conix
3 years ago
InPlay Oil Corp. Announces 2022 Capital Budget Highlighting Record Financial and Operational Guidance
January 12, 2022 - Calgary Alberta – InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) (“InPlay” or the “Company”) is pleased to announce that its Board of Directors has approved a $58 million capital program for 2022 which is forecasted to deliver 2022 average production of 8,900 – 9,400 boe/d(1) (62% - 63% light oil and liquids).
InPlay enters 2022 in the strongest position in the Company’s history following a highly successful 2021, which saw the Company achieve record levels of annual production, adjusted funds flow (“AFF”) and free adjusted funds flow (“FAFF”)(2) while also exiting the year at its lowest ever net debt to earnings before interest, taxes and depletion (“EBITDA”)(2) level. On November 30, 2021 InPlay completed the highly accretive acquisition of Prairie Storm Resources Corp., further expanding our position in the Cardium. Based on continued strong drilling results and the positive outlook for commodity prices, InPlay is well positioned to deliver continued strong operational and financial results in the upcoming year.
2022 Capital Program Overview
The Company’s Board of Directors has approved a capital program for 2022 of $58 million. Given InPlay owns significant infrastructure, over 93% of the capital program is dedicated to growing production through drilling, completion, equipping and optimization expenditures. The 2022 capital program will see InPlay drill the most Cardium Extended Reach Horizontal (“ERH”) wells in our history. The 2022 capital program consists of drilling approximately 17.0 net Cardium wells, with a roughly even allocation of capital between our core Pembina and Willesden Green areas, focused predominantly on ERH wells. The first quarter of 2022 is expected to be our most active quarter to date with plans to drill six gross (4.9 net) ERH wells with three (3.0 net) in Pembina, two (1.7 net) on our recently acquired Prairie Storm lands in Willesden Green and one (0.2 net) ERH non-operated well. The Company also plans to complete, equip, and tie-in the two (1.6 net) ERH wells that were drilled in December 2021 on the Prairie Storm lands. The capital program incorporates approximately 8% cost inflation associated with higher services and tangibles costs anticipated due to an increase in industry activity relative to 2021. InPlay would have experienced even greater cost pressure, however we proactively mitigated the price increase in steel casing by acquiring the majority of our H1 2022 requirements in the third quarter of 2021 when prices were 30% - 35% below current levels.
InPlay’s 2022 capital program is forecasted to deliver(3):
Annual average production of 8,900 to 9,400 boe/d (62% - 63% light oil & liquids), delivering annual production growth of approximately 55% to 63% over 2021. On a debt adjusted basis, production growth per weighted average basic share(2) is forecast to be approximately 76% to 86% over 2021 which is expected to be top-tier per share growth amongst InPlay’s light oil weighted peers;
AFF of $111.0 to $117.0 million, approximately 118% to 129% higher on an absolute basis and 76% to 86% higher per weighted average basic share compared to previous 2021 AFF guidance;
FAFF of $53.5 to $59.5 million, initially used for debt reduction which will significantly improve InPlay’s leverage metrics and long term sustainability;
Net debt to EBITDA of 0.2x to 0.3x with forecasted year end net debt between $22.0 to $28.0 million which represents a 68% decrease from previous 2021 year end net debt guidance. At a stress test pricing level averaging $50 USD WTI over the entire year in 2022, the Company estimates 2022 net debt to EBITDA would remain below 1.0x; and
Record operating income profit margin(2) of approximately 68%.
The Company’s 2022 guidance is based on a current future commodity price curve with an annual average WTI price of US $72.50/bbl, $3.30/GJ AECO and estimated foreign exchange of $0.78 CDN/USD. As demonstrated in the past, the Company will continue to remain flexible, adaptable and react promptly to changing commodity prices throughout the year and will adjust its capital program if deemed appropriate.
InPlay is proud of the actions taken in 2020 to survive the price collapse caused by the pandemic. The strong operational results and acquisitions we made in 2021 have put us in the best financial, operational and sustainable position we have ever been as a company. We are very excited about the upcoming year which will reflect the first year of operations including the Prairie Storm assets. Record financial and operational results are anticipated again in 2022 and we look forward to continuing to maintain sustainability, deliver disciplined growth and strong returns to our shareholders. We would like to thank all of our employees, service providers, and shareholders for their continued efforts and support as well as our directors for their ongoing commitment and dedication. Please view our January 2022 corporate presentation which will be uploaded at www.inplayoil.com.
