The FDC
for the expansion of the Pouce Coupe Gas Plant also include the
costs of the related gathering pipelines and maintenance
capital.
F&D and FD&A Costs
The following table sets forth Birchcliff’s
F&D and FD&A costs for its PDP, total proved and total
proved plus probable reserves for the three previous financial
years, including FDC:
|
|
2023(2) |
2022 |
2021 |
3-Year Average |
|
F&D costs($/boe)(1) |
|
|
|
|
|
Proved Developed Producing |
$13.16(3) |
$10.24 |
$5.88 |
$9.18 |
|
Total Proved |
$16.02(4) |
$82.02 |
$10.50 |
$20.79 |
|
Total Proved Plus Probable |
$24.90(5) |
n/a(6) |
$13.57 |
$47.94 |
|
FD&A costs($/boe)(1) |
|
|
|
|
|
Proved Developed Producing |
$13.06(7) |
$10.25 |
$5.89 |
$9.18 |
|
Total Proved |
$13.79(8) |
$78.96 |
$10.51 |
$18.60 |
|
Total Proved Plus Probable |
$20.97(9) |
n/a(6) |
$13.60 |
$39.67 |
(1) See“Advisories – Oil and Gas Metrics”for a
description of the methodology used to calculate F&D and
FD&A costs.(2) Birchcliff’s F&D and FD&A capital
expenditures were $304.6 million and $304.7 million, respectively,
in 2023. Birchcliff’s F&D and FD&A capital expenditures
included $58.0 million in expenditures that were directed towards
the acceleration of the Corporation’s 2024 capital program, various
Elmworth-related projects and gas gathering initiatives in Pouce
Coupe for which there was no production or reserves assigned at
year-end 2023.(3) Birchcliff added 23.1 MMboe of PDP reserves in
2023, after adding back 2023 actual production of 27.6 MMboe.(4)
Includes the 2023 increase in FDC from 2022 of $334.1 million on a
proved basis. Birchcliff added 39.9 MMboe of proved reserves in
2023, after adding back 2023 actual production of 27.6 MMboe.(5)
Includes the 2023 increase in FDC from 2022 of $403.2 million on a
proved plus probable basis. Birchcliff added 28.4 MMboe of proved
plus probable reserves in 2023, after adding back 2023 actual
production of 27.6 MMboe.(6) Birchcliff’s proved plus probable
reserves decreased in 2022, after adding back 2022 actual
production of 28.1 MMboe. As a result of the year-over-year
decrease in proved plus probable reserves, the calculations for
F&D and FD&A costs for this reserves category were not
applicable in 2022.(7) Birchcliff added 23.3 MMboe of PDP reserves
in 2023, after adding back 2023 actual production of 27.6 MMboe.(8)
Includes the 2023 increase in FDC from 2022 of $397.9 million on a
proved basis. Birchcliff added 51.0 MMboe of proved reserves in
2023, after adding back 2023 actual production of 27.6 MMboe.(9)
Includes the 2023 increase in FDC from 2022 of $431.7 million on a
proved plus probable basis. Birchcliff added 35.1 MMboe of proved
plus probable reserves in 2023, after adding back 2023 actual
production of 27.6 MMboe.
Recycle Ratios
The following table sets forth Birchcliff’s
F&D and FD&A operating netback recycle ratios for its PDP,
total proved and total proved plus probable reserves for the three
previous financial years, including FDC:
|
|
2023 |
2022 |
2021 |
3-Year Average |
|
F&D operating netback recycle ratio(1)(2) |
|
|
|
|
|
Proved Developed Producing |
1.1x |
3.2x |
3.7x |
2.5x |
|
Total Proved |
0.9x |
0.4x |
2.0x |
1.1x |
|
Total Proved Plus Probable |
0.6x |
n/a(3) |
1.6x |
0.5x |
|
FD&A operating netback recycle
ratio(1)(2) |
|
|
|
|
|
Proved Developed Producing |
1.1x |
3.2x |
3.7x |
2.5x |
|
Total Proved |
1.1x |
0.4x |
2.0x |
1.2x |
|
Total Proved Plus Probable |
0.7x |
n/a(3) |
1.6x |
0.6x |
(1) Non-GAAP ratio. See“Non-GAAP and Other
Financial Measures”.(2) Birchcliff’s operating netback was
$14.74/boe in 2023 as compared to $32.85/boe in 2022 and $21.50/boe
in 2021.(3) As a result of the year-over-year decrease in proved
plus probable reserves, the calculations for F&D and FD&A
operating netback recycle ratio for this reserves category were not
applicable in 2022.
Reserves Replacement
The following table sets forth Birchcliff’s 2023
reserves replacement on an F&D and FD&A basis for its PDP,
total proved and total proved plus probable reserves:
|
Reserves Category |
2023 F&D Reserves Replacement(1) |
2023 FD&A Reserves Replacement(1) |
|
Proved Developed Producing |
84 |
% |
84 |
% |
|
Total Proved |
144 |
% |
184 |
% |
|
Total Proved Plus Probable |
103 |
% |
127 |
% |
(1) See“Advisories – Oil and Gas Metrics”for a
description of the methodology used to calculate reserves
replacement.
Reserves Life Index
The following table sets forth Birchcliff’s
reserves life index for its PDP, total proved and total proved plus
probable reserves at December 31, 2023:
|
Reserves Category |
Reserves Life Index(1) |
|
Proved Developed Producing |
8.0 years |
|
Total Proved |
25.1 years |
|
Total Proved Plus Probable |
36.0 years |
(1) See “Advisories – Oil and Gas
Metrics” for a description of the methodology used to
calculate reserves life index.
