News Releases

Bonterra Energy Corp. Announces Fourth Quarter and Year End 2011 Results

Mar 22, 2012 - 06:30 ET

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 22, 2012) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Bonterra Energy Corp. (Bonterra or the Company) (TSX:BNE) is pleased to announce its operating and financial results for the fourth quarter and year ended December 31, 2011. The related financial statements and notes, as well as management's discussion and analysis (MD&A) for the year ended December 31, 2011, are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on Bonterra's website at www.bonterraenergy.com

Highlights


As at and for the year ended
($ 000s except $ per share)

December 31, 2011
  December 31, 2010
Restated (2)
  December 31, 2009
Cdn GAAP (1)
 
FINANCIAL            
Revenue - realized oil and gas sales 162,277   118,980   85,712  
Funds flow (3) 101,988   74,385   69,975  
  Per share - basic 5.27   3.95   3.89  
  Per share - diluted 5.22   3.84   3.86  
  Payout ratio (4) 58 % 64 % 44 %
Cash flow from operations 97,409   66,238   38,893  
  Per share - basic 5.04   3.52   2.16  
  Per share - diluted 4.98   3.42   2.15  
  Payout ratio (4) 61 % 72 % 79 %
Cash dividends per share (4) 3.06   2.55   1.70  
Net earnings 43,608   39,954   68,563  
  Per share - basic 2.25   2.12   3.81  
  Per share - diluted 2.23   2.06   3.78  
Capital expenditures and acquisitions net of dispositions 62,686   70,680   5,640  
Total assets 364,176   347,825   293,987  
Working capital deficiency 51,576   17,905   10,162  
Long-term debt (5) 69,916   85,386   59,823  
Shareholders' equity 181,640   190,173   118,874  
OPERATIONS            
Oil - barrels per day 4,075   3,585   2,881  
    - average price ($ per barrel) 92.76   74.76   62.16  
NGLs - barrels per day 386   290   259  
    - average price ($ per barrel) 60.89   47.11   32.68  
Natural gas - Mcf per day 11,163   10,521   11,120  
    - average price ($ per Mcf) 3.86   4.14   4.15  
Total barrels of oil equivalent per day (BOE) (6) 6,322   5,628   4,994  
RESERVES (Gross)            
Oil, NGLs and Natural Gas (BOE) (6)            
  Proved 28,130.4   28,575.2   25,327.1  
  Proved plus Probable 41,149.2   39,397.1   35,824.2  
Reserve Life Index (years)            
  Proved 12.9   12.9   14.2  
  Proved plus Probable 16.9   17.8   20.1  
Reserves per Weighted Average Outstanding Share (P+P)(BOE) (6) 2.13   2.09   1.99  
Production per Weighted Average Outstanding Share (BOE) (6) 0.119   0.109   0.101  
             
     
  2011  
As at and for the periods ended
($ 000s except $ per share)
Q4   Q3   Q2   Q1  
Financial                
Revenue - realized oil and gas sales 42,818   36,535   44,754   38,170  
Funds flow (3)                
  Per share - basic 1.34   1.08   1.44   1.42  
  Per share - diluted 1.32   1.06   1.42   1.39  
  Payout ratio (4) 58 % 72 % 54 % 51 %
Cash flow from operations 26,180   21,730   25,465   24,034  
  Per share - basic 1.35   1.12   1.32   1.25  
  Per share - diluted 1.33   1.10   1.29   1.22  
Cash dividends per share (4) 0.78   0.78   0.78   0.72  
Payout Ratio (4) 58 % 69 % 59 % 58 %
Net earnings 6,067   9,384   14,533   13,624  
  Per share - basic 0.31   0.49   0.75   0.71  
  Per share - diluted 0.31   0.48   0.74   0.69  
Capital expenditures and acquisitions, net of disposals 20,529   15,941   5,872   20,344  
Total assets 364,176   354,549   348,097   357,000  
Working capital deficiency 51,576   43,362   30,823   39,777  
Long-term debt 69,916   72,391   72,608   70,568  
Shareholders' equity 181,640   185,908   192,297   192,054  
Operations                
Oil (barrels per day) 4,096   3,789   4,164   4,258  
NGLs (barrels per day) 493   340   372   338  
Natural gas (MCF per day) 12,541   10,553   11,024   10,517  
Total BOE per day (6) 6,679   5,887   6,373   6,350  
                 

(1) The comparative highlights for 2009 are under Canadian Generally Accepted Accounting Principles (GAAP) prior to the adoption of International Financial Reporting Standards (IFRS).

