Pine Cliff Energy Ltd.
TSX VENTURE : PNE

Pine Cliff Energy Ltd.

April 12, 2012 18:00 ET

Pine Cliff Energy Announces Year End and Fourth Quarter 2011 Results

CALGARY, ALBERTA--(Marketwire - April 12, 2012) -

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

Pine Cliff Energy Ltd. (TSX VENTURE:PNE) (Pine Cliff or the Company) is pleased to announce its operating and financial results for the fourth quarter and year ended December 31, 2011. The related financial statements and notes, as well as management's discussion and analysis, are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on Pine Cliff's website at www.pinecliffenergy.com

Highlights

  • During 2011, Pine Cliff's senior management and Board of Directors refocused its business after successfully disposing of the South American segment of its operations in late 2010. A strategic review process was implemented with the intent of redirecting Pine Cliff's corporate strategy into a growth-oriented, Canadian based junior exploration and production company.
  • The strategic review process resulted in the announcement in late December 2011 that Mr. Philip Hodge would be joining the management team in January to help lead Pine Cliff into 2012 with new energy and focus. Mr. George Fink, the previous President and Chief Executive Officer, continues to play a key role in the vision, direction and operations of Pine Cliff as its Executive Chairman of the Board. Mr. Robb Thompson is remaining on as Chief Financial Officer. Mr. Randy Jarock will be resigning as Chief Operating Officer but has agreed to remain with the Pine Cliff team as a nominee to the Board of Directors at the annual general meeting on May 17, 2012.
  • Pine Cliff's strategy is to provide above industry average returns in the near term for short-term investors and high rates of return over time for long-term investors. The Company plans to take advantage of this unique time in the oil and gas industry to build a portfolio of high-return assets for future growth.
  • Management and insiders collectively own approximately 39 percent of Pine Cliff's shares and therefore are highly motivated and aligned with shareholders to increase share value and generate above average returns.
  • In February, the Company completed a rights offering and private placement for gross proceeds of approximately $2.9 million. It then closed in March an asset purchase in the Carrot Creek area of Alberta for $23.5 million.
  • Pine Cliff is now producing approximately 1,050 barrels of oil equivalent (BOE) per day with a production profile comprised of approximately 77 percent natural gas and 23 percent oil/NGLs and proved plus probable reserves of 2,223 MBOE.
  • The Company's net debt is approximately $20 million and it has a current working capital position of approximately $3 million.
  • The AECO natural gas spot price averaged $3.63 per Mcf in 2011 and prices in 2012 have decreased further and do not show any immediate prospect of recovery. This prolonged, weak natural gas price environment has led to a significant number of junior companies trading below valuations. Many of these companies have uncomfortable levels of debt and limited access to the credit or equity markets. At the same time, there are only a limited number of potential buyers with access to capital willing to consider gas-weighted transactions or smaller corporate takeovers. Pine Cliff anticipates that it will continue to be able to act quickly on acquisition opportunities identified this year and to fund these activities from working capital, debt or equity issues.
  • As it executes this strategy, the Company will:
    • maintain a balance sheet that will allow for more potential acquisitions but will also provide for a sustainable cash flow model even under low natural gas prices;
    • accelerate oil and liquids drilling and optimization activities on its current asset base; and
    • focus on providing investors with superior growth through a combination of drilling and further acquisitions to increase its inventory of drilling locations.
Annual Comparison
December 31, 2009
As at and for the year ended December 31,
2011
December 31,
2010(1)
Canadian GAAP(2 )
TOTAL OPERATIONS ($)
Revenue - oil and gas 866,124 1,362,570 518,401
Cash flow (deficiency) from operations 332,866 218,749 (613,398 )
Per share basic and diluted 0.01 0.00 (0.01 )
Net loss (206,103 ) (667,216 ) (2,822,276 )
Per share basic and diluted (0.00 ) (0.01 ) (0.06 )
Capital expenditures 24,136 1,323,639 996,569
Total assets 2,387,839 2,929,782 3,475,877
Working capital 482,322 309,805 491,064
Shareholders' equity 2,207,134 2,549,850 2,363,915
CONTINUING OPERATIONS ($)(3)
Cash flow from operations 332,866 612,854 94,343
Per share basic and diluted 0.01 0.01 0.00
Net loss (206,103 ) (1,100,180 ) (452,136 )
Per share basic and diluted (0.00 ) (0.02 ) (0.01 )
Capital expenditures 24,136 1,220,300 871,128
TOTAL OPERATIONS
Crude oil and NGLs
- Barrels per day 1 2 1
- Average price ($ per barrel) 80.93 77.68 60.98
Natural Gas
- MCF per day 596 876 315
- Average price ($ per MCF) 3.87 4.08 4.22
Total barrels of oil equivalent (BOE) per day (4) 100 148 54

(1) The comparative highlights have been restated with the adoption of International Financial Reporting Standards (IFRS).

(2) The comparative highlights for 2009 are under Canadian Generally Accepted Accounting Principles (GAAP) prior to the adoption of IFRS.

(3) Continuing operations excludes the results of operations from the South American assets which have been designated as discontinued operations. The South American assets were sold on September 24, 2010.

(4) Barrels of oil equivalent (BOE) are calculated using a conversion ratio of 6 MCF to 1 barrel of oil. The conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead and as such may be misleading if used in isolation.

Quarterly Financial and Operational Highlights

2011
Q4 Q3 Q2 Q1
TOTAL OPERATIONS ($)
Revenue oil and gas 163,979 220,398 236,229 245,518
Cash flow (deficiency) from operations (4,070 ) 120,109 68,707 148,120
Per share basic and diluted (0.00 ) 0.00 0.00 0.00
Net loss (45,745 ) (74,182 ) (53,732 ) (32,444 )
Per share basic and diluted (0.00 ) (0.00 ) (0.00 ) (0.00 )
Capital expenditures 1,816 13,223 2,942 6,155
Total assets 2,387,839 2,503,803 2,622,350 2,896,325
Working capital 482,322 487,693 510,444 482,299
Shareholders' equity 2,207,134 2,304,841 2,549,057 2,574,353
CONTINUING OPERATIONS ($)
Cash flow (deficiency) from operations (4,070 ) 120,109 68,707 148,120
Per share basic and diluted (0.00 ) 0.00 0.00 0.00
Net loss (45,745 ) (74,182 ) (53,732 ) (32,444 )
Per share basic and diluted (0.00 ) (0.00 ) (0.00 ) (0.00 )
Capital expenditures 1,816 13,223 2,942 6,155
TOTAL OPERATIONS
Crude oil and NGLs (barrels per day) 1 1 1 1
Natural gas (MCF per day) 522 594 614 659

Cautionary Statement

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

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

FORWARD-LOOKING INFORMATION

Certain statements contained in this release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, statements 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 release includes, but is not limited to: expected cash provided by continuing operations; 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 natural 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: the risks of foreign operations; 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. The foregoing factors are not exhaustive.

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 therefrom. Except as required by law, Pine Cliff 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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