ABBREVIATIONS
|
AECO |
benchmark price for natural gas determined at the AECO ‘C’ hub in
southeast Alberta |
|
bbl |
barrel |
|
bbls |
barrels |
|
bbls/d |
barrels per day |
|
boe |
barrel of oil equivalent |
|
boe/d |
barrel of oil equivalent per day |
|
C3+ |
propane plus |
|
condensate |
pentanes plus (C5+) |
|
F&D |
finding and development |
|
FD&A |
finding, development and acquisition |
|
G&A |
general and administrative |
|
GAAP |
generally accepted accounting principles for Canadian public
companies, which are currently IFRS as issued by the International
Accounting Standards Board |
|
GJ/d |
gigajoules per day |
|
HH |
Henry Hub |
|
Mbbls |
thousand barrels |
|
Mboe |
thousand barrels of oil equivalent |
|
Mcf |
thousand cubic feet |
|
Mcf/d |
thousand cubic feet per day |
|
MMboe |
million barrels of oil equivalent |
|
MMBtu |
million British thermal units |
|
MMBtu/d |
million British thermal units per day |
|
MMcf |
million cubic feet |
|
MMcf/d |
million cubic feet per day |
|
NGLs |
natural gas liquids consisting of ethane (C2), propane (C3) and
butane (C4) and, except where otherwise noted, excludes
condensate |
|
NPV |
net present value |
|
NYMEX |
New York Mercantile Exchange |
|
OPEC |
Organization of the Petroleum Exporting Countries |
|
PDP |
proved developed producing |
|
TSX |
Toronto Stock Exchange |
|
WTI |
West Texas Intermediate, the reference price paid in U.S. dollars
at Cushing, Oklahoma, for crude oil of standard grade |
|
000s |
thousands |
|
$000s |
thousands of dollars |
NON-GAAP AND OTHER FINANCIAL
MEASURES
This press release uses various “non-GAAP
financial measures”, “non-GAAP ratios” and “capital management
measures” (as such terms are defined in NI 52-112), which are
described in further detail below.
Non-GAAP Financial Measures
NI 52-112 defines a non-GAAP financial measure
as a financial measure that: (i) depicts the historical or expected
future financial performance, financial position or cash flow of an
entity; (ii) with respect to its composition, excludes an amount
that is included in, or includes an amount that is excluded from,
the composition of the most directly comparable financial measure
disclosed in the primary financial statements of the entity; (iii)
is not disclosed in the financial statements of the entity; and
(iv) is not a ratio, fraction, percentage or similar
representation. The non-GAAP financial measures used in this press
release are not standardized financial measures under GAAP and
might not be comparable to similar measures presented by other
companies. Investors are cautioned that non-GAAP financial measures
should not be construed as alternatives to or more meaningful than
the most directly comparable GAAP financial measures as indicators
of Birchcliff’s performance. Set forth below is a description of
the non-GAAP financial measures used in this press release.
Adjusted Funds Flow and Free Funds
Flow
Birchcliff defines “adjusted funds flow” as cash
flow from operating activities before the effects of
decommissioning expenditures, retirement benefit payments and
changes in non-cash operating working capital. Birchcliff
eliminates settlements of decommissioning expenditures from cash
flow from operating activities as the amounts can be discretionary
and may vary from period to period depending on its capital
programs and the maturity of its operating areas. The settlement of
decommissioning expenditures is managed with Birchcliff’s capital
budgeting process which considers available adjusted funds flow.
Birchcliff eliminates retirement benefit payments from cash flow
from operating activities as such payments reflect costs for past
service and contributions made by eligible participants under the
Corporation’s post-employment benefit plan, which are not
indicative of the current period. Birchcliff has not historically
adjusted for retirement benefit payments in the calculation of
adjusted funds flow as previously no payments had been made to
executive officers pursuant to their respective executive
employment agreements. Changes in non-cash operating working
capital are eliminated in the determination of adjusted funds flow
as the timing of collection and payment are variable and by
excluding them from the calculation, the Corporation believes that
it is able to provide a more meaningful measure of its operations
and ability to generate cash on a continuing basis. Management
believes that adjusted funds flow assists management and investors
in assessing Birchcliff’s financial performance after deducting all
operating and corporate cash costs, as well as its ability to
generate the cash necessary to fund sustaining and/or growth
capital expenditures, repay debt, settle decommissioning
obligations, buy back common shares and pay dividends.
Birchcliff defines “free funds flow” as adjusted
funds flow less F&D capital expenditures. Management believes
that free funds flow assists management and investors in assessing
Birchcliff’s ability to generate shareholder returns through a
number of initiatives, including but not limited to, debt
repayment, common share buybacks, the payment of common share
dividends, acquisitions and other opportunities that would
complement or otherwise improve the Corporation’s business and
enhance long-term shareholder value.
The most directly comparable GAAP financial
measure to adjusted funds flow and free funds flow is cash flow
from operating activities. The following table provides a
reconciliation of cash flow from operating activities to adjusted
funds flow and free funds flow for the periods indicated:
|
|
Three months ended |
|
Twelve months ended |
|
|
|
December 31, |
|
December 31, |
|
|
($000s) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
Cash flow from operating activities |
79,006 |
|
224,447 |
|
320,529 |
|
925,275 |
|
|
Change in non-cash operating working capital |
(6,248 |
) |
(7,919 |
) |
(19,477 |
) |
25,662 |
|
|
Decommissioning expenditures |
1,457 |
|
571 |
|
3,775 |
|
2,746 |
|
|
Retirement benefit payments |
2,000 |
|
- |
|
2,000 |
|
- |
|
|
Adjusted funds flow |
76,215 |
|
217,099 |
|
306,827 |
|
953,683 |
|
|
F&D capital expenditures |
(58,166 |
) |
(106,762 |
) |
(304,637 |
) |
(364,621 |
) |
|
Free funds flow |
18,049 |
|
110,337 |
|
2,190 |
|
589,062 |
|
Transportation and Other
Expense
Birchcliff defines “transportation and other
expense” as transportation expense plus marketing purchases less
marketing revenue. Birchcliff may enter into certain marketing
purchase and sales arrangements with the objective of reducing any
unused transportation or fractionation fees associated with its
take-or-pay commitments and/or increasing the value of its
production through value-added downstream initiatives. Management
believes that transportation and other expense assists management
and investors in assessing Birchcliff’s total cost structure
related to transportation and marketing activities.
