Seaview Energy Inc. Releases Record Financial and Operating Results for the Three Month Period Ended March 31, 2009
May 20 2009 - 2:34PM
Marketwired Canada
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A
VIOLATION OF U.S. SECURITIES LAWS.
Seaview Energy Inc. ("Seaview" or the "Company") (TSX VENTURE:CVU.A) (TSX
VENTURE:CVU.B) is pleased to announce its financial and operating results for
the three months ended March 31, 2009.
----------------------------------------------------------------------------
SELECTED INFORMATION
----------------------------------------------------------------------------
Financial Q1 2009 Q1 2008 % Change
----------------------------------------------------------------------------
Petroleum and natural gas sales ($000's) $ 7,000 $ 1,130 519%
Funds flow from operations ($000's)(1) 2,910 352 727%
Basic and diluted per share(2) 0.06 0.02 200%
Net loss ($000's) (1,061) (353) 201%
Basic and diluted per share(2) (0.02) (0.02) -
Capital expenditures ($000's)(3) 5,914 4,516 31%
Net debt (working capital surplus)($000's) 21,971 (3,801) (678%)
----------------------------------------------------------------------------
Shares Outstanding at period end
----------------------------------------------------------------------------
Class A 50,005,182 19,073,007 162%
Class B 1,053,540 1,053,540 -
----------------------------------------------------------------------------
Operations
----------------------------------------------------------------------------
Daily production
Natural gas (mcf/d) 9,464 1,456 550%
Light oil and NGLs (bbl/d) 388 4 9600%
----------------------------------------------------------------------------
Total production (boe/d) 1,965 246 699%
----------------------------------------------------------------------------
Average realized sales price
(net of risk management gains or losses)
Natural gas (per mcf) $ 6.34 $ 8.28 (23%)
Light oil and NGL (per bbl) 46.23 100.81 (54%)
----------------------------------------------------------------------------
Netback per boe
Sales price (net of risk management
gains or losses) $ 39.58 $ 50.43 (22%)
Royalties 7.60 11.83 (36%)
Operating expenses 10.19 11.23 (9%)
Transportation 1.73 1.25 38%
----------------------------------------------------------------------------
Operating netback $ 20.06 $ 26.12 (23%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The Company uses "funds flow from operations" and "funds flow from
operations per share" which do not have any standardized meaning
prescribed by Canadian GAAP. The term is used to analyze operating
performance and leverage.
(2) Weighted average diluted shares outstanding for Q1 2009 and Q1 2008
exclude the granted options and the impact of the conversion of the
Class B shares as these would have been anti-dilutive.
(3) Capital expenditures include the cash additions for the period and
capitalized G&A expense.
HIGHLIGHTS OF Q1 2009
- Average production for Q1 2009 was 1,965 boe/d, an increase of 699% relative
to Q1 2008 (204% per share), and a 10% increase compared to Q4 2008 of 1,794
boe/d (7% per share);
- Since commencing operations on October 17, 2007, record production levels in
the first quarter of 2009 mark the Company's sixth consecutive quarter of
growth;
- Funds flow from operations for Q1 2009 increased 727% to $2.91 million from
$0.35 million in Q1 2008. Funds flow from operations increased 200% per share
over the same period;
- Expanded credit facility to $44 million representing a 30% increase relative
to June 30, 2008. Based on net debt of approximately $22 million at the end of
Q1 2009, Seaview has $22 million of available credit capacity to pursue
strategic opportunities;
- Seaview drilled and cased 3 wells (1.67 net) in Q1 2009 resulting in 2
potential gas wells (0.67 net) and 1 abandoned well (1.0 net);
-- Participated in one successful exploration well (0.25 net) in the Harlech
area of west-central Alberta targeting a developing resource play. During the
first quarter of 2009, several prospective reservoir zones were successfully
completed evaluating the long-term resource potential of this exploration
property. Due to surface access issues in the Harlech area, tie-in of this
successful well to a near-by gathering system is planned for winter 2009-2010;
-- Participated in one successful gas well (0.42 net) in the Gordondale area.
The construction of the wellsite facilities and pipeline has been completed with
initial production of more than 50 boe/d expected to be on-stream by Q3 2009.
