CALGARY,
April 22, 2014 /CNW/ - Ironhorse Oil
& Gas Inc. ("Ironhorse" or the "Company") (TSXV: IOG) announces
its fourth quarter and full year 2013 financial and operating
results and year-end reserves information.
The Company's year-end reserves evaluation with
the effective date of December 31,
2013 was prepared by GLJ Petroleum Consultants Ltd. and
Sproule Associates Limited in accordance with definitions,
standards and procedures contained in the Canadian Oil and Gas
Evaluation Handbook ("COGE Handbook") and NI 51-101 "Standards of
Disclosure for Oil & Gas Activities". Reserves included
herein are stated on a company gross basis (working interest before
deduction of royalties without including any royalty interest)
unless otherwise noted.
Highlights of 2013:
- Completed the sale of the Leon Lake property for net proceeds
of $7.1 million, net of selling and
closing costs with funds used to repay all bank debt.
- Improvement of funds from operations to negative $4,000 for the year ended December 31, 2013 from negative $368,000 for the year ended December 2012.
- Reduced G&A expenses by $286,000 from $714,000 for the year ended December 31, 2012 to $428,000 for the year ended December 31, 2013.
- The Company's proved plus probable reserve volumes were 88% oil
and natural gas liquids weighted with 79% of reserve volumes being
proved.
- Annual production decreased by 7% to 99 boe per day from 107
boe per day in 2012 primarily due to the disposition of the Leon
Lake oil property in November
2013.
- Received approval from the Alberta Energy Regulator for the
completion of pipeline and facility expansion to bring on the
Company's share of production from the Pembina Nisku light oil
property.
Outlook for 2014:
The Company is debt free with cash on hand to
complete its share of all remaining capital expenditures for the
Pembina Nisku L2L pool. The 14-5-50-6W5M and 9-5-50-6W5M wells are
currently tied in and producing at restricted rates while Sinopec
is testing their current gas blending capacities and completing
work on the related facilities, with the 10-5- 50-6W5M water
injector now completed.
In 2014 the Company will focus on establishing
the maximum allowed production levels from the Pembina Nisku L2L
pool which includes application for a Special MRL (maximum rate
limitation) allowable and Enhanced Recovery water injection scheme
which includes Good Production Practice. Once
stabilized production is established at Pembina, the Company will
pursue options to maximize shareholder value.
On April 15, 2014
TransCanada provided industry with an updated status as to
potential shut in of gas pipelines as a result of a National Energy
Board (NEB) compliance order. TransCanada announced that effective
immediately, all gas pipelines, including those which handle gas
production from the Pembina L2L pool would not be curtailed or shut
in as the NEB has accepted TransCanada's plan to remedy pipeline
issues. As a result of this, Keyera will not be required to shut-in
production that would have affected production from the Pembina L2L
pool.
|
|
|
SELECTED
INFORMATION |
Three months
ended
December 31 |
Year ended
December 31 |
($ thousands except
per share & unit amounts) |
2013 |
2012 |
2013 |
2012 |
Financial |
|
|
|
|
Petroleum and natural
gas revenues (1) |
130 |
649 |
1,590 |
2,053 |
Funds from operations
(2) |
(75) |
136 |
(4) |
(368) |
|
Per share - basic and diluted |
- |
- |
- |
(0.01) |
Net income (loss) |
(277) |
270 |
(1,713) |
(889) |
|
Per share - basic
and diluted |
(0.01) |
0.01 |
(0.06) |
(0.03) |
Capital expenditures
(3) |
756 |
73 |
870 |
698 |
Operation |
|
|
|
|
Production |
|
|
|
|
|
Gas (mcf/d) |
159 |
741 |
375 |
277 |
|
Oil (bbl/d) |
9 |
60 |
36 |
61 |
|
Total (boe/d) |
36 |
184 |
99 |
107 |
Petroleum and natural
gas revenues ($/boe) |
38.84 |
38.39 |
44.00 |
52.54 |
Royalties ($/boe) |
6.03 |
6.55 |
11.56 |
13.48 |
Operating expenses ($/boe) |
0.64 |
13.26 |
13.85 |
20.60 |
Operating netback ($/boe) |
32.17 |
18.58 |
18.59 |
18.46 |
(1) Petroleum and
natural gas revenues are before royalty expense. |
(2) Funds from
operations and net debt are non-GAAP measures as defined in the
Advisory section of the MD&A. |
(3) Capital expenditures
are before acquisitions and dispositions. |
Reserves Summary - Oil Equivalent
(Mboe) |
(Mboe) |
Proved
Producing |
Proved
Developed
Non-Producing |
Proved
Undeveloped |
Total Proved |
Total Probable |
Proved plus
Probable |
2013 |
12 |
625 |
- |
637 |
172 |
809 |
2012 |
119 |
617 |
276 |
1,012 |
416 |
1,428 |
Net Present Value Summary(1)
|
($ thousands) |
Proved
Producing |
Proved
Developed
Non-Producing |
Proved
Undeveloped |
Total
Proved |
Total
Probable |
Total
Proved plus
Probable |
10% |
141 |
22,016 |
- |
22,157 |
4,895 |
27,052 |
15% |
135 |
20,212 |
- |
20,347 |
4,046 |
24,393 |
(1)Net present value summary are before
income taxes |
Reserves Reconciliation - Oil Equivalent