The most directly comparable GAAP financial
measure to transportation and other expense is transportation
expense. The following table provides a reconciliation of
transportation expense to transportation and other expense for the
periods indicated:
|
|
Three months ended |
|
Twelve months ended |
|
|
|
December 31, |
|
December 31, |
|
|
($000s) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
Transportation expense |
38,509 |
|
38,793 |
|
152,828 |
|
155,864 |
|
|
Marketing purchases |
8,928 |
|
9,529 |
|
34,772 |
|
17,866 |
|
|
Marketing revenue |
(8,532 |
) |
(8,916 |
) |
(30,521 |
) |
(18,806 |
) |
|
Transportation and other expense |
38,905 |
|
39,406 |
|
157,079 |
|
154,924 |
|
Operating Netback
Birchcliff defines “operating netback” as
petroleum and natural gas revenue less royalty expense, operating
expense and transportation and other expense. Management believes
that operating netback assists management and investors in
assessing Birchcliff’s operating profits after deducting the cash
costs that are directly associated with the sale of its production,
which can then be used to pay other corporate cash costs or satisfy
other obligations.
The following table provides a breakdown of
Birchcliff’s operating netback for the periods indicated:
|
|
Three months ended |
|
Twelve months ended |
|
|
|
December 31, |
|
December 31, |
|
|
($000s) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
Petroleum and natural gas revenue |
183,295 |
|
320,358 |
|
740,359 |
|
1,340,180 |
|
|
Royalty expense |
(19,400 |
) |
(35,679 |
) |
(70,257 |
) |
(161,226 |
) |
|
Operating expense |
(26,808 |
) |
(29,783 |
) |
(105,809 |
) |
(101,581 |
) |
|
Transportation and other expense |
(38,905 |
) |
(39,406 |
) |
(157,079 |
) |
(154,924 |
) |
|
Operating netback |
98,182 |
|
215,490 |
|
407,214 |
|
922,449 |
|
FD&A and Total Capital
Expenditures
Birchcliff defines “FD&A capital
expenditures” as exploration and development expenditures, less
dispositions, plus acquisitions (if any). Birchcliff defines “total
capital expenditures” as FD&A capital expenditures plus
administrative assets. Management believes that FD&A capital
expenditures and total capital expenditures assist management and
investors in assessing Birchcliff’s overall capital cost structure
associated with its petroleum and natural gas activities. The most
directly comparable GAAP financial measure to FD&A capital
expenditures and total capital expenditures is exploration and
development expenditures.
The following table provides a reconciliation of
exploration and development expenditures to FD&A capital
expenditures and total capital expenditures for the periods
indicated:
|
|
Three months ended |
Twelve months ended |
|
|
|
December 31, |
December 31, |
|
|
($000s) |
2023 |
|
2022 |
2023 |
|
2022 |
|
|
Exploration and development expenditures(1) |
58,166 |
|
106,762 |
304,637 |
|
364,621 |
|
|
Acquisitions |
2 |
|
- |
190 |
|
2,348 |
|
|
Dispositions |
(10 |
) |
- |
(87 |
) |
(315 |
) |
|
FD&A capital expenditures |
58,158 |
|
106,762 |
304,740 |
|
366,654 |
|
|
Administrative assets |
1,383 |
|
709 |
3,176 |
|
1,576 |
|
|
Total capital expenditures |
59,541 |
|
107,471 |
307,916 |
|
368,230 |
|
(1) Disclosed as F&D
capital expenditures elsewhere in this press release. See
“Advisories – F&D Capital Expenditures”.
Net Asset Value
Birchcliff defines “net asset value” as
property, plant and equipment, plus reserves premium adjustment
(less reserves discount adjustment) for its PDP, total proved and
total proved plus probable reserves (as the case may be), less
total debt and plus the value of unexercised in-the-money stock
options and performance warrants outstanding at the end of the
period. Management believes that net asset value assists management
and investors in assessing the long-term fair value of Birchcliff’s
underlying reserves assets after settling its outstanding financial
obligations.
The most directly comparable GAAP financial
measure to net asset value is property, plant and equipment. The
following table provides a reconciliation of property, plant and
equipment to net asset value for the periods indicated:
|
|
Proved Developed Producing |
Total Proved |
Total Proved Plus Probable |
|
($000s) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
Property, plant and equipment(1) |
3,055,958 |
|
2,972,592 |
|
3,055,958 |
|
2,972,592 |
|
3,055,958 |
|
2,972,592 |
|
|
Reserves premium (discount) adjustment(2) |
(435,894 |
) |
297,708 |
|
2,349,659 |
|
3,481,608 |
|
3,779,459 |
|
5,183,408 |
|
|
Total debt |
(382,306 |
) |
(138,549 |
) |
(382,306 |
) |
(138,549 |
) |
(382,306 |
) |
(138,549 |
) |
|
Unexercised securities |
16,717 |
|
110,136 |
|
16,717 |
|
110,136 |
|
16,717 |
|
110,136 |
|
|
Net asset value |
2,254,475 |
|
3,241,887 |
|
5,040,028 |
|
6,425,787 |
|
6,469,828 |
|
8,127,587 |
|
(1) Previously disclosed as “petroleum and
natural gas properties and equipment” on the financial
statements.(2) Represents the premium or discount, as the case may
be, between the net present value of future net revenue (before
income taxes, discounted at 10%) of Birchcliff’s PDP, total proved
and total proved plus probable reserves, as the case may be, and
the property, plant and equipment disclosed on the financial
statements.
Effective Sales – Total Corporate, Total
Natural Gas, AECO Market and NYMEX HH Market
Birchcliff defines “effective sales” in the AECO
market and NYMEX HH market as the sales amount received from the
production of natural gas that is effectively attributed to the
AECO and NYMEX HH market pricing, respectively, and does not
consider the physical sales delivery point in each case. Effective
sales in the NYMEX HH market includes realized gains and losses on
financial instruments and excludes the notional fixed basis costs
associated with the underlying financial contract in the period.
Birchcliff defines “effective total natural gas sales” as the
aggregate of the effective sales amount received in each natural
gas market. Birchcliff defines “effective total corporate sales” as
the aggregate of the effective total natural gas sales and the
sales amount received from the production of light oil, condensate
and NGLs. Management believes that disclosing the effective sales
for each natural gas market assists management and investors in
assessing Birchcliff’s natural gas diversification and commodity
price exposure to each market.
