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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Crew Energy Inc | TSX:CR | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.06 | -1.39% | 4.27 | 4.27 | 4.28 | 4.32 | 4.26 | 4.32 | 53,874 | 16:09:23 |
CALGARY, May 7, 2020 /CNW/ - Crew Energy Inc. (TSX: CR) ("Crew" or the "Company") today announces our operating and financial results for the three month period ended March 31, 2020. Crew's Financial Statements and Notes, as well as Management's Discussion and Analysis ("MD&A") for the three month period ended March 31, 2020 are available on Crew's website and filed on SEDAR at www.sedar.com.
Q1 2020 HIGHLIGHTS
__________________________________________________________________________________________________________________________________ |
(1) Condensate is defined as a mixture of pentanes and heavier hydrocarbons recovered as a liquid at the inlet of a gas processing plant before the gas is processed and pentanes and heavier hydrocarbons obtained from the processing of raw natural gas. |
(2) Non-IFRS Measure. "Net debt", "Adjusted funds flow" and "net capital expenditures" do not have standardized measures prescribed by International Financial Reporting Standards ("IFRS"), and therefore may not be comparable with the calculations of similar measures for other companies. See "Information Regarding Disclosure on Oil and Gas Reserves, Operational Information and Non-IFRS Measures" within this press release and the Company's MD&A for details including reasons for use.(3) Ultra-Condensate Rich" or "UCR" is not defined in NI 51-101 and means a fairway of land at Crew's Greater Septimus area of operations where productive zones have high condensate rates (initial 30-day condensate / gas ratio rates of greater than 75 bbls per mmcf). |
Financial & Operating Highlights:
FINANCIAL ($ thousands, except per share amounts) | Three months | Three months |
Petroleum and natural gas sales | 38,094 | 55,451 |
Adjusted Funds Flow (1) | 12,400 | 25,771 |
Per share - basic | 0.08 | 0.17 |
- diluted | 0.08 | 0.17 |
Net (loss) income | (191,909) | 6,186 |
Per share - basic | (1.27) | 0.04 |
- diluted | (1.27) | 0.04 |
Exploration and Development expenditures | 18,029 | 55,241 |
Property acquisitions (net of dispositions) | (34,940) | (15,924) |
Net capital expenditures | (16,911) | 39,317 |
Capital Structure ($ thousands) | As at | As at |
Working capital deficiency (surplus) (2) | 10,541 | (149) |
Bank loan | 31,049 | 52,136 |
41,590 | 51,987 | |
Senior Unsecured Notes | 296,113 | 295,868 |
Total Net Debt (3) | 337,703 | 347,855 |
Common Shares Outstanding (thousands) | 151,692 | 151,534 |
Notes: | |
(1) | Non-IFRS Measure. AFF is calculated as cash provided by operating activities, adding the change in non-cash working capital, decommissioning obligation expenditures and accretion of deferred financing costs on the senior unsecured notes. AFF does not have a standardized measure prescribed by International Financial Reporting Standards, ("IFRS") and therefore may not be comparable with the calculations of similar measures for other companies. See "Non-IFRS Measures" contained within Crew's MD&A for details including a reconciliation of AFF to its most closely related IFRS measure. |
(2) | Non-IFRS Measure. Working capital deficiency and surplus includes accounts receivable and net assets held for sale; less accounts payable and accrued liabilities. See "Non-IFRS Measures" contained within Crew's MD&A |
(3) | Non-IFRS Measure. Net debt is defined as outstanding long-term debt and net working capital. See "Non-IFRS Measures" within the Company's MD&A. |
Operations | Three months | Three months |
Daily production | ||
Light crude oil (bbl/d) | 215 | 226 |
Heavy crude oil (bbl/d) | 1,527 | 1,608 |
Natural gas liquids ("ngl")(1) (bbl/d) | 2,288 | 2,014 |
Condensate (bbl/d) | 3,340 | 2,617 |
Natural gas (mcf/d) | 99,144 | 100,542 |
Total (boe/d @ 6:1) | 23,894 | 23,222 |
Average prices (2) | ||
Light crude oil ($/bbl) | 44.81 | 61.04 |
Heavy crude oil ($/bbl) | 20.06 | 44.25 |
Natural gas liquids ($/bbl) | 4.86 | 10.89 |
Condensate ($/bbl) | 54.83 | 62.17 |
Natural gas ($/mcf) | 1.86 | 3.45 |
Oil equivalent ($/boe) | 17.52 | 26.53 |
Notes: | |
(1) | Throughout this news release, natural gas liquids ("ngl") comprise all natural gas liquids as defined by NI 51-101 other than condensate, which is disclosed separately. |
