Traverse Energy Announces 2012 Year End Results
18 April 2013 - 7:02AM
Marketwired Canada
Traverse Energy Ltd. ("Traverse" or "the Company") (TSX VENTURE:TVL) presents
financial and operating results for the year ended December 31, 2012.
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Three Months Ended
December 31 Year Ended
(unaudited) December 31
Highlights 2012 2011 2012 2011
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Financial ($ thousands, except per share amounts)
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Petroleum and natural gas
revenue $ 1,588 $ 1,035 $ 4,600 $ 3,731
Royalty income 964 534 3,322 830
Cash provided by operations 1,815 814 5,209 2,358
Funds from operations (1) 1,779 936 5,588 2,398
Per share - basic and diluted 0.04 0.02 0.13 0.07
Net loss (3,255) (584) (2,828) (1,822)
Per share - basic and diluted (0.07) (0.01) (0.07) (0.05)
Capital expenditures, net of
dispositions 2,158 3,279 8,111 10,408
Total assets 19,450 19,781 19,450 19,781
Working capital 3,083 2,532 3,083 2,532
Common shares
Outstanding (millions) 47.1 42.2 47.1 42.2
Weighted average (millions) 44.9 40.3 43.3 36.5
Operations (Units as noted)
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Production (BOE/d) 545 243 405 197
Natural gas (Mcf per day) 1,362 424 957 420
Oil and NGL (bbls per day) 318 172 245 127
Average sales price
Natural gas ($/Mcf) 2.91 3.28 2.51 3.82
Oil and NGL ($/bbl) 72.90 91.07 77.90 85.90
Operating netback ($/BOE) (2)
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Petroleum and natural gas
revenue 45.95 67.62 49.04 64.99
Royalties 2.95 8.08 3.19 5.11
Operating costs 12.40 19.24 11.58 17.04
Transportation costs 1.40 1.68 1.55 2.01
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Working interest netback 29.20 38.62 32.72 40.83
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Royalty netback 61.94 76.03 61.07 57.57
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Operating netback 39.36 50.39 43.13 44.19
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(1) Funds from operations is calculated as cash provided by operating
activities before changes in non-cash working capital. Funds from
operations does not have a standardized measure prescribed by IFRS and
therefore may not be comparable with the calculation of similar measures
for other companies.
(2) Operating netback equals petroleum and natural gas revenue and royalty
income, less royalties, operating and transportation costs and is
calculated on a per unit basis. Working interest netback is calculated
as petroleum and natural gas revenue, less royalties, operating and
transportation costs and is calculated on a per unit basis. Royalty
netback is royalty income and is calculated on a per unit basis.
Operating netback, working interest netback and royalty netback do not
have a standardized measure prescribed by IFRS and therefore may not be
comparable with the calculation of similar measures by other companies.
Reserves Highlights
Traverse has released the results of an independent reserves evaluation
effective December 31, 2012. The report was completed by Sproule Associates Ltd.
("Sproule") and was prepared in accordance with National Instrument 51-101.
Detailed reserves information is included in Traverse's annual information form
for the year ended December 31, 2012 which is available for review on SEDAR at
www.sedar.com. The summary information that follows has been derived from that
evaluation.
-- Total Company interest proved plus probable reserves of 1,218.6 MBOE -
115% year over year growth
-- Total Company interest proved reserves of 865.3 MBOE - a 116% increase
year over year
-- Total Company interest proved developed producing reserves represent 78%
of total proved reserves
-- Total Company interest proved reserves constitute 71% of total reserves
-- Total Company interest oil and natural gas liquids at December 31, 2012
constitute 45% of proved plus probable reserves
Summary of oil and gas reserves
Oil
Oil and NGL Natural Gas Oil Equivalent Equivalent
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Company
Reserve Gross(1) Net(2) Gross(1) Net(2) Gross(1) Net(2) interest(3)
Category (Mbbl) (Mbbl) (MMcf) (MMcf) (MBOE) (MBOE) (MBOE)
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Proved
Developed
Producing 208.4 308.5 1,234 1,682 414.1 588.9 675.8
Proved
Developed
Non-
producing 8.9 13.9 649 647 117.0 121.8 133.6
Proved
Undeveloped - 33.6 - 134 - 55.9 55.9
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Total Proved 217.3 355.8 1,883 2,465 531.1 766.6 865.3
Probable 98.4 134.8 798 1,046 231.4 309.2 353.3
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Total Proved
plus
Probable 315.7 490.7 2,681 3,510 762.5 1,075.8 1,218.6
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(1) Gross reserves are Traverse's working interest share before deduction of
royalties and without including any over-riding royalty interest of
Traverse.
(2) Net reserves are Traverse's working interest share after deduction of
royalty obligations, plus Traverse's over-riding royalty interest in
reserves.
(3) Company interest reserves are Traverse's working interest share before
deduction of royalties plus Traverse's over-riding royalty interest in
reserves.