Notes:
See “Reader Advisories - Production Breakdown by Product Type”
“Free adjusted funds flow”, “Net debt to EBITDA”, “Operating income”, “Operating income profit margin” and “Production per debt adjusted share” do not have a standardized meaning under International Financial Reporting Standards (IFRS) and GAAP and therefore may not be comparable with the calculations of similar measures for other companies. Please refer to “Non-GAAP Financial Measures and Ratios” at the end of this news release and to the section entitled “Non-GAAP Measures and Ratios” in our MD&A for details of calculations, rationale for use and applicable reconciliation to the nearest IFRS measure.
See “Reader Advisories – Forward Looking Information and Statements” for key budget and underlying assumptions related to our 2022 capital program and associated guidance.
Hedging Update
In adherence to our recently increased and amended first lien credit facility, the Company has entered into additional near-term crude oil and natural gas derivative contracts. These contracts are structured such that they still provide InPlay with exposure to significantly higher commodity prices including $USD WTI prices up to $93/bbl in the second quarter of 2022 and $100/bbl in the third and fourth quarter of 2022 while also providing protection to extreme reductions in commodity prices. The following is a summary of all commodity contracts currently in place:
Fixed price swaps provide InPlay with a guaranteed price in lieu of realization of floating index prices.
Costless collars indicate InPlay concurrently bought put and sold call options at strike prices such that the costs and premiums received offset each other, thereby completing the derivative contracts on a costless basis.
Puts provide InPlay with a minimum floor price and full exposure to floating index prices realized above the minimum floor price for a premium payment.
The WTI three-way collars are a combination high priced sold call, low priced sold put and a mid-priced bought put. The high sold call price is the maximum price the Company will receive for the contract volumes. The mid bought put price is the minimum price InPlay will receive, unless the market price falls below the low sold put strike price, in which case InPlay receives market price plus the difference between the mid bought put price minus the low sold put price.
About InPlay Oil Corp.
InPlay, based in Calgary, Alberta, has been engaged in the business of exploring for, developing and producing oil and natural gas, and acquiring oil and natural gas properties in western Canada since it commenced operations as a private company in June 2013. InPlay has concentrated on exploration and development drilling of light oil prospects in the Province of Alberta in a focused area of Central and West Central Alberta.
The InPlay management team has worked closely together for many years in both private and public company environments and has an established track record of delivering cost-effective per share growth in reserves, production, AFF and funds flow. InPlay will continue to implement its proven strategy of exploring, acquiring, and exploiting assets with a long-term focus on large, light oil resources. The InPlay management team brings a full spectrum of geotechnical, engineering, negotiating and financial experience to its investment decisions. An updated corporate presentation will be posted to InPlay’s website in due course. Additional information about the Company can be found on SEDAR and on InPlay’s website at: www.inplayoil.com.
Doug Bartole
President and Chief Executive Officer
InPlay Oil Corp.
Telephone: (587) 955-0632
Darren Dittmer
Chief Financial Officer
InPlay Oil Corp.
Telephone: (587) 955-0634
conix
5 years ago
InPlay Oil Corp. Provides Operations Update and Announces Renewal of Credit Facilities
CALGARY, ALBERTA, July 8, 2019 – InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) ("InPlay" or the "Company") is pleased to provide an operations update and announce that the annual review of its operating and syndicated credit facilities by its lenders has been completed.