The most directly comparable GAAP financial
measure to effective total natural gas sales and effective total
corporate sales is natural gas sales. The following table provides
a reconciliation of natural gas sales to effective total natural
gas sales and effective total corporate sales for the periods
indicated:
|
|
Three months ended |
|
|
December 31, |
|
($000s) |
2023 |
|
2022 |
|
Natural gas sales |
99,957 |
|
217,822 |
|
Realized gain (loss) on financial instruments |
(2,583 |
) |
18,764 |
|
Notional fixed basis costs(1) |
20,802 |
|
21,645 |
|
Effective total natural gas sales |
118,176 |
|
258,231 |
|
Light oil sales |
15,180 |
|
25,588 |
|
Condensate sales |
49,135 |
|
50,712 |
|
NGLs sales |
18,977 |
|
26,224 |
|
Effective total corporate sales |
201,468 |
|
360,755 |
(1) Reflects the aggregate notional fixed basis cost associated
with Birchcliff’s financial and physical NYMEX HH/AECO 7A basis
swap contracts in the period.
Non-GAAP Ratios
NI 52-112 defines a non-GAAP ratio as a
financial measure that: (i) is in the form of a ratio, fraction,
percentage or similar representation; (ii) has a non-GAAP financial
measure as one or more of its components; and (iii) is not
disclosed in the financial statements of the entity. The non-GAAP
ratios used in this press release are not standardized financial
measures under GAAP and might not be comparable to similar measures
presented by other companies. Set forth below is a description of
the non-GAAP ratios used in this press release.
Adjusted Funds Flow Per Boe and Adjusted
Funds Flow Per Basic Common Share
Birchcliff calculates “adjusted funds flow per
boe” as aggregate adjusted funds flow in the period divided by the
production (boe) in the period. Management believes that adjusted
funds flow per boe assists management and investors in assessing
Birchcliff’s financial profitability and sustainability on a cash
basis by isolating the impact of production volumes to better
analyze its performance against prior periods on a comparable
basis.
Birchcliff calculates “adjusted funds flow per
basic common share” as aggregate adjusted funds flow in the period
divided by the weighted average basic common shares outstanding at
the end of the period. Management believes that adjusted funds flow
per basic common share assists management and investors in
assessing Birchcliff’s financial strength on a per common share
basis.
Free Funds Flow Per Basic Common
Share
Birchcliff calculates “free funds flow per basic
common share” as aggregate free funds flow in the period divided by
the weighted average basic common shares outstanding at the end of
the period. Management believes that free funds flow per basic
common share assists management and investors in assessing
Birchcliff’s financial strength and its ability to deliver
shareholder returns on a per common share basis.
Transportation and Other Expense Per
Boe
Birchcliff calculates “transportation and other
expense per boe” as aggregate transportation and other expense in
the period divided by the production (boe) in the period.
Management believes that transportation and other expense per boe
assists management and investors in assessing Birchcliff’s cost
structure as it relates to its transportation and marketing
activities by isolating the impact of production volumes to better
analyze its performance against prior periods on a comparable
basis.
Operating Netback Per Boe
Birchcliff calculates “operating netback per
boe” as aggregate operating netback in the period divided by the
production (boe) in the period. Operating netback per boe is a key
industry performance indicator and one that provides investors with
information that is commonly presented by other oil and natural gas
producers. Management believes that operating netback per boe
assists management and investors in assessing Birchcliff’s
operating profitability and sustainability by isolating the impact
of production volumes to better analyze its performance against
prior periods on a comparable basis.
Operating Netback Recycle
Ratio
Birchcliff calculates “operating netback recycle
ratio” as operating netback per boe in the period divided by
F&D or FD&A costs, as the case may be, for its PDP, proved
and proved plus probable reserves, as the case may be, in the
period. Management believes that operating netback recycle ratio
assists management and investors in assessing Birchcliff’s ability
to profitably find and develop its PDP, proved and proved plus
probable reserves.
Net Asset Value Per Common
Share
Birchcliff calculates “net asset value per
common share” as the net asset value in each category of reserves
divided by the aggregate of the basic common shares outstanding and
in-the-money dilutive common shares attributable to stock options
and performance warrants outstanding at the end of the period.
Management believes that net asset value per common share assists
management and investors in comparing Birchcliff’s common share
trading price to the underlying fair market value of its net assets
on a per common share basis.
Effective Average Realized Sales Price –
Total Corporate, Total Natural Gas, AECO Market and NYMEX HH
Market
Birchcliff calculates “effective average
realized sales price” as effective sales, in each of total
corporate, total natural gas, AECO market and NYMEX HH market, as
the case may be, divided by the effective production in each of the
markets during the period. Management believes that disclosing the
effective average realized sales price for each natural gas market
assists management and investors in comparing Birchcliff’s
commodity price realizations in each natural gas market on a per
unit basis.
Capital Management Measures
NI 52-112 defines a capital management measure
as a financial measure that: (i) is intended to enable an
individual to evaluate an entity’s objectives, policies and
processes for managing the entity’s capital; (ii) is not a
component of a line item disclosed in the primary financial
statements of the entity; (iii) is disclosed in the notes to the
financial statements of the entity; and (iv) is not disclosed in
the primary financial statements of the entity. Set forth below is
a description of the capital management measure used in this press
release.
Total Debt
Birchcliff calculates “total debt” as the amount
outstanding under the Credit Facilities plus working capital
deficit (less working capital surplus) plus the fair value of the
current asset portion of financial instruments less the fair value
of the current liability portion of financial instruments and less
the current portion of lease obligations at the end of the period.