- During Q1 2009 operations focused on equipping and tie-in activities on 3
producing wells (1.2 net) drilled and completed in Q4 2008 and Q1 2009 in the
Gordondale, Valhalla and Sinclair areas adding more than 220 boe/d of
production. New production from these wells was deferred until April 1, 2009 in
order to maximize the 5% royalty rate under the Alberta Government's Royalty
Incentive Program ("2009 RIP") announced on March 3, 2009; and
- Seaview has an additional three wells (1.2 net) to be brought on production
during the year which are expected to add combined deliverability of
approximately 180 boe/d. New production from these wells will also qualify for
the 5% royalty rate under the 2009 RIP for a total of 400 boe/d of new
production eligible for the maximum 5% royalty rate until March 2010.
BUSINESS STRATEGY
Although industry experienced volatile commodity prices and the impact of the
global financial crisis on capital markets, Seaview is well positioned to
continue executing its aggressive growth strategy. Through a disciplined
approach to capital management, the Company has several key characteristics that
support continued growth and value creation for shareholders despite the current
economic climate:
- High-quality, long reserve life assets, focused on natural gas in the Peace
River Arch and light oil in southeast Saskatchewan, both desirable areas within
the Western Canadian Sedimentary Basin;
- Strong financial position including a low cost structure, strong balance sheet
and $22 million of available credit capacity providing Seaview with the ability
to capitalize on strategic opportunities;
- Attractive commodity risk management program to provide an enhanced cash flow
stream in order to maintain balance sheet strength, secure acquisition economics
and finance the Company's capital expenditures; and
- Strong management team, directors and technical professionals with significant
ownership positions, ensuring strong alignment to shareholders' interests.
Seaview continues to focus on the Company's balanced growth strategy of
acquiring, exploiting and exploring for high-quality natural gas and light oil
assets in Western Canada.
Throughout the first quarter of 2009, the Company has focused on preparing for
an active summer program directed towards capitalizing on the benefits of the
2009 RIP. In order to qualify for the drilling credit, new wells must be drilled
between April 1, 2009 and March 31, 2010. Seaview is well positioned to
capitalize on the incentive program due to the Company's solid balance sheet and
inventory of low to medium risk drilling opportunities within the Peace River
Arch core area. The benefits of 2009 RIP may be significant to Seaview as the
royalty credits earned through drilling offset 50% - 75% of the capital cost to
drill a typical well.
The 2009 RIP provides a one-time opportunity to maximize the net asset value of
the assets by adding new reserves while benefiting from the reduced royalty
rates on new production as well as drilling credits used to lower royalties
payable on existing production. It is estimated that, at current strip pricing,
the 2009 RIP would have approximately a $2.5 million cash impact over the next
two years, which will result in a reduction to royalties payable.
Seaview has the ability to expand the prospect inventory of over 60
opportunities through execution of additional acquisition and farm-in
opportunities in the Peace River Arch. Due to the lack of equity and credit
availability for many competitors, Seaview has an ability to capitalize on
several opportunities in an area where the Company has experienced significant
drilling success to date. Seaview has demonstrated this success with our strong
2008 drilling program, drilling 18 wells (9.1 net) and adding over 2.6 million
boe of reserves on a Total Proven Plus Probable basis at a cost of $12.08/boe
(including changes in Future Development Costs ("FDC")).
The Company continues to review several property and corporate acquisition
opportunities aimed at consolidating the existing Peace River Arch and southeast
Saskatchewan core areas, or adding a new focus area, for the Company. Seaview is
well positioned, financially, to capitalize the drilling program and acquisition
opportunities that meet the investment criteria of quality reserves with
additional upside potential through drilling and optimization.
COMMODITY PRICE RISK MANAGEMENT
A key component to Seaview's balance sheet management is the Company's commodity
price risk program. The price risk management program is intended to reduce
price volatility in order to maintain balance sheet strength, protect
acquisition economics and finance ongoing capital expenditures.
- Seaview currently has approximately 850 boe/d (43% of estimated 2009
production) hedged for the remainder of 2009.
-- 4,500 GJ/d of natural gas hedged in put and fixed contracts providing for a
"net of cost" floor of $8.10/GJ which is a 94% premium to the current calendar
AECO 2009 futures strip of $4.17/GJ.
-- 100 bbl/d of crude oil hedged in a fixed contract at CDN$55.90/bbl.
- Current hedging program provides minimum gross revenue of $14.5 million for
2009 for the hedged volumes.
- As at April 30, 2009, the estimated mark-to-market value of the derivatives
contracts was $4.0 million.
