Bonterra Energy Corp.

TSX : BNE


Bonterra Energy Corp.

March 20, 2014 18:02 ET

Bonterra Energy Corp. Announces Fourth Quarter and Year End 2013 Results

CALGARY, ALBERTA--(Marketwired - March 20, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Bonterra Energy Corp. (TSX:BNE) (Bonterra or the Company) is pleased to announce its operating and financial results for the fourth quarter and year ended December 31, 2013. The related financial statements and notes, as well as management's discussion and analysis (MD&A) for the year ended December 31, 2013, are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on Bonterra's website at www.bonterraenergy.com.

HIGHLIGHTS

As at and for the year ended ($ 000s except $ per share) December 31, 2013 (1) December 31, 2012 December 31, 2011
FINANCIAL
Revenue - realized oil and gas sales 295,675 142,770 162,277
Funds flow (2) 181,574 80,429 101,988
Per share - basic 6.01 4.07 5.27
Per share - diluted 5.99 4.06 5.22
Payout ratio 55% 77% 58%
Funds flow (2) 185,393 (5) 80,429 101,988
Per share - basic 6.14 4.07 5.27
Per share - diluted 6.11 4.06 5.22
Payout ratio 54% 77% 58%
Cash flow from operations 173,896 74,325 97,409
Per share - basic 5.76 3.75 5.04
Per share - diluted 5.74 3.75 4.98
Payout ratio 58% 83% 61%
Cash dividends per share 3.33 3.12 3.06
Net earnings 62,758 33,211 43,608
Per share - basic 2.08 1.68 2.25
Per share - diluted 2.07 1.68 2.23
Capital expenditures and acquisitions net of dispositions 109,227 (3) 98,130 (4) 62,686
Total assets 1,000,531 419,933 364,176
Working capital deficiency 35,895 29,876 51,576
Long-term debt 156,764 166,808 69,916
Shareholders' equity 667,641 163,277 181,640
OPERATIONS
Oil - barrels per day 7,787 4,035 4,075
- average price ($ per barrel) 89.26 82.04 92.76
NGLs - barrels per day 744 476 386
- average price ($ per barrel) 52.41 52.18 60.89
Natural gas - MCF per day 21,954 13,157 11,163
- average price ($ per MCF) 3.46 2.60 3.86
Total barrels of oil equivalent per day (BOE) 12,190 6,703 6,322
(1) Annual figures for 2013 include the results of Spartan Oil Corp. (Spartan) for the period of January 25, 2013 to December 31, 2013. Production includes 341 days for Spartan and 365 days for Bonterra.
(2) Funds flow is not a recognized measure under IFRS. For these purposes, the Company defines funds flow as funds provided by operations including proceeds from sale of investments and investment income received excluding the effects of changes in non-cash working capital items and decommissioning expenditures settled.
(3) Includes the Spartan acquisition that closed on January 25, 2013 that included $10,000,000 of acquired cash that reduced capital expenditures from $121,641,000 excluding dispositions.
(4) Includes an acquisition that closed on June 7, 2012 for $17,108,000.
(5) Annual figures for 2013 include the results of Spartan for the period of January 1, 2013 to December 31, 2013. Production includes 365 days for Spartan and Bonterra.

Year In Review

In 2013, the Company has maintained its focus on providing investors with continuous growth on a per share basis, a sustainable pace of development and monthly income through its dividend policy. For the year ended December 31, 2013, Bonterra has achieved record results in net earnings, funds flow, production volumes and the monthly dividend rate.