Management believes that total debt assists management and
investors in assessing Birchcliff’s overall liquidity and financial
position at the end of the period. The following table provides a
reconciliation of the amount outstanding under the Credit
Facilities, as determined in accordance with GAAP, to total debt
for the periods indicated:
|
As at December 31, ($000s) |
2023 |
|
2022 |
|
|
Revolving term credit facilities |
372,097 |
|
131,981 |
|
|
Working capital deficit (surplus)(1) |
10,522 |
|
(7,902 |
) |
|
Fair value of financial instruments – asset(2) |
3,588 |
|
17,729 |
|
|
Fair value of financial instruments – liability(2) |
(1,394 |
) |
(1,345 |
) |
|
Lease obligations(3) |
(2,507 |
) |
(1,914 |
) |
|
Total debt |
382,306 |
|
138,549 |
|
(1) Current liabilities less current assets.(2)
Reflects the current portion only.(3) Reflects the current portion
only, which is included in “other liabilities” in the financial
statements.
PRESENTATION OF OIL AND GAS
RESERVES
Deloitte prepared the Deloitte Report and the
2022 Deloitte Report. In addition, Deloitte prepared a reserves
evaluation in respect of Birchcliff’s oil and natural gas
properties effective December 31, 2021. Such evaluations were
prepared in accordance with the standards contained in NI 51-101
and the COGE Handbook that were in effect at the relevant time.
Reserves estimates stated herein are extracted from the relevant
evaluation.
There are numerous uncertainties inherent in
estimating quantities of oil, natural gas and NGLs (including
condensate) reserves and the future net revenue attributed to such
reserves. The reserves and associated future net revenue
information set forth in this press release are estimates only. In
general, estimates of economically recoverable oil, natural gas and
NGLs reserves and the future net revenue therefrom are based upon a
number of variable factors and assumptions, such as historical
production from the properties, production rates, ultimate reserves
recovery, the timing and amount of capital expenditures,
marketability of oil, natural gas and NGLs, royalty rates, the
assumed effects of regulation by governmental agencies and future
operating costs, all of which may vary materially from actual
results. For these reasons, estimates of the economically
recoverable oil, natural gas and NGLs reserves attributable to any
particular group of properties, the classification of such reserves
based on risk of recovery and estimates of future net revenue
associated with reserves prepared by different engineers, or by the
same engineer at different times, may vary. Birchcliff’s actual
production, revenue, taxes and development and operating
expenditures with respect to its reserves will vary from estimates
thereof and such variations could be material.
It should not be assumed that the undiscounted
or discounted net present value of future net revenue attributable
to the Corporation’s reserves estimated by the Corporation’s
independent qualified reserves evaluator represent the fair market
value of those reserves. There is no assurance that the forecast
prices and costs assumptions will be attained and variances could
be material. Actual oil, natural gas and NGLs reserves may be
greater than or less than the estimates provided herein and
variances could be material.
In this press release, unless otherwise stated
all references to “reserves” are to Birchcliff’s gross company
reserves (Birchcliff’s working interest (operating or
non-operating) share before deduction of royalties and without
including any royalty interests of Birchcliff).
The information set forth in this press release
relating to the reserves, future net revenue and future development
costs of Birchcliff constitutes forward-looking statements and is
subject to certain risks and uncertainties. See “Advisories –
Forward-Looking Statements”.
Certain terms used herein but not defined are
defined in NI 51-101, CSA Staff Notice 51-324 – Revised
Glossary to NI 51-101 Standards of Disclosure for Oil and Gas
Activities (“CSA Staff Notice 51-324”) and/or
the COGE Handbook and, unless the context otherwise requires, shall
have the same meanings herein as in NI 51-101, CSA Staff Notice
51-324 and the COGE Handbook, as the case may be.
ADVISORIES
Unaudited Information
All financial information contained in this
press release for the fourth quarter and year ended December 31,
2023 is based on unaudited estimated financial information which
has been disclosed in accordance with GAAP. These estimated results
have not been reviewed by the Corporation’s auditor and are subject
to change upon completion of the audited financial statements for
the year ended December 31, 2023, and changes could be material.
Birchcliff anticipates filing its audited financial statements and
related management’s discussion and analysis for the year ended
December 31, 2023 on SEDAR+ on March 13, 2024.
Currency
Unless otherwise indicated, all dollar amounts
are expressed in Canadian dollars, all references to “$” and “CDN$”
are to Canadian dollars and all references to “US$” are to United
States dollars.
Boe Conversions
Boe amounts have been calculated by using the
conversion ratio of 6 Mcf of natural gas to 1 bbl of oil. Boe
amounts 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.
MMBtu Pricing Conversions
$1.00 per MMBtu equals $1.00 per Mcf based on a
standard heat value Mcf.
Oil and Gas Metrics
This press release contains metrics commonly
used in the oil and natural gas industry, including F&D costs,
FD&A costs, reserves replacement, reserves life index,
operating netback recycle ratio, net asset value, net asset value
per common share and netback, which have been determined by
Birchcliff as set out below. These oil and gas metrics do not have
any standardized meanings or standard methods of calculation and
therefore may not be comparable to similar measures presented by
other companies. As such, they should not be used to make
comparisons. Management uses these oil and gas metrics for its own
performance measurements and to provide investors with measures to
compare Birchcliff’s performance over time; however, such measures
are not reliable indicators of Birchcliff’s future performance,
which may not compare to Birchcliff’s performance in previous
periods, and therefore should not be unduly relied upon.
-
With respect to F&D and FD&A costs:
-
F&D costs for PDP, proved or proved plus probable reserves, as
the case may be, are calculated by taking the sum of: (i)
exploration and development costs (F&D capital expenditures)
incurred in the period; and (ii) where appropriate, the change
during the period in FDC for the reserves category; divided by the
additions to the reserves category after adding back production in
the period. F&D costs exclude the effects of acquisitions and
dispositions.
-
FD&A costs for PDP, proved or proved plus probable reserves, as
the case may be, are calculated by taking the sum of: (i) FD&A
capital expenditures incurred in the period; and (ii) where
appropriate, the change during the period in FDC for the reserves
category; divided by the additions to the reserves category after
adding back production in the period.
-
In determining the F&D and FD&A costs for PDP, proved or
proved plus probable reserves, as the case may be, the estimated
reserves additions during the period and the change during the
period in estimated FDC are based upon the evaluations of
Birchcliff’s reserves prepared by its independent qualified
reserves evaluators, effective December 31 of such year.
