Top-News
Donnerstag,
05.05.2016 19:56
von
PR Newswire
| Aufrufe: 17
Advantage Announces First Quarter 2016 Results
Mann mit Wirtschaftszeitung (Symbolbild).
pixabay.com
PR Newswire
CALGARY, May 5, 2016
Production Growth, Record Low Cash Costs & Improved Glacier Well Results Generates Strong Cash Flow & Underpins 350 MMCF/D Plant Expansion Plan
(TSX: AAV, NYSE: AAV)
CALGARY, May 5, 2016 /PRNewswire/ - Advantage Oil & Gas Ltd. ("Advantage" or the "Corporation") is pleased to report strong cash flow of $30.2 million or $0.17/share for the first quarter of 2016 supported by a 25% increase in production to 167 mmcfe/d (27,854 boe/d) and an 11% reduction in its total cash cost to a corporate record and industry leading low cost of $0.75/mcfe. Additionally, Advantage's financial strategy to reduce downside cash flow exposure through its ongoing hedging program generated a $14.7 million gain which is included in our first quarter results. These operational and financial achievements helped to maintain a comparable level of cash flow to the same period in 2015 despite a 33% reduction in AECO natural gas prices to Cdn $1.84/mcf.
During the first quarter of 2016, Advantage continued to achieve outperformance in its Glacier well results. In particular, one of our Lower Montney wells which included a new cemented port completion design with 37 frac ports and 20 frac stages significantly exceeded Management expectations by demonstrating an on-production rate of 18.3 mmcf/d (3,050 boe/d) and proved up another extension area of high quality Lower Montney reservoir at Glacier. This Lower Montney well was drilled, completed and tied-in at a cost of $5 million (10% less than budgeted) and confirmed additional opportunities to improve capital efficiencies as a result of advancing our drilling and completion technologies. Five other Lower Montney wells with an average of 21 frac stages were production tested during the quarter and demonstrated an average per well rate of 12.3 mmcf/d, exceeding Management expectations by 30% (see additional information in the Operational Update section below).
Advantage's plans to expand its 100% owned Glacier gas plant to increase processing capacity from 250 to 350 mmcf/d (58,330 boe/d) is progressing with design and regulatory application work underway. The Glacier "350" plant expansion is targeted for completion in the second quarter of 2018 to continue production growth through 2020. These plans are reinforced by our ongoing operational achievements and solid financial results which demonstrate the exceptional quality of our Glacier Montney resource.
Advantage continues to advance its Montney development at Glacier with a strategy to reduce downside cash flow exposure while retaining financial and operational flexibility to immediately capitalize on improvements in the natural gas price environment and organic growth opportunities. The Corporation's strong balance sheet and multi-year hedging program in conjunction with having readily available additional gas plant capacity and additional productivity from its 27 current standing wells provides flexibility to optimize investment returns for our shareholders.
First Quarter 2016 Operating and Financial Highlights
Production increased 25% to average 167.1 mmcfe/d (27,854 boe/d) for the first quarter of 2016 as compared to the same period in 2015. In April 2016 Glacier production increased a further 20% from the prior quarter to a record 200 mmcfe/d (33,300 boe/d). The Corporation's 2016 annual production is expected to be within our previously announced Budget production guidance range of 190 to 210 mmcfe/d, resulting in year on year production growth of 40%.
Funds from operations for the first quarter of 2016 was $30.2 million or $0.17 per share. Cash netbacks for the three months ended March 31, 2016 was $1.99/mcfe ($11.94/boe) which represents 73% of the realized sales price, including hedging. Funds from operations were supported by increased production, lower costs and a realized hedging gain of $14.7 million.
Total cash costs were reduced to a corporate record low of $0.75/mcfe in the first quarter of 2016 which is an 11% decrease compared to the same period of 2015. Total cash costs include royalties ($0.07/mcfe), operating expense ($0.35/mcfe), transportation expense for liquids ($0.01/mcfe), general and administrative expense ($0.13/mcfe), and finance expense ($0.19/mcfe). An additional water disposal well was commissioned in March 2016 to reduce water handling costs and when combined with other ongoing cost initiatives, we anticipate additional operating cost savings could be realized during the latter half of 2016.
Capital expenditures during the quarter were on-track at $45 million. This included $32 million (71%) invested to expand Advantage's sales gas pipeline takeaway capacity to 400 mmcf/d from its Glacier gas plant to TransCanada Pipeline Limited's ("TCPL") main northwest Alberta sales pipeline, to increase its raw gas gathering system capacity and to install back-up plant utilities. The remaining expenditures in the quarter were directed to completion operations on 7 previously cased wells. Capital expenditures are targeted to be $58 million during the first half of 2016 and $120 million for the full year.
Total debt (including working capital deficit) as of March 31, 2016 was $213 million or 47% drawn against Advantage's $450 million borrowing base Credit Facility providing ample financial flexibility to support future development. Advantage's year-end 2016 total debt to trailing cash flow is estimated to be 1.2 times and 1.5 times based on average annual AECO natural gas prices of Cdn $2.00/mcf and Cdn $1.50/mcf respectively, including the Corporation's hedges.
Strong multi-year natural gas hedge positions in place to support future development. Advantage's hedging positions include an average 52% of forecast annual production for 2016 at an average AECO floor price of $3.62/mcf, 36% of forecast 2017 annual production at an average AECO floor price of $3.24/mcf and 15% of forecast 2018 annual production at average AECO floor price of $3.04/mcf.
