(TSX: AAV)
CALGARY,
AB, Oct. 26, 2023 /CNW/ - Advantage
Energy Ltd. ("Advantage" or the "Corporation") is pleased to report
its third quarter 2023 results, including record production, strong
well performance, and continuing share buybacks, while net
debta remained on-target. Development operations
continued at a steady pace with a focus on our prolific
Wembley and Glacier assets.
Third Quarter 2023 Financial Highlights
- Cash provided by operating activities of $90.4 million
- Adjusted funds flow ("AFF")[a] of $81.9
million or $0.49 per
sharea
- Cash used in investing activities was $49.9 million
- Net capital expendituresa were $61.2 million (Advantage $58.1 million, Entropy $3.1 million)
- Net income of $28.2 million or
$0.17 per basic share
- Repurchased 1.7 million shares at a cost of $15.8 million ($9.34/share average)
- Awarded TSX30 for the second year in a row, recognizing the
thirty top-performing companies on the Toronto Stock Exchange over
the prior three years (see www.tsx.com/tsx30)
Third Quarter 2023 Operational Highlights
- Record quarterly production of 64,195 boe/d (339.7 MMcf/d
natural gas and 7,577 bbls/d liquids), a 19% increase from the
third quarter of 2022
- Record quarterly liquids production of 7,577 bbls/d (3,035
bbls/d crude oil, 1,368 bbls/d condensate and 3,174 bbls/d NGLs),
18% higher than the third quarter of 2022
- At Glacier, the last eighteen wells delivered an average IP30
of 13.6 MMcf/d
- The Glacier Gas Plant achieved peak raw gas throughput
exceeding 410 MMcf/d following commissioning of an expansion in Q2
2023. The recently completed 5-well pad at 4-1 is expected to be
onstream early in November, and will temporarily fill the plant up
to 425 MMcf/d.
- At Wembley, the last seven
wells delivered an average IP30 of 1,549 boe/d (3.7 MMcf/d natural
gas, 605 bbls/d crude oil and 328 bbls/d NGLs)
- At Conroy in British Columbia,
Advantage acquired 53 net sections of Montney rights to increase geographic exposure
to export markets including our participation in the Rockies LNG
project.
____________________________________
|
a
Specified financial measure which is not a standardized measure
under International Financial Reporting Standards ("IFRS") and may
not be comparable to similar specified financial measures used by
other entities. Please see "Specified Financial Measures" for the
composition of such specified financial measure, an explanation of
how such specified financial measure provides useful information to
a reader and the purposes for which Management of Advantage uses
the specified financial measure, and where required, a
reconciliation of the specified financial measure to the most
directly comparable IFRS measure.
|
Marketing Update
Advantage has hedged approximately 19% of its forecast natural
gas production for this upcoming winter, 12% for summer 2024, and
5% for winter 2024/25. In order to reduce exposure to AECO Basis
volatility, Advantage has 40,000 mmbtu/d of AECO Basis hedged at US
$1.19 per mmbtu until the end of
2024.
Looking Forward
To maximize shareholder value, Advantage remains focused on
growing AFF per sharea through organic growth and
share repurchases. Advantage's three-year plan is to deliver
compound annual production growth of approximately 10% with annual
capital spending between $250 million and $300
million, including the new Progress Gas Plant, expected to be
onstream in 2025. All free cash flowa is planned to be
returned to shareholders via share buybacks. With Advantage's
2023 capital program now 85% completed, free cash flow is expected
to surge allowing us to repurchase up to 5% of our outstanding
shares during the fourth quarter. Our net debta target
remains between $170 million and
$230 million (excluding Entropy)
though this target may increase for 2024, in proportion to our
growing production and cash flow; any increase in targeted debt
would be for the purpose of additional share buybacks.
Advantage's 2023 capital guidance remains between $250 million and $280
million. Production guidance for 2023 remains between
59,000 boe/d and 62,500 boe/d. Operational outperformance this year
has allowed Advantage to reduce well counts and associated capital
spending to achieve our targeted production, though unplanned
events including third-party plant outages and unscheduled downtime
at the Valhalla compressor station
partially offset these benefits.