-
The aggregate of the F&D and FD&A capital expenditures
incurred in the most recent financial year and the change during
that year in estimated FDC generally will not reflect total F&D
and FD&A costs related to reserves additions for that
year.
-
F&D and FD&A costs may be used as a measure of the
Corporation’s efficiency with respect to finding and developing its
reserves.
-
Reserves replacement on an F&D basis is calculated by dividing
PDP, proved or proved plus probable reserves additions, as the case
may be, before production by the total annual production in the
applicable period. Reserves replacement on an FD&A basis is
calculated in the same manner as F&D reserves replacement, but
include the effects of acquisitions and dispositions. Reserves
replacement may be used as a measure of the Corporation’s
sustainability and its ability to replace its PDP, proved or proved
plus probable reserves, as the case may be.
-
Reserves life index is calculated by dividing PDP, proved or proved
plus probable reserves, as the case may be, estimated by
Birchcliff’s independent qualified reserves evaluator at December
31, 2023, by 75,500 boe/d (which represents the mid-point of
Birchcliff’s annual average production guidance range for 2024).
Reserves life index may be used as a measure of the Corporation’s
sustainability.
-
For information regarding operating netback, operating netback
recycle ratio, net asset value and net asset value per common share
and how such metrics are calculated, see“Non-GAAP and Other
Financial Measures”.
Production
With respect to the disclosure of Birchcliff’s
production contained in this press release: (i) references to
“light oil” mean “light crude oil and medium crude oil” as such
term is defined in NI 51-101; (ii) references to “liquids” mean
“light crude oil and medium crude oil” and “natural gas liquids”
(including condensate) as such terms are defined in NI 51-101; and
(iii) references to “natural gas” mean “shale gas”, which also
includes an immaterial amount of “conventional natural gas”, as
such terms are defined in NI 51-101. In addition, NI 51-101
includes condensate within the product type of natural gas liquids.
In certain cases, Birchcliff has disclosed condensate separately
from other natural gas liquids as the price of condensate as
compared to other natural gas liquids is currently significantly
higher and Birchcliff believes presenting the two commodities
separately provides a more accurate description of its operations
and results therefrom.
F&D Capital
Expenditures
Unless otherwise stated, references in this
press release to “F&D capital expenditures” denotes exploration
and development expenditures as disclosed in the Corporation’s
financial statements in accordance with GAAP, and is primarily
comprised of capital for land, seismic, workovers, drilling and
completions, well equipment and facilities and capitalized G&A
costs and excludes any acquisitions, dispositions, administrative
assets and the capitalized portion of cash incentive payments that
have not been approved by the Board. Management believes that
F&D capital expenditures assists management and investors in
assessing Birchcliff’s capital cost outlay associated with its
exploration and development activities for the purposes of finding
and developing its reserves.
Forward-Looking Statements
Certain statements contained in this press
release constitute forward‐looking statements and forward-looking
information (collectively referred to as “forward‐looking
statements”) within the meaning of applicable Canadian
securities laws. The forward-looking statements contained in this
press release relate to future events or Birchcliff’s future plans,
strategy, operations, performance or financial position and are
based on Birchcliff’s current expectations, estimates, projections,
beliefs and assumptions. Such forward-looking statements have been
made by Birchcliff in light of the information available to it at
the time the statements were made and reflect its experience and
perception of historical trends. All statements and information
other than historical fact may be forward‐looking statements. Such
forward‐looking statements are often, but not always, identified by
the use of words such as “seek”, “plan”, “focus”, “future”,
“outlook”, “position”, “expect”, “project”, “intend”, “believe”,
“anticipate”, “estimate”, “forecast”, “guidance”, “potential”,
“proposed”, “predict”, “budget”, “continue”, “targeting”, “may”,
“will”, “could”, “might”, “should”, “would”, “on track”,
“maintain”, “deliver” and other similar words and expressions.
By their nature, forward-looking statements
involve 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. Accordingly,
readers are cautioned not to place undue reliance on such
forward-looking statements. Although Birchcliff believes that the
expectations reflected in the forward-looking statements are
reasonable, there can be no assurance that such expectations will
prove to be correct and Birchcliff makes no representation that
actual results achieved will be the same in whole or in part as
those set out in the forward-looking statements.
In particular, this press release contains
forward‐looking statements relating to:
-
Birchcliff’s plans and other aspects of its anticipated future
financial performance, results, operations, focus, objectives,
strategies, opportunities, priorities and goals, including:
Birchcliff’s belief that there is significant intrinsic shareholder
value embedded in Birchcliff’s asset base that is not reflected in
its current share price, as demonstrated by its PDP reserves net
asset value per common share of $8.22 and $18.38 and $23.60 per
share for its proved and proved plus probable reserves,
respectively; that Birchcliff’s Elmworth asset provides Birchcliff
with significant inventory and a large potential future development
area; that the unutilized credit capacity under the Credit
Facilities provides the Corporation with significant financial
flexibility and additional capital resources; and Birchcliff’s 2024
guidance for production and F&D capital expenditures;
-
the information set forth under the heading “Operational Update”
and elsewhere in this press release regarding Birchcliff’s 2024
outlook and capital program and its exploration, production and
development activities and the timing thereof, including: that
Birchcliff’s 2024 capital program utilizes its latest wellbore and
completions design and targets high rate-of-return wells with
strong capital efficiencies and attractive paybacks; that
Birchcliff’s 2024 capital budget reflects its commitment to
maintaining a strong balance sheet and capital discipline, while
focusing on sustainable shareholder returns and the continued
development of its world-class asset base; that the previously
announced deferral of 13 wells to the second half of the year
provides Birchcliff with the flexibility to adjust its 2024 capital
program if necessary to achieve these priorities and that these
wells are expected to come on production in Q4 2024, aligned with
the anticipated improvement in commodity prices; that Birchcliff
expects to bring 29 wells on production in 2024; targeted product
types; and the expected timing for wells to be drilled, completed
and brought on production;
-
statements regarding dividends, including that the cash dividend of
$0.10 per common share for the quarter ending March 31, 2024
equates to an annual base dividend of $0.40 per common share for
2024 (approximately $107 million in aggregate);
-
the information set forth under the heading “2023 Year-End
Reserves” and elsewhere in this press release relating to the
Corporation’s reserves, including: estimates of reserves; estimates
of the net present values of future net revenue associated with
Birchcliff’s reserves; forecasts of prices, inflation and exchange
rates; FDC; and reserves life index;
-
the performance and other characteristics of Birchcliff’s oil and
natural gas properties and expected results from its assets,
including statements regarding the potential or prospectivity of
Birchcliff’s properties; and
-
that Birchcliff anticipates filing its annual information form and
audited financial statements and related management’s discussion
and analysis for the year ended December 31, 2023 on March 13,
2024.
