Traverse Energy Announces 2013 Second Quarter Results
14 August 2013 - 6:28AM
Marketwired Canada
Traverse Energy Ltd. ("Traverse" or "the Company") (TSX VENTURE:TVL) presents
financial and operating results for the six months ended June 30, 2013.
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Three months ended Six months ended
June 30, June 30,
2013 2012 2013 2012
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Financial ($ thousands, except
per share amounts)
Petroleum and natural gas
revenue 2,015 739 3,479 1,718
Royalty income 1,023 691 2,320 1,540
Cash provided by operations 1,922 1,209 4,082 2,263
Funds from operations (1) 2,124 990 4,161 2,207
Per share - basic and diluted 0.04 0.02 0.09 0.05
Net income 1,060 39 1,581 395
Per share - basic and diluted 0.02 0.00 0.03 0.01
Capital expenditures, net of
dispositions 1,674 430 4,435 2,913
Total assets 23,620 18,590 23,620 18,590
Working capital 4,202 1,826 4,202 1,826
Common shares
Outstanding (millions) 49.5 42.2 49.5 42.2
Weighted average (millions) 47.8 42.2 47.3 42.2
Operations (Units as noted)
Average production
Natural gas (Mcf/day) 1,638 702 1,524 699
Oil and NGL (bbls/ day) 326 184 329 198
Total (BOE/day) 599 301 584 315
Average sales price
Natural gas ($/Mcf) 3.72 2.02 3.61 2.18
Oil and NGL ($/bbl) 83.60 77.92 80.65 82.73
Operating netback ($/BOE) (2)
Petroleum and natural gas
revenue 49.75 48.16 47.63 50.33
Realized gain on financial
derivatives 0.10 0.00 0.06 0.00
Royalties 3.65 0.85 3.58 2.43
Operating costs 12.73 11.65 11.36 12.82
Transportation costs 1.47 1.50 1.58 1.37
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Working interest netback 32.00 34.16 31.17 33.71
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Royalty netback 72.83 57.62 71.39 66.62
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Operating netback 42.50 44.45 43.56 47.00
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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, royalty
income and realized gain on financial derivatives, less royalties,
operating and transportation costs and is calculated on a per unit
basis. Working interest netback is calculated as petroleum and natural
gas revenue and realized gain on financial derivatives, less royalties,
operating and transportation costs and is calculated on a per unit
basis. Royalty netback is royalty income and is calculated on a per unit
basis. Operating netback, working interest netback and royalty netback
do not have a standardized measure prescribed by IFRS and therefore may
not be comparable with the calculation of similar measures by other
companies.
Operations Review
In the second quarter of 2013 Traverse participated in the drilling of 1 well in
the Skiff area of southern Alberta resulting in a potential natural gas well.
The Company has a 20% carried working interest in the well through completion.
The well (100% interest) drilled at Coyote in March was completed as an oil well
and placed on production in June after being pipeline connected to conserve
solution gas. The Coyote well contributed 72 BOE/day to the second quarter
production. This well has averaged over 200 barrels of oil per day since being
placed on production. Other activities included the acquisition of seismic and
the purchase of additional acreage in east central Alberta.
Subsequent to the second quarter, Traverse drilled an additional 4 wells (100%
interest) in the Coyote area targeting oil prospects. One of these wells was
drilled as an offset development well to the initial discovery well. The offset
well is being completed as a potential oil well. The three other wells were
drilled on recently acquired lands. These wells are currently being completed
and tested.
In the Brazeau area of West Central Alberta, Traverse has a gross overriding
royalty interest in 10 sections of land (6,400 acres). In the first half of 2013
a total of 19 horizontal Cardium wells were on production. Net production to the
Company for the first six months of 2013 averaged 159 BOE per day with an oil
and NGL component of 87%. Two additional wells have been drilled but were not on
production as of June 30, 2013.
At June 30, 2013 undeveloped land holdings totalled 141,200 gross (138,700 net)
acres with an average working interest of 98%. Additional drilling is planned at
Turin, Coyote and on another Company owned property in east central Alberta. The
Board of Directors has approved a total exploration and development program of
$12.6 million for 2013.
Non-IFRS measures
Funds from operations
Funds from operations is a measure not defined in IFRS that is commonly used in
the oil and gas industry. Funds from operations is calculated as cash provided
by operating activities before non-cash working capital as detailed under the
heading "Cash and funds from operations and net income" within the Company's
management's discussion and analysis for the six months ended June 30, 2013. The
Company believes that in addition to net income, funds from operations is a
useful supplemental measure as it provides an indication of Traverse's operating
performance. Funds from operations should not be considered as an alternative to
or more meaningful than cash provided by operating activities as determined in
accordance with IFRS. Traverse's determination of funds from operations may not
be comparable to that reported by other companies. Traverse also presents funds
from operations per share whereby share amounts are calculated using weighted
average shares outstanding consistent with the calculation of income per share.
Operating netback
Management uses certain industry benchmarks such as operating netback to analyze
financial and operating performance. This benchmark as presented does not have
any standardized meaning prescribed by IFRS and therefore may not be comparable
with the calculation of similar measures for other entities. Operating netback
reflects petroleum and natural gas revenue, royalty income and realized gain on
financial derivatives, less royalties, operating and transportation costs and is
calculated on a per unit basis. Working interest netback is calculated as
petroleum and natural gas revenue and realized gain on financial derivatives,
less royalties, operating and transportation costs and is calculated on a per
unit basis. Royalty netback is royalty income and is calculated on a per unit
basis. The calculation of Traverse's netbacks is detailed under the heading
"Operating netback" within the Company's management's discussion and analysis
for the six months ended June 30, 2013.
BOE equivalent
Unless otherwise stated, the volume conversion of natural gas to barrel of oil
equivalent (BOE) is presented on the basis of 6 thousand cubic feet of natural
gas being equal to 1 barrel of oil. This conversion ratio is based upon an
energy equivalent conversion method primarily applicable at the burner tip and
does not represent value equivalence at the wellhead. BOE figures may be
misleading, particularly if used in isolation.
Forward-looking information
This news release contains forward-looking information which is not comprised of
historical fact. Forward-looking information involves risks, uncertainties and
other factors that could cause actual events, results, performance, prospects
and opportunities to differ materially from those expressed or implied by such
forward-looking information. Forward-looking information in this news release
includes the Company's statements with respect to planned additional drilling at
Turin, Coyote and east central Alberta. This forward looking information is
subject to a variety of substantial known and unknown risks and uncertainties
and other factors that could cause actual events or outcomes to differ
materially from those anticipated or implied by such forward looking
information. The Company's Annual Information Form filed on April 17, 2013 with
securities regulatory authorities (accessible through the SEDAR website
www.sedar.com) describes the risks, material assumptions and other factors that
could influence actual results and which are incorporated herein by reference.
Although the Company believes that the material assumptions and factors used in
preparing the forward-looking information in this news release are reasonable,
undue reliance should not be placed on such information, which only applies as
of the date of this news release, and no assurance can be given that such events
will occur. The Company disclaims any intention or obligation to update or
review any forward-looking information, whether as a result of new information,
future events or otherwise, other than as required by law.
Further details on the Company including the 2012 year end audited financial
statements, the related management's discussion and analysis and Annual
Information Form are available on the Company's website (www.traverseenergy.com)
and SEDAR.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accept
responsibility for the adequacy or accuracy of the content of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Traverse Energy Ltd.
Laurie Smith
President and CEO
(403) 264-9223
www.traverseenergy.com
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