CALGARY, AB, April 15, 2021 /CNW/ - Altura Energy Inc.
("Altura" or the "Company") (TSXV: ATU) is pleased to announce its
financial and operating results for the fourth quarter and year
ended December 31, 2020 and the
independent evaluation of the Company's oil and natural gas
reserves (the "McDaniel Report"), effective December 31, 2020, as prepared by McDaniel and
Associates Consultants Ltd. ("McDaniel"). The audited consolidated
financial statements and related management's discussion and
analysis ("MD&A") for the year ended December 31, 2020 are available on SEDAR at
www.sedar.com and on Altura's website at www.alturaenergy.ca.
Selected financial and operating information for the fourth quarter
and year ended December 31, 2020
appear below and should be read in conjunction with the related
financial statements and MD&A.
Operational and Financial Summary
|
|
|
|
Three Months
Ended
|
Year
Ended
|
|
December 31,
2020
|
September 30,
2020
|
December 31,
2019
|
December 31,
2020
|
December 31,
2019
|
Operating
|
|
|
|
|
|
Average daily
production
|
|
|
|
|
|
Heavy crude oil
(bbls/d)
|
468
|
512
|
881
|
465
|
1,112
|
Light crude &
medium crude oil (bbls/d)
|
-
|
16
|
-
|
6
|
17
|
Natural gas
(Mcf/d)
|
2,402
|
2,118
|
3,406
|
2,151
|
3,145
|
NGLs
(bbls/d)
|
48
|
38
|
113
|
51
|
89
|
Total
(boe/d)
|
916
|
919
|
1,561
|
880
|
1,742
|
Total boe/d per
million shares – diluted
|
8.4
|
8.4
|
14.3
|
8.1
|
15.9
|
Average realized
prices
|
|
|
|
|
|
Heavy crude oil
($/bbl)
|
44.45
|
40.19
|
54.40
|
36.59
|
55.69
|
Natural gas
($/Mcf)
|
2.87
|
2.45
|
2.70
|
2.43
|
1.73
|
NGLs
($/bbl)
|
25.72
|
25.83
|
26.64
|
21.32
|
26.75
|
Average realized price
($/boe)
|
31.56
|
29.87
|
38.50
|
26.74
|
40.50
|
$/BOE
|
|
|
|
|
|
Petroleum and natural
gas sales
|
31.56
|
29.87
|
38.50
|
26.74
|
40.50
|
Royalties
|
(2.61)
|
(2.63)
|
(4.43)
|
(2.03)
|
(4.16)
|
Operating
|
(12.75)
|
(13.85)
|
(8.63)
|
(13.27)
|
(8.25)
|
Transportation
|
(1.93)
|
(2.51)
|
(2.45)
|
(2.34)
|
(3.48)
|
Operating
netback(1)
|
14.27
|
10.88
|
22.99
|
9.10
|
24.61
|
Realized gain on
financial instruments
|
1.48
|
0.51
|
0.53
|
4.51
|
0.34
|
Operating netback
after realized gain on
|
|
|
|
|
|
financial
instruments(1)
|
15.75
|
11.39
|
23.52
|
13.61
|
24.95
|
General and
administrative
|
(4.66)
|
(5.71)
|
(2.52)
|
(4.93)
|
(2.55)
|
Exploration
expense
|
-
|
-
|
-
|
-
|
(0.03)
|
Interest and financing
expense (cash)
|
(1.39)
|
(1.21)
|
(0.37)
|
(0.91)
|
(0.36)
|
Adjusted funds flow
per boe(1)
|
9.70
|
4.47
|
20.63
|
7.77
|
22.01
|
Financial
($000, except per share amounts)
|
|
|
|
|
Petroleum and natural
gas sales
|
2,659
|
2,526
|
5,531
|
8,615
|
25,757
|
Cash flow from
operating activities
|
206
|
505
|
3,955
|
2,406
|
12,994
|
Adjusted funds
flow(1)
|
818
|
378
|
2,963
|
2,502
|
13,994
|
Per share – basic and
diluted(1)
|
0.01
|
-
|
0.03
|
0.02
|
0.13
|
Net income
(loss)
|
10,823
|
(360)
|
(56)
|
(22,313)
|
2,215
|
Per share – basic and
diluted(2)
|
0.10
|
-
|
-
|
(0.20)
|
0.02
|
Capital
expenditures
|
105
|
469
|
1,528
|
7,874
|
12,884
|
Property acquisitions
(dispositions), net
|
-
|
(875)
|
(3,508)
|
(1,746)
|
(3,508)
|
Total capital
expenditures, net
|
105
|
(406)
|
(1,980)
|
6,128
|
9,376
|
Net
debt(1)
|
3,857
|
4,560
|
563
|
3,857
|
563
|
Common shares
outstanding – basic (000)
|
108,921
|
108,921
|
108,921
|
108,921
|
108,921
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted funds flow,
net debt, operating netback, and operating netback after realized
gain on financial instruments are non-GAAP measures that do
not have any standardized meaning under IFRS and therefore may not
be comparable to similar measures presented by other
companies. Refer to the heading entitled "Non-GAAP Measures"
included in the "Advisories" section at the end of the
MD&A.