Information relating to reserves is
forward-looking as it involves the implied assessment, based on
certain estimates and assumptions, that the reserves exist in the
quantities predicted or estimated and that the reserves can
profitably be produced in the future. See“Presentation of Oil and
Gas Reserves”.
With respect to the forward‐looking statements
contained in this press release, assumptions have been made
regarding, among other things: prevailing and future commodity
prices and differentials, exchange rates, interest rates, inflation
rates, royalty rates and tax rates; the state of the economy,
financial markets and the exploration, development and production
business; the political environment in which Birchcliff operates;
the regulatory framework regarding royalties, taxes, environmental,
climate change and other laws; the Corporation’s ability to comply
with existing and future laws; future cash flow, debt and dividend
levels; future operating, transportation, G&A and other
expenses; Birchcliff’s ability to access capital and obtain
financing on acceptable terms; the timing and amount of capital
expenditures and the sources of funding for capital expenditures
and other activities; the sufficiency of budgeted capital
expenditures to carry out planned operations; the successful and
timely implementation of capital projects and the timing, location
and extent of future drilling and other operations; results of
operations; Birchcliff’s ability to continue to develop its assets
and obtain the anticipated benefits therefrom; the performance of
existing and future wells; reserves volumes and Birchcliff’s
ability to replace and expand reserves through acquisition,
development or exploration; the impact of competition on
Birchcliff; the availability of, demand for and cost of labour,
services and materials; the approval of the Board of future
dividends; the ability to obtain any necessary regulatory or other
approvals in a timely manner; the satisfaction by third parties of
their obligations to Birchcliff; the ability of Birchcliff to
secure adequate processing and transportation for its products;
Birchcliff’s ability to successfully market natural gas and
liquids; the results of the Corporation’s risk management and
market diversification activities; and Birchcliff’s natural gas
market exposure. In addition to the foregoing assumptions,
Birchcliff has made the following assumptions with respect to
certain forward-looking statements contained in this press
release:
-
With respect to Birchcliff’s production guidance for 2024, such
guidance assumes that: the Corporation’s capital program will be
carried out as currently contemplated; no unexpected outages occur
in the infrastructure that Birchcliff relies on to produce its
wells and that any transportation service curtailments or unplanned
outages that occur will be short in duration or otherwise
insignificant; the construction of new infrastructure meets timing
and operational expectations; existing wells continue to meet
production expectations; and future wells scheduled to come on
production meet timing, production and capital expenditure
expectations.
-
With respect to Birchcliff’s forecast of F&D capital
expenditures for 2024, such forecast assumes that the 2024 capital
program will be carried out as currently contemplated and excludes
any potential acquisitions, dispositions and the capitalized
portion of cash incentive payments that have not been approved by
the Board. The amount and allocation of capital expenditures for
exploration and development activities by area and the number and
types of wells to be drilled and brought on production is dependent
upon results achieved and is subject to review and modification by
management on an ongoing basis throughout the year. Actual spending
may vary due to a variety of factors, including commodity prices,
economic conditions, results of operations and costs of labour,
services and materials.
-
With respect to statements of future wells to be drilled and
brought on production, such statements assume: the continuing
validity of the geological and other technical interpretations
performed by Birchcliff’s technical staff, which indicate that
commercially economic volumes can be recovered from Birchcliff’s
lands as a result of drilling future wells; and that commodity
prices and general economic conditions will warrant proceeding with
the drilling of such wells.
-
With respect to estimates of reserves volumes and the net present
values of future net revenue associated with Birchcliff’s reserves,
the key assumption is the validity of the data used by Deloitte in
the Deloitte Report.
Birchcliff’s actual results, performance or
achievements could differ materially from those anticipated in the
forward-looking statements as a result of both known and unknown
risks and uncertainties including, but not limited to: the risks
posed by pandemics (including COVID-19), epidemics and global
conflict (including the Russian invasion of Ukraine and the
Israel-Hamas conflict) and their impacts on supply and demand and
commodity prices; actions taken by OPEC and other major producers
of crude oil and the impact such actions may have on supply and
demand and commodity prices; the uncertainty of estimates and
projections relating to production, revenue, costs, expenses and
reserves; the risk that any of the Corporation’s material
assumptions prove to be materially inaccurate; general economic,
market and business conditions which will, among other things,
impact the demand for and market prices of Birchcliff’s products
and Birchcliff’s access to capital; volatility of crude oil and
natural gas prices; risks associated with increasing costs, whether
due to high inflation rates, supply chain disruptions or other
factors; fluctuations in exchange and interest rates; stock market
volatility; loss of market demand; an inability to access
sufficient capital from internal and external sources on terms
acceptable to the Corporation; risks associated with Birchcliff’s
Credit Facilities, including a failure to comply with covenants
under the agreement governing the Credit Facilities and the risk
that the borrowing base limit may be redetermined; fluctuations in
the costs of borrowing; operational risks and liabilities inherent
in oil and natural gas operations; the occurrence of unexpected
events such as fires, severe weather, explosions, blow-outs,
equipment failures, transportation incidents and other similar
events; an inability to access sufficient water or other fluids
needed for operations; uncertainty that development activities in
connection with Birchcliff’s assets will be economic; an inability
to access or implement some or all of the technology necessary to
operate its assets and achieve expected future results; the
accuracy of estimates of reserves, future net revenue and
production levels; geological, technical, drilling, construction
and processing problems; uncertainty of geological and technical
data; horizontal drilling and completions techniques and the
failure of drilling results to meet expectations for reserves or
production; delays or changes in plans with respect to exploration
or development projects or capital expenditures; the accuracy of
cost estimates and variances in Birchcliff’s actual costs and
economic returns from those anticipated; incorrect assessments of
