CUT BANK, MT, May 21, 2015 /CNW/ - Mountainview Energy Ltd.
("Mountainview" or the "Company") (TSX-V: MVW) announces its
operating and financial results for the quarter ended March 31, 2015. The Company also announces that
its financial statements and management's discussion and analysis
for the quarter ended March 31, 2015,
are available on SEDAR at www.sedar.com, and on Mountainview's
website at www.mountainviewenergy.com.
Quarter End Financials
During the first quarter of 2015, Mountainview, like all
similarly situated oil and gas companies, continued to face a
depressed commodity price environment. In addition, equipment
replacement in the field and tie-in operations to connect wells to
a third party salt water disposal system lead to sporadic
production interruptions in the quarter. These factors
combined resulted in a decrease in quarterly revenue. The
Company remains focused on reducing costs going forward and
management is reviewing strategic options available to the Company
at this time.
Highlights of Mountainview's performance in 2014 are as
follows:
- Realized lower per barrel operating costs when compared to the
preceding three quarters.
- Reduced G&A expenses to an average of $162,000 per month for the quarter, 19% below the
target of $200,000 per month.
Certain selected financial and operational information for the
three months ended March 31, 2015 and
2014, and twelve months ended December 31,
2014 and 2013, is outlined below and should be read in
conjunction with Mountainview's reviewed financial statements for
the quarters ended March 31, 2015 and
2014, and the audited financial statements for the years ended
December 31, 2014 and 2013 and the
accompanying management's discussion and analysis filed with the
Canadian securities regulatory authorities which may be accessed
through the SEDAR website (www.sedar.com) and also on the Company's
website: www.mountainviewenergy.com.
|
Three months March
31
|
Twelve months
ended December 31
|
|
2015
|
2014
|
%
Change
|
2014
|
2013
|
%
Change
|
|
Financial (US
$ 000's, except per share amounts)
|
|
|
|
|
|
|
|
Petroleum and
natural gas sales
|
2,050
|
6,108
|
-66%
|
24,108
|
20,527
|
17%
|
|
Funds flow from
operations (1)
|
(2,879)
|
310
|
-1029%
|
(1,973)
|
3,359
|
-159%
|
|
Per share
basic
|
(0.03)
|
0.00
|
-1029%
|
(0.02)
|
0.07
|
-131%
|
|
Per share
diluted
|
(0.03)
|
0.00
|
-1029%
|
(0.02)
|
0.06
|
-131%
|
|
Expiries and
Impairment (2)
|
(584)
|
(267)
|
-119%
|
(46,474)
|
(2,795)
|
-1563%
|
|
Net
loss
|
(5,011)
|
(1,542)
|
-225%
|
(54,347)
|
(5,974)
|
-810%
|
|
Per share
basic
|
(0.06)
|
(0.02)
|
-225%
|
(0.62)
|
(0.07)
|
-786%
|
|
Per share diluted
(3)
|
(0.06)
|
(0.02)
|
-225%
|
(0.62)
|
(0.07)
|
786%
|
|
Capital expenditures
(4)
|
307
|
7,910
|
-96%
|
23,553
|
48,707
|
-52%
|
|
Net debt
(5)
|
88,109
|
65,314
|
35%
|
84,658
|
59,244
|
43%
|
|
Operating
|
|
|
|
|
|
|
|
Average daily
production
|
|
|
|
|
|
|
|
Light crude oil (bbl
per day)
|
627
|
778
|
-19%
|
802
|
644
|
25%
|
|
Natural gas (Mcf per
day)
|
211
|
719
|
-71%
|
219
|
632
|
-65%
|
|
Natural Gas Liquids
(bbl per day)
|
18
|
-
|
N/A
|
14
|
-
|
N/A
|
|
Barrels of oil
equivalent (boe per day, 6:1)
|
680
|
898
|
-24%
|
853
|
749
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
Three months March
31
|
Twelve months
ended December 31
|
|
2015
|
2014
|
%
Change
|
2014
|
2013
|
%
Change
|
|
% Oil and
NGLs
|
92%
|
87%
|
6%
|
94%
|
86%
|
9%
|
|
Average sales
price
|
|
|
|
|
|
|
|
Light crude oil ($
per bbl)
|
35.36
|
85.28
|
-59%
|
80.81
|
86.20
|
-6%
|
|
Natural gas ($ per
Mcf)