(2) The comparative highlights for 2010 have been restated with the adoption of IFRS.

(3) Funds flow is not a recognized measure under IFRS. For these purposes, the Company defines funds flow as funds provided by operations including proceeds from sale of investments and investment income received excluding the effects of changes in non-cash working capital items, restricted cash, investment tax credit receivable and decommissioning expenditures settled.

(4) Cash payments per share are based on payments made in respect of production months within the quarter.

(5) At December 31, 2010, long-term debt includes bank debt and subordinated promissory note.

(6) BOE 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.

Year in Review

Bonterra continued to focus on providing long-term returns to shareholders in 2011 through the sustainable development of its Cardium horizontal drill program and a disciplined approach to financial management. The year was characterized by great success across the organization. Revenue, cash flow, dividends, net earnings, production and reserves all increased year over year and the Company continued to balance its business model with growth on both a total and per share basis and income through its monthly dividend to shareholders.

2011 Operational Highlights

  • A capital program of $63 million comprised of 20 gross (16.3 net) operated Cardium horizontal wells drilled in the halo areas of the Pembina and Willesden Green fields, four gross (0.86 net) non-operated Cardium horizontal wells in the main Pembina pool and one gross (0.13 net) non-operated horizontal well in southeast Saskatchewan.
  • New production records set with average daily production of 6,322 barrels of oil equivalent (BOE) per day (approximately 71 percent oil and liquids) for full year 2011 and 6,679 BOE per day in the fourth quarter, an increase of 12.3 percent and 9.9 percent, respectively over the same periods in 2010.
  • Production per share increased to 0.119 BOE per share, an increase of 9.2 percent over 2010.
  • Proved plus Probable (P+P) reserves of 41.2 million BOE (approximately 74 percent oil and liquids), a 4.6 percent increase over December 2010 reserves of 39.4 million BOE.
  • Added a total of 4.1 million BOE of P+P reserves which equates to 1.75 times 2011 production.
  • Reserves per share (P+P) increased two percent to 2.13 BOE per share compared to the prior year.
  • Conservative reserve booking with 50 percent of reserves assigned being Proved Developed Producing or Proved Developed Non-Producing and over 68 percent being Total Proved.
  • Reserve Life index of 16.9 years on a P+P basis and 12.9 years on a proved basis continues to remain above industry average.

2011 Financial Highlights

  • Bonterra increased the monthly dividend to shareholders during the year to its current level of $0.26 per share. The Company paid out a total of $3.04 per share in dividends during the year, a 22 percent increase over 2010.
  • Financial results were positively impacted by the Company's record production levels and strong crude oil prices. Bonterra generated record cash flow from operations of $97.4 million ($5.04 per share) and record funds flow of $101.9 million ($5.27 per share), a 47 percent and 37 percent increase over 2010 levels, respectively.
  • Bonterra's average oil price per barrel increased 24 percent over 2010 levels to $92.76 while natural gas liquids pricing increased to $60.89 per barrel, a 29 percent increase year over year. Natural gas prices continued to weaken and decreased seven percent in 2011 compared with 2010 and averaged $3.86 per MCF.
  • The Company does not have any commodity hedges in place and therefore fully benefits from the strong oil prices which are currently exceeding $100 per barrel. However, recently the differential between West Texas Intermediate (WTI) and the Edmonton Price (Edmonton Par) is in the $15 to $20 range and this results in reduced revenue. Normally, the differential has been in the $5 range.
  • Bonterra has tax pools of $402 million, investment tax credits of $27.7 million and $137.5 million of capital loss carry forwards (which can only be claimed against taxable capital gains), pushing the Company's tax horizon past 2016.
  • Bonterra ended the year with a net debt to 2011 cash flow from operations ratio of 1.25 times resulting in the Company being well-funded to execute its 2012 capital program and fund potential acquisition opportunities.