With modern, low emissions-intensity assets and ownership of
80%[b] of Entropy Inc., the Corporation continues to proudly
deliver clean, reliable, sustainable energy, contributing to a
reduction in global emissions by displacing high-carbon
fuels. Advantage wishes to thank our employees, Board of
Directors and our shareholders for their ongoing support.
Below are complete tables showing financial and operating
highlights.
_________________________
|
b
Advantage currently owns 92% of Entropy's common shares.
Assuming Brookfield Global Transition Fund's currently-held
unsecured debentures are exchanged for common shares according to
the terms of the investment agreement, Advantage will own 80% of
Entropy's common shares.
|
Financial
Highlights
|
Three months
ended
September
30
|
Nine months
ended
September
30
|
($000, except as
otherwise indicated)
|
2023
|
2022
|
2023
|
2022
|
Financial Statement
Highlights
|
|
|
|
|
Natural gas and liquids
sales
|
140,724
|
235,392
|
393,963
|
727,258
|
Net income and
comprehensive income
|
28,152
|
40,568
|
59,477
|
224,298
|
per basic
share (2)
|
0.17
|
0.22
|
0.36
|
1.19
|
Basic weighted average
shares (000)
|
167,702
|
186,717
|
167,434
|
189,305
|
Cash provided by
operating activities
|
90,376
|
123,224
|
234,297
|
389,820
|
Cash used in financing
activities
|
(3,562)
|
(71,048)
|
(18,143)
|
(159,373)
|
Cash used in investing
activities
|
(49,886)
|
(42,822)
|
(223,915)
|
(200,525)
|
Other Financial
Highlights
|
|
|
|
|
Adjusted funds flow
(1)
|
81,862
|
96,651
|
231,076
|
392,585
|
per boe
(1)
|
13.86
|
19.39
|
14.57
|
25.76
|
per basic share
(1)(2)
|
0.49
|
0.52
|
1.38
|
2.07
|
Net capital
expenditures (1)
|
61,234
|
58,519
|
242,858
|
192,103
|
Free cash flow
(1)
|
20,628
|
38,132
|
(11,782)
|
200,482
|
Working capital surplus
(1)
|
29,816
|
46,960
|
29,816
|
46,960
|
Bank
indebtedness
|
226,127
|
113,804
|
226,127
|
113,804
|
Net debt (1)
(3)
|
217,064
|
82,432
|
217,064
|
82,432
|
(1)
|
Specified financial
measure which is not a standardized measure under IFRS and may not
be comparable to similar specified financial measures used by other
entities. Please see "Specified Financial Measures" for the
composition of such specified financial measure, an explanation of
how such specified financial measure provides useful information to
a reader and the purposes for which management of Advantage uses
the specified financial measure, and/or where required, a
reconciliation of the specified financial measure to the most
directly comparable IFRS measure.
|
(2)
|
Based on basic weighted
average shares outstanding.
|
(3)
|
Consolidated net debt
of $217.1 million includes $206.7 million with Advantage and $10.4
million with Entropy.
|
Operating
Highlights
|
Three months
ended
September
30
|
Nine months
ended
September
30
|
|
2023
|
2022
|
2023
|
2022
|
Operating
|
|
|
|
|
Production
|
|
|
|
|
Crude oil
(bbls/d)
|
3,035
|
2,168
|
2,527
|
2,012
|
Condensate
(bbls/d)
|
1,368
|
1,049
|
1,134
|
1,078
|
NGLs
(bbls/d)
|
3,174
|
3,230
|
2,913
|
3,160
|
Total
liquids production (bbls/d)
|
7,577
|
6,447
|
6,574
|
6,250
|
Natural
gas (Mcf/d)
|
339,709
|
286,328
|
309,060
|
297,503
|
Total
production (boe/d)
|
64,195
|
54,168
|
58,083
|
55,834
|
Average realized prices
(including realized derivatives)
|
|
|
|
|
Natural
gas ($/Mcf) (1)
|
2.95
|
4.61
|
3.40
|
5.51
|
Liquids
($/bbl) (1)
|
77.91
|
87.89
|
77.03
|
94.34
|
Operating Netback
($/boe)
|
|
|
|
|
Natural
gas and liquids sales (1)
|
23.83
|
47.23
|
24.85
|
47.71
|
Realized
gains (losses) on derivatives (1)
|
1.02
|
(12.58)
|
1.84
|
(7.86)
|
Processing
and other income (1)
|
0.39
|
0.46
|
0.32
|
0.39
|
Net sales
of purchased natural gas (1)
|
-
|
-
|
(0.02)
|
-
|
Royalty
expense (1)
|
(1.55)
|
(5.80)
|
(2.03)
|
(5.19)
|
Operating
expense (1)
|
(3.85)
|
(3.72)
|
(3.89)
|
(3.08)
|
Transportation expense (1)
|
(3.70)
|
(4.48)
|
(4.10)
|
(4.43)
|
Operating
netback (1)
|
16.14
|
21.11
|
16.97
|
27.54
|
(1)
|
Specified financial
measure which is not a standardized measure under IFRS and may not
be comparable to similar specified financial measures used by other
entities. Please see "Specified Financial Measures" for the
composition of such specified financial measure, an explanation of
how such specified financial measure provides useful information to
a reader and the purposes for which management of Advantage uses
the specified financial measure, and/or where required, a
reconciliation of the specified financial measure to the most
directly comparable IFRS measure.