|
1.91
|
1.35
|
41%
|
3.53
|
2.98
|
19%
|
|
Natural Gas Liquids
($ per bbl)
|
14.85
|
-
|
N/A
|
41.89
|
-
|
N/A
|
|
Barrels of oil
equivalent ($ per boe, 6:1)
|
33.51
|
75.01
|
-55%
|
77.78
|
75.08
|
4%
|
|
Operating netback
($ per boe) (6)
|
|
|
|
|
|
|
|
Petroleum and natural
gas sales
|
33.51
|
75.01
|
-55%
|
77.78
|
75.08
|
4%
|
|
Realized gain (loss)
on derivatives
|
7.14
|
(0.40)
|
1885%
|
(0.04)
|
-
|
N/A
|
|
Royalties
|
(6.04)
|
(13.02)
|
54%
|
(14.24)
|
(12.18)
|
-17%
|
|
Operating
expenses
|
(31.01)
|
(27.43)
|
-13%
|
(35.60)
|
(24.06)
|
-48%
|
|
Operating
netback
|
3.60
|
34.16
|
-89%
|
27.90
|
38.84
|
-28%
|
|
Wells
drilled
|
|
|
|
|
|
|
|
Gross
|
-
|
2.0
|
-
|
3.0
|
8.0
|
-63%
|
|
Net
|
-
|
1.4
|
-
|
1.3
|
4.8
|
-73%
|
|
Success
(%)
|
N/A
|
100
|
-
|
100
|
100
|
0%
|
|
Common
Shares
|
|
|
|
|
|
|
|
Shares outstanding,
end of period
|
87,820,443
|
87,820,443
|
0%
|
87,820,443
|
87,820,443
|
0%
|
|
|
|
(1)
|
Funds flow from
operations should not be considered an alternative to, or more
meaningful than, cash flow from operating activities as determined
in accordance with International Financial Reporting Standards as
an indicator of Mountainview's performance. Funds flow from
operations represents cash flow from operating activities prior to
changes in non-cash working capital, transaction costs and
decommissioning provision expenditures incurred. Mountainview also
presents funds flow from operations per share whereby per share
amounts are calculated using weighted average shares outstanding
consistent with the calculation of earnings per share.
|
|
(2)
|
The low commodity
price environment at year end 2014 led the Company to assess for
indicators for impairment. The indicators for impairment
noted include no future capital allocated for undeveloped land in
the Stateline area, low market value for acreage in Divide County,
North Dakota, and fair value less cost to dispose of existing oil
and gas assets that was below the carrying value. The
resulting $16.9 million impairment charge on undeveloped acreage
reduced the carrying value of undeveloped land in the Stateline
area, which straddles the border between Montana and North Dakota,
and in Divide County, North Dakota. In addition, undeveloped
leases on 7,511 net acres of land expired in 2014, which had a
carrying value of $6.7 million. An impairment charge on the
Company's developed oil and gas properties reduced the value by
$22.9 million. For additional information on the indicators of
impairment and resulting impairment charges, please see Notes 9
& 10 of the Company's audited annual financial
statements.
|
|
(3)
|
Due to the
anti-dilutive effect of Mountainview's net loss for the three
months and year ended March 31, 2015 and 2014, the diluted number
of shares is equal to the basic number of shares. Therefore,
diluted per share amounts of the net loss are equivalent to basic
per share amounts.
|
|
(4)
|
Capital expenditures
are a non-GAAP measure, calculated as the purchase or sale price of
an asset, plus development capital expenditures added to PP&E.
Corporate acquisitions are excluded from this measure.
|
|
(5)
|
Net debt is a
non-GAAP measure representing the total of bank indebtedness,
accounts payables and accrued liabilities and long-term debt, less
accounts receivables, deposits and prepaid expenses.
|
|
(6)
|
Operating netback is
a non-GAAP measure calculated as the average per boe of the
Company's oil and gas sales plus realized gains on derivatives,
less royalties, production taxes, operating and transportation
expenses.
