CALGARY, Aug. 21, 2013 /CNW/ - TriOil Resources Ltd.
("TriOil" or the "Company") (TSXV:TOL) is pleased to announce that
it has filed its financial statements and related Management's
Discussion and Analysis ("MD&A") for the three and six months
ended June 30, 2013 on SEDAR.
Selected financial and operational information is outlined below
and should be read in conjunction with TriOil's unaudited interim
financial statements and related MD&A, available for review at
www.trioilresources.com and www.sedar.com.
Second Quarter 2013 Operating and Financial
Highlights
- Reached a record average daily production level of 4,147 BOE/d
(weighted 62 percent towards light oil and NGLs), representing a 98
percent increase over the second quarter 2012 level of 2,091 BOE/d
and a 19 percent increase over the first quarter 2013 level of
3,472 BOE/d;
- Increased funds from operations to a record $13.3 million ($0.21 per diluted share), representing a 99
percent increase (62 percent per share) from second quarter 2012
funds from operations of $6.6 million
and a 27 percent increase (31 percent per share) from first quarter
2013 funds from operations of $10.5
million;
- Achieved net earnings of $6.7
million ($0.09 per share), up
141 percent from first quarter 2013 net earnings of $2.5 million ($0.04
per share);
- Generated a strong operating netback of $41.53 per BOE, up 7 percent from $38.65 per BOE in the first quarter of 2013;
- Decreased corporate operating costs by 13 percent to
$11.58 per BOE from $13.35 per BOE in the second quarter of 2012;
- Maintained a strong balance sheet with net debt as of
June 30, 2013 of $56.4 million, representing approximately 1.1
times net debt-to-annualized second quarter 2013 funds from
operations and also representing a 7% decrease from net debt of
$60.5 million as of March 31, 2013.
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Financial and Operating Results |
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Three months ended June 30, |
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Six months ended June 30, |
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2013 |
2012 |
% Change |
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2013 |
2012 |
% Change |
($000s, except per share numbers) |
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Financial |
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Total petroleum and natural gas sales |
23,954 |
12,295 |
95 |
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42,018 |
21,882 |
92 |
Funds from operations (1) |
13,281 |
6,659 |
99 |
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23,767 |
10,878 |
118 |
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Per share - diluted |
0.21 |
0.13 |
62 |
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0.37 |
0.22 |
69 |
Net income |
6,045 |
7,020 |
(14) |
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8,558 |
6,677 |
- |
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Per share - basic and diluted |
0.09 |
0.13 |
(31) |
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0.13 |
0.14 |
- |
Net debt (working capital) (2) |
56,390 |
(6,855) |
- |
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56,390 |
(6,855) |
- |
Total assets |
302,435 |
206,552 |
46 |
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302,435 |
206,552 |
46 |
Capital expenditures(4) |
9,144 |
15,788 |
(42) |
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56,420 |
47,930 |
18 |
Weighted average shares outstanding |
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Basic |
63,982 |
53,220 |
20 |
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63,982 |
49,100 |
30 |
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Diluted |
64,000 |
53,258 |
20 |
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64,004 |
49,216 |
30 |
Operating |
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Average daily production |
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Crude oil and NGLs (bbls/d) |
2,554 |
1,594 |
60 |
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2,299 |
1,355 |
70 |
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Natural gas (mcf/d) |
9,555 |
2,981 |
221 |
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9,077 |
2,953 |
207 |
Total (boe/d) |
4,147 |
2,091 |
98 |
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3,812 |
1,847 |
106 |
Average sales prices |
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Crude oil and NGLs ($/bbl) |
88.40 |
80.99 |
9 |
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86.32 |
84.06 |
3 |
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Natural gas ($/mcf) |
3.91 |
2.00 |
96 |
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3.71 |
2.16 |
72 |
Total ($/boe) |
63.47 |
64.60 |
(2) |
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60.91 |
65.11 |
(6) |
Wells drilled - gross (net) |
1 (0.7) |
7 (3.8) |
- |
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14 (10.4) |
16 (9.4) |
- |
Drilling success rate (%) |
100 |
100 |
- |
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100 |
100 |
- |
Operating netback ($/boe) |