|
(2)
|
Basic weighted
average shares are used to calculate diluted per share amounts when
the Corporation is in a loss position.
|
FOURTH QUARTER 2020 REVIEW
Production volumes averaged 916 boe per day in the fourth
quarter, consistent with the third quarter of 2020. Production
was impacted by one Leduc-Woodbend oil well that was curtailed for
most of the quarter due to third-party gas processing
restrictions.
Altura's realized heavy oil price increased 11% to $44.45 per barrel in the fourth quarter compared
to $40.19 per barrel in the third
quarter of 2020 but decreased 18% compared to $54.40 per barrel in the fourth quarter of
2019.
Operating expenses in the fourth quarter were $12.75 per boe, compared to $13.85 per boe in the third quarter of
2020. The decrease was mainly due to lower repair and
maintenance costs associated with fewer well workovers in the
fourth quarter. Transportation expenses were $1.93 per boe, 23% lower than $2.51 per boe in the third quarter of 2020 due to
lower clean oil hauling rates in the quarter.
The Company's operating netback1 averaged
$14.27 per boe, up 31% from the third
quarter of 2020 due to higher crude oil and natural gas prices and
lower operating and transportation expenses.
Adjusted funds flow1 was $818,000 in the quarter, up 116% from the third
quarter of 2020 due to increased crude oil and natural prices,
lower operating and transportation expenses, lower G&A expenses
and an increased realized gain on financial instruments.
Altura received $81,000 under the
Canada Emergency Wage Subsidy and
Canada Emergency Rent Subsidy in
the fourth quarter, which was applied against G&A
expenses.
Altura recorded net income of $10.8
million in the quarter compared to a net loss of
$0.4 million in the third quarter of
2020, mainly due to a reversal of impairment of $11.2 million in the quarter.
Altura reduced its net debt1 by $703,000 during the fourth
quarter. Considering Altura's net debt1 of
$3.9 million as at December 31, 2020, the Company has sufficient
liquidity to execute its business plan in the current volatile
commodity market.
The Company successfully abandoned five inactive wells and
reclaimed three wells that were previously abandoned utilizing
Alberta's Site Rehabilitation
Program ("SRP"), reducing its net asset retirement obligation by
$192,000.
2020 REVIEW
2020 will be remembered for the significant challenges to the
global economy and energy sector. The COVID-19 induced global
economic downturn combined with the actions of Saudi Arabia and Russia in the global oil market resulted in an
unprecedented decline in crude oil prices. As a result, in March
Altura quickly eliminated all discretionary capital spending for
the remainder of 2020 and immediately reduced production volumes
including shutting in all production volumes in May. The Company
began restoring curtailed production in June as oil prices
improved.
In August, the Company confirmed its revolving operating demand
loan (the "Operating Loan") borrowing base at $6.0 million. Additionally, Altura secured a
$3.0 million term loan from its
lender through the Business Credit Availability Program ("BCAP")
from the Export Development Bank of Canada ("EDC") (the "Term Loan") providing
Altura with $9.0 million of total
credit facilities and allowing the Company to exit 2020 in a strong
financial position.
In 2020, Altura successfully closed two disposition transactions
with a private company, divesting of a 2.75% working interest for
cash of $1.75 million to further
bolster the balance sheet.
