/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR
DISSEMINATION IN THE U.S./
CALGARY,
April 25, 2013 /CNW/ - Novus Energy
Inc. ("Novus" or the "Company") is pleased to announce that it has
filed its audited financial statements and management's discussion
and analysis ("MD&A") as at and for the fiscal year ended
December 31, 2012. These may be
accessed through the SEDAR website www.sedar.com and at the
Company's website www.novusenergy.ca.
Novus had a very active and highly successful
year in 2012. The large reserve additions the Company
obtained were almost exclusively generated in its key Viking light
oil resource play in Dodsland,
Saskatchewan. Virtually all of the proved and probable
reserve growth the Company achieved came from organic drilling.
Financial Highlights
- Production revenue increased 43% to $76.0 million from $53.1
million in 2011.
- Funds flow from operations increased 60% to $41.7 million from $26.1
million a year ago.
- Funds flow from operations per share increased 47% to
$0.22 from $0.15 per share in 2011.
- Net income for the year ended December
31, 2012 was $6.8 million,
compared to a loss of $0.8 million a
year ago.
- Novus achieved operating netbacks of $46.41/boe in 2012.
- The Company's Viking production achieved impressive operating
netbacks of $54.16/boe for the twelve
months of 2012.
- The Company ended 2012 with net debt of $78.9 million against available lines of credit
of $105 million.
Operational Highlights
- Production increased 55% to 3,059 boe/d, weighted 78% towards
oil and liquids, from 1,971 boe/d in 2011.
- Fourth quarter production increased 21% to 3,444 boe/d,
weighted 78% towards oil and liquids, in 2012 from 2,845 boe/d in
the corresponding quarter of 2011.
- Production per share increased 41% in 2012 compared to the year
ended December 31, 2011.
- Based on field estimates, average production for the first
quarter of 2013 was 4,090 boe/d.
- During 2012, Novus operated the drilling of 72 wells, all using
horizontal multi-stage frac technology.
- Proved reserves at December 31,
2012 increased by 68% to 14.85 million boe, up substantially
from 8.84 million boe on December 31,
2011.
- Proved plus probable reserves at December 31, 2012 increased by 56% to 22.72
million boe, up from 14.56 million boe on December 31, 2011.
- Proved reserves per share increased 50% at December 31, 2012, compared to a year ago.
- Proved plus probable reserves per share increased 39% at the
end of 2012, compared with December 31,
2011.
- The net present value of proved plus probable reserves, before
income tax and discounted at 10%, increased to $377.1 million up from $331.3 million at December
31, 2011.
- Reserve replacement for the year was 829% on a proved plus
probable basis and 637% based on proved reserves.
- Novus' operating costs have continued to materially decrease
from $14.70/boe in 2011 to
$10.30/boe for the year ended
December 31, 2012 representing a 30%
decrease.
- Novus' operating costs for its core Viking production have
materially decreased 33% from $11.78/boe in 2011 to $7.88/boe for the year ended December 31, 2012.
- Novus currently controls 219 net sections of Viking rights, and
has a risked drilling inventory of 1,585 net, undrilled Viking oil
locations.
- Novus has invested $11.7 million
over the past year in facilities, infrastructure and pipelines.
These large investments in the Company's 100% owned facilities and
infrastructure have led to a material reduction in the Company's
Viking production operating costs.
A summary of financial and operational results
for the three months and years ended December 31, 2012 and 2011 are outlined in the
following table.
|
|
|
|
Three months ended |
Year ended |
|
Dec 31, 2012 |
Dec 31, 2011 |
Dec 31, 2012 |
Dec 31, 2011 |
Financial
(000s, except per share amounts) |
|
|
|
|
Production revenue |
$21,322 |
$21,187 |
$75,952 |
$53,137 |
Funds flow from operations |
11,655 |
12,025 |
41,737 |
26,104 |
|
per share - basic and diluted |
0.06 |
0.07 |
0.22 |
0.15 |
Net income (loss) |
1,111 |
(2,176) |
6,765 |
(808) |
|
per share - basic and diluted |
0.01 |
(0.01) |
0.04 |
- |
Capital expenditures, net |
29,146 |
11,684 |
87,306 |
73,110 |
Working capital (deficit) |
|
|
(78,883) |
(48,257) |
|
|
|
|
|
Weighted average shares - basic |
189,375 |
168,974 |
186,838 |
169,238 |
|
|
|
|
|
Weighted average shares - diluted |
193,353 |
168,974 |
190,948 |
169,238 |
|
|
|
|
|
|
Three months ended |
Year ended |
Operational |
Dec 31, 2012 |
Dec 31, 2011 |
Dec 31, 2012 |
Dec 31, 2011 |
|
|
|
|
|
Production |
|
|
|
|
Oil & liquids (bbls/d) |
2,683 |
2,350 |
2,371 |
1,495 |
Natural gas (mcf/d) |
4,568 |
2,969 |
4,129 |
2,854 |
Oil equivalent (boe/d) |
3,444 |
2,845 |
3,059 |
1,971 |
|
|
|
|
|
Sales price per unit |
|
|
|
|
Oil & liquids ($/bbl) |
80.55 |
93.65 |
82.94 |
90.16 |
Natural gas ($/mcf) |
3.43 |
3.46 |
2.64 |
3.79 |
Oil equivalent ($/boe) |
67.29 |
80.97 |
67.84 |
79.89 |
|
|
|
|
|
Reserves (Proved plus probable) |
|
|
|
|
Oil & liquids (mbbls) |
|
|
18,605 |
11,913 |
Natural gas (mmcf) |
|
|
24,666 |
15,863 |
Oil equivalent (mboe) |
|
|
22,716 |
14,557 |
|
|
|
|
|
The full text of the December 31, 2012 financial statements and
associated MD&A can be found on the Company's website at
www.novusenergy.ca and on SEDAR at www.sedar.com.