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Oil and natural gas sales |
63.47 |
64.60 |
(2) |
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60.91 |
65.11 |
(6) |
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Realized gain (loss) on
financial derivative contracts |
0.59 |
(0.18) |
- |
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1.09 |
(1.78) |
- |
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Royalties |
(9.71) |
(10.47) |
(7) |
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(9.25) |
(10.53) |
(12) |
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Operating costs |
(11.58) |
(13.35) |
(13) |
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(11.23) |
(14.02) |
(20) |
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Transportation |
(1.24) |
(1.23) |
1 |
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(1.30) |
(1.29) |
1 |
Operating netback (3) |
41.53 |
39.37 |
5 |
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40.22 |
37.49 |
7 |
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Notes: |
(1) |
Funds from (used in) operations is a non-GAAP measure and is
calculated as cash flow from operating activities before the change
in non-cash working capital and abandonment expenditures. |
(2) |
Net debt (working capital) is a non-GAAP measure and excludes
unrealized gains and losses from financial derivative contracts and
flow through share liability. |
(3) |
Operating netback is a non-GAAP measure and is determined by
deducting royalties, operating costs, transportation and realized
hedging loss (gain) from oil and natural gas sales. |
(4) |
Capital expenditures include additions to property, plant and
equipment and exploration and evaluation assets and property
acquisitions and are presented net of proceeds of disposals. |
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OPERATIONS UPDATE
The Company's drilling and completion operations
in the second quarter of 2013 were restricted due to spring
break-up and prolonged wet weather, with the only field activity
taking place at Kaybob early in the second quarter. Capital
expenditures during the second quarter were limited to $9.1 million. The Company drilled 1 (0.7 net)
well, completed 3 (2.0 net) wells and brought 6 (4.1 net) wells on
production during the quarter, all at Kaybob.
Field activity has resumed on all 3 of our core
properties. To date in the third quarter the Company has completed
2 (1.4 net) oil wells at Lochend, drilled 1 (0.7 net) oil well at
Kaybob, commenced drilling 1 (0.7 net) oil well at Kaybob,
commenced pipeline construction to tie-in 3 (1.5 net) Cardium oil
wells at Lochend, commenced completion operations on a light oil
well (70 percent working interest) at Kaybob and commenced drilling
a horizontal Montney liquids-rich
gas well (61% working interest) at Pouce
Coupe. Drilling operations on our Cardium light oil project
at Lochend are expected to get underway in September.
Our second half 2013 capital program includes
drilling and completion of 9 (6.1 net) horizontal wells.
Outlook
TriOil continues to deliver strong drill bit
growth from its 3 core assets, with corporate production
effectively doubled over the past one year period. The Company
produced a record 4,147 boe/d in the second quarter of 2013,
compared to 2,091 boe/d in the second quarter of 2012. Second
quarter 2013 production was also up a significant 19% from 3,472
boe/d in the first quarter of 2013, despite an early and protracted
spring breakup and wet weather delays through July.
Per share performance continues to improve with
production per share climbing 65% from the second quarter of 2012
and funds from operations per share increasing 62% to $0.21 per share compared to $0.13 per share in the second quarter of
2012.
The Company's assets continue to provide strong
netbacks and improving efficiencies, with our operating netback
climbing 7% from Q1 2013 to $41.53
per boe and operating costs decreasing 13% to $11.58 per boe from $13.35 per boe in Q2 2012.
TriOil has maintained a solid financial position
with net debt of $56 million at
June 30, 2013 (1.1 times Q2 2013
annualized funds from operations) and current credit facilities of
$90 million. Year to date capital
expenditures are $56.4 million and
our 2013 total capital expenditures are still forecast at
$93 million. TriOil remains on track
to meet its corporate production guidance of 3,900 to 4,100 boe/d
average annual production with a 2013 exit target of 4,400
boe/d.
With a multi-year horizontal development
drilling inventory of 178 net wells on 3 proven plays at Lochend,
Kaybob and Pouce Coupe, strong
corporate netbacks, improving efficiencies and a solid balance
sheet, TriOil is well positioned to deliver strong per share
production, reserve and cash flow growth for the next several
years.
UPDATE ON STRATEGIC PROCESS
On July 3, 2013
TriOil announced that it had entered into exclusive negotiations
with another party in connection its previously announced strategic
alternatives process. The negotiations with the other party are
ongoing and TriOil expects to provide a further update on the
Company's strategic alternatives process on or about the end of
August 2013.