These defensive actions were taken to preserve value and
safeguard the balance sheet through this pandemic related low oil
price period. With the recent strengthening of global economies and
commodity price recovery the Company is now well positioned to
resume and focus planned activities to capitalize on the depth of
its opportunities on its large conventional oil resource with an
estimated 400 MMbbls of OOIP2 on Altura's lands.
Altura continued with its Environmental, Social and Governance
("ESG") initiatives in 2020. Starting in July 2020, Altura submitted applications under
the Government of Alberta's SRP to
accelerate the abandonment of wellbores and reclaim inactive well
sites and the Company was approved for an abandonment and
reclamation grant under the SRP. The Corporation utilized
$213,000 ($192,000 net) of grant funding and abandoned five
inactive wells (15% of the Corporation's inactive gross well count)
and finalized reclamation of three wells that were previously
abandoned. Altura's undiscounted and un-escalated asset
retirement obligation was $5.4
million ($2.1 million, 2%
inflation rate, discounted at 10%) at December 31, 2020 and the Company ended 2020 with
a Liability Management Rating ("LMR") of 5.68 with the Alberta
Energy Regulator.
OPERATIONAL UPDATE
In February 2021, Altura completed
its 102/16-14-049-26W4 Rex horizontal well ("16-14") that was
drilled in February 2020 and not
completed due to low commodity prices. The 16-14 well was
designed with increased frac density of 74 intervals at 27 meter
spacing. This completion is consistent with two Rex horizontal
wells that were completed in 2018 with increased frac density that
continue to outperform previous type curve expectations. By
comparison this is a 57% increase in intervals compared to earlier
wells with 47 intervals at 40 meter spacing. Initial production
rates for 16-14 are consistent with and meeting the Company's
higher expectations of increased frac density wells. This
increased frac density is an exciting optimization that management
will carry forward for future wells at Leduc-Woodbend.
Altura's current production is estimated at 1,060 boe per
day3 based on field estimates from April 1, 2021 to April
14, 2021. Approximately 110 boe per
day4 of net production from one (0.9 net) well is
currently shut-in due to third-party gas processing restrictions.
This well was shut-in in March 2020
and was brought back on production in mid-December 2020. The
well produced intermittently in January
2021 and was shut-in again in February 2021 due to further third-party gas
processing restrictions. Management is working with the gas
plant operator with the goal to restart production in May 2021.
OUTLOOK
The 2021 $6.0 million capital
budget builds on the recent sector commodity price recovery with
WTI moving up from US$35.00 per
barrel on October 30, 2020 to today's
price of approximately US$60 per
barrel, a level not seen in well over a year. Western Canadian
Select ("WCS") differentials also continue to narrow with the
forward curve approaching US$11 per
barrel this summer.
Two (1.8 net) new wells at Leduc-Woodbend are planned to be
drilled and completed in the summer of 2021 and are scheduled to
commence production in July and October
2021, respectively. The 2021 capital expenditure budget
targets an annual average production rate of 1,100 to 1,150 boe per
day compared to 880 boe per day5 in 2020, representing
more than 25% growth on an absolute and per share basis.
Altura's Leduc-Woodbend asset has a well inventory of 47 (36.6
net) booked locations and 104 (67 net) drilling
opportunities6 with drilling flexibility at current
commodity prices to self-fund growth within cash flow and maintain
a strong balance sheet.
Altura expects to close two additional dispositions of a 0.6875%
working interest for $437,500 on
April 30, 2021 and a 1.375% working
interest for $875,000 on June 30, 2021 (total remaining disposition of
2.0625% working interest for $1,312,500), as disclosed in the January 29, 2021 news release.
While 2020 was primarily a defensive year of survival for many
junior oil weighted producers, 2021 is looking to be a year of
opportunity. The Altura team is very excited and poised to refocus
efforts towards creating value for its shareholders in 2021 and
beyond.
2020 RESERVES
During 2020, Altura responded to the unprecedented commodity
price weakness and volatility by cutting its planned capital budget
in early March and reducing production volumes in April, May and
June. The reduction in capital investment, shut-in of production
volumes and natural well declines combined to reduce reserves
year-over-year.