Production for the second quarter, based on field estimates, is expected to average over 5,100 boed. The Company is very pleased with this result as it is above the high end of our annual production guidance of 4,900 – 5,100 boed, and achieved despite significant third party infrastructure turn arounds and downtime encountered during the quarter. The last two Willesden Green 1.5 mile Extended Reach Horizontal (“ERH”) wells that were drilled and brought on production in March 2019 have delivered some of our strongest production rates to date. The two ERH wells are flowing (without artificial lift) at the following initial production (“IP”) rates:
Average IP-30 days of 891 boed (83% light oil and liquids)
Average IP-60 days of 817 boed (79% light oil and liquids)
Average IP-90 days of 668 boed (73% light oil and liquids)
Our strong balance sheet, coupled with low second quarter industry activity in Canada, provided InPlay access to preferred equipment as the Company elected in June to commence drilling the next two 1.5 mile ERH wells directly offsetting the last two wells brought on in March. These two wells, originally scheduled to commence drilling in the third quarter, were drilled in 9.0 and 9.2 days respectively continuing our industry pacesetting times for 1.5 mile ERH wells, but more importantly achieving new low costs of less than $1.4 mm on the drilling operations per well. These two wells are planned to be completed and brought on production later in July. In addition, as per our guidance, InPlay anticipates drilling and completing another four net horizontal wells prior to year-end. With strong production results year to date and an active second half drilling program, InPlay is well positioned to achieve its annual production guidance.
InPlay's borrowing base has been reconfirmed by its lenders at $75 million, comprised of a $65 million revolving line of credit and a $10 million operating line of credit, with the term out dates being extended to May 31, 2020. In conjunction with the customary annual review, the terms of the credit facilities have been amended to include newly required industry standard banking compliance and reporting features related to abandonment and reclamation activities and liability management ratings. As well, a provision has been put in place until the next semi-annual review on November 30, 2019 in which the borrowing base may be re-determined if requested by any lender in the event the outstanding principal under the credit facilities exceeds $60 million. The Company believes that this credit facility provides ample liquidity for InPlay to execute its stated 2019 capital program. The Company has never been drawn in excess of $60 million on our credit facilities and our expectations with our current 2019 program is that capital spending should not exceed expected funds flow from operations based on future commodity pricing while also still delivering top tier light oil growth amongst our oil weighted peers.
InPlay is based in Calgary, Alberta and the common shares of InPlay are traded on The Toronto Stock Exchange under the trading symbol "IPO". For further information about the Company, please visit our website at www.inplayoil.com.
For further information please contact:
Doug Bartole
President and Chief Executive Officer
InPlay Oil Corp.
Telephone: (587) 955-0632
Darren Dittmer
Chief Financial Officer
InPlay Oil Corp.
cash4
8 years ago
InPlay Oil Corp. Announces Fourth Quarter and 2016 Year End Financial and Operating Results
Mar 23, 2017
OTC Disclosure & News Service
https://www.otcmarkets.com/stock/IPOOF/news/InPlay-Oil-Corp--Announces-Fourth-Quarter-and-2016-Year-End-Financial-and-Operating-Results?id=154077&b=y
InPlay Oil Corp. Announces Fourth Quarter and 2016 Year End Financial and Operating Results
CALGARY, AB--(Marketwired - March 23, 2017) - InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) ("InPlay" or the "Company") announces its financial and operating results for the three months and year ended December 31, 2016. InPlay's full audited financial statements and notes, as well as management's discussion and analysis ("MD&A") for the three and twelve month periods ended December 31, 2016 will be available shortly on the System for Electronic Document Analysis and Retrieval ("SEDAR").
Financial and Operating Highlights
For the Three and Twelve Months Ended
(CDN$) (000's) Three months ended
December 31 Twelve months ended
December 31
2016 2015 2016 2015
Financial (CDN $)
Petroleum and natural gas revenue 10,578 7,655 27,850 32,556
Funds flow from Operations (1) (29 ) 4,500 6,407 15,792
Per share -- basic and diluted (1) (2) 0.00 0.37 0.33 1.31
Per boe(1) (0.12 ) 25.39 9.02 23.20
Comprehensive Income (Loss) 36,077 (9,862 ) 20,019 (30,101 )
Per share -- basic and diluted (2) 0.86 (0.82 ) 1.02 (2.50 )
Exploration and Development Capital expenditures 7,340 3,196 11,083 22,513
Property Acquisitions 45,450 - 45,450 885
Corporate Acquisitions 33,212 - 33,212 -
(Net Debt)/Working Capital (1) (34,556 ) (59,159 ) (34,556 ) (59,159 )
Shares outstanding (2) 62,396,169 12,063,110 62,396,169 12,063,110
Basic & fully diluted weighted-average shares (2) 42,153,526 12,063,110 19,626,821 12,052,898
