CALGARY, March 16, 2017 /CNW/ - Ironhorse Oil &
Gas Inc. ("Ironhorse" or the "Company") (TSX-V: IOG) announces its
fourth quarter and full year 2016 financial and operating results
and year-end reserves information.
Highlights of 2016:
- Funds from operations decreased 113% to negative $30,000 for the year ended December 31, 2016 from positive $228,000 for the year ended December 2015.
- Despite producing for just 31 days during the first seven
months of 2016 as a result of being shut-in, annual production from
the Pembina area averaged 105 boe/d net, a decrease of 43% compared
to 2015.
- Realized net loss of $1.0 million
for 2016 triggered primarily by the $0.8
million impairment of the Pembina asset due to a decline in
estimated future commodity prices provided by the Company's third
party external reserve report evaluators as compared with
2015.
- General and administrative costs decreased 38% to $427,000 compared to $688,000 for the year ended December 31, 2015 which incurred $270,000 in costs in defense of the unsolicited
take-over-bid by 1927297 Alberta Ltd. initiated on November 4, 2015 which expired on February 5, 2016.
- The Company's proved plus probable reserve volumes are 85% oil
and natural gas liquids weighted, with 73% of reserve volumes being
proved.
Outlook 2017:
Production from the Nisku L2L
Pool (the "Pool"), the Company's primary source of cash flows, is
projected to average in the range of 140 boe/d to 170 boe/d for the
next six months as the operator manages reservoir performance and
optimizes the Pool production and water injection requirements.
During the second half of 2017 downhole pump upgrades are to be
completed on the Pembina producer wells which will impact
production slightly.
Additional expenditures will be incurred in 2017 related to
capital costs for pump upgrades at Pembina and surface reclamation
activity primarily related to the Company's Dawson, Alberta operated property.
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SELECTED
INFORMATION
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Three months
ended
December 31
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Year ended
December 31
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($ thousands except
per share & unit amounts)
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2016
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2015
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2016
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2015
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Financial
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|
|
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Petroleum and natural
gas revenues (1)
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884
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892
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1,731
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3,343
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Funds from operations
(2)
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142
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(144)
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(30)
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228
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Per share – basic and
diluted
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0.01
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(0.01)
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-
|
0.01
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Net (loss)
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(700)
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(2,076)
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(1,036)
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(5,719)
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Per share – basic and
diluted
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(0.03)
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(0.07)
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(0.04)
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(0.21)
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Capital expenditures
(3)
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-
|
-
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(1)
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44
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Operation
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|
|
|
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Production
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|
|
|
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Gas
(mcf/d)
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212
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202
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142
|
192
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Oil & NGL
(bbl/d)
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167
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197
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89
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164
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Total
(boe/d)
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202
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231
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113
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196
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Petroleum and natural
gas revenues ($/boe)
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47.61
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42.08
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41.81
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46.83
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Royalties
($/boe)
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19.09
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18.00
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15.48
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17.62
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Operating expenses
($/boe)
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16.41
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12.55
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17.16
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16.60
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Operating netback
($/boe)
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12.11
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11.53
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9.17
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12.61
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(1) Petroleum and natural gas
revenues are before royalty expense.
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(2) Funds from operations and
net debt are non-GAAP measures as defined in the Advisory section
of the MD&A.
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(3) Capital expenditures are
before acquisitions and dispositions.
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The Company's year-end reserves evaluation with the effective
date of December 31, 2016 was
prepared by Sproule Associates Limited in accordance with
definitions, standards and procedures contained in the Canadian Oil
and Gas Evaluation Handbook ("COGE Handbook") and NI 51-101
"Standards of Disclosure for Oil & Gas Activities".
Reserves included herein are stated on a company gross basis
(working interest before deduction of royalties without including
any royalty interest) unless otherwise noted.