(2) | Average prices are before deduction of transportation costs and do not include realized gains and losses on financial instruments. |
Three months | Three months | |
Netback ($/boe) | ||
Petroleum and natural gas sales | 17.52 | 26.53 |
Royalties | (1.00) | (1.85) |
Realized commodity hedging gain/(loss) | 1.75 | (0.88) |
Marketing income(1) | 0.11 | 1.40 |
Net operating costs(2) | (5.74) | (6.25) |
Transportation costs | (3.21) | (2.26) |
Operating netback(3) | 9.43 | 16.69 |
G&A | (1.15) | (1.51) |
Other income | - | - |
Financing costs on long-term debt | (2.58) | (2.86) |
Adjusted funds flow | 5.70 | 12.32 |
Drilling Activity | ||
Gross wells | 2 | 7 |
Working interest wells | 2.0 | 7.0 |
Success rate, net wells (%) | 100% | 100% |
Notes: | |
(1) | Marketing income was recognized from the monetization of forward physical sales contracts offset by the cost of committed natural gas transportation that was not available during the period. |
(2) | Net operating costs are calculated as gross operating costs less processing revenue. |
(3) | Non-IFRS Measure. Operating netback equals petroleum and natural gas sales including realized hedging gains and losses on commodity contracts, marketing income, less royalties, net operating costs and transportation costs calculated on a boe basis. Operating netback does not have a standardized measure prescribed by IFRS and therefore may not be comparable with the calculations of similar measures for other companies. See "Non-IFRS Measures" contained within Crew's MD&A. |
COMMITMENT TO ESG: CREW'S RAPID RESPONSE TO COVID-19
Crew is dedicated to ensuring the health, safety and security of employees, contractors, partners and residents within all of our operating areas and communities. In response to the COVID-19 pandemic, we mobilized quickly to implement response plans and procedures that would protect the health and well-being of all stakeholders. We established work from home protocols in mid-March, including training programs specifically designed to ensure home working environments are effective, and rolled-out new technologies and programs to facilitate remote working across the organization. Due to Crew's rapid and effective mitigation actions, 100% of our head office employees were able to work remotely within days of our local schools closing, having minimal impact on operations or productivity. We also implemented social distancing protocols throughout our field operations that help to protect our field staff and contractors while new workforce efficiencies have been implemented to streamline costs. As a result of the actions taken and the diligence of our staff in following prescribed social distancing measures, we are pleased to report that Crew has not had any lost time as a result of COVID-19.
The Company has taken a measured and calculated approach to shutting-in production to ensure that we not only minimize costs and maximize AFF, but also defer flush production in our UCR area to enhance returns. Crew continues to actively engage with government regulatory bodies both corporately and through our membership in EPAC. Due to our strong relationships, we have maintained open communication with these entities regarding industry challenges and the impacts on employees and the economy. In addition, the health and safety of our Crew family remains paramount and we are pleased to report that our strong safety record is ongoing with zero recordable injuries in Q1/20.
Over the summer of 2020, Crew planned to offer educational work experience to four new students through our annual summer student program which, over the past five years, has provided valuable work experience for 17 students. However, to protect the health and safety of all employees and students, this program has been placed on hold pending easing of restrictions related to COVID-19.
In the current challenging financial and operating environment, Crew's Board has taken proactive steps to reduce G&A expenses, including a 20% reduction in cash compensation for the CEO and the Board of Directors, a 15% compensation reduction for the executive team and 10% reduction for all other staff. In addition, the Company implemented a Shareholder Engagement Policy during Q1/20, which reflects Crew's commitment to transparency, communications and active stakeholder engagement throughout all markets.