Operational Highlights
For 2012, average annual production was 3,059
boe/d, a 55% increase over 2011 average annual production volumes
of 1,971 boe/d. In the fourth quarter of 2012, Novus achieved
production of 3,444 boe/d, a 21% increase over fourth quarter 2011
average production volumes of 2,845 boe/d.
The Company drilled a total of 72 wells (72.0
net) in 2012 all targeting Viking oil within the Dodsland region of Saskatchewan. Twenty-four of these wells (24.0
net) were drilled in the fourth quarter of 2012.
During the fourth quarter of 2012, Novus
drilled, completed and placed on production three wells to the west
of its Flaxcombe field. The
western most well drilled in this extension is situated over 12
miles from the Flaxcombe field. In
the first quarter of 2013, Novus drilled, cased and put on
production four additional successful wells in this region. With
recent land purchases Novus controls approximately 17.5 sections of
land in this western extension and with its success, has materially
added to its drilling inventory.
Novus has been focused on continually lowering
its drilling and completion costs, employing new completion
techniques to improve the economic performance of its wells, and
building the necessary area infrastructure to support stable, low
operating cost production. Novus' operating costs have
continued to materially decrease from $11.66/boe in the first quarter of 2012 to
$9.84/boe in the fourth quarter of
2012. The Company's 2012 operating costs for its Viking
production were $7.88 /boe, with
further reductions anticipated in 2013.
Novus has entered 2013 with an extensive light
oil development drilling inventory of more than 1,500 net risked
locations. Novus believes that the development of the Viking
resource is in its early stages and that there is further
significant upside to recovery factors by applying secondary
recovery methods such as water flooding.
Outlook
The Company is competitively positioned in the
repeatable, low risk, highly economic Viking oil resource play with
219 net sections of land and 1,585 net risked drilling locations.
The core of the Company's development program in 2013 and beyond
will focus on further exploitation of its sizeable opportunity
base. With highly economic operating netbacks from its Viking
oil assets, the Company is generating strong funds flow which will
provide it with the ability to internally fund an aggressive
drilling program in 2013.
The Company's first quarter 2013 drilling
program resulted in 17 wells being drilled. A total of twenty
wells were completed and brought on production by the end of
March 2013.
Due to higher than average snowfall levels in
Saskatchewan this year, Novus has
taken several steps to mitigate the impact of spring breakup on its
production. The Company has tied all possible wells into its
pipeline system and has negated the need for trucks in regular
operations in its core Flaxcombe
area. Within the region, where trucks will be required, the
Company has distributed a large quantity of rig matting to ensure
emulsion hauling can continue on access roads through
breakup. All field oil storage tanks were emptied prior to
road bans being applied giving the Company ample capacity to
maintain regular production in the event of inadvertent short term
trucking disruptions.
The Company ended the 2012 fiscal year with net
debt of $78.9 million, against lines
of credit of $105 million.
Novus' strong financial position and unused lines of credit provide
the Company with the ability to maintain its growth profile and
continue the exploitation of its significant drilling
inventory.
Based upon the stable production rates, highly
economic netbacks, significant recoverable reserves, and lower
drilling and completion costs in the Dodsland area the Company has experienced to
date, Novus plans on maintaining an aggressive drilling program on
its current acreage.
Value Optimization Process
On December 4,
2012, Novus announced that it had retained financial
advisors to assist the Special Committee of the Board of Directors
in exploring and evaluating a broad range of options to optimize
shareholder value. Technical presentations commenced during the
third week of January 2013 for
interested and qualified parties who have entered into a
confidentiality agreement with Novus. The Company does not
intend to disclose future developments with respect to the process
unless and until the Board of Directors has approved a specific
transaction or otherwise determines that disclosure is appropriate
or required.