Operational
Daily production volumes
Crude oil (bbls/d) 1,522 1,593 1,318 1,598
Natural gas liquids (bbls/d) 258 50 143 49
Natural gas (Mcf/d) 5,592 1,701 2,871 1,305
Total (boe/d) 2,712 1,926 1,940 1,865
Realized prices
Crude Oil & NGLs ($/bbls) 58.64 48.31 49.71 52.18
Natural gas ($/Mcf) 3.33 2.27 2.53 2.50
Total ($/boe) 42.40 43.20 39.22 47.84
Operating netbacks ($ per boe) (1)
Oil and Gas sales 42.40 43.20 39.22 47.84
Royalties (3.75 ) (4.03 ) (3.48 ) (4.39 )
Transportation expense (0.79 ) (0.33 ) (0.83 ) (0.24 )
Operating costs (17.61 ) (16.00 ) (17.36 ) (16.80 )
Operating Netback (prior to realized derivative contracts) 20.25 22.84 17.55 26.41
Realized gain on derivative contracts (1.04 ) 12.18 3.74 5.73
Operating Netback (including realized derivative contracts) 19.21 35.02 21.29 32.14
(1) "Funds flow from operations", "Funds flow from operations per share", "Funds flow from operations per boe", "Net Debt", "Working Capital", "Operating netback per boe" and "Operating income" do not have a standardized meaning under international financial Reporting standards (IFRS) and GAAP. Please refer to Non-GAAP Financial Measures and BOE equivalent at the end of this news release.
(2) All weighted average share amounts are converted retrospectively at the exchange rate of 0.1303 in accordance with the terms of the Arrangement Agreement as outlined in note 5 & 13 in the audited annual December 31, 2016 financial statements. This is done in accordance with IAS 33.64.
We are pleased to present InPlay's financial and operating results for the three months and year ended December 31, 2016. This was a transformational year which saw InPlay transition into a publicly traded entity following the November 7, 2016 private placement financing, asset acquisition in Pembina (the "Asset Acquisition") and the closing of the reverse take-over transaction (the "Arrangement") with Anderson Energy Inc. ("Anderson"). These transactions have positioned InPlay as a well-financed light oil producer (65% oil & liquids) with 74% of our current field estimated production of 4,100 boed in the Cardium and providing ample opportunities for growth and development in our expanded core areas.
The Company's 2016 drilling program included a total of six (5.7 net) wells. Two (1.7 net) Belly River horizontal wells were drilled in the first quarter of 2016 and four (3.9 net) Pembina Cardium horizontals were drilled in the fourth quarter. Two (1.9 net) of the Cardium horizontals came on production in late December 2016 while the others began production in mid-February 2017. The drilling and completion program carried over into 2017 with an additional six (4.1 net) wells being drilled and five (3.1 net) wells are expected to be completed and brought on production through March and April of 2017.
Fourth quarter 2016 production averaged 2,712 boe/day, reflecting limited production from the newly acquired assets as of November 7, 2016. Capital expenditures in 2016 amounted to $86.0 million comprised of $7.3 million related to the quarterly E&D capital program and $78.7 million as consideration for the Arrangement with Anderson as well as the Pembina Asset Acquisition. Funds flow from operations for the fourth quarter was ($29) thousand net of $2.4 million of transaction related expenses. We exited the year with $34.6 million in net debt with a draw of $29.8 million on our $60.0 million syndicated credit facility. At year end, following these transactions, proved plus probable reserves increased 180% to 24.5 mmboe from the previous year's 8.7 mmboe resulting in an asset base with a long reserve life of 19.3 years. Complete details of the results of our independent reserves evaluation prepared by Sproule Associates Limited effective as of December 31, 2016 were contained in our press release issued March 14, 2017.
Outlook
In 2017 we have a focused plan in place that will allow InPlay to achieve its targeted production growth per share of greater than 20% (December 2017 over December 2016) through an efficient development program in our core areas. In 2017 we anticipate drilling a total of 12.0 net wells in our two core Cardium areas of Pembina and Willesden Green. We recently started drilling our first (1.0 net) Willesden Green Cardium horizontal well that is expected to be completed and placed on production in the second quarter which will leave approximately seven net wells to be drilled for the second half of the year. Capital expenditures are forecast to be $28.0 million for this program which is expected to be less than forecasted funds flow from operations, assuming a $55 WTI yearly average oil price. This program is forecast to generate net debt to funds flow from operations for the fourth quarter annualized of approximately 0.8 times. At a stress tested $45 WTI price for the remainder of 2017 this program is forecast to generate fourth quarter 2017 net debt to adjusted funds flow from operations of approximately 1.1 times ensuring that the 2017 capital program can be maintained in a lower commodity price environment. This production growth is expected to yield top quartile production per share growth within our oil weighted peers.