(Mboe) |
(Mboe) |
Total
Proved |
Total
Probable |
Total
Proved plus
Probable |
December 31, 2012 |
1,012 |
416 |
1,428 |
Technical Revisions |
(239) |
(63) |
(302) |
Dispositions |
(100) |
(175) |
(274) |
Economic Factors |
- |
(6) |
(7) |
Production |
(36) |
- |
(36) |
December 31, 2013 |
637 |
172 |
809 |
Net Asset Value ("NAV") before income tax -
Discounted at 10% |
($ thousands except share and per
share data) |
|
December 31,
2013 |
December 31,
2012 |
Net present value-proved and probable |
|
27,052 |
39,507 |
Net working capital (debt) |
|
2,815 |
(3,277) |
Net asset value |
|
29,867 |
36,230 |
Common shares outstanding |
|
27,860,824 |
27,860,824 |
NAV per share, December 31 |
|
1.07 |
1.30 |
GLJ Price Forecasts as of December 31, 2013
(1) |
Year |
|
|
|
Edmonton Par Price
40o API
($Cdn/bbl) |
AECO Gas
Price
($Cdn/Mmbtu) |
2014 |
|
|
|
92.76 |
4.03 |
2015 |
|
|
|
97.37 |
4.26 |
2016 |
|
|
|
100.00 |
4.50 |
2017 |
|
|
|
100.00 |
4.74 |
2018 |
|
|
|
100.00 |
4.97 |
2019 |
|
|
|
100.00 |
5.21 |
2020 |
|
|
|
100.77 |
5.33 |
2021 |
|
|
|
102.78 |
5.44 |
2022 |
|
|
|
104.83 |
5.55 |
2023 |
|
|
|
106.93 |
5.66 |
Thereafter |
|
|
|
+2%/year |
+2%/year |
(1) This summary table
identifies benchmark reference pricing schedules that might apply
to a reporting issuer. |
Additional Information
Ironhorse's complete results for the year ended
December 31, 2013, including audited
financial statements and the management's discussion and analysis,
annual information form, statement of reserves data and other oil
and gas information are available on SEDAR or the Company's web
site at www.ihorse.ca.
About Ironhorse:
Ironhorse Oil & Gas Inc. is a Calgary-based junior oil and natural gas
production company trading on the TSX Venture Exchange under the
symbol "IOG."
Forward-looking statements:
Statements throughout this release that are
not historical facts may be considered to be "forward looking
statements." These forward looking statements sometimes include
words to the effect that management believes or expects a stated
condition or result. All estimates and statements that describe the
Company's objectives, goals, or future plans, including
management's assessment of future plans and operations, drilling
plans and timing thereof, expected production rates and additions
and the expected levels of activities may constitute
forward-looking statements under applicable securities laws and
necessarily involve risks including, without limitation, risks
associated with oil and gas exploration, development, exploitation,
production, marketing and transportation, volatility of commodity
prices, imprecision of reserve estimates, environmental risks,
competition from other producers, incorrect assessment of the value
of acquisitions, failure to complete and/or realize the anticipated
benefits of acquisitions, delays resulting from or inability to
obtain required regulatory approvals and ability to access
sufficient capital from internal and external sources and changes
in the regulatory and taxation environment. As a consequence, the
Company's actual results may differ materially from those expressed
in, or implied by, the forward-looking statements. Forward-looking
statements or information are based on a number of factors and
assumptions which have been used to develop such statements and
information but which may prove to be incorrect. Although the
Company 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
the Company can give no assurance that such expectations will prove
to be correct. In addition to other factors and assumptions which
may be identified in this document, assumptions have been made
regarding, among other things: the ability of the Company to obtain
equipment and services in a timely and cost efficient manner;
drilling results; the ability of the operator of the projects which
the Company has an interest in to operate the field in a safe,
efficient and effective manor; and field production rates and
decline rates. Readers are cautioned that the foregoing list of
factors is not exhaustive. Additional information on these and
other factors that could affect the Company's operations and
financial results are included elsewhere herein and in reports on
file with Canadian securities regulatory authorities and may be
accessed through the SEDAR website (www.sedar.com). Furthermore,
the forward-looking statements contained in this release are made
as at the date of this release.
Boe Conversion - Certain natural gas volumes
have been converted to barrels of oil equivalent ("boe") whereby
six thousand cubic feet (mcf) of natural gas is equal to one barrel
(bbl) of oil. This conversion ratio is based on an energy
equivalency conversion applicable at the burner tip and does not
represent a value equivalency at the wellhead.
"Neither 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 Ironhorse Oil & Gas Inc.