CALGARY, Nov. 13, 2014 /CNW/ - Marquee Energy Ltd.
("Marquee" or the "Company") (TSXV: "MQL") announces record
production and funds flow from operations for the quarter ended
September 30, 2014. The Company's
financial statements and Management's Discussion and Analysis
("MD&A") for the three and nine months ended September 30, 2014 are available on SEDAR at
www.sedar.com and on Marquee's website at
www.marquee-energy.com.
Financial and Operational Highlights
- Achieved record production of 5,143 boe/d, an increase of 140%
from the same quarter in 2013.
- Achieved a 50% increase in funds flow per share in the third
quarter of 2014 versus the third quarter of 2013. Funds flow from
operations increased 11% to $10.3
million ($0.09 per share),
compared to $9.3 million
($0.08 per share) in the second
quarter of 2014, and $3.1 million
($0.06 per share) in the third
quarter of 2013.
- Enhanced balance sheet strength in the quarter. The Company's
annualized third quarter debt-to-cash flow ratio has improved from
4.0 in 2013 to 1.3 in 2014. The company's net debt at the end of
the third quarter was $54.7
million.
- Reduced field operating costs in the third quarter of 2014 to
less than $15/boe from $23.51/boe in the same quarter of 2013 and
$19.66/boe in the second quarter of
2014.
- Realized net proceeds of $15.2
million from the sale of 425 boe/d of (>75%) gas-weighted
non-core assets during the third quarter of 2014.
Summary of Quarterly Results
(unaudited)
|
|
|
|
|
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Three months ended
September 30
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Nine Months ended
September 30
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2014
|
2013
|
2014
|
2013
|
Financial
(000's except per share and per boe amounts)
|
|
|
|
|
Oil and natural gas
sales (1)
|
$
|
23,644
|
$
|
12,489
|
$
|
70,845
|
$
|
35,201
|
Funds flow from
operations
|
$
|
10,334
|
$
|
3,080
|
$
|
26,428
|
$
|
10,529
|
|
Per share - basic and
diluted
|
$
|
0.09
|
$
|
0.06
|
$
|
0.25
|
$
|
0.19
|
|
Per boe
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$
|
21.84
|
$
|
15.65
|
$
|
20.43
|
$
|
17.34
|
Net income (loss)
(2)
|
$
|
(13,254)
|
$
|
(1,527)
|
$
|
(15,104)
|
$
|
(3,627)
|
|
Per share - basic and
diluted
|
$
|
(0.11)
|
$
|
(0.03)
|
$
|
(0.14)
|
$
|
(0.07)
|
Capital
expenditures
|
$
|
23,190
|
$
|
8,484
|
$
|
40,361
|
$
|
18,617
|
Asset acquisitions
including non-cash consideration
|
$
|
205
|
$
|
-
|
$
|
13,048
|
$
|
-
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Property
Dispositions
|
$
|
(15,199)
|
$
|
(2,363)
|
$
|
(15,728)
|
$
|
(3,149)
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Net debt
(3)
|
|
|
$
|
54,739
|
$
|
48,776
|
Total
Assets
|
|
|
$
|
276,951
|
$
|
163,418
|
Weighted average
basic and diluted shares outstanding
|
120,338
|
54,469
|
107,173
|
54,657
|
|
|
|
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Operational
|
|
|
|
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Daily sales
volumes
|
|
|
|
|
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Oil and NGLs (bbls
per day)
|
2,163
|
1,298
|
2,079
|
1,388
|
|
Gas (mcf per
day)
|
17,881
|
5,045
|
15,960
|
5,014
|
|
Total (boe per
day)
|
5,143
|
2,139
|
4,739
|
2,224
|
|
% Oil and
NGL's
|
42%
|
61%
|
44%
|
62%
|
Average realized
prices
|
|
|
|
|
|
Oil
($/bbl)
|
$
|
89.71
|
$100.77
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$
|
94.79
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$
|
89.21
|
|
Heavy Oil
($/bbl)
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$
|
78.47
|
$89.88
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$
|
77.71
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$
|
69.04
|
|
NGL's
($/bbl)
|
$
|
50.45
|
$
|
61.88
|
$
|
59.19
|
$
|
61.62
|
|
Gas
($/mcf)
|
$
|
4.41
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$
|
2.65
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$
|
4.94
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$
|
3.30
|
Netbacks
|
|
|
|
|
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Revenue
($/boe)
|
$
|
49.97
|
$
|
63.46
|
$
|
54.76
|
$
|
57.98
|
|
Royalties
($/boe)
|
$
|
6.54
|
$
|
7.43
|
$
|
6.49
|
$
|
5.57
|
|
Opex and
transportation ($/boe)
|
$
|
14.90
|
$
|
23.51
|
$
|
18.88
|
$
|
22.27
|
Field operating
netbacks
|
$
|
28.53
|
$
|
32.52
|
$
|
29.39
|
$
|
30.14
|
|
|
|
|
|
(1)
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Before
royalties.
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(2)
|
Reflects $20.1
million loss on sale of non-core, gas-weighted assets in the third
quarter of 2014.
|
(3)
|
Net debt is
calculated as currents assets less current liabilities, excluding
commodity contracts and flow-through share premiums.
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Corporate Update
During the third quarter, Marquee invested $23.4 million in capital expenditures, primarily
in its core area at Michichi. Capital expenditure highlights for
the quarter include:
- Drilling, completion and tie-in operations on six horizontal
oil wells at Michichi
- Construction of a multi-well oil battery in the Michichi
area
- Drilling, completion and tie-in operations on one vertical and
one horizontal well at Lloydminster
- Launched a recompletion and work-over program currently
underway in the greater Michichi/Drumheller area
- Acquisition of 3D seismic surveys at Michichi and Lloydminster
Marquee's operating costs continue to improve throughout 2014,
attributable to the acquisition of owned and operated
infrastructure from transactions completed earlier in the year, as
well as meaningful increases in low-cost volumes at Michichi. The
Company completed the construction of its first multi-well battery
at Michichi, which is expected to enable further capital savings
and operating cost reductions for Marquee.