In addition, a significant reduction in the reserves evaluator's
2020 price forecast compared to 2019 negatively impacted net
present values and reserves volumes by reducing well economic limit
cut-offs. The evaluator WTI oil price forecast may have been
considered reasonable at year-end 2020; however, this forecast has
decoupled from current pricing and is now over US$10 per barrel lower than the current forward
strip for 2021 and does not reach the current WTI spot price of
approximately US$60 per barrel until
the year 2029.
YEAR END RESERVES EVALUATION
Altura's year end 2020 reserves were evaluated by independent
reserves evaluator McDaniel & Associates Consultants Ltd. in
accordance with the definitions, standards and procedures contained
in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook")
and National Instrument 51-101 - Standards of Disclosure for Oil
and Gas Activities ("NI 51-101") as of December 31, 2020. The reserves evaluation was
based on the average of the published price forecasts for McDaniel,
GLJ Petroleum Consultants Ltd., and Sproule Associates Ltd. (the
"Consultant Average Price Forecast") at January 1, 2021.
Consistent with 2019, and as per guidance in the Canadian Oil
and Gas Evaluation Handbook COGE Handbook ("COGE Handbook"),
the McDaniel Report includes all abandonment, decommissioning and
reclamation obligations ("ADR"), including all the ADR associated
with both active and inactive wells regardless of whether such
wells had any attributed reserves.
Unless noted otherwise, reserves included herein are stated on a
company gross basis, which is the Company's working interest before
deduction of government royalties and excluding any other
additional royalty interests. This news release contains several
cautionary statements under the heading "Reader Advisory" and
throughout the release. In addition to the information contained in
this news release, more detailed reserves information will be
included in Altura's Annual Information Form for the year ended
December 31, 2020, which will be
filed on SEDAR by April 30, 2021.
Company Gross Reserves as at December
31, 2020
The following table summarizes the Company's gross reserve
volumes at December 31, 2020
utilizing the Consultant Average Price Forecast and cost estimates
outlined further below in this press release.
|
|
|
Company Gross
Reserves(1)(2)
|
Category
|
Light
Crude &
Medium
Crude Oil
(Mbbl)
|
Heavy
Crude
Oil
(Mbbl)
|
Conventional
Natural Gas
(MMcf)
|
Natural
Gas
Liquids
("NGLs")
(Mbbl)
|
2020 Oil
Equivalent (MBoe)
|
2019 Oil
Equivalent (MBoe)
|
2020/
2019
Percent
Change
|
Proved
|
|
|
|
|
|
|
|
Developed
Producing
|
164.5
|
562.8
|
3,439.0
|
100.3
|
1,400.8
|
1,754.5
|
(20)
|
Developed
Non-Producing
|
11.4
|
83.5
|
252.7
|
7.3
|
144.4
|
161.0
|
(10)
|
Undeveloped
|
-
|
2,559.0
|
8,034.1
|
233.0
|
4,131.1
|
4,431.1
|
(7)
|
Total
Proved(3)
|
176.0
|
3,205.4
|
11,725.8
|
340.6
|
5,676.3
|
6,346.5
|
(11)
|
Total
Probable
|
67.3
|
2,439.2
|
12,491.8
|
362.8
|
4,951.3
|
4,803.9
|
3
|
Total Proved +
Probable(3)
|
243.3
|
5,644.7
|
24,217.6
|
703.4
|
10,627.6
|
11,150.4
|
(5)
|
|
|
(1)
|
Gross reserves are
Company working interest reserves before royalty
deductions
|
(2)
|
Based on the January
1, 2021 Consultant Average Price Forecast
|
(3)
|
Numbers may not add
due to rounding
|
Reconciliation of Company Gross Reserves for
2020(1)(2)