|
The Corporation's unaudited consolidated financial statements
for the three and nine months ended September 30, 2023 together with the notes
thereto, and Management's Discussion and Analysis for the three and
nine months ended September 30, 2023
have been filed on www.sedarplus.ca and are available on the
Corporation's website at
https://www.advantageog.com/investors/financial-reports.
Upon request, Advantage will provide a hard copy of any financial
reports free of charge.
Forward-Looking Information
and Advisory
The information in this press release contains certain
forward-looking statements, including within the meaning of
applicable securities laws. These statements relate to future
events or our future intentions or 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 "anticipate", "continue",
"demonstrate", "expect", "may", "can", "will", "believe", "would"
and similar expressions and include statements relating to, among
other things, Advantage's position, strategy and development plans
and the benefits to be derived therefrom; the anticipated benefits
to be derived from the Corporation's hedging program; Advantage's
plans to maximize shareholder value by focusing on growing AFF per
share through organic growth and share repurchases; Advantage's
anticipated annual compounded production growth and annual capital
spending over the next three years; Advantage's expectations that
all free cash flow will be returned to its shareholders via share
buybacks; Advantage's expectations that its free cash flow will
grow and that it will repurchase up to 5% of its outstanding shares
in the fourth quarter; Advantage's net debt target for the next
three years; Advantage's 2023 capital guidance; Advantage's
anticipated 2023 average production; and the Corporation's
expectations that it will continue to deliver clean, reliable,
sustainable energy, and contribute to a reduction in global
emissions by displacing high-carbon fuels. Advantage's actual
decisions, activities, 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 Advantage will derive from them.
These statements involve substantial known and unknown risks
and uncertainties, certain of which are beyond Advantage's control,
including, but not limited to: changes in general economic, market
and business conditions; industry conditions, including as a result
of demand and supply effects remaining from the COVID-19 pandemic;
actions by governmental or regulatory authorities including
increasing taxes and changes in investment or other regulations;
changes in tax laws, royalty regimes and incentive programs
relating to the oil and gas industry; Advantage's success at
acquisition, exploitation and development of reserves; unexpected
drilling results; changes in commodity prices, currency exchange
rates, net capital expenditures, reserves or reserves estimates and
debt service requirements; the occurrence of unexpected events
involved in the exploration for, and the operation and development
of, oil and gas properties, including hazards such as fire,
explosion, blowouts, cratering, and spills, each of which could
result in substantial damage to wells, production and processing
facilities, other property and the environment or in personal
injury; changes or fluctuations in production levels; delays in
anticipated timing of drilling and completion of wells; individual
well productivity; competition from other producers; the lack of
availability of qualified personnel or management; credit risk;
changes in laws and regulations including the adoption of new
environmental laws and regulations and changes in how they are
interpreted and enforced; our ability to comply with current and
future environmental or other laws; stock market volatility and
market valuations; liabilities inherent in oil and natural gas
operations; competition for, among other things, capital,
acquisitions of reserves, undeveloped lands and skilled personnel;
incorrect assessments of the value of acquisitions; geological,
technical, drilling and processing problems and other difficulties
in producing petroleum reserves; ability to obtain required
approvals of regulatory authorities; ability to access sufficient
capital from internal and external sources; the risk that Advantage
may not grow AFF per share through organic growth and share
repurchases; the risk that the Corporation may not have sufficient
financial resources to purchase its shares pursuant to its share
buyback program in the future; the risk that Advantage's annual
compounded production growth over the next three years may be less
than anticipated; the risk that Advantage's annual capital spending
over the next three years may be greater than anticipated; the risk
that all free cash flow may not be returned to shareholders via
share buybacks; the risk that Advantage's free cash flow in the
fourth quarter may be less than anticipated; the risk that
Advantage's net debt may be greater than anticipated; and the risk
that Advantage's 2023 average production may be less than
anticipated. Many of these risks and uncertainties and additional
risk factors are described in the Corporation's Annual Information
Form which is available at www.sedarplus.ca ("SEDAR+") and
www.advantageog.com. Readers are also referred to risk factors
described in other documents Advantage files with Canadian
securities authorities.
