Traverse Energy Announces 2013 Third Quarter Results
13 November 2013 - 7:41AM
Marketwired Canada
Traverse Energy Ltd. ("Traverse" or "the Company") (TSX VENTURE:TVL) presents
financial and operating results for the nine months ended September 30, 2013.
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Three months Nine months
ended Sept. 30, ended Sept. 30,
2013 2012 2013 2012
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Financial ($ thousands, except per share
amounts)
Petroleum and natural gas revenue 3,976 1,294 7,455 3,012
Royalty income 843 818 3,163 2,358
Cash provided by operations 3,789 1,132 7,871 3,394
Funds from operations (1) 3,796 1,602 7,279 3,809
Per share - basic and diluted 0.08 0.04 0.17 0.09
Net income 1,636 32 3,217 427
Per share - basic and diluted 0.03 0.00 0.07 0.01
Capital expenditures, net of dispositions 4,957 3,041 9,393 5,954
Total assets 26,489 21,154 26,489 21,154
Working capital 3,015 1,727 3,015 1,727
Common shares
Outstanding (millions) 49.5 44.3 49.5 44.3
Weighted average (millions) 49.5 44.1 48.1 42.8
Operations (Units as noted)
Average production
Natural gas (Mcf/day) 1,560 1,064 1,536 822
Oil and NGL (bbls/ day) 505 266 389 221
Total (BOE/day) 765 444 644 358
Average sales price
Natural gas ($/Mcf) 3.06 2.36 3.42 2.25
Oil and NGL ($/bbl) 94.25 76.77 86.61 80.32
Operating Netback ($/BOE) (2)
Petroleum and natural gas revenue 67.83 51.56 56.63 50.85
Realized gain on financial derivatives 0.23 0.00 0.13 0.00
Royalties 7.21 4.56 5.19 3.33
Operating and transportation costs 9.13 10.78 11.24 12.74
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Working interest netback 51.72 36.22 40.33 34.78
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Royalty netback 71.56 52.02 71.43 60.72
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Operating netback 55.04 42.31 48.16 45.05
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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 third quarter of 2013 Traverse drilled 4 wells (100% working interest) in
the Coyote area of east central Alberta resulting in 3 oil wells. The 4th well
appears to be uneconomic and is being evaluated as a potential water injection
well. The 4 wells were drilled as a follow up to the initial Coyote well which
was drilled in March and placed on production in June, 2013. The 3 additional
wells were placed on production later in the third quarter. Production from the
Coyote area for the third quarter averaged 308 BOE per day (85% oil). Other
activities included the acquisition of seismic data and the purchase of
additional acreage in east central Alberta.
In the Turin area production was interrupted by a 5 week shutdown of a third
party owned pipeline which transports Traverse's natural gas to market. During
the shutdown, Traverse tested and confirmed the integrity of the pipeline.
Traverse subsequently purchased an interest in the pipeline and became the
pipeline operator. Normal production operations have resumed. Additional
drilling (2 wells) is planned for the first quarter of 2014.
In the Brazeau area of West Central Alberta, Traverse has a gross overriding
royalty interest in 10 sections of land (6,400 acres). A total of 20 horizontal
Cardium wells are producing from the property. Net production to the Company for
the third quarter of 2013 averaged 121 BOE per day (oil and NGL component of
75%).
At September 30, 2013 undeveloped land holdings totaled 141,400 gross (136,800
net) acres with an average working interest of 98%. Additional drilling (3
wells) and the shooting of a 3D seismic program are planned in the Coyote area
prior to year end.
The Board of Directors has approved an initial exploration and development
program and budget of $17 million for 2014. This budget is to be financed from
working capital, cash flow, new equity issues and debt where appropriate. The
program includes the drilling of 12 wells located on Company owned lands in the
Turin and Coyote areas and on other properties located in east central Alberta.
Non-IFRS measures
Funds from operations
Funds from operations is a measure not defined in IFRS that is commonly used in
the oil and gas industry. Funds from operations is calculated as cash provided
by operating activities before non-cash working capital as detailed under the
heading "Cash and funds from operations and net income" within the Company's
management's discussion and analysis for the nine months ended September 30,
2013. The Company believes that in addition to net income, funds from operations
is a useful supplemental measure as it provides an indication of Traverse's
operating performance. Funds from operations should not be considered as an
alternative to or more meaningful than cash provided by operating activities as
determined in accordance with IFRS. Traverse's determination of funds from
operations may not be comparable to that reported by other companies. Traverse
also presents funds from operations per share whereby share amounts are
calculated using weighted average shares outstanding consistent with the
calculation of income per share.
Operating netback
Management uses certain industry benchmarks such as operating netback to analyze
financial and operating performance. This benchmark as presented does not have
any standardized meaning prescribed by IFRS and therefore may not be comparable
with the calculation of similar measures for other entities. Operating netback
reflects petroleum and natural gas revenue, royalty income and realized gain on
financial derivatives, less royalties, operating and transportation costs and is
calculated on a per unit basis. Working interest netback is calculated as
petroleum and natural gas revenue and realized gain on financial derivatives,
less royalties, operating and transportation costs and is calculated on a per
unit basis. Royalty netback is royalty income and is calculated on a per unit
basis. The calculation of Traverse's netbacks is detailed under the heading
"Operating netback" within the Company's management's discussion and analysis
for the nine months ended September 30, 2013.
BOE equivalent
Unless otherwise stated, the volume conversion of natural gas to barrel of oil
equivalent (BOE) is presented on the basis of 6 thousand cubic feet of natural
gas being equal to 1 barrel of oil. This conversion ratio is based upon an
energy equivalent conversion method primarily applicable at the burner tip and
does not represent value equivalence at the wellhead. BOE figures may be
misleading, particularly if used in isolation.
Forward-looking information
This news release contains forward-looking information which is not comprised of
historical fact. Forward-looking information involves risks, uncertainties and
other factors that could cause actual events, results, performance, prospects
and opportunities to differ materially from those expressed or implied by such
forward-looking information. Forward-looking information in this news release
includes the Company's statements with respect to planned additional drilling at
Turin, Coyote and east central Alberta; planned seismic at Coyote and intentions
for funding capital expenditures during 2013 and 2014. This forward looking
information is subject to a variety of substantial known and unknown risks and
uncertainties and other factors that could cause actual events or outcomes to
differ materially from those anticipated or implied by such forward looking
information. The Company's Annual Information Form filed on April 17, 2013 with
securities regulatory authorities (accessible through the SEDAR website
www.sedar.com) describes the risks, material assumptions and other factors that
could influence actual results and which are incorporated herein by reference.
Although the Company believes that the material assumptions and factors used in
preparing the forward-looking information in this news release are reasonable,
undue reliance should not be placed on such information, which only applies as
of the date of this news release, and no assurance can be given that such events
will occur. The Company disclaims any intention or obligation to update or
review any forward-looking information, whether as a result of new information,
future events or otherwise, other than as required by law.
Further details on the Company including the 2012 year end audited financial
statements, the related management's discussion and analysis and Annual
Information Form are available on the Company's website (www.traverseenergy.com)
and SEDAR.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accept
responsibility for the adequacy or accuracy of the content of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Traverse Energy Ltd.
Laurie Smith
President and CEO
(403) 930-0552
www.traverseenergy.com
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