TSX Venture Exchange: PRY
CALGARY, April 9, 2014 /CNW/ - Pinecrest Energy Inc. ("Pinecrest" or the
"Company") announces it has filed on SEDAR its audited annual financial
statements, related Management's Discussion and Analysis ("MD&A") and
Annual Information Form for the year ended December 31, 2013. The
statements will be available for review at www.sedar.com or www.pinecrestenergy.com.
Three months ended
Petroleum and natural gas sales
Funds flow from operations (1)
Per share - basic
Per share - diluted
Net income (loss)
Per share - basic
Per share - diluted
Capital expenditures, net of dispositions
Net debt and working capital deficit (2)
Common Shares Outstanding
Weighted average - basic
Weighted average - diluted
Number of days
Crude oil (bbls/d)
Natural gas (mcf/d)
Barrels of oil equivalent (boe/d-6:1)
Average realized price (3)
Crude oil ($/bbl)
Natural gas ($/mcf)
Netback per boe ($)(1)
Petroleum and natural gas sales
Production and transportation expenses
Realized gain (loss) on derivative financial instruments
Success rate (%)
(1) Non-GAAP measure
(2) Net debt and working capital is defined as current assets minus current
liabilities, plus outstanding debt, excluding derivative financial
(3) Before the effects of derivative financial instruments
Operations Update and Outlook
During the fourth quarter, the Company completed 1 (1.0 net) oil well
and placed 3 (3.0 net) wells on production. The Company also completed
the conversion of 7 (7.0 net) horizontal wells in the Otter field to
water injection along with the construction of associated injection
facilities and pipelines. Pinecrest continues to review the
performance of its waterflood projects as well as the primary
production profiles for all of its wells in order to optimize
production rates as well as ultimate recovery.
During the first quarter of 2014, no new wells were drilled or completed
and minimal capital was spent on production optimization and
maintenance; this continues to be the plan through the first half of
2014. An updated capital plan will be provided later this year and,
until such time, Pinecrest will apply all of its free cash flow towards
reducing its indebtedness. In this regard, exit Q1 2014 net debt and
working capital is estimated to be approximately $120 million.
The Company's credit facility remains at $165 million with its annual
valuation expected to be completed in May by its syndication of
Canadian chartered banks.
As previously disclosed, the Company entered 2014 producing 2,300 boed
and current production, based on field estimates, is 2,250 boed with 50
boed shut in due to routine maintenance and field conditions. Based on
field estimates, Q1 2014 production was 2,130 boe per calendar day and
2,270 boe per producing day. With minimal capital being spent on
production optimization and maintenance during Q1 2014, Pinecrest has
been able to maintain a relatively flat production profile throughout
Q1 2014. Looking forward to Q2, Pinecrest anticipates that overall
production will be adversely affected by spring break-up in the Red
Earth area with every effort being undertaken to mitigate the effects
of additional downtime.
The following tables summarize certain information contained in the
independent reserves report prepared by Sproule Associates Ltd.
("Sproule") as at December 31, 2013. The report was prepared in
accordance with 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"). Additional reserves information as required under NI
51-101 will be included in the Company's Annual Information Form - a
copy of which can be obtained under Pinecrest's profile at www.sedar.com or at www.pinecrestenergy.com.
Gross Company Reserves
December 31, 2013
@ 0% Discount
@ 10% Discount
Proved developed producing
Proved developed non-producing
Total Proved plus Probable
At December 31, 2013, the Company has a reserve life index of 12.1 years
for the Proved plus Probable reserves, based on the 2013 fourth quarter
average production of 2,620 boe per day.
Decreases in the Company's reserves were attributable to: the
divestiture of the Viewfield assets in southeast Saskatchewan, the
election to remove certain undeveloped reserves and corresponding
future development capital as they are not in the Company's near term
capital plans and decreased performance in some of the Company's
primary producing wells.
For further disclosure relative to the Company's reserves please refer
to the Company's Management's Discussion and Analysis and the Annual
Information Form for the year ended December 31, 2013.