|
|
|
|
|
|
|
Light Crude
& Medium Crude
Oil (Mbbl)
|
Heavy
Crude Oil
(Mbbl)
|
Conventional
Natural Gas
(MMcf)
|
Natural Gas
Liquids
(Mbbl)
|
Oil Equivalent
(MBoe)
|
Total
Proved
|
|
|
|
|
|
December 31,
2019
|
161.2
|
3,695.0
|
13,052.0
|
315.1
|
6,346.5
|
Extensions
|
11.4
|
-
|
-
|
-
|
11.4
|
Technical
Revisions
|
49.5
|
(13.6)
|
889.3
|
85.7
|
269.7
|
Acquisitions
|
-
|
-
|
-
|
-
|
-
|
Dispositions
|
(7.4)
|
(125.6)
|
(518.3)
|
(15.1)
|
(234.5)
|
Economic
Factors
|
(8.9)
|
(207.8)
|
(910.1)
|
(26.4)
|
(394.8)
|
Production
|
(29.8)
|
(142.6)
|
(787.1)
|
(18.6)
|
(322.1)
|
December 31,
2020
|
176.0
|
3,205.4
|
11,725.8
|
340.7
|
5,676.2
|
Total Proved +
Probable
|
|
|
|
|
|
December 31,
2019
|
325.4
|
6,031.6
|
25,161.9
|
599.7
|
11,150.4
|
Extensions
|
14.6
|
509.1
|
1,967.9
|
57.1
|
908.8
|
Technical
Revisions
|
(38.9)
|
(250.2)
|
297.5
|
135.6
|
(104.1)
|
Acquisitions
|
-
|
-
|
-
|
-
|
-
|
Dispositions
|
(38.9)
|
(250.2)
|
297.5
|
135.6
|
(104.1)
|
Economic
Factors
|
(18.4)
|
(311.4)
|
(1,559.8)
|
(45.3)
|
(635.1)
|
Production
|
(29.8)
|
(142.6)
|
(787.1)
|
(18.6)
|
(322.1)
|
December 31,
2020
|
243.2
|
5,644.6
|
24,217.6
|
703.5
|
10,627.6
|
|
|
|
|
|
|
|
(1)
|
Gross reserves are
Company working interest reserves before royalty
deductions
|
(2)
|
Numbers may not add
due to rounding
|
Technical revisions for heavy crude oil, natural gas and NGLs,
in both the Total Proved ("1P") and Total Proved + Probable ("2P")
reserves categories, are due to performance deviations and changes
in the Leduc-Woodbend production forecast based on higher natural
gas production in 2020 than previous year's forecast.
Future Development Costs ("FDC") and Well Schedule
The following is a summary of the estimated FDC and number of
wells required to bring 1P and 2P undeveloped reserves on
production. Changes in forecast FDC occur annually as a
result of drilling activities, acquisition and disposition
activities, and changes in capital cost estimates based on
improvements in well design and performance, as well as changes in
service costs. FDC for 1P undeveloped reserves decreased
by $4.1 million compared to year-end 2019 due to a decreased
working interest and lower expected drilling and completion cost
estimates at Leduc-Woodbend. FDC for 2P undeveloped reserves
increased by $0.2 million compared to year-end 2019 due to 2.3
additional net wells in 2020 with decreased expected drilling and
completion cost estimates at Leduc-Woodbend.
|
|
|
|
|
|
Total Proved
FDC(1)(2)
($000)
|
Total
Proved
Wells(2)
Gross
(Net)
|
Total Proved +
Probable FDC(1)(2)
($000)
|
Total Proved +
Probable Wells(2)
Gross
(Net)
|
|
|
|
|
|
2021
|
4,947
|
2
(1.7)
|
4,947
|
2 (1.7)
|
2022
|
15,111
|
8
(6.6)
|
15,261
|
8 (6.6)
|
2023
|
21,843
|
11
(9.1)
|
26,060
|
13 (10.9)
|
2024
|
17,710
|
11
(7.2)
|
32,255
|
18 (13.2)
|
2025
|
-
|
-
|
10,526
|
6 (4.2)
|
Total
Undiscounted
|
59,611
|
32 (24.5)
|
89,049
|
47 (36.6)
|
(1)
|
Numbers may not add
due to rounding
|
(2)
|
FDC and well counts
as per the McDaniel Report and based on the January 1, 2021
Consultant Average Price Forecast
|
The forecasted future net operating income for the next four
years from the McDaniel Report based on the January 1, 2021 Consultant Average Price Forecast
is estimated to be $66.3 million for
1P reserves and $90.8 million for 2P
reserves, which is sufficient to fund Altura's FDC.