|
Corporate Update
A sharp decline in oil prices in the latter half of 2014 and
continued low prices during the first four months of 2015 has
materially reduced the Company's operating cash flow. In
response, the Company has taken steps to reduce G&A expenses,
including layoffs, salary reductions, decreasing or delaying field
operating expenses and plans and a freeze on new capital drilling
and/or completions in efforts to maximize available cash on hand
during these difficult times. These austerity measures aside, the
Company there has been no significant change in the Company's
financial, liquidity and debt challenges since the news release
dated April 30, 2015. As at
March 31, 2015 Mountainview has a
working capital deficit of $76.9
million consisting of current assets of $4.6 million ($ 1.0
million cash) and current liabilities of $79.4 million. The Company owes $51.1 million under its credit facility with
Wells Fargo, $8.5 million to First
Interstate Bank and trade payables and other of $19.7 million. With respect to the credit
facility with Wells Fargo, the Company's US subsidiary borrower was
in breach of its current ratio covenant at March 31, 2015 and remains in breach. In
addition, the Company is in breach of covenants around timely
payments of trade payables and requirements that oil and gas assets
remain free of liens. Liens have been filed totaling $7.9 million; however, agreements with certain
lienholders have allowed for continued receipt of production
revenues to fund interest payments and critical ongoing operations
and administration. Wells Fargo is
aware of these issues and has not taken any formal action to
exercise rights and/or remedies under the credit agreement. Under
the bank line of credit the Company was in default due to
non-payment of principal and interest in December and has not made
payments for February, March and April of 2015. At this time, the
bank has not taken any formal action to exercise its rights and/or
remedies under the credit agreement. The Company is involved in
active discussions with its lenders and trade creditors to
negotiate a comprehensive solution to resolve its financial
challenges. In addition the Company has long- term debts consisting
of an aggregate of $10.9 million
pursuant to outstanding promissory notes with an officer and
director of the Company and two major shareholders and $2.6 million pursuant to a convertible debenture,
a portion of which is with an officer and director of the Company.
These debts mature July 1, 2016 and
are in good standing. The Company is looking to include them in any
debt solution plan and is currently engaged in discussions to this
end.
The Company plans to continue negotiations and discussions with
creditors to resolve its liquidity and debt challenges. In parallel
the Company is actively considering debt and equity financing
solutions, assets sales and corporate transactions among other
available alternatives, with a view to the best interest of the
Company.
About Mountainview
Mountainview Energy Ltd. is a public oil and gas company listed
on the TSX Venture Exchange, with a primary focus on the
exploration, production and development of the Bakken and Three
Forks Shale in the Williston Basin
and the South Alberta Bakken.
Forward Looking Statements
Statements in this press release contain forward-looking
information and forward-looking statements within the meaning of
applicable securities laws (collectively, "forward-looking
information"). Forward-looking information is frequently
characterized by words such as "plan", "expect", "project",
"intend", "believe", "anticipate", "estimate" and other similar
words, or statements that certain events or conditions "may" or
"will" occur. In particular, forward-looking information in this
press release includes, without limitation, statements with respect
to the challenges facing the Company and its subsidiaries and the
various alternatives available.
Although the Company believes that the expectations and
assumptions reflected in the forward-looking information are
reasonable, there can be no assurance that such expectations or
assumptions will prove to be correct. Forward-looking information
is based on the opinions and estimates of management at the date
the statements are made, and is subject to a variety of risks and
uncertainties and other factors (many of which are beyond the
control of Mountainview) that could cause actual events or results
to differ materially from those anticipated in the forward-looking
information. Some of the risks and other factors could cause
results to differ materially from those expressed in the
forward-looking information include, but are not limited to:
operational risks in exploration, development and production;
delays or changes in plans; competition for and/or inability to
retain drilling rigs and other services; competition for, among
other things, capital, acquisitions of reserves, skilled personnel
and supplies; risks associated to the uncertainty of reserve and
resource estimates; governmental regulation of the oil and gas
industry, including environmental regulation; geological,
technical, drilling and processing problems and other difficulties
in producing reserves; the uncertainty of estimates and projections
of production, costs and expenses; unanticipated operating events
or performance which can reduce production or cause production to
be shut in or delayed; incorrect assessments of the value of
acquisitions; the need to obtain required approvals from regulatory
authorities; stock market volatility; volatility in market prices
for oil and natural gas; liabilities inherent in oil and natural
gas operations; access to capital; the outcome and impact of
litigation to which the Company or its subsidiaries may become
party; turnover in management; uncertainty with respect to the
various alternatives available to the Company and its subsidiaries
and other factors. Readers are cautioned that this list of risk
factors should not be construed as exhaustive.
The forward-looking information contained in this news
release is expressly qualified by this cautionary statement.
Mountainview does not undertake any obligation to update or revise
any forward-looking statements to conform such information to
actual results or to changes in its expectations except as
otherwise required by applicable securities legislation. Readers
are cautioned not to place undue reliance on this forward-looking
information.
Meaning of BOE
The term "BOE" or barrels of oil equivalent may be
misleading, particularly if used in isolation. A BOE conversion
ratio of six thousand cubic feet of natural gas to one barrel of
oil equivalent (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. Additionally,
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 ratio of 6:1 may
be misleading as an indication of value.
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 Mountainview Energy Ltd.