- The following natural gas and crude oil financial contracts are currently
outstanding:
Volume Pricing Point Price Term
----------------------------------------------------------------------------
Natural Gas August '08-
Put(1) 1,000 GJ/d AECO Monthly $ 8.70/GJ December '09
Natural Gas November '08-
Put 1,500 GJ/d AECO Monthly $ 8.50/GJ December '09
Natural Gas April '09-
Put 1,000 GJ/d AECO Monthly $ 9.00/GJ December '09
Natural gas March '09-
swap 1,000 GJ/d AECO Monthly $ 6.02/GJ December '09
Natural gas January '10-
call 1,500 GJ/d AECO Monthly $ 7.00/GJ December '10
Crude oil March '09-
swap 100 bbl/d WTI-Nymex CAD $ 55.90/bbl December '09
Crude oil January '10-
call 100 bbl/d WTI-Nymex CAD $ 80.00/bbl December '10
----------------------------------------------------------------------------
(1) The net floor for this contract reflects the deferred cost of $1.80/GJ
paid over the course of the contract. The strike price of the put is
$10.50/GJ before the deferred cost.
OUTLOOK; 2009 GUIDANCE
Seaview's core areas feature high-quality, long-life reserves with significant
identified upside potential through exploration and development drilling. The
Company is currently well positioned to continue its growth strategy in 2009
despite the current challenging economic climate, with the following
characteristics:
- Total Proven reserves are 4,786 mboe, and Total Proven plus Probable reserves
are 7,256 mboe, effective December 31, 2008, as evaluated by Sproule and
Associates using National Instrument 51-101 reserve definitions;
- Forecast 2009 average daily production of more than 2,000 boe/d, and 2009 exit
rate of more than 2,100 boe/d;
- Expanded credit facility of $44 million representing a 30% increase relative
to June 30, 2008. Based on net debt of $22 million as at March 31, 2009, Seaview
has $22 million of available credit capacity to pursue strategic opportunities;
- Commodity hedging program providing for downside protection on 43% of 2009
forecasted average production generating minimum of $14.5 million gross revenue
for 2009;
- Reserve life index is 10.1 years based on Total Proven plus Probable reserves
and Q1 2009 production of 1,965 boe/d;
- Forecasted 2009 capital budget designed to be net debt neutral at the end of
2009 compared to year end 2008 based on reinvesting cash-flow plus the positive
impact of drilling credits to be earned under the 2009 RIP announced on March 3,
2009; and
- Drilling inventory of more than 80 locations, including over 60 prospects
targeting multizone conventional formations in the Peace River Arch, and 20
potential locations targeting light oil in southeast Saskatchewan. Seaview's
prospect inventory is not fully reflected in the Company's independent reserve
evaluation and therefore provides for significant long-term growth potential.
FILING OF FIRST QUARTER 2009 FINANCIALS
Seaview has filed its financial results for the three month period ended March
31, 2009 including the unaudited interim consolidated financial statements and
related management's discussion and analysis ("MD&A").
These filings are available in their entirety at www.seaviewenergy.com and
www.sedar.com or by contacting the Company directly.
ANNUAL MEETING
Seaview's Annual Meeting is scheduled for 3:00 pm on Thursday, June 4, 2009 in
the Viking Room at the Calgary Petroleum Club, 319 - 5th Avenue SW, Calgary,
Alberta.
Barrels of oil equivalent (boe) may be misleading, particularly if used in
isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural
gas to one barrel (bbl) of oil is based on an energy conversion method primarily
applicable at the burner tip and is not intended to represent a value
equivalency at the wellhead. All boe conversions in this press release are
derived by converting natural gas to oil in the ratio of six thousand cubic feet
of natural gas to one barrel of oil. Certain financial amounts are presented on
a per boe basis, such measurements may not be consistent with those used by
other companies.
Estimated values contained in this press release do not represent fair market value.
This press release may contain forward-looking statements within the meaning of
applicable securities laws. Forward-looking statements may include estimates,
plans, anticipations, expectations, opinions, forecasts, projections, guidance
or other similar statements that are not statements of fact. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to be correct. These statements are subject to certain risks and
uncertainties and may be based on assumptions that could cause actual results to
differ materially from those anticipated or implied in the forward-looking
statements. These risks include, but are not limited to: the risks associated
with the oil and gas industry (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 fluctuation and uncertainties resulting from
potential delays or changes in plans with respect to exploration or development
projects or capital expenditures. The Company's forward-looking statements are
expressly qualified in their entirety by this cautionary statement. The
forward-looking statements contained in this press release are made as of the
date hereof and the Company undertakes no obligations 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.
Seaview Energy Inc. Class B (TSXV:CVU.B)
Historical Stock Chart
From Jun 2024 to Jul 2024
Seaview Energy Inc. Class B (TSXV:CVU.B)
Historical Stock Chart
From Jul 2023 to Jul 2024