Summary of Before Tax Net Present Value ("NPV") of Future Net
Revenue as at December 31,
2020
Benchmark oil and NGL prices used are adjusted for quality of
oil or NGL produced and for transportation costs. The calculated
NPVs are based on the Consultant Average Pricing Forecast at
January 1, 2021 as outlined in the
price forecast table further below in this press release. The
NPVs include ADR but do not include a provision for interest, debt
service charges and general and administrative expenses. It should
not be assumed that the NPV estimate represents the fair market
value of the reserves.
|
|
|
Before Tax Net
Present Value ($000) (1)(2)(3)
|
|
Discount
Rate
|
Category
|
Undiscounted
|
5%
|
10%
|
15%
|
20%
|
Proved
|
|
|
|
|
|
Developed
Producing
|
8,968.9
|
10,540.0
|
10,604.1
|
10,181.4
|
9,630.7
|
Developed
Non-Producing
|
1,756.0
|
1,562.7
|
1,391.5
|
1,243.6
|
1,116.3
|
Undeveloped
|
27,544.7
|
19,555.7
|
13,565.6
|
9,122.3
|
5,822.6
|
Total
Proved
|
38,269.6
|
31,658.4
|
25,561.2
|
20,547.3
|
16,569.6
|
Total
Probable
|
60,816.8
|
43,540.0
|
31,887.2
|
23,914.6
|
18,339.6
|
Total Proved +
Probable
|
99,086.5
|
75,198.4
|
57,448.5
|
44,461.9
|
34,909.1
|
(1)
|
Based on the January
1, 2021 Consultant Average Price Forecast
|
(2)
|
Numbers may not add
due to rounding
|
Price Forecast
The McDaniel Report was based on the Consultant Average Price
Forecast at January 1, 2021 as
outlined below.
|
|
|
|
|
|
WTI
Crude
Oil
($US/bbl)
|
Western Canadian
Select
Crude
Oil
($CAD/bbl)
|
Alberta
AECO
Gas
($CAD/mmbtu)
|
Foreign
Exchange ($US/$CAD)
|
2021
|
47.17
|
44.63
|
2.78
|
0.768
|
2022
|
50.17
|
48.18
|
2.70
|
0.765
|
2023
|
53.17
|
52.10
|
2.61
|
0.763
|
2024
|
54.97
|
54.10
|
2.65
|
0.763
|
2025
|
56.07
|
55.19
|
2.70
|
0.763
|
2026
|
57.19
|
56.29
|
2.76
|
0.763
|
2027
|
58.34
|
57.42
|
2.81
|
0.763
|
2028
|
59.50
|
58.57
|
2.87
|
0.763
|
2029
|
60.69
|
59.74
|
2.92
|
0.763
|
2030
|
61.91
|
60.93
|
2.98
|
0.763
|
2031
|
63.15
|
62.15
|
3.04
|
0.763
|
2032
|
64.41
|
63.40
|
3.10
|
0.763
|
2033
|
65.70
|
64.66
|
3.16
|
0.763
|
2034
|
67.01
|
65.96
|
3.23
|
0.763
|
2035
|
68.35
|
67.28
|
3.29
|
0.763
|
thereafter
|
+2.0%/yr
|
+2.0%/yr
|
+2.0%/yr
|
0.763
|
Price Forecast Sensitivity
Given the material oil price increase in the first quarter of
2021, Altura prepared a commodity price sensitivity comparing the
net present value (before tax, discounted at 10%) of reserves
effective December 31, 2020, using
the average of the published price forecasts for McDaniel, GLJ
Petroleum Consultants Ltd., and Sproule Associates Ltd. as at
April 1, 2021 to the Company's NI
51-101 net present values in the reserves evaluation using the
January 1, 2021 price forecast.
Net present values of proved developed producing reserves increases
26% to $13.4 million, total proved
reserves increases 25% to $32.4
million, and total proved plus probable reserves increases
14% to $65.7 million. It should
not be assumed that the net present value estimate represents the
fair market value of the reserves.
On behalf of the Board of Directors and the Altura management
team, we would like to thank our shareholders for their ongoing
support.
ABOUT ALTURA ENERGY INC.