With respect to forward-looking statements contained in this
press release, Advantage has made assumptions regarding, but not
limited to: conditions in general economic and financial markets;
the impact and duration thereof that the COVID-19 pandemic will
have on (i) the demand for crude oil, NGLs and natural gas, (ii)
the supply chain including the Corporation's ability to obtain the
equipment and services it requires, and (iii) the Corporation's
ability to produce, transport and/or sell its crude oil, NGLs and
natural gas; effects of regulation by governmental agencies;
current and future commodity prices and royalty regimes; the
Corporation's current and future hedging program; future exchange
rates; royalty rates; future operating costs; future transportation
costs and availability of product transportation capacity;
availability of skilled labor; availability of drilling and related
equipment; timing and amount of net capital expenditures; the
impact of increasing competition; the price of crude oil and
natural gas; the number of new wells required to achieve the budget
objectives; that the Corporation will have sufficient cash flow,
debt or equity sources or other financial resources required to
fund its capital and operating expenditures and requirements as
needed; that the Corporation's conduct and results of operations
will be consistent with its expectations; that the Corporation will
have the ability to develop the Corporation's properties in the
manner currently contemplated; current or, where applicable,
proposed assumed industry conditions, laws and regulations will
continue in effect or as anticipated; that growth in adjusted funds
flow per share will maximize shareholder value; that the
Corporation will allocate its free cash flow to its share buyback
program; that the Corporation will have sufficient financial
resources to purchase its shares pursuant to its share buyback
program in the future; and the estimates of the Corporation's
production and reserves volumes and the assumptions related thereto
(including commodity prices and development costs) are accurate in
all material respects. Readers are cautioned that the foregoing
lists of factors are not exhaustive.
This press release contains additional forward-looking
statements which are estimates of Advantage's annual compounded
production growth, annual capital spending and net debt target for
the next three years. The foregoing estimates are based on various
assumptions and are provided for illustration only and are based on
budgets and forecasts that have not been finalized and are subject
to change and a variety of contingencies including prior years'
results. In addition, the foregoing estimates and assumptions
underlying the 2024 and 2025 forecasts are management prepared only
and have not been approved by the Board of Directors of Advantage.
These forecasts are made as of the date of this press release and
except as required by applicable securities laws, Advantage
undertakes no obligation to update such forecasts.
The future acquisition by the Corporation of the
Corporation's common shares pursuant to its share buyback program,
if any, and the level thereof is uncertain. Any decision to acquire
common shares of the Corporation pursuant to the share buyback
program will be subject to the discretion of the board of directors
of the Corporation and may depend on a variety of factors,
including, without limitation, the Corporation's business
performance, financial condition, financial requirements, growth
plans, expected capital requirements and other conditions existing
at such future time including, without limitation, contractual
restrictions and satisfaction of the solvency tests imposed on the
Corporation under applicable corporate law. There can be no
assurance of the number of common shares of the Corporation that
the Corporation will acquire pursuant to its share buyback program,
if any, in the future.