Reserves Summary –
Oil Equivalent (Mboe)
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(Mboe)
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Proved
Producing
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Proved
Developed
Non-Producing
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Proved
Undeveloped
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Total
Proved
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Total
Probable
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Proved plus
Probable
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2015
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483
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89
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-
|
572
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175
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747
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2016
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450
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2
|
-
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452
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165
|
617
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Net Present Value
Summary(1)
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($
thousands)
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Proved
Producing
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Proved
Developed
Non-Producing
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Proved
Undeveloped
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Total
Proved
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Total
Probable
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Total
Proved plus
Probable
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10%
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6,834
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3
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-
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6,838
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2,324
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9,162
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15%
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6,012
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6
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-
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6,019
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1,795
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7,813
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(1) Net
present value summary is before income taxes
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Reserves
Reconciliation - Oil Equivalent (Mboe)
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(Mboe)
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Total Proved
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Total
Probable
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Total
Proved plus
Probable
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December 31,
2015
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572
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175
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747
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Technical
Revisions
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(79)
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(10)
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(89)
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Dispositions
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-
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-
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-
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Economic
Factors
|
(0.1)
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-
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(0.1)
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Production
|
(41)
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-
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(41)
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December 31,
2016
|
452
|
165
|
617
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Net Asset Value
("NAV") before income tax – Discounted at 10%
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($ thousands except
share and per share data)
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December 31,
2016
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December 31,
2015
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Net present
value-proved and probable
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9,162
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10,538
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Net working capital
(1)
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2,788
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2,915
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Net asset
value
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11,950
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13,453
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Common shares
outstanding
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27,885,824
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27,885,824
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NAV per share,
December 31
|
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0.43
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0.48
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Sproule Price
Forecasts as of December 31, 2016 (1)
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Year
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Canadian Light
Sweet Oil Price At Edmonton
40o
API
($Cdn/bbl)
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AECO/NIT
Spot Gas
Price
($Cdn/Mmbtu)
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2017
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65.58
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3.44
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2018
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74.51
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3.27
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2019
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78.24
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3.22
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2020
|
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80.64
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3.91
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2021
|
|
82.25
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4.00
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2022
|
|
83.90
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4.10
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2023
|
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85.58
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4.19
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2024
|
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87.29
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4.29
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2025
|
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89.03
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4.40
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2026
|
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90.81
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4.50
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2027
|
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92.63
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4.61
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Thereafter
|
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+2.0%/year
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+2.0%/year
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(1) This summary table
identifies benchmark reference pricing schedules that might apply
to a reporting issuer
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Additional Information
Ironhorse's complete results
for the year ended December 31, 2016,
including audited financial statements and the management's
discussion and analysis, statement of reserves data and other oil
and gas information are available on SEDAR or the Company's web
site at www.ihorse.ca.
About Ironhorse:
Ironhorse Oil & Gas Inc. is a Calgary-based junior oil and natural gas
production company trading on the TSX Venture Exchange under the
symbol "IOG."
Forward-looking statements:
Statements throughout this release that are not historical
facts may be considered to be "forward looking statements." These
forward looking statements sometimes include words to the effect
that management believes or expects a stated condition or result.
All estimates and statements that describe the Company's
objectives, goals, or future plans, including management's
assessment of future plans and operations, drilling plans and
timing thereof, expected production rates and additions and the
expected levels of activities may constitute forward-looking
statements under applicable securities laws and necessarily involve
risks including, without limitation, risks associated with oil and
gas exploration, development, exploitation, production, marketing
and transportation, volatility of commodity prices, imprecision of
reserve estimates, environmental risks, competition from other
producers, incorrect assessment of the value of acquisitions,
failure to complete and/or realize the anticipated benefits of
acquisitions, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from
internal and external sources and changes in the regulatory and
taxation environment. As a consequence, the Company's actual
results may differ materially from those expressed in, or implied
by, the forward-looking statements. Forward-looking statements or
information are based on a number of factors and assumptions which
have been used to develop such statements and information but which
may prove to be incorrect. Although the Company believes that the
expectations reflected in such forward-looking statements or
information are reasonable, undue reliance should not be placed on
forward-looking statements because the Company can give no
assurance that such expectations will prove to be correct. In
addition to other factors and assumptions which may be identified
in this document, assumptions have been made regarding, among other
things: the ability of the Company to obtain equipment and services
in a timely and cost efficient manner; drilling results; the
ability of the operator of the projects which the Company has an
interest in to operate the field in a safe, efficient and effective
manor; and field production rates and decline rates. Readers are
cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could affect
the Company's operations and financial results are included
elsewhere herein and in reports on file with Canadian securities
regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com). Furthermore, the forward-looking
statements contained in this release are made as at the date of
this release.
Boe Conversion – Certain natural gas volumes have been
converted to barrels of oil equivalent ("boe") whereby six thousand
cubic feet (mcf) of natural gas is equal to one barrel (bbl) of
oil. This conversion ratio is based on an energy equivalency
conversion applicable at the burner tip and does not represent a
value equivalency at the wellhead.
"Neither 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."
SOURCE Ironhorse Oil & Gas Inc.