Altura is a junior oil and gas exploration, development and
production company with operations in central Alberta. Altura
predominantly produces from the Rex reservoir in the Upper
Mannville group and is focused on delivering per share growth and
attractive shareholder returns through a combination of organic
growth and strategic acquisitions. An updated corporate
presentation is available on Altura's website at
www.alturaenergy.ca.
READER ADVISORIES
Forward–looking Information and
Statements
This press release contains certain forward-looking information
and statements within the meaning of applicable securities laws.
The use of any of the words "expect", "anticipate", "budget",
"forecast", "continue", "estimate", "objective", "ongoing", "may",
"will", "project", "should", "believe", "plans", "intends",
"strategy" and similar expressions are intended to identify
forward-looking information or statements. In particular, but
without limiting the foregoing, this press release contains
forward-looking information and statements pertaining to:
- Altura's expectation of bringing one shut-in well back on
production in May 2021;
- Altura's ability to self-fund growth within cash flow and
maintain a strong balance sheet;
- plans to close stages 3b and 4 of
the previously announced asset disposition on April 30, 2021 and June
30, 2021;
- the 2021 capital expenditure budget;
- forecasted average production and percent growth for 2021.
Statements relating to "reserves", including but not limited to
forecasted future net revenue and future development costs, are
also deemed to be forward-looking statements, as they involve the
implied assessment, based on certain estimates and assumptions,
that the reserves described exist in the quantities predicted or
estimated and that the reserves can be profitably produced in the
future.
The forward-looking information and statements contained in this
press release reflect several material factors and expectations and
assumptions of Altura including, without limitation:
- the continued performance of Altura's oil and gas properties in
a manner consistent with its past experiences
- that Altura will continue to conduct its operations in a manner
consistent with past operations;
- the general continuance of current industry conditions;
- the continuance of existing (and in certain circumstances, the
implementation of proposed) tax, royalty and regulatory
regimes;
- the accuracy of the estimates of Altura's reserves and resource
volumes;
- certain commodity price and other cost assumptions;
- the continued availability of oilfield services; and
- the continued availability of adequate debt and equity
financing and cash flow from operations to fund its planned
expenditures.
Altura believes the material factors, expectations and
assumptions reflected in the forward-looking information and
statements are reasonable but no assurance can be given that these
factors, expectations and assumptions will prove to be correct. To
the extent that any forward-looking information contained herein
may be considered future oriented financial information or a
financial outlook, such information has been included to provide
readers with an understanding of management's assumptions used for
budgeted and developing future plans and readers are cautioned that
the information may not be appropriate for other purposes.
The forward-looking information and statements included in this
press release report are not guarantees of future performance and
should not be unduly relied upon. Such information and
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
information or statements including, without limitation:
- changes in commodity prices;
- changes in the demand for or supply of Altura's products;
- unanticipated operating results or production declines;
- changes in tax or environmental laws, royalty rates or other
regulatory matters;
- changes in development plans of Altura or by third party
operators of Altura's properties,
- increased debt levels or debt service requirements;
- inaccurate estimation of Altura's 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 Altura's
public documents.
The forward-looking information and statements contained in this
press release speak only as of the date of this press release, and
Altura does not assume any obligation to publicly update or revise
them to reflect new events or circumstances, except as may be
required pursuant to applicable laws.
Oil and Gas Advisories
Reserves
McDaniel & Associates Consultants Ltd. is the Corporation's
independent "qualified reserve evaluator" as defined in National
Instrument 51-101. The McDaniel Report has an effective date
of December 31, 2020 and a
preparation date of April 14, 2021
and was prepared in accordance with the definitions, standards and
procedures contained in the Canadian Oil and Gas Evaluation
Handbook and NI 51-101. The reserve evaluation was based on
the average of the published price forecasts for McDaniel, GLJ
Petroleum Consultants Ltd., and Sproule Associates Ltd. at
January 1, 2021. The Reserves
Committee of the Board and the Board of Directors of Altura have
reviewed and approved the evaluation prepared by McDaniel.
All reserve references in this press release are "company share
reserves". Company share reserves are the Company's total working
interest reserves before the deduction of any royalties and
including any royalty interests of the Company.