Summary of net present value of future net revenue as of December 31, 2012
Value Before Income Taxes Discounted at
(%/Year) (1)
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0 5 10
Reserve Category (M$) (M$) (M$)
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Proved Developed Producing 25,360 20,124 17,048
Proved Developed Non-producing (2) 1,815 1,547 1,359
Proved Undeveloped (2) 3,414 2,430 1,898
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Total Proved (2) 30,589 24,102 20,305
Probable 13,605 8,068 5,618
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Total Proved plus Probable (2) 44,194 32,170 25,922
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(1) Sproule forecast prices at December 31, 2012.
(2) Includes future development capital of $0.5 million (undiscounted).
Operations Review
In 2012 Traverse participated in the drilling of 7 gross (6.25 net) wells all
within the province of Alberta. This drilling resulted in 2.75 net oil wells,
1.75 net shut-in natural gas wells and 1.75 abandoned wells. In addition the
Company completed 2D and 3D seismic programs in the Turin and Willow areas.
Total capital expenditures during 2012 were approximately $8.1 million.
In the Brazeau area of west central Alberta Traverse has a gross overriding
royalty interest in ten sections of land (6,400 acres). By December 31, 2012 a
total of 17 horizontal Cardium wells were drilled on these lands by an industry
partner. Subsequent to December 31, 2012 an additional 2 wells were drilled by
the industry partner and 2 more wells are currently drilling.
The Company plans an active drilling program for 2013 with 10 wells planned on
existing properties. The Board of Directors has approved a total exploration and
development program of $12.6 million for 2013. During the first quarter 3
exploratory wells (100% working interest) were drilled. Two wells drilled in the
Turin area resulted in 1 cased well awaiting completion and one dry hole. One
well drilled in the Coyote area resulted in a potential oil well.
Non-IFRS measures
Funds from operations
Funds from operations is a measure not defined in IFRS that is commonly used in
the oil and gas industry. Funds from operations is calculated as cash provided
by operating activities before non-cash working capital as detailed under the
heading "Cash and funds from operations and net loss" within the Company's
management's discussion and analysis for the year ended December 31, 2012. The
Company believes that in addition to net loss, funds from operations is a useful
supplemental measure as it provides an indication of Traverse's operating
performance. Funds from operations should not be considered as an alternative to
or more meaningful than cash provided by operating activities as determined in
accordance with IFRS. Traverse's determination of funds from operations may not
be comparable to that reported by other companies. Traverse also presents funds
from operations per share whereby share amounts are calculated using weighted
average shares outstanding consistent with the calculation of income per share.
Operating netback
Management uses certain industry benchmarks such as operating netback to analyze
financial and operating performance. This benchmark as presented does not have
any standardized meaning prescribed by IFRS and therefore may not be comparable
with the calculation of similar measures for other entities. Operating netback
reflects petroleum and natural gas revenue and royalty income, less royalties,
operating and transportation costs and is calculated on a per unit basis.
Working interest netback is calculated as petroleum and natural gas revenue,
less royalties, operating and transportation costs and is calculated on a per
unit basis. Royalty netback is royalty income and is calculated on a per unit
basis. The calculation of Traverse's netbacks is detailed under the heading
"Operating netback" within the Company's management's discussion and analysis
for the year ended December 31, 2012.
BOE equivalent
Unless otherwise stated, the volume conversion of natural gas to barrel of oil
equivalent (BOE) is presented on the basis of 6 thousand cubic feet of natural
gas being equal to 1 barrel of oil. This conversion ratio is based upon an
energy equivalent conversion method primarily applicable at the burner tip and
does not represent value equivalence at the wellhead. BOE figures may be
misleading, particularly if used in isolation.
Forward-looking information
This news release contains forward-looking information which is not comprised of
historical fact. Forward-looking information involves risks, uncertainties and
other factors that could cause actual events, results, performance, prospects
and opportunities to differ materially from those expressed or implied by such
forward-looking information. Forward-looking information in this news release
includes: the volumes and estimated value of Traverse's oil and gas reserves,
future oil and natural gas prices and statements with respect to the drilling
program for 2013. This forward looking information is subject to a variety of
substantial known and unknown risks and uncertainties and other factors that
could cause actual events or outcomes to differ materially from those
anticipated or implied by such forward looking information. The Company's Annual
Information Form filed on April 17, 2013 with securities regulatory authorities
(accessible through the SEDAR website www.sedar.com) describes the risks,
material assumptions and other factors that could influence actual results and
which are incorporated herein by reference.
Although the Company believes that the material assumptions and factors used in
preparing the forward-looking information in this news release are reasonable,
undue reliance should not be placed on such information, which only applies as
of the date of this news release, and no assurance can be given that such events
will occur. The Company disclaims any intention or obligation to update or
review any forward-looking information, whether as a result of new information,
future events or otherwise, other than as required by law.
Further details on the Company including the 2012 year end audited financial
statements, the related management's discussion and analysis and Annual
Information Form are available on the Company's website (www.traverseenergy.com)
and SEDAR.
FOR FURTHER INFORMATION PLEASE CONTACT:
Traverse Energy Ltd.
Laurie Smith
President and CEO
www.traverseenergy.com
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