Management has included the above summary of assumptions and
risks related to forward-looking information above and in its
continuous disclosure filings on SEDAR+ in order to provide
shareholders with a more complete perspective on Advantage's future
operations and such information may not be appropriate for other
purposes. Advantage's actual results, performance or achievement
could differ materially from those expressed in, or implied by,
these forward-looking statements and, accordingly, no assurance can
be given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what
benefits that Advantage will derive therefrom. Readers are
cautioned that the foregoing lists of factors are not exhaustive.
These forward-looking statements are made as of the date of this
news release and Advantage disclaims any intent or obligation to
update publicly any forward-looking statements, whether as a result
of new information, future events or results or otherwise, other
than as required by applicable securities laws.
This press release contains information that may be
considered a financial outlook under applicable securities laws
about the Corporation's potential financial position, including,
but not limited to, Advantage's anticipated annual capital spending
over the next three years; Advantage's expectations that all free
cash flow will be returned to shareholders via share buybacks;
Advantage's net debt target for the next three years; and
Advantage's 2023 capital guidance; all of which are subject to
numerous assumptions, risk factors, limitations and qualifications,
including those set forth in the above paragraphs. The actual
results of operations of the Corporation and the resulting
financial results will vary from the amounts set forth in this
press release and such variations may be material. This information
has been provided for illustration only and with respect to future
periods are based on budgets and forecasts that are speculative and
are subject to a variety of contingencies and may not be
appropriate for other purposes. Accordingly, these estimates are
not to be relied upon as indicative of future results. Except as
required by applicable securities laws, the Corporation undertakes
no obligation to update such financial outlook. The financial
outlook contained in this press release was made as of the date of
this press release and was provided for the purpose of providing
further information about the Corporation's potential future
business operations. Readers are cautioned that the financial
outlook contained in this press release is not conclusive and is
subject to change.
References in this press release to short-term production
rates, such as IP30, are useful in confirming the presence of
hydrocarbons, however such rates are not determinative of the rates
at which such wells will commence production and decline thereafter
and are not indicative of long-term performance or of ultimate
recovery. Additionally, such rates may also include recovered "load
oil" fluids used in well completion stimulation. While encouraging,
readers are cautioned not to place reliance on such rates in
calculating the aggregate production of Advantage.
Barrels of oil equivalent (boe) and thousand cubic feet of
natural gas equivalent (mcfe) may be misleading, particularly if
used in isolation. Boe and mcfe conversion ratios have been
calculated using a conversion rate of six thousand cubic feet of
natural gas equivalent to one barrel of oil. A boe and mcfe
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. 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.
References to natural gas, crude oil and condensate and NGLs
production in this press release refer to conventional natural gas,
light crude oil and medium crude oil and natural gas liquids
product types, respectively, as defined in National Instrument
51-101.
Specified Financial Measures
Throughout this news release, Advantage discloses certain
measures to analyze financial performance, financial position, and
cash flow. These non-GAAP and other financial measures do not have
any standardized meaning prescribed under IFRS and therefore may
not be comparable to similar measures presented by other entities.
The non-GAAP and other financial measures should not be considered
to be more meaningful than GAAP measures which are determined in
accordance with IFRS, such as net income (loss) and comprehensive
income (loss), cash provided by operating activities, and cash used
in investing activities, as indicators of Advantage's
performance.