Marquee is currently producing in excess of 5,300 boe/d (based
on field estimates), net of 425 boe/d of non-core, gas-weighted
assets sold in the third quarter of 2014. Currently, the Company
has five wells in various stages of completion and tie-in
operations at Michichi, and five (four net) wells being drilled or
equipped at Lloydminster.
Michichi
During the third quarter, the Company drilled six horizontal oil
wells (100% success rate), five of which are currently on
production. Subsequent to the end of the quarter, four additional
wells were drilled to complete Marquee's 14-well program at
Michichi for 2014.
The success of the program at Michichi is the result of a strong
technical focus applied to the selection of drilling locations,
refinement of Marquee's drilling and completion program, and
efficient production operations. Marquee currently utilizes 3D
seismic for the selection of all of its drilling locations at
Michichi, where it is in the process of acquiring a new 176 sq. km.
3D survey that will complete coverage over the Company's focus
area.
Microseismic studies have been completed on two wells at
Michichi in 2014. The results will be used to optimize completion
design and to evaluate the potential for downspacing. All wells
from Marquee's 2014 drilling program were drilled from multi-well
pads, which resulted in reduced equipping and tie-in costs and
lower operating expenditures.
Lloydminster
The Company drilled one vertical heavy oil well, and its first
horizontal heavy oil well at Lloydminster during the quarter. Subsequent to
the quarter Marquee drilled two successful vertical wells in the
area. Additional drilling is underway for the first of a three-well
(two net) horizontal drilling program, which is scheduled for the
fourth quarter of 2014.
Drilling results at Lloydminster have exceeded expectations for
2014. Results from the Company's first horizontal well, and from
delineation wells realized during a previous exploration discovery,
have had a significant impact on the expansion of Marquee's
drilling inventory in the area. Marquee continues to add to its
land holdings in the area through acquisitions, farm-ins and land
sale opportunities.
Outlook
Marquee expects that its strategy to apply strong technical
focus and prudent financial management to its capital program and
operations, will continue to produce significant cash flow and
production per share growth. The strength of the Company's balance
sheet and its ongoing commodity hedging program, continues to
mitigate Marquee's exposure to volatile commodity prices. The
Company has hedged approximately 50% of its forecast fourth quarter
volumes, and approximately 22% of its forecast volumes for the
first half of 2015. Going forward, Marquee will carefully manage
capital expenditures in order to maintain prudent debt levels.
About Marquee
Marquee Energy Ltd. is a Calgary based, junior oil and gas company
focused on high rate of return oil development and production.
Marquee is committed to growing the company through exploitation of
existing opportunities and continued consolidation within its core
area at Michichi. The Company's shares are traded on the Toronto
Stock Exchange under the trading symbol "MQL.V" and on the OTCQX
marketplace under the symbol "MQLXF". An updated presentation and
additional information about Marquee may be found on its website
www.marquee-energy.com and in its continuous disclosure documents
filed with Canadian securities regulators on the System for
Electronic Document Analysis and Retrieval (SEDAR) at
www.sedar.com.
FORWARD LOOKING STATEMENTS OR INFORMATION
Certain statements included or incorporated by reference in this
news release may constitute forward looking statements under
applicable securities legislation. Such forward looking
statements or information typically contain statements with words
such as "anticipate", "believe", "expect", "plan", "intend",
"estimate", "propose", or similar words suggesting future outcomes
or statements regarding an outlook. Forward looking
statements or information in this news release may include, but are
not limited to: the number and quality of future potential drilling
opportunities; anticipated capital budgets and expenditures;
petroleum and natural gas sales; anticipated 2014 exit production,
cashflow and debt; anticipated 2014 exit debt to 2014 annualized
cashflow; the timing of facility improvements; and business
strategies, objectives and outlook.
Such forward-looking statements or information are based on a
number of assumptions all or any of which may prove to be
incorrect. In addition to any other assumptions identified in
this document, assumptions have been made regarding, among other
things: the ability of the Company to obtain equipment, services
and supplies in a timely manner to carry out its activities; the
ability of the Company to market crude oil, natural gas liquids and
natural gas successfully to current and new customers; the ability
to secure adequate product transportation; the timely receipt of
required regulatory approvals; the ability of the Company to obtain
financing on acceptable terms; interest rates; regulatory framework
regarding taxes, royalties and environmental matters; future crude
oil, natural gas liquids and natural gas prices; and management's
expectations relating to the timing and results of development
activities.
Forward-looking information is based on current expectations,
estimates and projections that involve a number of risks and
uncertainties which could cause actual results to differ materially
from those anticipated by the Company and described in the
forward-looking information. The material risk factors affecting
the Company and its business are contained in Marquee's Annual
Information Form which is available under Marquee's issuer profile
on SEDAR at www.sedar.com.
The forward-looking information contained in this press release
is made as of the date hereof and the Company undertakes no
obligation to update publicly or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, unless required by applicable securities laws. The
forward looking information contained in this press release is
expressly qualified by this cautionary statement.
ADDITIONAL ADVISORIES
Boes are presented on the basis of one Boe for six Mcf of
natural gas. Disclosure provided herein in respect of Boe may be
misleading, particularly if used in isolation. A Boe 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.
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.
SOURCE Marquee Energy Ltd.