FINANCIAL OVERVIEW
Production Exceeds Expectations
AFF Driven by Pricing
Controlling Cash Costs
Prioritizing Liquidity
TRANSPORTATION, MARKETING & HEDGING
Diversified Market Access and Risk Management
OPERATIONS & AREA OVERVIEW
NE BC Montney - Greater Septimus
Greater Septimus
Production & Drilling | Q1 | Q4 | Q3 | Q2 | Q1 |
Average daily production (boe/d) | 19,894 | 18,720 | 19,648 | 19,594 | 19,535 |
Wells drilled (gross / net) | 0 | 0 | 0 | 1 / 1.0 | 6 / 6.0 |
Wells completed (gross / net) | 0 | 4 / 4.0 | 1 / 1.0 | 0 | 8 / 8.0 |
Operating Netback | Q1 | Q4 | Q3 | Q2 | Q1 |
Revenue | 17.61 | 20.13 | 17.38 | 22.20 | 25.61 |
Royalties | (0.86) | (1.76) | (1.04) | (1.27) | (1.56) |
Realized commodity hedge gain / (loss) | 1.44 | 0.90 | 1.78 | 0.28 | (0.74) |
Marketing income(1) | 0.13 | (0.02) | 1.55 | 1.43 | 1.66 |
Net operating costs(2) | (4.52) | (3.99) | (4.41) | (4.46) | (4.65) |
Transportation costs | (2.99) | (2.61) | (2.62) | (2.81) | (1.73) |
Operating netback(3) | 10.81 | 12.65 | 12.64 | 15.37 | 18.59 |
Notes: | |
(1) | Marketing income was recognized from the monetization of forward physical sales contracts offset by the cost of committed natural gas transportation that was not available during the period. |
(2) | Net operating costs are calculated as gross operating costs less processing revenue. |
(3) | Non-IFRS Measure. Operating netback equals petroleum and natural gas sales including realized hedging gains and losses on commodity contracts, marking income, less royalties, net operating costs and transportation costs calculated on a boe basis. Operating netback does not have a standardized measure prescribed by IFRS and therefore may not be comparable with the calculations of similar measures for other companies. See "Non-IFRS Measures" contained within Crew's MD&A. |
Other NE BC Montney
AB / SK Heavy Oil - Lloydminster
OUTLOOK
The crisis caused by the COVID-19 pandemic has resulted in unprecedented economic challenges facing the world and in particular our business. We appreciate the tireless efforts of Crew's employees and Directors whose commitment and dedication is critical to the success of our Company. We thank all of our shareholders and bondholders for your ongoing support.
Stay safe and be well.
Advisories
Information Regarding Disclosure on Operational Information and Non-IFRS Measures
All amounts in this news release are stated in Canadian dollars unless otherwise specified.
This press release contains financial and performance metrics that are not defined in IFRS and do not have standardized meanings or standardized methods of calculation, such as "adjusted funds flow", "operating netbacks", "net capital expenditures", "working capital surplus" and "net debt". As such, these terms may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons. Such metrics have been included herein to provide readers with additional information to evaluate the Company's performance, however such metrics should not be unduly relied upon. Management uses oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare Crew's operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this press release, should not be relied upon for investment or other purposes.
With respect to the use of terms used in this press release identified as Non-IFRS Measures, see Non-IFRS Measures contained in Crew's MD&A for applicable definitions, calculations, rationale for use and, where applicable, reconciliations to the most directly comparable measure under IFRS.
Forward-Looking Information and Statements
This news release contains certain forward–looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" "forecast" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this news release contains forward-looking information and statements pertaining to the following: the potential and uncertain impact of COVID-19 on the Company's operations and results; as to the execution of Crew's business plan including 2020 production guidance, capital spending plans and budget estimates; the anticipated receipt of additional net cash proceeds of $23 million upon remaining closings of the Company's previously announced strategic transactions; as to the Company's ongoing goal of increasing the overall weighting of condensate in its production mix; the estimated volumes, including planned production shut-ins, and product mix of Crew's oil and gas production; production estimates; commodity price expectations including Crew's estimates of natural gas pricing exposure; Crew's commodity risk management programs; marketing and transportation plans; estimates of sales points weightings; future liquidity and financial capacity; expectations regarding our credit facility renewal; future results from operations and operating metrics; potential for lower costs and efficiencies going forward including forecasted reductions in G&A for 2020 and estimated annual savings associated with shut-ins and planned operations and streamlining efforts; expectations regarding the potential government programs associated with COVID-19; world supply and demand projections and anticipated reductions in industry spending as a result, and long-term impact on pricing; future development, exploration, acquisition and disposition activities (including drilling and completion plans and associated timing and cost estimates); infrastructure investment plans and associated production capacity; and the amount and timing of capital projects.