Non-GAAP Financial Measures
Adjusted Funds Flow
The Corporation considers adjusted funds flow to be a useful
measure of Advantage's ability to generate cash from the production
of natural gas and liquids, which may be used to settle outstanding
debt and obligations, support future capital expenditures plans, or
return capital to shareholders. Changes in non-cash working capital
are excluded from adjusted funds flow as they may vary
significantly between periods and are not considered to be
indicative of the Corporation's operating performance as they are a
function of the timeliness of collecting receivables and paying
payables. Expenditures on decommissioning liabilities are excluded
from the calculation as the amount and timing of these expenditures
are unrelated to current production and are partially discretionary
due to the nature of our low liability. A reconciliation of the
most directly comparable financial measure has been provided
below:
|
Three months
ended
September
30
|
Nine months
ended
September
30
|
($000)
|
2023
|
2022
|
2023
|
2022
|
Cash provided by
operating activities
|
90,376
|
123,224
|
234,297
|
389,820
|
Expenditures on decommissioning liability
|
1,420
|
517
|
1,919
|
1,071
|
Changes in
non-cash working capital
|
(9,934)
|
(27,090)
|
(5,140)
|
1,694
|
Adjusted funds
flow
|
81,862
|
96,651
|
231,076
|
392,585
|
Net Capital Expenditures
Net capital expenditures include total capital expenditures
related to property, plant and equipment, exploration and
evaluation assets and intangible assets. Management considers this
measure reflective of actual capital activity for the period as it
excludes changes in working capital related to other periods and
excludes cash receipts on government grants. A reconciliation of
the most directly comparable financial measure has been provided
below:
|
Three months
ended
September
30
|
Nine months
ended
September
30
|
($000)
|
2023
|
2022
|
2023
|
2022
|
Cash used in investing
activities
|
49,886
|
42,822
|
223,915
|
200,525
|
Changes in
non-cash working capital
|
11,348
|
15,697
|
18,943
|
(8,427)
|
Project
funding received
|
-
|
-
|
-
|
5
|
Net capital
expenditures
|
61,234
|
58,519
|
242,858
|
192,103
|
Free Cash Flow
Advantage computes free cash flow as adjusted funds flow less
net capital expenditures. Advantage uses free cash flow as an
indicator of the efficiency and liquidity of Advantage's business
by measuring its cash available after net capital expenditures to
settle outstanding debt and obligations and potentially return
capital to shareholders by paying dividends or buying back common
shares. A reconciliation of the most directly comparable financial
measure has been provided below:
|
Three months
ended
September
30
|
Nine months
ended
September
30
|
($000)
|
2023
|
2022
|
2023
|
2022
|
Cash provided by
operating activities
|
90,376
|
123,224
|
234,297
|
389,820
|
Cash used in investing
activities
|
(49,886)
|
(42,822)
|
(223,915)
|
(200,525)
|
Changes in non-cash working
capital
|
(21,282)
|
(42,787)
|
(24,083)
|
10,121
|
Expenditures on decommissioning
liability
|
1,420
|
517
|
1,919
|
1,071
|
Project
funding received
|
-
|
-
|
-
|
(5)
|
Free cash
flow
|
20,628
|
38,132
|
(11,782)
|
200,482
|
Operating Netback
Operating netback is comprised of natural gas and liquids
sales, realized gains (losses) on derivatives, processing and other
income, net sales of purchased natural gas, net of expenses
resulting from field operations, including royalty expense,
operating expense and transportation expense. Operating netback
provides Management and users with a measure to compare the
profitability of field operations between companies, development
areas and specific wells. The composition of operating netback is
as follows:
|
Three months
ended
September
30
|
Nine months
ended
September
30
|
($000)
|
2023
|
2022
|
2023
|
2022
|
Natural gas and liquids
sales
|
140,724
|
235,392
|
393,963
|
727,258
|
Realized gains (losses)
on derivatives
|
6,010
|
(62,668)
|
29,103
|
(119,790)
|
Processing and other
income
|
2,303
|
2,276
|
5,143
|
5,991
|
Net sales of purchased
natural gas
|
-
|
-
|
(247)
|
70
|
Royalty
expense
|
(9,154)
|
(28,882)
|
(32,130)
|
(79,103)
|
Operating
expense
|
(22,758)
|
(18,544)
|
(61,729)
|
(46,925)
|
Transportation
expense
|
(21,833)
|
(22,325)
|
(64,939)
|
(67,456)
|
Operating
netback
|
95,292
|
105,249
|
269,164
|
420,045
|
Non-GAAP Ratios
Adjusted Funds Flow per Share
Adjusted funds flow per share is derived by dividing adjusted
funds flow by the basic weighted average shares outstanding of the
Corporation. Management believes that adjusted funds flow per share
provides investors an indicator of funds generated from the
business that could be allocated to each shareholder's equity
position.