2013 Highlights include:

  • Generated record funds flow of $181.6 million ($6.01 per share), as compared to $80.4 million ($4.07 per share) in the same period in 2012, an increase of 126 percent;
  • Annual production averaged 12,190 BOE per day; a volume increase of 82 percent over the same period in 2012 and an increase of 18.5 percent on a per share basis;
  • Operating costs for the year were $12.77 per boe, a reduction of 24 percent over the same period in 2012;
  • Paid out $3.33 per share in cash dividends to shareholders in 2013 compared to $3.12 per share in 2012, represented by two increases in the monthly dividend during 2013. This represents a payout ratio of 55 percent of funds flow which is the low end of the Company's payout ratio guidance;
  • The Company's net debt to cash flow ratio at December 31, 2013 was 1.1 to 1 times providing the Company with a strong balance sheet;
  • Corporate netback increased to $40.58 per BOE from $31.36 per BOE in 2012;
  • Proved plus probable (P & P) reserves of 75 million BOE (approximately 73 percent oil and liquids), a 67 percent volume increase over 2012 and an increase of 8 percent on a per share basis;
  • Drilled 55 gross (35 net) horizontal wells with a 100 percent success rate; and
  • Completed a bought deal financing of 553,725 common shares at a price of $49.85 per common share for gross proceeds of $27.6 million. The funds were used to increase the 2013 capital development budget and to decrease outstanding bank debt.

2014 Outlook

Bonterra's capital development program is focused on sustaining its current business model offering both solid growth and yield to its shareholders. The Board of Directors has approved a capital development program of $120.0 million which targets light oil prospects through its Cardium horizontal drill program. The program plan in 2014 is to:

  • Maintain a steady pace of development and manage annual declines. Production estimate is expected to average between 12,400 and 12,700 BOE per day (67 percent oil, 5 percent liquids and 28 percent natural gas) on an annual basis;
  • Drill a total of 56 gross (41.05 net) horizontal wells with approximately $72 million of the capital budget spent drilling 26 gross (25.5 net) wells in the Carnwood area;
  • Seek out additional operating efficiencies and control costs. Operating expenditures are expected to average approximately $13 per boe on an annualized basis;
  • Manage risk by maintaining balance sheet strength. Bonterra anticipates maintaining its net debt to funds flow at less than 1.5 times in 2013; and
  • Continue to provide increased value to shareholders. Bonterra's Board of Directors and management will continue to take into account production volumes and commodity prices in determining monthly dividend amounts and will consider increasing the dividend should crude oil pricing remain favourable coupled with production increases.

Cautionary Statement

This summarized news release should not be considered a suitable source of information for readers who are unfamiliar with Bonterra Energy Corp. and should not be considered in any way as a substitute for reading the full report.

For the full report, please go to www.bonterraenergy.com

Use of Non-IFRS Financial Measures

Throughout this press release, the Company uses the terms "payout ratio", "cash netback" and "net debt" to analyze operating performance, which are not standardized measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. These measures are commonly used in the oil and gas industry and are considered informative by management, shareholders and analysts. These measures may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies.

The Company calculates payout ratio by dividing cash dividends paid to shareholders by cash flow from operating activities, both of which are measures prescribed by IFRS which appear on our statements of cash flows. We calculate cash netback by dividing various financial statement items as determined by IFRS by total production for the period on a barrel of oil equivalent basis.

Frequently recurring terms

Bonterra uses the following frequently recurring terms in this press release: "bbl" refers to barrel, "NGL" refers to Natural gas liquids, "MCF" refers to thousand cubic feet and "BOE" refers to barrels of oil equivalent. Disclosure provided herein in respect of a BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 MCF: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Numerical Amounts

The reporting and the functional currency of the Company is the Canadian dollar.

Forward-Looking Information

Certain statements contained in this press release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this press release includes, but is not limited to: expected cash provided by continuing operations; cash dividends; future capital expenditures, including the amount and nature thereof; oil and natural gas prices and demand; expansion and other development trends of the oil and gas industry; business strategy and outlook; expansion and growth of our business and operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit risks; and other such matters.

All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas companies to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control.

Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do, what benefits will be derived there from. Except as required by law, Bonterra disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

The forward-looking information contained herein is expressly qualified by this cautionary statement.

The TSX does not accept responsibility for the accuracy of this release.

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