Operational Update
Lower Montney Wells Exceed Expectations
A Lower Montney well located in the central area of Glacier was drilled to a lateral length of 2,083 meters and was completed with a cemented port, ball-drop system with 37 frac ports (45 meter spacing) and 20 stages, slickwater and 1,480 tonnes of proppant. This Lower Montney well has been standing since December 2015 and was recently brought on production. After four days of production, the well was producing at a restricted rate of 18.3 mmcf/d (3,050 boe/d) and at a flowing pressure of 7 mpa, above its tested rate of 12.4 mmcf/d. This Lower Montney well will be restricted below 10 mmcf/d to control the volume of frac sand flowback during its initial production period to match the design of our standard wellsite facilities. The longer term production behavior will be evaluated to assess the change in frac design but the initial results are encouraging. The total drill, complete and tie-in cost of $5 million for this Lower Montney well results in an estimated 30 day average initial production rate ("IP30") well capital efficiency of $2,220/boe/d. Additionally, this well proves up an expanded area of top decile Lower Montney well productivity at Glacier.
During the first quarter of 2016, five other Lower Montney wells were production tested at Glacier. After an average flow period of 57 hours, the average per well final production test rate was 12.3 mmcf/d normalized to our average gas gathering system flowing pressure of 3,000 kpa (435 psi). At the average final production test pressure of 11.2 mpa (1,624 psi) the average production test rate was 10.2 mmcf/d. These wells included an average of 21 frac stages and exceeded Management's final production test rate expectations by 30%.
For the balance of 2016, additional wells which contain a combination of higher frac stages, cemented ports and longer laterals will be brought on-production and compared against offsetting older wells to evaluate the long term production and reserve impacts of drilling and completion technology changes at Glacier.
Glacier "350" Gas Plant Expansion
Design and regulatory application work has commenced on Advantage's planned expansion of its 100% owned Glacier gas plant processing capacity from 250 to 350 mmcf/d (58,330 boe/d). The expansion will be undertaken at the existing Glacier gas plant site with a preliminary cost estimate of $75 million. The existing gas plant capacity of 250 mmcf/d will provide sufficient processing throughput to accommodate growth plans through 2017. The plant expansion to 350 mmcf/d is targeted for completion in the second quarter of 2018 and will accommodate growth plans through 2020. Options to accelerate this expansion project while maintaining industry leading capital efficiencies will also be evaluated.
Modernized Royalty Framework Impact
The Alberta government has now substantially completed the new Modernized Royalty Framework. The new royalty framework partially emulates a revenue minus cost royalty structure and will be effective for wells spud on or after January 1, 2017 with existing wells continuing to operate under the previous royalty framework for a ten-year period. The new royalty framework is expected to incentivize low cost producers with higher productivity wells which will continue to benefit Advantage. We have reviewed the new framework formulas and estimate that at natural gas prices up to AECO $4.00/mcf, the impact on the economic returns for our average Upper and Lower Montney wells are insignificant while the economic returns for our average Middle Montney wells are slightly improved. Advantage will continue to evaluate and optimize the impact of drilling and completion design changes on royalties and economics in respect of the Modernized Royalty Framework.
Consolidated Financial Statements and MD&A
The Corporation's unaudited interim consolidated financial statements for the three months ended March 31, 2016 together with the notes thereto, and Management's Discussion and Analysis for the three months ended March 31, 2016 have been filed on SEDAR and with the SEC and are available on the Corporation's website at http://www.advantageog.com. Upon request, Advantage will provide a hard copy of any financial reports free of charge.
Appendix – First Quarter 2016 Operating & Financial Summary
| | | | Three months ended | | ||||
| Financial and Operating Highlights | | March 31 | | |||||
| | | | 2016 | | 2015 | | ||
| | | | | | | | ||
| Financial ($000, except as otherwise indicated) | | | | | | |||
| Sales including realized hedging | | $ | 41,625 | | $ | 39,991 | | |
| Funds from operations | | $ | 30,236 | | $ | 29,929 | | |
| | per share(1) | | $ | 0.17 | | $ | 0.18 | |
| Total capital expenditures | | $ | 44,736 | | $ | 78,708 | | |
| Working capital deficit(2) | | $ | 10,666 | | $ | 40,552 | | |
| Bank indebtedness | | $ | 202,538 | | $ | 261,241 | | |
| Basic weighted average shares (000) | | 174,479 | | 170,301 | | |||
| Operating | | | | | | |||
| Daily Production | | | | | | |||
| | Natural gas (mcf/d) | | 164,618 | | 133,281 | | ||
| | Liquids (bbls/d) | | 418 | | 112 | | ||
| | Total mcfe/d(3) | | 167,126 | | 133,953 | | ||
| | Total boe/d(3) | | 27,854 | | 22,326 | | ||
| Average prices (including hedging) | | | | | | |||
| | Natural gas ($/mcf) | | $ | 2.70 | | $ | 3.30 | |
| | Liquids ($/bbl) | | $ | 31.21 | | $ | 41.86 | |
| Cash netbacks ($/mcfe)(3) | | | | | | |||
| | Natural gas and liquids sales | | $ | 1.77 | | $ | 2.71 | |
| | Realized gains on derivatives Werbung Mehr Nachrichten zur Advantage Energy Aktie kostenlos abonnieren
E-Mail-Adresse
Bitte überprüfe deine die E-Mail-Adresse.
Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1  Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News | |||||||