|
Three months
ended
September
30
|
Nine months
ended
September
30
|
($000, except as
otherwise indicated)
|
2023
|
2022
|
2023
|
2022
|
Adjusted funds
flow
|
81,862
|
96,651
|
231,076
|
392,585
|
Weighted average shares
outstanding (000)
|
167,702
|
186,717
|
167,434
|
189,305
|
Adjusted funds flow per
share ($/share)
|
0.49
|
0.52
|
1.38
|
2.07
|
Adjusted Funds Flow per BOE
Adjusted funds flow per boe is derived by dividing adjusted
funds flow by the total production in boe for the reporting
period. Adjusted funds flow per boe is a useful ratio that
allows users to compare the Corporation's adjusted funds flow
against other competitor corporations with different rates of
production.
|
Three months
ended
September
30
|
Nine months
ended
September
30
|
($000, except as
otherwise indicated)
|
2023
|
2022
|
2023
|
2022
|
Adjusted funds
flow
|
81,862
|
96,651
|
231,076
|
392,585
|
|
|
|
|
|
Total production
(boe/d)
|
64,195
|
54,168
|
58,083
|
55,834
|
Days in
period
|
92
|
92
|
273
|
273
|
Total production
(boe)
|
5,905,940
|
4,983,456
|
15,856,659
|
15,242,682
|
Adjusted funds flow per
BOE ($/boe)
|
13.86
|
19.39
|
14.57
|
25.76
|
Operating netback per BOE
Operating netback per boe is derived by dividing each
component of operating netback by the total production in boe for
the reporting period. Operating netback per boe provides Management
and users with a measure to compare the profitability of field
operations between companies, development areas and specific wells
against other competitor corporations with different rates of
production.
|
Three months
ended
September
30
|
Nine months
ended
September
30
|
($000, except as
otherwise indicated)
|
2023
|
2022
|
2023
|
2022
|
Operating
netback
|
95,292
|
105,249
|
269,164
|
420,045
|
|
|
|
|
|
Total production
(boe/d)
|
64,195
|
54,168
|
58,083
|
55,834
|
Days in
period
|
92
|
92
|
273
|
273
|
Total production
(boe)
|
5,905,940
|
4,983,456
|
15,856,659
|
15,242,682
|
Operating
netback per BOE ($/boe)
|
16.14
|
21.11
|
16.97
|
27.54
|
Payout Ratio
Payout ratio is calculated by dividing net capital
expenditures by adjusted funds flow. Advantage uses payout ratio as
an indicator of the efficiency and liquidity of Advantage's
business by measuring its cash available after net capital
expenditures to settle outstanding debt and obligations and
potentially return capital to shareholders by paying dividends or
buying back common shares.
|
Three months
ended
September
30
|
Nine months
ended
September
30
|
($000, except as
otherwise indicated)
|
2023
|
2022
|
2023
|
2022
|
Net capital
expenditures
|
61,234
|
58,519
|
242,858
|
192,103
|
Adjusted funds
flow
|
81,862
|
96,651
|
231,076
|
392,585
|
Payout
ratio
|
0.7
|
0.6
|
1.1
|
0.5
|
Net Debt to Adjusted Funds Flow Ratio
Net debt to adjusted funds flow is calculated by dividing net
debt by adjusted fund flow for the previous four quarters. Net debt
to adjusted funds flow is a coverage ratio that provides Management
and users the ability to determine how long it would take the
Corporation to repay its bank indebtedness if it devoted all its
adjusted funds flow to debt repayment.
($000, except as
otherwise indicated)
|
|
September
30
2023
|
September
30
2022
|
Net Debt
|
|
217,064
|
82,432
|
Adjusted funds flow
(prior four quarters)
|
|
355,281
|
463,812
|
Net debt to adjusted
funds flow ratio
|
|
0.6
|
0.2
|
Capital Management Measures
Working capital
Working capital is a capital management financial measure
that provides Management and users with a measure of the
Corporation's short-term operating liquidity. By excluding
short-term derivatives and the current portion of provision and
other liabilities, Management and users can determine if the
Corporation's energy operations are sufficient to cover the
short-term operating requirements. Working capital is not a
standardized measure and therefore may not
be comparable with the calculation of similar measures
by other entities.