It should not be assumed that the present value of estimated
future net revenue presented in the tables above represents the
fair market value of the reserves. There is no assurance that the
forecast prices and costs assumptions will be attained and
variances could be material. The recovery and reserve estimates of
Altura's crude oil, natural gas liquids and natural gas reserves
provided herein are estimates only and there is no guarantee that
the estimated reserves will be recovered. Actual crude oil, natural
gas and natural gas liquids reserves may be greater than or less
than the estimates provided herein.
All future net revenues are estimated using forecast prices,
arising from the anticipated development and production of our
reserves, net of the associated royalties, operating costs,
development costs, and abandonment and reclamation costs and are
stated prior to provision for interest and general and
administrative expenses. Future net revenues have been presented on
a before tax basis. Estimated values of future net revenue
disclosed herein do not represent fair market value.
Barrels of Oil Equivalent
The term barrels of oil equivalent ("Boe") may be misleading,
particularly if used in isolation. Per Boe amounts have been calculated by using
the conversion ratio of six thousand cubic feet (6 mcf) of natural
gas to one barrel (1 bbl) of crude oil. The Boe conversion
ratio of 6 mcf to 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 from the energy
equivalent of 6:1, utilizing a conversion on a 6:1 basis may be
misleading as an indication of value.
Drilling Opportunities
Potential drilling opportunities are internal estimates based on
the Corporation's prospective acreage and an assumption as to the
number of wells that can be drilled per section based on industry
practice and Altura's internal review. Potential drilling
opportunities do not have attributed reserves or resources.
Potential drilling opportunities have specifically been identified
by management as an estimation of our multi-year drilling
activities based on evaluation of applicable geologic, seismic,
engineering, production and reserves data on prospective acreage
and geologic formations. The drilling locations on which we
actually drill wells will ultimately depend upon the availability
of capital, regulatory approvals, seasonal restrictions, crude oil
and natural gas prices, costs, actual drilling results and other
factors. While certain of the potential drilling
opportunities have been derisked by drilling existing wells in
relative close proximity to such potential drilling opportunities,
the majority of other potential drilling opportunities are farther
away from existing wells where management has less information
about the characteristics of the reservoir and therefore there is
more uncertainty whether wells will be drilled in such locations,
and if drilled there is more uncertainty that such wells will
result in additional reserves, resources or production.
Original Oil in Place (OOIP)
For the purpose of this news release, Original Oil in Place
("OOIP") means Discovered Petroleum Initially In Place ("DPIIP").
DPIIP is derived by Altura's internal Qualified Reserve Evaluators
("QRE") and prepared in accordance with National Instrument 51-101
and the Canadian Oil and Gas Evaluations Handbook ("COGEH"). DPIIP,
as defined in COGEH, is that quantity of petroleum that is
estimated, as of a given date, to be contained in known
accumulations prior to production. The recoverable portion of DPIIP
includes production, reserves and Resources Other Than Reserves
(ROTR). The OOIP/DPIIP and potential recovery rate estimates are as
at December 31, 2020 and are based on
current recovery technologies and have been prepared by Altura's
internal QRE. There is significant uncertainty as to the ultimate
recoverability and commercial viability of any of the resource
associated with the OOIP/DPIIP estimates, and as such a recovery
project cannot be defined for this volume of OOIP/DPIIP at this
time.
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Adjusted funds flow, net debt and
operating netback are non-GAAP measures that do not have any
standardized meaning under IFRS and therefore may not be comparable
to similar measures presented by other companies. Refer to
the heading entitled "Non-GAAP Measures" contained within the
"Advisories" section of Altura's MD&A
|
2 OOIP is original oil in
place. See advisories in this news release
|
3 Consists of 600 bbls/d of heavy
crude oil, 52 bbls/d of NGLs and 2,450 Mcf/d of natural
gas
|
4 Consists
of 40 bbls/d of heavy crude oil, 25 bbls/d of NGLs and 270 Mcf/d of
natural gas
|
5 Consists of 465 bbls/d of heavy
crude oil, 6 bbls/d of light crude oil, 51 bbls/d of NGLs and 2,151
Mcf/d of natural gas
|
6 See
advisories on drilling opportunities in this news
release
|
SOURCE Altura Energy Inc.