Net Asset Value
The following table summarizes the corporate Net Asset Value as at
December 31, 2013:
December 31, 2013
Present value of Proved plus Probable reserves, discounted at 10% before
Undeveloped land (1)
Bank debt and working capital
Common shares outstanding - basic (000's)
Common shares outstanding - diluted (000's)
NAV per common share - basic
NAV per common share - diulted
(1) Undeveloped land value reflects an independent evaluation dated December
31, 2013 by Seaton-Jordon & Associates Ltd.
Annual General and Special Meeting
Pinecrest's Annual General and Special Meeting is scheduled for 10:00am
on Tuesday, June 10, 2014 at the Bow Valley Conference Centre,
Angus/Northcote Room, located at 300, 205 - 5th Avenue S.W., Calgary.
Alberta, T2P 2V7.
The information in this press release contains certain forward-looking
statements. These statements relate to future events or our future
performance. All statements other than statements of historical fact
may be forward-looking statements. Forward-looking statements are
often, but not always, identified by the use of words such as "seek",
"anticipate", "plan", "continue", "estimate", "expect", "may", "will",
"project", "predict", "potential", "targeting", "intend", "could",
"might", "should", "believe", "would" and similar expressions. In
particular, forward looking statements in this press release includes,
but is not limited to: Pinecrest's capital program and 2014 business
objectives, oil recovery rates, drilling plans for 2014, expected
production, expected oil to gas ratios, the effects of waterfloods on
recovery factors, anticipated receipt of AER approvals, decline rates
and type curves for wells, success in drilling and waterflood
activities, production rates, exit rates for production and bank debt,
downspacing opportunities, the quantity of reserves, and projections of
market prices, and costs. These statements involve substantial known
and unknown risks and uncertainties, certain of which are beyond
Pinecrest's control, including: the impact of general economic
conditions; industry conditions; changes in laws and regulations
including the adoption of new environmental laws and regulations and
changes in how they are interpreted and enforced; fluctuations in
commodity prices and foreign exchange and interest rates; stock market
volatility and market valuations; volatility in market prices for oil
and natural gas; liabilities inherent in oil and natural gas
operations; uncertainties associated with estimating oil and natural
gas reserves; competition for, among other things, capital,
acquisitions, of reserves, undeveloped lands and skilled personnel;
incorrect assessments of the value of acquisitions; changes in income
tax laws or changes in tax laws and incentive programs relating to the
oil and gas industry; geological, technical, drilling and processing
problems and other difficulties in producing petroleum reserves.
Pinecrest's actual results, performance or achievement could differ
materially from those expressed in, or implied by, such forward-looking
statements and, accordingly, no assurances can be given that any of the
events anticipated by the forward-looking statements will transpire or
occur or, if any of them do, what benefits that Pinecrest will derive
from them. Forward-looking statements are made as of the date herein
except as required by law, Pinecrest undertakes no obligation to
publicly update or revise any forward-looking statements.
Statements relating to "reserves" or "resources" are deemed to be
forward-looking statements, as they involve the implied assessment,
based on certain estimates and assumptions, that the resources or
reserves described can be profitably produced in the future.
The Corporation uses the following terms for measurement within this
press release that do not have a standardized prescribed meaning under
GAAP and these measurements may differ from other companies and
accordingly may not be comparable to measures used by other companies.
The terms "funds from operations" and "operating netback" are not
recognized measures under the applicable GAAP. Management of the
Corporation believes that these terms are useful, in addition to profit
and loss and cash flow from operating activities as defined by GAAP,
for evaluating the Corporation's operating performance and leverage.
Funds from operations is expressed as cash flow from operating
activities before changes in non-cash working capital and asset
retirement expenditures. Operating netback is a measure of operating
margin used in capital allocation decisions. Pinecrest defines
operating netback as average realized price per boe, less royalties per
boe, less operating and transportation expenses per boe, plus any
realized gain or loss per boe on financial instruments.
Barrels of Oil Equivalent ("boe") may be misleading, particularly if
used in isolation. A boe conversion ratio of 6MCF:1bbl 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
equivalency of 6:1, utilizing a conversion on a 6:1 basis 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 news
SOURCE: Pinecrest Energy Inc.
For further information:
Pinecrest Energy Inc.
Suite 500, 255 - 5th Avenue S.W.
Calgary, Alberta T2P 3G6
Wade Becker, President & CEO
Dan Toews, V.P. Finance & CFO
Tel: (403) 817-2550 or
Fax: (403) 817-2599