A summary of working capital as at September 30, 2023 and September 30, 2022 is as follows:
|
|
September
30
2023
|
September
30
2022
|
Cash and cash
equivalents
|
|
41,179
|
55,160
|
Trade and other
receivables
|
|
49,229
|
82,342
|
Prepaid expenses and
deposits
|
|
19,056
|
10,638
|
Trade and other accrued
liabilities
|
|
(79,648)
|
(101,180)
|
Working capital
surplus
|
|
29,816
|
46,960
|
Net Debt
Net debt is a capital management financial measure that
provides Management and users with a measure to assess the
Corporation's liquidity. Net debt is not a standardized measure and
therefore may not be comparable with the calculation of similar
measures by other entities. Comparative figures have been restated
to reflect the reclassification of deferred share units in trade
and other accrued liabilities which affects net debt.
A summary of the reconciliation of net debt as at
September 30, 2023 and September 30, 2022 is as follows:
|
|
September
30
2023
|
September
30
2022
|
Bank
indebtedness
|
|
226,127
|
113,804
|
Unsecured
debentures
|
|
20,753
|
15,588
|
Working capital
surplus deficit
|
|
(29,816)
|
(46,960)
|
Net
debt
|
|
217,064
|
82,432
|
Supplementary Financial Measures
Average Realized Prices
The Corporation discloses multiple average realized prices
within this press release. The determination of these prices are as
follows:
"Natural gas excluding derivatives" is comprised of natural
gas sales, as determined in accordance with IFRS, divided by the
Corporation's natural gas production.
"Natural gas including derivatives" is comprised of natural
gas sales, including realized gains (losses) on natural gas
derivatives, as determined in accordance with IFRS, divided by the
Corporation's natural gas production.
"Crude Oil" is comprised of crude oil sales, as determined in
accordance with IFRS, divided by the Corporation's crude oil
production.
"Condensate" is comprised of condensate sales, as determined
in accordance with IFRS, divided by the Corporation's condensate
production.
"NGLs" is comprised of NGLs sales, as determined in
accordance with IFRS, divided by the Corporation's NGLs
production.
"Total liquids excluding derivatives" is
comprised of crude oil, condensate and NGLs sales, as determined in
accordance with IFRS, divided by the Corporation's crude oil,
condensate and NGLs production.
"Total liquids including derivatives" is
comprised of crude oil, condensate and NGLs sales, including
realized gains (losses) on crude oil derivatives as determined in
accordance with IFRS, divided by the Corporation's crude oil,
condensate and NGLs production.
Dollars per BOE figures
Throughout this press release, the Corporation presents
certain financial figures, in accordance with IFRS, stated in
dollars per boe. These figures are determined by dividing the
applicable financial figure as prescribed under IFRS by the
Corporation's total production for the respective period. Below is
a list of figures which have been presented in this press release
in $ per boe:
- Natural gas and liquids sales per boe
- Operating expense per boe
- Realized gains (losses) on derivatives per boe
- Royalty expense per boe
- Net sales of purchased natural gas per boe
- Processing and other income per boe
- Transportation expense per boe
Abbreviations
Terms and abbreviations that are used in this press release
that are not otherwise defined herein are provided below:
bbl(s)
|
-
barrel(s)
|
bbls/d
|
- barrels per
day
|
boe
|
- barrels of oil
equivalent (6 Mcf = 1 bbl)
|
boe/d
|
- barrels of oil
equivalent per day
|
Mcf
|
- thousand cubic
feet
|
Mcf/d
|
- thousand cubic
feet per day
|
Mcfe
|
- thousand cubic
feet equivalent (1 bbl = 6
Mcf)
|
MMcf/d
|
- million cubic feet
per day
|
Crude
oil
|
- Light Crude Oil
and Medium Crude Oil as defined in National Instrument
51-101
|
"NGLs" &
"condensate"
|
- Natural Gas
Liquids as defined in National Instrument 51-101
|
Natural
gas
|
- Conventional
Natural Gas as defined in National Instrument 51-101
|
Liquids
|
- Total of crude
oil, condensate and NGLs
|
IP30
|
- average initial
production rate over 30 consecutive days
|
AECO
|
- a notional market
point on TransCanada Pipeline Limited's NGTL system
where the purchase
and sale of natural gas is transacted
|
SOURCE Advantage Energy Ltd.