InPlay is in a very strong position with low debt levels, high operating netback assets and a solid set of commodity hedges that will allow us to continue to develop our asset base in the current volatile commodity price environment, while always focusing on meaningful and sustainable per share growth for our shareholders.
We thank our employees and directors for their commitment and dedication through the past year, and we thank all of our shareholders for their continued interest in InPlay.
Reader Advisories
Non-GAAP Financial Measures
InPlay uses certain terms within this news release that do not have a standardized prescribed meaning under GAAP and these measurements may not be comparable with the calculation of similar measurements of other entities. The terms "Funds flow from operations", "Funds flow from operations per share", "Funds flow from operations per boe" and "Operating netbacks" and "netback per boe" in this news release are not recognized measures under GAAP. Management believes that in addition to net earnings and cash flow from operating activities as defined by GAAP, these terms are useful supplemental measures to evaluate operating performance and assess leverage. Funds flow from operations is calculated by adjusting for changes in non-cash working capital from operating activities and from cashflow from operating activities. Funds flow from operations per share is calculated using the same weighted average number of shares outstanding used in calculating earnings per share. Users are cautioned, however, that these measures should not be construed as an alternative to net earnings or cash flow from operating activities determined in accordance with GAAP as an indication of InPlay's performance. The term "net debt" is not recognized under GAAP and is calculated as bank debt plus working capital deficiency adjusted for risk management fair values and deferred lease credits. Net debt is used by management to analyze the financial position and leverage of InPlay. InPlay also uses "netback per boe" as a key performance indicator. Netback per boe is utilized by InPlay to evaluate the operating performance of its petroleum and natural gas assets, and is determined by deducting royalties and operating and transportation expenses from petroleum and natural gas revenue (all on a per boe basis). Acquisition capital amounts to the total amount of cash and share consideration net of any working capital balances assumed with an acquisition on closing.
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 volume and product mix of InPlay's oil and gas production; production estimates; targeted production growth; reserve estimates; future oil and natural gas prices and InPlay's commodity risk management programs; forecasted funds flow from operations and net debt to funds flow from operations; future liquidity and financial capacity; future results from operations and operating metrics including forecasts of operating netbacks, cash flow and well payouts; future costs, expenses and royalty rates; future interest costs; the exchange rate between the $US and $Cdn; future development, exploration, acquisition, development and infrastructure activities and related capital expenditures, including our 2017 capital budget, and the timing thereof; the number of wells to be drilled, completed and tied-in and the timing thereof; the amount and timing of capital projects; and methods of funding our capital program. Forward-looking statements or information are based on a number of material factors, expectations or assumptions of InPlay which have been used to develop such statements and information but which may prove to be incorrect. Although InPlay 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 InPlay 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: the impact of increasing competition; the general stability of the economic and political environment in which InPlay operates; the timely receipt of any required regulatory approvals; the ability of InPlay 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 InPlay has an interest in to operate the field in a safe, efficient and effective manner; the ability of InPlay 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 the ability of InPlay 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 InPlay operates; the ability of InPlay to successfully market its oil and natural gas products.
The forward-looking information and statements included herein 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: changes in commodity prices; the potential for variation in the quality of the reservoirs in which we operate; changes in the demand for or supply of our products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of InPlay or by third party operators of our properties, increased debt levels or debt service requirements; inaccurate estimation of our oil and gas reserve and resource volumes; limited, unfavorable 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 InPlay's disclosure documents. The forward-looking information and statements contained in this news release speak only as of the date hereof and InPlay 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.
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 a 6:1 conversion basis may be misleading as an indication of value.
For further information please contact:
Doug Bartole
President and Chief Executive Officer
InPlay Oil Corp.
Telephone: (587) 955-0632
Darren Dittmer
Chief Financial Officer
InPlay Oil Corp.
Telephone: (587) 955-0634
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