NON-IFRS FINANCIAL MEASUREMENTS
Included in this press release are references to
certain financial measures commonly used in the oil and natural gas
industry, such as funds flow from operations, operating netbacks
and net debt. These measures have no standardized meanings,
are not defined by IFRS, and accordingly are referred to as
non-IFRS measures. The determination of these measures may
not be comparable to the same as reported by other companies and
should not be considered an alternative to, or more meaningful
than, cash provided by operating, investing and financing
activities or net income as determined by IFRS as an indicator of
the Company's performance or liquidity.
Novus determines funds flow from operations as
cash provided by operating activities prior to changes in non-cash
working capital items and decommissioning expenditures. The
Company considers funds flow from operations to be a key measure as
it demonstrates the Company's ability to generate the cash
necessary to repay debt and to fund future growth through capital
investment.
Operating netbacks are calculated by deducting
royalties, field operations and transportation and marketing
expenses from production revenue. Operating netbacks are used
by management to assess operating results between periods and
between peer companies as they provide an indication of results
generated by the Company's principal business activities before the
consideration of how these activities are financed or how the
results are taxed.
Net debt is calculated as current assets less
all current liabilities, including any bank debt. The Company
monitors net debt as part of its capital structure.
OTHER MEASUREMENTS
Reported production represents Novus' ownership
share of sales before the deduction of royalties. Where amounts are
expressed on a barrel of oil equivalent ("boe") basis, natural gas
has been converted at a ratio of six thousand cubic feet to one
boe. This ratio is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead. Boe's may be
misleading, particularly if used in isolation. References to
natural gas liquids ("liquids") include condensate, propane, butane
and ethane and one barrel of liquids is considered to be equivalent
to one boe.
Novus Energy Inc. is a well positioned, junior
oil and gas company with a proven management team committed to
aggressive, cost-effective growth of high netback light oil
reserves and production. Novus will continue to grow through
exploratory and development drilling funded through its strong
financial position.
Novus Shares trade on the TSX Venture Exchange
under the symbol NVS. Novus currently has 189.4 million common
shares outstanding.
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.
This news release will not constitute an
offer to sell or the solicitation of an offer to buy the securities
in any jurisdiction. Such securities have not been registered under
the United States Securities Act
of 1933 and may not be offered or sold in the United States, or to a U.S. person, absent
registration, or an applicable exemption therefrom.
Advisory Regarding Forward Looking
Statements
The information provided above includes
references to discovered and undiscovered oil and natural gas
resources. There is no certainty that any portion of the resources
will be discovered. If discovered, there is no certainty that it
will be commercially viable to produce any portion of the
resource.
This press release contains forward-looking
statements and forward-looking information within the meaning of
applicable securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "objective", "ongoing",
"may", "will", "project", "should", "believe", "plans", "intends"
and similar expressions are intended to identify forward-looking
information or statements. More particularly and without
limitation, this press release contains forward looking statements
and information concerning the company's petroleum and natural gas
production; reserves; undeveloped land holdings; business strategy;
future development and growth opportunities; prospects; asset base;
future cash flows; value and debt levels; capital programs;
treatment under tax laws; and oil and natural gas prices. The
forward-looking statements and information are based on certain key
expectations and assumptions made by Novus, including expectations
and assumptions concerning prevailing commodity prices and exchange
rates, applicable royalty rates and tax laws; future well
production rates and reserve volumes; the performance of existing
wells; the success obtained in drilling new wells; the sufficiency
of budgeted capital expenditures in carrying out planned
activities; and the availability and cost of labour and services.
Although Novus believes that the expectations and assumptions on
which such forward-looking statements and information are based are
reasonable, undue reliance should not be placed on the forward
looking statements and information because Novus can give no
assurance that they will prove to be correct. Since forward-looking
statements and information address future events and conditions, by
their very nature they involve inherent risks and uncertainties.
Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include,
but are not limited to, the risks associated with the oil and gas
industry in general such as operational risks in development,
exploration and production; delays or changes in plans with respect
to exploration or development projects or capital expenditures; the
uncertainty of reserve estimates; the uncertainty of estimates and
projections relating to reserves, production, costs and expenses;
health, safety and environmental risks; commodity price and
exchange rate fluctuations; marketing and transportation; loss of
markets; environmental risks; competition; incorrect assessment of
the value of acquisitions; failure to realize the anticipated
benefits of acquisitions; ability to access sufficient capital from
internal and external sources; failure to obtain required
regulatory and other approvals; and changes in legislation,
including but not limited to tax laws, royalties and environmental
regulations.
Readers are cautioned that the foregoing list
of factors is not exhaustive. Additional information on these and
other factors that could affect Novus' operations or financial
results are included in reports on file with applicable securities
regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com), and at Novus' website
(www.novusenergy.ca). The forward-looking statements and
information contained in this press release are made as of the date
hereof and Novus undertakes no obligation to update publicly or
revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise, unless so
required by applicable securities laws.
SOURCE Novus Energy Inc.