News Releases

Bonterra Energy Corp. Announces Third Quarter 2014 Results

Nov 12, 2014 - 08:00 ET

CALGARY, ALBERTA--(Marketwired - Nov. 12, 2014) -


Bonterra Energy Corp. (Bonterra or the Company) (TSX:BNE) is pleased to announce its operating and financial results for the three months and nine months ended September 30, 2014. The related unaudited condensed financial statements and notes, as well as management's discussion and analysis, are available on the System for Electronic Document Analysis and Retrieval (SEDAR) at and on Bonterra's website at

The third quarter of 2014 has been a very successful quarter. The Company recorded higher production, revenue and cash flow compared to the same periods in 2013 and has successfully maintained a debt level that is favorable amongst its peers.

Three months ended Nine Months ended
As at and for the periods ended September 30, September 30, September 30, September 30,
($ 000s except for $ per share) 2014 2013 2014 2013(1)
Revenue - realized oil and gas sales 88,959 78,946 270,754 224,758
Funds flow(4) 57,705 46,874 177,739 138,215
Per share - basic 1.80 1.50 5.57 4.63
Per share - diluted 1.79 1.50 5.54 4.61
Payout ratio 50 % 56 % 47 % 53 %
Cash flow from operations 65,705 43,953 171,888 126,124
Per share - basic 2.05 1.41 5.38 4.22
Per share - diluted 2.03 1.40 5.35 4.21
Payout ratio 44 % 60 % 49 % 58 %
Cash dividends per share 0.90 0.84 2.64 2.48
Net earnings 20,983 19,690 71,638 47,504
Per share - basic 0.65 0.63 2.24 1.59
Per share - diluted 0.65 0.63 2.23 1.59
Capital expenditures and acquisitions, net of dispositions 41,205 34,025 133,907 83,262(2)
Total assets 1,080,801 1,002,773
Working capital deficiency 55,047 43,681
Long-term debt 140,339 147,189
Shareholders' equity 697,337 671,528
- barrels per day 8,874 7,310 8,521 7,727
- average price ($ per barrel) 92.73 103.30 97.27 92.17
- barrels per day 818 772 772 762
- average price ($ per barrel) 54.13 55.30 58.13 51.16
Natural gas
- MCF per day 21,981 22,274 22,816 21,668
- average price ($ per MCF) 4.54 2.71 5.17 3.33
Total barrels of oil equivalent per day (BOE)(3) 13,355 11,794 13,096 12,100
(1) Nine month figures for 2013 include the results of Spartan Oil Corp. (Spartan) for the period of January 25, 2013 to September 30, 2013. Production includes 249 days for Spartan and 273 days for Bonterra.
(2) Includes the Spartan acquisition that closed on January 25, 2013 that included $10,000,000 of acquired cash that reduced capital expenditures from $95,676,000 excluding dispositions.
(3) BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 MCF: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
(4) 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 and decommissioning expenditures settled.


  • Production for the third quarter averaged 13,355 BOE per day and 13,096 BOE per day for the nine months ended September 30, 2014;

  • Generated funds flow of $57.7 million ($1.80 per share) for the third quarter of 2014 compared to $46.9 million ($1.50 per share) for the same period in 2013 and $177.7 million ($5.57 per share) for the nine months ended September 30, 2104 compared to $138.2 million ($4.63 per share) for the same period in 2013;

  • Average Canadian dollar realized commodity prices during the third quarter were: crude oil $92.73 per barrel, natural gas liquids $54.13 per barrel and natural gas $4.54 per mcf, and for the nine months ended September 30, 2013 were: crude oil $97.27 per barrel, natural gas liquids $$58.13 per barrel and $5.17 per mcf;

  • Operating costs were $15.17 per BOE in Q3 2014 compared to $14.71 per BOE in Q3 2013 and for the nine months ended September 30, 2014 were $14.06 per BOE (excluding a non-recurring item) compared to $13.00 per BOE for the same period in the prior year;

  • Corporate netback reflected a strong oil price environment relative to prior periods, and increased to $46.07 per BOE for the third quarter compared to $43.20 per BOE for the same period in 2013 and were $49.28 per BOE for the nine months ended September 30, 2014 compared to $41.54 per BOE for the same period in 2013;

  • Paid out $0.90 per share in cash dividends in the third quarter compared to $0.84 per share for the same period in 2013 reflecting growth in production and funds flow and $2.64 per share for the nine months ended September 30, 2014 compared to $2.48 per share for the same period in 2013;

  • The Company maintained a very strong balance sheet with a net debt to twelve months trailing cash flow of 0.86 to 1.0 times; and

  • Drilled 55 gross (37.6 net) horizontal wells for the nine months ended September 30, 2014 with a 100 percent success rate.


