CUT BANK, MT, Nov. 24, 2015 /CNW/ - Mountainview Energy Ltd.
("Mountainview" or the "Company") (TSX-V: MVW) announces its
operating and financial results for the quarter ended September 30, 2015. The Company also announces
that its financial statements and management's discussion and
analysis for the quarter ended September 30,
2015, is available on SEDAR at www.sedar.com, and on
Mountainview's website at
www.mountainviewenergy.com.
Quarter End Financials
During the third quarter of 2015, Mountainview continued to face
a depressed commodity price environment. The company reported a
loss for the three and nine months ended September 30, 2015 despite quarter over prior
year quarter and year over year decreases in both operating costs
and general and administrative costs per barrel of oil equivalent
("boe"). The depressed commodity price environment, expiration of
the Company's hedging contract along with non-cash costs such as
impairment, lease expiration and depletion expenses factored into
the Company's operating loss. The Company remains focused on
reducing costs going forward, and is pleased to report that it has
achieved its goal of reducing monthly general and administrative
costs to less than $0.2 million per
month for the year so far.
Highlights of Mountainview's performance in the third quarter of
2015 are as follows:
- Reduced operating costs per boe by $7.65 in comparison to the prior year quarter, a
decrease of 25%.
- Reduced G&A expenses to an average of $100,000 per month for the quarter, down from
$239,000 per month for the prior year
quarter
Certain selected financial and operational information for the
three and nine months ended September 30,
2015 and 2014, is outlined below and should be read in
conjunction with Mountainview's financial statements for the
quarters ended September 30, 2015 and
2014 and the accompanying management discussion and analysis filed
with the Canadian securities regulatory authorities which may be
accessed through the SEDAR website (www.sedar.com) and also on the
Company's website: www.mountainviewenergy.com.
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Three months ended
September 30
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Nine months ended
September 30
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2015
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2014
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%
Change
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2015
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2014
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%
Change
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Financial(US$
000's, except per share amounts)
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Petroleum and
natural gas sales
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897
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5,883
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(85%)
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4,569
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19,000
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(76%)
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Funds flow from
operations (1)
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(3,509)
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(332)
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957%
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(5,341)
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(50)
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10,582%
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Per share
basic
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(0.04)
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(0.00)
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957%
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(0.06)
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(0.00)
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10,582%
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Per share
diluted
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(0.04)
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(0.00)
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957%
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(0.06)
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(0.00)
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10,582%
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Expiries
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-
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673
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(100%)
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1,785
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5,364
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(67%)
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Impairment(2)
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5,780
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-
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N/A
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6,658
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-
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N/A
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Net
loss
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(9,639)
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(1,638)
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488%
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(22,291)
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(9,448)
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136%
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Per share
basic
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(0.11)
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(0.02)
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488%
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(0.25)
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(0.11)
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136%
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Per share diluted
(3)
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(0.11)
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(0.02)
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488%
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(0.25)
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(0.11)
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136%
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Capital expenditures
(disposals)(4)
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688
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7,132
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(90%)
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1,076
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21,250
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(95%)
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Net debt
(5)
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93,286
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75,911
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23%
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93,286
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75,911
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23%
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(1)
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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.
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(2)
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The low commodity
price environment led the Company to assess for indicators for
impairment. Noting the existence of impairment indicators the
Company performed an impairment analysis and concluded recoverable
amounts for all cash generating units exceeded their respective
carrying values, with the exception of the 12 Gage cash generating
unit "CGU". An impairment expense was recognized in the current
quarter on the 12 Gage CGU.
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(3)
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Due to the
anti-dilutive effect of Mountainview's net loss for the three and
nine months and year ended September 30, 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.
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(4)
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Capital expenditures
is a non-GAAP measure and is defined as the total cash
consideration paid or received for property acquisitions and
dispositions, plus development and exploration capital
expenditures.
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(5)
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Net debt is a
non-GAAP measure representing the total of bank indebtedness,
accounts payables and accrued liabilities and long term debt, less
current assets.
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(6)
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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.