In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of Crew which have been used to develop such statements and information but which may prove to be incorrect. Although Crew believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Crew can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: that Crew will continue to conduct its operations in a manner consistent with past operations; results from drilling and development activities consistent with past operations; the quality of the reservoirs in which Crew operates and continued performance from existing wells; the continued and timely development of infrastructure in areas of new production; the accuracy of the estimates of Crew's reserve volumes; certain commodity price and other cost assumptions; continued availability of debt and equity financing and cash flow to fund Crew's current and future plans and expenditures; the impact of increasing competition; the general stability of the economic and political environment in which Crew operates; the general continuance of current industry conditions; the timely receipt of any required regulatory approvals; the ability of Crew to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which Crew has an interest in to operate the field in a safe, efficient and effective manner; the ability of Crew to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Crew to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Crew operates; and the ability of Crew to successfully market its oil and natural gas products.
The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: the impact of COVID-19; changes in commodity prices; changes in the demand for or supply of Crew's products, the early stage of development of some of the evaluated areas and zones the potential for variation in the quality of the Montney formation; interruptions, unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates; climate change regulations, or other regulatory matters; changes in development plans of Crew or by third party operators of Crew's properties, increased debt levels or debt service requirements; inaccurate estimation of Crew's oil and gas reserve volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in Crew's public disclosure documents (including, without limitation, those risks identified in this news release and Crew's Annual Information Form).
The internal projections, expectations or beliefs underlying the Company's 2020 capital budget and corporate outlook for 2020 and beyond are subject to change in light of ongoing results, prevailing economic circumstances, commodity prices and industry conditions and regulations. Crew's outlook for 2020 and beyond provides shareholders with relevant information on management's expectations for results of operations, excluding any potential acquisitions, dispositions or strategic transactions that may be completed in 2020 and beyond. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted and Crew's 2020 guidance and outlook may not be appropriate for other purposes.
The forward-looking information and statements contained in this news release speak only as of the date of this news release, and Crew does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Supplemental Information Regarding Product Types
This news release includes references to average daily production volumes by quarter at Greater Septimus. The following is intended to provide the product type composition for each of the production figures provided herein, where not already disclosed within tables above:
Greater Septimus Production Volume Breakdown | ||||
Natural gas liquids(1) | Condensate | Natural gas | Total (boe/d) | |
Q1/20 | 11% | 17% | 72% | 19,894 |
Q4/19 | 10% | 13% | 77% | 18,720 |
Q3/19 | 11% | 13% | 76% | 19,648 |
Q2/19 | 10% | 16% | 74% | 19,594 |
Q1/19 | 10% | 13% | 77% | 19,535 |
Notes: | |
(1) | Throughout this news release, natural gas liquids ("ngl") comprise all natural gas liquids as defined by NI 51-101 other than condensate, which is disclosed separately. |
Test Results and Initial Production Rates
A pressure transient analysis or well-test interpretation has not been carried out and thus certain of the test results provided herein should be considered to be preliminary until such analysis or interpretation has been completed. Test results and initial production rates disclosed herein, particularly those short in duration, may not necessarily be indicative of long term performance or of ultimate recovery.
BOE equivalent
Barrel of oil equivalents or BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio 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 than the energy equivalency of 6:1, utilizing the 6:1 conversion ratio may be misleading as an indication of value.
Crew is a growth-oriented oil and natural gas producer, committed to pursuing sustainable per share growth through a balanced mix of financially and socially responsible exploration and development complemented by strategic acquisitions. The Company's operations are primarily focused in the vast Montney resource, situated in northeast British Columbia, and include a large contiguous land base. Crew's ultra-condensate-rich Septimus and West Septimus areas ("Greater Septimus") along with Groundbirch and the light oil area at Tower in British Columbia offer significant development potential over the long-term. The Company has access to diversified markets with operated infrastructure and access to multiple pipeline egress options. Crew's common shares are listed for trading on the Toronto Stock Exchange ("TSX") under the symbol "CR".
Financial statements and Management's Discussion and Analysis for the three month periods ended March 31, 2020 and 2019 are filed on SEDAR at www.sedar.com and are available on the Company's website at www.crewenergy.com.
SOURCE Crew Energy Inc.
Copyright 2020 Canada NewsWire
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