Bonterra spent approximately $135.0 million on its capital program for the first nine months of 2014 primarily on 33 gross (32.7 net) wells and completing and tying-in 4 gross (3.9 net) wells that were drilled in 2013. This represents approximately 96 percent of the Company's revised 2014 annual capital program announced in Q2 which increased from $120 million to $140 million. Currently, 41 gross (40.6 net) operated wells and 26 gross (6.4 net) non-operated wells are planned for 2014, of which up to 8 gross (7.9 net) wells will be drilled, but not completed, equipped and tied-in until the beginning of the first quarter of 2015. The remaining budgeted capital will be directed to facilities, pipelines, and other areas within Bonterra's Cardium land base.

Bonterra's land position in the Carnwood area includes 38 gross (35 net) sections representing approximately 152 gross (140 net) locations at four wells per section. As the Company continues to explore increased well density within its land base to increase its ultimate oil recovery factor, it estimates that six to eight wells per section will likely become the standard for development of its Cardium assets. This would increase the Carnwood drilling inventory substantially to approximately 305 gross (280 net) locations at eight wells per section for this one area of its Cardium land base.

With Bonterra's ongoing drilling activities, the Company has successfully delineated the outer edges of the Carnwood area allowing it to increase well density throughout the area by implementing a targeted pad drilling program. This program involves drilling multiple horizontal wells from a single surface location which should result in fewer drilling days, reduced costs, improved on stream efficiencies and a smaller environmental footprint. Based on the results of the Carnwood program, the Company anticipates that increased well density and pad drilling will be used across its Cardium asset base to lower costs, drive higher recovery rates and ultimately generate higher rates of return.


With a decreasing benchmark oil price through the third quarter of 2014, the Company's average realized price for crude oil was $92.73 per barrel in the period, a decrease of 9.4 percent over the second quarter of 2014 and a decrease of 10.2 percent over the third quarter of 2013. However, relative to the first nine months of 2013, oil prices increased during the same period in 2014 and the Company realized an average crude oil price of $97.27 per barrel, an increase of 5.5 percent over the same period in 2013. As a result of this increased price environment for the nine month period coupled with a significant increase in production volumes for the first nine months of 2014, revenue and cash flow from operations increased 20.5 percent and 36.3 percent, respectively, over the same period in 2013.

This stronger commodity price environment drove the Company's netback to $49.28 per BOE for the first nine months of 2014, an increase of 18.6 percent year over year. The cash netback for the third quarter of 2014 was $46.07 per BOE compared to $43.20 per BOE for third quarter of 2013. As a function of growing production and funds flow, the Board of Directors approved an increase to the monthly dividend in June 2014 payable July 31, 2014 from $0.29 per share to $0.30 per share ($3.60 per share annually).

Bonterra has maintained its focus on preserving balance sheet strength and exercising conservative financial management, the importance of which is demonstrated during periods of significantly weaker commodity prices. At September 30, 2014, the Company net debt to cash flow at 0.86 to 1.0 times was below its guidance range of 1.0 to 1.0 times to 1.5 to 1.0 times. The Company will continue to closely monitor this ratio by managing cash flow and capital expenditure ranges over the year to ensure that it remains within its targeted annual guidance for 2014.


Bonterra will continue to focus its drilling and completions activities in the Carnwood field, where approximately 70 percent of its capital will be allocated. The other 30 percent will be deployed in various operated and non-operated well locations across other areas of the Pembina Cardium field. Results from the wells that have commenced production in 2014 continue to be favorable and the Company is well positioned to carry this momentum through the remainder of 2014 and into 2015.

From a longer-term perspective, Bonterra has a sizable inventory from its Cardium locations that totals approximately 14 years, subject to the length of the horizontal laterals and the average number of wells per section. This inventory of undrilled locations does not include any Belly River or Edmonton sands or wells targeting deeper zones in the Pembina field, nor does it account for any drilling on the Company's Saskatchewan or British Columbia lands. As such, Bonterra has access to significant future development opportunities, and is very well positioned to capture the tremendous upside afforded by having a high quality asset base focused within the Pembina Cardium.

Bonterra Energy Corp. is a conventional oil and gas corporation with operations in Alberta, Saskatchewan and British Columbia. The shares are listed on The Toronto Stock Exchange under the symbol "BNE".

Cautionary Statements

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

Use of Non-IFRS Financial Measures

Throughout this 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 paid to shareholders 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 financial statement items as determined by IFRS by total production for the period on a barrel of oil equivalent basis.

Forward-Looking Information

Certain statements contained in this 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 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.


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)


© 2018 Bonterra