Outlook

  • Bonterra's strategy for exploiting the main Pembina Cardium pool by horizontal drilling has now replaced the Company's previous exploitation strategy of drilling vertical infill wells. As such, Bonterra intends to focus the majority of its $65 million 2012 capital program on executing a targeted multi-well horizontal drilling program in the main Pembina Cardium pool.
  • Current drilling plans include 33 gross wells to be drilled with 21 gross (13.33 net) wells to be drilled in the main Pembina Cardium pool and 11 gross (9.5 net) wells to be drilled in the halo area of the Pembina Cardium and Willesden Green fields. The Company plans to drill at least one new oil play using horizontal technology in 2012.
  • The drilling program is expected to increase full year average daily production in 2012 to between 6,700 and 7,000 BOE per day.
  • As near-term development continues to focus on high-netback light oil opportunities, management and the Board will continue to assess the dividend levels in relation to anticipated production levels and commodity prices. The Board will consider increasing dividends during 2012 should crude oil pricing remain strong and should production continue to grow.
  • There continues to be a great deal of instability in the global economy which has negatively impacted credit and commodity markets. This environment may provide opportunities for the Company to further grow its asset base through land or corporate acquisitions. Bonterra has historically made acquisitions counter‐cyclically and this strategic approach remains a focus for the Company as it continues to look at a number of short, medium and longer term opportunities available.
  • The Company will continue to focus on maximizing shareholder returns through the allocation of capital to its high return horizontal drilling program, the active pursuit of improved reserve recovery within the main Pembina Cardium pool and continued improvements in ongoing operations. Bonterra's proven management team and committed employees will execute its 2012 capital development program with discipline to meet its production guidance, manage its operations safely and efficiently and endeavor to maximize shareholder value.
  • Taking this approach will allow Bonterra to maintain its dividend policy that provides substantial income that is paid on a monthly basis while still retaining sufficient funds flow to ensure the long-term sustainability of its future growth.

Cautionary Statement

This summarized news release should not be considered a suitable source of information for readers who are unfamiliar with Bonterra Energy Corp. and should not be considered in any way as a substitute for reading the full report.

For the full report, please go to www.bonterraenergy.com

Use of Non-IFRS Financial Measures

Throughout this press release the Company uses the terms "payout ratio" and "cash netback" to analyze operating performance, which are not standardized measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. These measures are commonly utilized in the oil and gas industry and are considered informative by management, shareholders and analysts. These measures may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies.

The Company calculates payout ratio by dividing cash dividends to shareholder by cash flow from operating activities both of which are measures prescribed by IFRS which appear on our statements of cash flows. We calculate cash netback by dividing various operation and deficit statement items as determined by IFRS by total production on a barrel of oil equivalent basis.

Forward-Looking Information

Certain statements contained in this press release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this press release includes, but is not limited to: expected cash provided by continuing operations; cash dividends; future capital expenditures, including the amount and nature thereof; oil and natural gas prices and demand; expansion and other development trends of the oil and gas industry; business strategy and outlook; expansion and growth of our business and operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit risks; and other such matters.

All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas companies to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control.

Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do, what benefits will be derived there from. Except as required by law, Bonterra disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

The forward-looking information contained herein is expressly qualified by this cautionary statement.

The TSX does not accept responsibility for the accuracy of this release.



FOR FURTHER INFORMATION PLEASE CONTACT:

Bonterra Energy Corp.
George F. Fink
CEO and Chairman of the Board
(403) 262-5307
(403) 265-7488 (FAX)

Bonterra Energy Corp.
Robb D. Thompson
CFO and Secretary
(403) 262-5307
(403) 265-7488 (FAX)

Bonterra Energy Corp.
Kirsten Lankester
Manager, Investor Relations
(403) 262-5307
(403) 265-7488 (FAX)
info@bonterraenergy.com
www.bonterraenergy.com
 

 

 
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