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Three months ended
September 30
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Nine months ended
September 30
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2015
|
2014
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%
Change
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2015
|
2014
|
%
Change
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Operating
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Average daily
production
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Light crude oil (bbl
per day)
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299
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755
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(60%)
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426
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792
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(46%)
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Natural gas (mcf per
day)
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220
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227
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(3%)
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222
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232
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(4%)
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Natural gas liquids
(boe per day)
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8
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14
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(43%)
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18
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8
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125%
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Barrels of oil
equivalent (boe per day, 6:1)
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345
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806
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(57%)
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481
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839
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(43%)
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% oil
production
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87%
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94%
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(7%)
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89%
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94%
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(6%)
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% natural gas
production
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13%
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6%
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110%
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11%
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6%
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105%
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Average sales
price
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Light crude oil ($
per bbl)
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30.87
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84.33
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(63%)
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37.82
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86.63
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(56%)
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Natural gas ($ per
mcf)
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2.27
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3.06
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(26%)
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2.20
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3.69
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(40%)
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Natural gas liquids
($ per bbl)
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4.40
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67.28
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(93%)
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7.39
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46.38
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(84%)
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Barrels of oil
equivalent ($ per day, 6:1)
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28.39
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82.40
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(66%)
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34.81
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84.06
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(59%)
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Operating netback
($ per boe)(6)
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Petroleum and natural
gas sales
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28.39
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82.40
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(66%)
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34.81
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84.06
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(59%)
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Realized gain (loss)
on derivatives
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-
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(0.39)
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(100%)
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5.80
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1.04
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458%
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Royalties
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(4.46)
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(16.84)
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(74%)
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(6.01)
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(15.61)
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(61%)
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Operating expenses
and production taxes
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(25.14)
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(36.73)
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(32%)
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(29.81)
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(34.07)
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(13%)
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Operating
netback
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(1.21)
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28.44
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(104%)
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4.79
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35.42
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(86%)
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Wells
drilled
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Gross
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-
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2.0
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0%
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-
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4.0
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(100%)
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Net
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-
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1.9
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0%
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-
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1.9
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(100%)
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Success
(%)
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N/A
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100%
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0%
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N/A
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100%
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0%
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Corporate Update
A sharp decline in oil prices was first felt in Q4 2014 and has
continued through the current year. This price decline and the
expiration of the Company's hedging in the current quarter has
materially reduced the Company's operating cash flow. In response,
the Company has taken steps to reduce field operating expenses and
currently plans no new capital drilling and/or completions for the
remainder of 2015 in efforts to maximize available cash during
these difficult times. The Company has also reduced its G&A
through layoffs, salary reductions and overall general efforts to
conserve cash.
The Company continues to be faced with liquidity and debt
challenges. At September 30, 2015
Mountainview has a working capital deficit of $93 million. The Company owes $50.7 million in principal and interest under its
credit facility and $8.7 million on
its term loan. The credit facility matured on July, 1 2015, the
term loan matured on November 1,
2015. Both remain unpaid, triggering default events. Neither
bank has enacted any of its remedies under the agreements at this
time, however each bank has reserved all of its available rights
and remedies. Management continues to negotiate a change in terms
agreement/amendment with both banks, however the agreements have
not been finalized and no assurances can be given that such
negotiations will be successful.
Liens have been filed on certain of the Company's oil and gas
assets totaling $8.1 million;
however, agreements with certain lienholders have allowed for
continued receipt of production revenues to fund critical ongoing
operations and administration.
The Company is involved in active discussions with its banks and
trade creditors to negotiate a comprehensive solution to resolve
its financial challenges. In addition, the Company has short term
debts consisting of $11.8 million
pursuant to outstanding promissory notes with an officer/director
and two major shareholders and $2.4
million in convertible debenture, a portion of which is with
an officer and director. These debts mature July 1, 2016 and are in good standing. The
Company is looking to include them in any comprehensive 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.
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 liquidity and financial challenges facing the Company and
its subsidiaries and matters related thereto..
Although we believe 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 our expectations except as
otherwise required by applicable securities legislation. Readers
are cautioned not to place undue reliance on 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.