the value of acquisitions and exploration and development programs;
changes to the regulatory framework in the locations where the
Corporation operates, including changes to tax laws, Crown royalty
rates, environmental laws, climate change laws, carbon tax regimes,
incentive programs and other regulations that affect the oil and
natural gas industry; political uncertainty and uncertainty
associated with government policy changes; actions by government
authorities; an inability of the Corporation to comply with
existing and future laws and the cost of compliance with such laws;
dependence on facilities, gathering lines and pipelines;
uncertainties and risks associated with pipeline restrictions and
outages to third-party infrastructure that could cause disruptions
to production; the lack of available pipeline capacity and an
inability to secure adequate and cost-effective processing and
transportation for Birchcliff’s products; an inability to satisfy
obligations under Birchcliff’s firm marketing and transportation
arrangements; shortages in equipment and skilled personnel; the
absence or loss of key employees; competition for, among other
things, capital, acquisitions of reserves, undeveloped lands,
equipment and skilled personnel; management of Birchcliff’s growth;
environmental and climate change risks, claims and liabilities;
potential litigation; default under or breach of agreements by
counterparties and potential enforceability issues in contracts;
claims by Indigenous peoples; the reassessment by taxing or
regulatory authorities of the Corporation’s prior transactions and
filings; unforeseen title defects; third-party claims regarding the
Corporation’s right to use technology and equipment; uncertainties
associated with the outcome of litigation or other proceedings
involving Birchcliff; uncertainties associated with counterparty
credit risk; risks associated with Birchcliff’s risk management and
market diversification activities; risks associated with the
declaration and payment of future dividends, including the
discretion of the Board to declare dividends and change the
Corporation’s dividend policy and the risk that the amount of
dividends may be less than currently forecast; the failure to
obtain any required approvals in a timely manner or at all; the
failure to complete or realize the anticipated benefits of
acquisitions and dispositions and the risk of unforeseen
difficulties in integrating acquired assets into Birchcliff’s
operations; negative public perception of the oil and natural gas
industry and fossil fuels; the Corporation’s reliance on hydraulic
fracturing; market competition, including from alternative energy
sources; changing demand for petroleum products; the availability
of insurance and the risk that certain losses may not be insured;
breaches or failure of information systems and security (including
risks associated with cyber-attacks); risks associated with the
ownership of the Corporation’s securities; and the accuracy of the
Corporation’s accounting estimates and judgments.
The declaration and payment of any future
dividends are subject to the discretion of the Board and may not be
approved or may vary depending on a variety of factors and
conditions existing from time to time, including commodity prices,
free funds flow, current and forecast commodity prices,
fluctuations in working capital, financial requirements of
Birchcliff, applicable laws (including solvency tests under
the Business Corporations Act (Alberta) for the
declaration and payment of dividends) and other factors beyond
Birchcliff’s control. The payment of dividends to shareholders is
not assured or guaranteed and dividends may be reduced or suspended
entirely. In addition to the foregoing, the Corporation’s ability
to pay dividends now or in the future may be limited by covenants
contained in the agreements governing any indebtedness that the
Corporation has incurred or may incur in the future, including the
terms of the Credit Facilities. The agreement governing the Credit
Facilities provides that Birchcliff is not permitted to make any
distribution (which includes dividends) at any time when an event
of default exists or would reasonably be expected to exist upon
making such distribution, unless such event of default arose
subsequent to the ordinary course declaration of the applicable
distribution.
Readers are cautioned that the foregoing lists
of factors are not exhaustive. Additional information on these and
other risk factors that could affect results of operations,
financial performance or financial results are included in
Birchcliff’s most recent annual information form under the
heading “Risk Factors” and in other reports filed with
Canadian securities regulatory authorities.
This press release contains information that may
constitute future-oriented financial information or financial
outlook information (collectively, “FOFI”) about
Birchcliff’s prospective financial performance, financial position
or cash flows, all of which is subject to the same assumptions,
risk factors, limitations and qualifications as set forth above.
Readers are cautioned that the assumptions used in the preparation
of such information, although considered reasonable at the time of
preparation, may prove to be imprecise or inaccurate and, as such,
undue reliance should not be placed on FOFI. Birchcliff’s actual
results, performance and achievements could differ materially from
those expressed in, or implied by, FOFI. Birchcliff has included
FOFI in order to provide readers with a more complete perspective
on Birchcliff’s future operations and management’s current
expectations relating to Birchcliff’s future performance. Readers
are cautioned that such information may not be appropriate for
other purposes.
Management has included the above summary of
assumptions and risks related to forward-looking statements
provided in this press release in order to provide readers with a
more complete perspective on Birchcliff’s future operations and
management’s current expectations relating to Birchcliff’s future
performance. Readers are cautioned that this information may not be
appropriate for other purposes.
The forward-looking statements and FOFI
contained in this press release are expressly qualified by the
foregoing cautionary statements. The forward-looking statements and
FOFI contained herein are made as of the date of this press
release. Unless required by applicable laws, Birchcliff does not
undertake any obligation to publicly update or revise any
forward-looking statements or FOFI, whether as a result of new
information, future events or otherwise.
ABOUT BIRCHCLIFF:
Birchcliff is a dividend-paying, intermediate
oil and natural gas company based in Calgary, Alberta with
operations focused on the Montney/Doig Resource Play in Alberta.
Birchcliff’s common shares are listed for trading on the TSX under
the symbol “BIR”.
| For further
information, please contact: |
|
Birchcliff Energy Ltd.Suite 1000, 600 –
3rd Avenue S.W.Calgary, Alberta T2P 0G5Telephone: (403)
261-6401Email: info@birchcliffenergy.comwww.birchcliffenergy.com |
|
Chris Carlsen – President and Chief Executive
OfficerBruno Geremia – Executive Vice
President and Chief Financial Officer |
Birchcliff Energy (TSX:BIR)
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