TriOil is a publicly traded junior oil resource
player in Western Canada.
Substantial land positions have been acquired on early stage light
oil resource opportunities to capitalize on improvements in
horizontal drilling and multi-stage fracture stimulation
technologies, specifically targeting opportunities in the emerging
Cardium and Dunvegan oil trends in
Alberta. TriOil has successfully
executed its business plan and has positioned the Company for solid
growth in production, reserves and shareholder value.
TriOil trades on the TSX Venture Exchange under
the symbol "TOL". As of August 21,
2013, there were approximately 64.0 million shares issued
and outstanding (70.0 million fully diluted).
Forward Looking Statements
This news release contains forward-looking
information and forward-looking statements within the meaning of
applicable securities laws. The use of any of the words "expect",
"seek", "anticipate", "continue", "estimate", "approximate",
"believe", "plans", "intends", "confident", "may", "objective",
"ongoing", "will", "should", "project", "predict", "potential",
"targeting", "could", "would", and similar expressions are intended
to identify forward-looking information. More particularly, this
document contains forward looking statements which include, but are
not limited to, expected timing for commencing drilling operations
on the Company's Cardium light oil project at Lochend, expected
drilling and completion plans for the second half of 2013, expected
capital expenditures, expected average and exit production for
2013, expectation of TriOil delivering strong, multi-year per share
production, reserve and cash flow growth and expected timing for
providing updates on the Company's negotiations with another party
and strategic alternatives process.
The forward-looking statements contained in this
document are based on certain key expectations and assumptions made
by TriOil, including with respect to the anticipated exploration
and development opportunities and the outlook for the fiscal year
ending December 31, 2013,
expectations and assumptions concerning the success of future
exploration and development activities, production guidance, the
performance of new wells and drilling and completion programs,
prevailing commodity prices and the availability of additional
capital if and when required by the Company.
Although TriOil believes that the expectations and assumptions
on which the forward-looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements because TriOil can give no assurance that they will
prove to be correct. Since forward-looking statements address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks. These include, but are not limited to, the
failure to satisfy the conditions to closing the transaction, risks
associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses, and health, safety and
environmental risks), commodity price and exchange rate
fluctuations and uncertainties resulting from potential delays or
changes in plans with respect to exploration or development
projects or capital expenditures. In addition, at the present time,
there can be no assurances or guarantees that the Company's
negotiations with another party as described herein will result in
an acceptable transaction. Certain of these risks are set out in
more detail in TriOil's Annual Information Form which has been
filed on SEDAR and can be accessed at www.sedar.com and TriOil's
other public disclosure documents which have been filed on SEDAR
and can be accessed at www.sedar.com.
The forward-looking statements contained in this
press release are made as of the date hereof and TriOil undertakes
no obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information,
future events or otherwise, unless so required by applicable
securities laws.
Non-GAAP Measures
This document contains the terms "funds from
operations", "net debt" and "operating netback", which do not have
a standardized meaning prescribed by Canadian Generally Accepted
Accounting Principles ("GAAP") and therefore may not be comparable
with the calculation of similar measures by other companies.
Management uses funds from operations to analyze operating
performance and leverage. Management believes "net debt" is a
useful supplemental measure of the total amount of current and
long-term debt of the Company. Mark-to-market risk management
contracts are excluded from the net debt calculation. Management
believes "operating netback" is a useful supplemental measure of
the amount of revenues received after royalties and operating and
transportation costs. Additional information relating to these
non-GAAP measures, including the reconciliation between funds from
operations and cash flow from operating activities, can be found in
the MD&A.
Meaning of BOE
The term "BOE" may be misleading, particularly
if used in isolation. A BOE conversion of 6 Mcf:1 bbl 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 different
from the energy equivalency of 6:1, utilizing a conversion on a 6:1
basis may be misleading as an indication of value. All BOE
conversions in this report are derived from converting gas to oil
in the ratio of six thousand cubic feet of gas to one barrel of
oil.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS
REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE
POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR
THE ADEQUACY OR ACCURACY OF THIS RELEASE.
SOURCE TriOil Resources Ltd.