Dundee Energy Limited
TSX : DEN

Dundee Energy Limited

April 28, 2016 17:01 ET

Dundee Energy Limited Announces First Quarter 2016 Financial Results

TORONTO, ONTARIO--(Marketwired - April 28, 2016) - Dundee Energy Limited ("Dundee Energy" or the "Corporation") (TSX:DEN) today announced its financial results for the three months ended March 31, 2016. The Corporation's unaudited condensed interim consolidated financial statements, along with management's discussion and analysis have been filed on the System for Electronic Document Analysis and Retrieval ("SEDAR") and may be viewed under the Corporation's profile at www.sedar.com or the Corporation's website at www.dundee-energy.com.

FINANCIAL HIGHLIGHTS

  • Net loss attributable to owners of the parent for the three months ended March 31, 2016 was $2.9 million or a loss of $0.02 per share. The net loss in the current period includes a realized loss of $1.5 million related to the disposal of a redundant offshore jack-up drilling platform. This compares with a net loss attributable to owners of the parent of $1.2 million or $0.01 per share incurred in the same period of the prior year.

  • Revenues before royalty interest earned from oil and natural gas sales during the first quarter of 2016 were $5.0 million, compared with $8.0 million of revenues earned in the same quarter of 2015, reflecting substantial decreases in the realized sales price for commodities on a comparative period-over-period basis.

  • Production volumes during the first quarter of 2016 averaged 10,872 Mcf/d (three months ended March 31, 2015 - 11,620 Mcf/d) of natural gas and 490 bbls/d (three months ended March 31, 2015 - 533 bbls/d) of oil and liquids.

  • Field netbacks during the three months ended March 31, 2016, before realized amounts related to derivative financial instruments, were $0.98/Mcf (three months ended March 31, 2015 - $2.56/Mcf) from natural gas and $12.34/bbl (three months ended March 31, 2015 - $13.94/bbl) from oil and liquids.

SOUTHERN ONTARIO ASSETS
(in thousands)
Natural Gas Oil and Liquids Total
Net Sales
Three months ended March 31, 2016 $ 2,642 $ 1,588 $ 4,230
Three months ended March 31, 2015 4,433 2,393 6,826
Net decrease in net sales $ (1,791 ) $ (805 ) $ (2,596 )
Effect of changes in production volumes $ (239 ) $ (173 ) $ (412 )
Effect of changes in commodity prices (1,552 ) (632 ) (2,184 )
$ (1,791 ) $ (805 ) $ (2,596 )

During the first quarter of 2016, sales of oil and natural gas, net of royalty interests, were $4.2 million, a decrease of $2.6 million from net sales generated in the first quarter of the prior year. As illustrated in the above table, the decrease arises primarily from lower realized prices for the underlying commodities, which reduced revenues by $2.2 million, as well as lower production volumes resulting from the natural decline in the underlying assets, which further reduced revenues by $0.4 million.

Field Level Cash Flows and Field Netbacks
(in thousands)
For the three months ended March 31, 2016 2015
Natural Gas Oil and Liquids Total Natural Gas Oil and Liquids Total
Total sales $ 3,110 $ 1,865 $ 4,975 $ 5,221 $ 2,822 $ 8,043
Royalties (468 ) (277 ) (745 ) (788 ) (429 ) (1,217 )
Production expenditures (1,668 ) (1,039 ) (2,707 ) (1,757 ) (1,725 ) (3,482 )
974 549 1,523 2,676 668 3,344
Gain on derivative financial instruments 199 - 199 - 341 341
Field level cash flows $ 1,173 $ 549 $ 1,722 $ 2,676 $ 1,009 $ 3,685
For the three months ended March 31, 2016 2015
Natural Gas Oil and Liquids Total Natural Gas Oil and Liquids Total
$ /Mcf $ /bbl $ /boe $ /Mcf $ /bbl $ /boe
Total sales $ 3.14 $ 41.89 $ 23.76 $ 4.99 $ 58.81 $ 36.18
Royalties (0.47 ) (6.21 ) (3.56 ) (0.75 ) (8.93 ) (5.47 )
Production expenditures (1.69 ) (23.34 ) (12.93 ) (1.68 ) (35.94 ) (15.66 )
0.98 12.34 7.27 2.56 13.94 15.05
Gain on derivative financial instruments 0.20 - 0.95 - 7.11 1.53
Field netbacks $ 1.18 $ 12.34 $ 8.22 $ 2.56 $ 21.05 $ 16.58

Capital Expenditures

In response to declining commodity prices for both crude oil and natural gas, the Corporation's work plan for 2016 was set at $0.8 million and consists of costs to maintain the existing and essential land portfolio. During the first quarter of 2016, the Corporation incurred costs of $0.4 million related to these activities.

CASTOR UNDERGROUND GAS STORAGE PROJECT

The Corporation continues to prepare for the binding arbitration proceedings to resolve contractual disputes with ACS Servicios Communicacions y Energia S.L., its 67% partner in the underlying Castor project, in anticipation of a decision before the end of 2016.

NON-IFRS MEASURES

The Corporation believes that important measures of operating performance include certain measures that are not defined under International Financial Reporting Standards ("IFRS") and as such, may not be comparable to similar measures used by other companies. While these measures are non-IFRS, they are common benchmarks in the oil and natural gas industry, and are used by the Corporation in assessing its operating results, including net earnings and cash flows.

  • "Field Level Cash Flows" are calculated as revenues from oil and gas sales, less royalties and production expenditures, adjusted for realized gains or losses on risk management contracts.
  • "Field Netbacks" refer to field level cash flows expressed on a measurement unit or barrel of oil equivalent basis.

ABOUT THE CORPORATION

Dundee Energy Limited is a Canadian-based oil and natural gas company with a mandate to create long-term value for its shareholders through the exploration, development, production and marketing of oil and natural gas, and through other high impact energy projects. Dundee Energy holds interests, both directly and indirectly, in the largest accumulation of producing oil and gas assets in Ontario and, through a preferred share investment, in certain exploration and evaluation programs for oil and natural gas offshore Tunisia. The Corporation's common shares trade on the Toronto Stock Exchange under the symbol "DEN".

FORWARD-LOOKING STATEMENTS

Certain information set forth in these documents, including management's assessment of each of the Corporation's future plans and operations, contains forward-looking statements. Forward-looking statements are statements that are predictive in nature, depend upon or refer to future events or conditions and may include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" or similar expressions.

In particular, forward-looking statements contained in this document include, but are not limited to, statements with respect to: volatility of commodity prices, expectations regarding the Corporation's ability to raise capital; effectiveness of hedging strategies; exploration, development and production; quantity of oil and natural gas reserve and recovery estimates; pending legal actions; treatment under government regulatory regimes and tax laws; financial and business prospects and financial outlook; performance characteristics of the Corporation's oil and natural gas properties; the Corporation's capital expenditure programs; supply and demand for oil and natural gas; drilling plans and strategy; availability of rigs, equipment and other goods and services; continually adding to reserves through acquisitions, exploration and development; anticipated work programs and land tenure; the granting of formal permits, licenses or authorities to prospect; the timing of acquisitions; the realization of the anticipated benefits of the Corporation's acquisitions and dispositions and other risk factors discussed or referred to in the section entitled "Risk Factors" in the Corporation's Annual Information Form for the year ended December 31, 2015.

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 and, as such, undue reliance should not be placed on forward-looking statements. The Corporation's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Corporation will derive from them. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact Information

  • Dundee Energy Limited
    Bruce Sherley
    President & CEO
    (403) 774-9966
    (416) 363-4536 (FAX)
    www.dundee-energy.com