Shoreline Energy Corp.
TSX : SEQ

Shoreline Energy Corp.

August 14, 2013 22:04 ET

Shoreline Energy Corp. Announces Second Quarter Results

CALGARY, ALBERTA--(Marketwired - Aug. 14, 2013) - Shoreline Energy Corp. ("Shoreline" or the "Company") (TSX:SEQ) is pleased to announce financial and operating results from the second quarter of 2013.

Second Quarter Financial and Operating Highlights

Operating

  • Sales volumes averaged 2,617 barrels of oil equivalent per day (BOED) and increased by 57% from the first quarter of 2013.
  • Oil and NGL production as a percentage of total production was 38% and increased from 34% for the first quarter of 2013.
  • The Company brought onto production 1 gross (1 net) well.
  • Capital expenditures before dispositions totaled $1.4 million.

Financial

  • The Company's cash flow from operating activities increased to $2.9 million from $0.2 million for the first quarter of 2013.
  • The Company closed a flow through share private placement financing for net proceeds of $2.6 million.

Acquisitions and Dispositions

  • The Company disposed of a portion of the Wattenberg working interest assets in Weld County Colorado and reduced its current debt by $16.0 million. The Company recognized a loss on divestiture of $0.1 million.
  • The Company divested of non-core assets for net proceeds of $1.0 million and recognized a gain on divestiture of $0.3 million.

Subsequent Events

  • Subsequent to June 30, 2013, the Company closed a private placement flow through share offering for gross proceeds of $2.6 million.

Financial Summary

Three months ended
June 30,
Six months ended
June 30,
2013 2012 Change 2013 2012 Change
(in thousand dollars except as otherwise indicated)
Financial
Revenue, before royalties and financial instruments 9,697 4,251 128 % 16,231 8,857 83 %
Funds from operations (1) 1,264 1,483 (15 %) 3,018 2,278 32 %
Basic & diluted ($/common share) 0.16 0.26 (40 %) 0.41 0.40 3 %
Net (loss) (1,451 ) (664 ) 119 % (1,189 ) (1,684 ) (29 %)
Basic & diluted ($/common share) (2) (0.18 ) (0.12 ) 50 % (0.16 ) (0.30 ) (47 %)
Capital expenditures (excluding acquisitions) 1,384 1,567 (12 %) 4,691 7,427 (37 %)
Net acquisitions (dispositions) (18,500 ) - NA 4,499 (17 ) (1,365 %)
Total assets 117,284 74,865 57 % 117,284 74,865 57 %
Bank debt 21,363 17,511 22 % 21,363 17,511 22 %
Working capital (deficiency) (31,292 ) (18,174 ) 72 % (31,292 ) (18,174 ) 72 %
Shareholders' equity 37,083 31,383 18 % 37,083 31,383 18 %
Weighted average common shares outstanding
Basic & diluted 8,094 5,657 43 % 7,298 5,649 29 %
Three months ended
June 30,
Six months ended
June 30,
2013 2012 Change 2013 2012 Change
Operating
Production
Oil & NGLs (bbls/d) 987 394 151 % 779 387 101 %
Gas (mcf/d) 9,782 7,776 26 % 8,240 7,643 8 %
Combined (boe/d) (3) 2,617 1,690 55 % 2,152 1,661 30 %
Average realized prices
Oil ($/bbl) 88.28 80.13 10 % 87.79 82.33 7 %
Gas ($/mcf) 3.26 1.81 80 % 3.41 1.96 74 %
Operating netbacks ($/ boe) (1)
Oil & gas revenue 40.72 27.64 47 % 41.67 29.46 41 %
Realized gain (loss) on derivative financial instruments (0.06 ) 0.96 (106 %) 0.14 0.53 (74 %)
Royalties (8.09 ) 1.16 (797 %) (6.90 ) (1.89 ) 265 %
Operating expenses (15.44 ) (13.64 ) 13 % (14.47 ) (13.85 ) 4 %
Transport expenses (0.97 ) (1.25 ) (22 %) (1.20 ) (1.20 ) - %
Operating netback 16.16 14.87 9 % 19.24 13.06 47 %
Drilling activity
Total wells 3 - NA 4 3 33 %
Working interest wells 0.2 - NA 1.2 2.3 (48 %)
  1. These terms are not IFRS measures and do not have standardized meanings prescribed by IFRS. Management believes that in addition to net income (loss), funds from operation and operating netback are useful supplemental measures as they demonstrate the Company's ability to generate the cash necessary to fund future growth through capital investment, fund dividend payments and/or repay debt in future periods. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss) determined in accordance with IFRS as an indication of the Company's performance.
  2. The effect of outstanding options and warrants on loss per share for the three and six month periods ended June 30, 2012 and 2011 is anti-dilutive.
  3. Boe means barrels of oil equivalent. Boe may be misleading, particularly is used in isolation. A boe conversion rate of 1 boe: 6 mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Investor Information

Shoreline is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. The Company's common shares are currently listed on the TSX under the trading symbol "SEQ" and its debentures under the trading symbol "SEQ.DB". Additional information regarding Shoreline is available under the Company's profile at www.sedar.com or at the Corporation's website, www.shorelineenergy.ca.

Forward-Looking and Cautionary Statements

This news release contains forward-looking statements relating to the Corporation's plans and other aspects of the Corporation's anticipated future operations, strategies, financial and operating results and business opportunities. These forward-looking statements may include opinions, assumptions, estimates, management's assessment of value, reserves, future plans and operations.

Forward-looking statements typically use words such as "will," "anticipate," "believe," "estimate," "expect," "intend," "may," "project," "should," "plan," and similar expressions suggesting future outcomes, and include statements that actions, events or conditions "may," "would," "could," or "will" be taken or occur in the future. The forward-looking statements are based on various assumptions including expectations regarding the success of current or future drill wells; the outlook for petroleum and natural gas prices; estimated amounts and timing of capital expenditures; estimates of future production; assumptions concerning the timing of regulatory approvals; the state of the economy and the exploration and production business; results of operations; business prospects and opportunities; future exchange and interest rates; the Corporation's ability to obtain equipment in a timely manner to carry out development activities; and the ability of the Corporation to access capital and credit. While the Corporation considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward-looking statements are subject to a wide range of assumptions, known and unknown risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation: risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; loss of markets; volatility of commodities prices; currency fluctuations; imprecision of reserves estimates; environmental risks; competition from other producers; inability to retain drilling rigs and other services; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; general economic conditions; delays resulting from or inability to obtain required regulatory approvals and to satisfy various closing conditions; and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive.

Although Shoreline believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not rely unduly on forward-looking statements. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by applicable law, Shoreline does not undertake any obligation to publicly update or revise any forward-looking statements.

Note Regarding BOEs

The term barrel of oil equivalent ("boe") may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

Contact Information