Painted Pony Reports 2010 Financial Results
30 Marzo 2011 - 1:31AM
Marketwired Canada
Painted Pony Petroleum Ltd. (TSX VENTURE:PPY.A) (TSX VENTURE:PPY.B) ("Painted
Pony" or the "Company") is pleased to report the financial results for the year
ended December 31, 2010.
In 2010 the Company achieved several major milestones:
-- grew daily production to average 2,848 boe/d in 2010, up 84% over 2009.
Fourth quarter production in 2010 averaged 3,443 boe/d (weighted 53% oil
and liquids and 47% gas);
-- exited 2010 with an undrawn credit facility of $65 million;
-- raised $44 million in bought-deal financing through the issuance of
Class A shares at $6.48 per share in August 2010;
-- enjoyed 2010 field netbacks of $55.42 per bbl for oil on sales prices
averaging $77.84 per bbl;
-- made discoveries in the Bakken formation at Flat Lake and Weyburn in
Saskatchewan;
-- continued to grow its land to a total of 202,307 net acres of developed
and undeveloped land in Saskatchewan and British Columbia, with
undeveloped land valued at $168.1 million; and
-- drilled 51 (34.9 net) wells at a net success rate of 92%, including 6
(1.2 net) joint venture wells.
In 2011 to date, the Company has:
-- increased the undrawn credit facility to $75 million; and
-- raised $80 million in bought-deal financing through the issuance of
Class A shares at $10.50 per share in February 2011.
Plans for 2011
Painted Pony is anticipating another active year. With the 2011 capital budget
currently set at $160 million, allocating approximately 47% to British Columbia
targeting liquids-rich Montney gas and 53% towards Saskatchewan targeting Bakken
and Mississippian light oil plays, the Company expects to grow both core areas.
A total of 38.3 net wells are planned in Saskatchewan targeting both Bakken and
Mississippian targets. This will include follow-up drilling on the discovery
wells in Weyburn and Flat Lake. In British Columbia, 8.3 net wells (including
anticipated joint venture wells) are planned targeting liquids-rich Montney gas.
Painted Pony's plans are focused on developing the three layers of Montney
within the existing land base. Mid-year, the Company is planning to complete two
(1.0 net) wells to establish the commerciality of gas from the Buckinghorse
formation. To supplement the existing exploration and development program, the
Company will continue to pursue acquisitions complementary to existing core
areas.
Painted Pony's financial flexibility remains strong. As at December 31, 2010,
Painted Pony had no debt and a working capital deficiency of $1.2 million. On
February 17, 2011, the Company completed a bought-deal financing of 7,620,000
Class A shares at a price of $10.50 per share for total gross proceeds of $80
million. In March 2011, Painted Pony's demand credit facility was increased to
$75 million from $65 million, on which no balance is currently owed.
Financial and Operational Highlights
Three months ended
December 31, Year ended
(Unaudited) December 31,
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2010 2009 2010 2009
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Financial ($000's except
per share and shares
outstanding)
Petroleum and natural gas
revenue (before
royalties) 16,621 11,612 58,283 28,895
Funds flow from
operations(1) 10,394 6,981 36,279 15,210
Per share - basic(2) 0.20 0.17 0.76 0.44
Per share - diluted(2) 0.19 0.16 0.74 0.44
Cash flow from operating
activities 10,183 6,157 35,360 12,460
Net earnings (loss) 1,373 1,953 1,894 (3,656)
Per share - basic and
diluted(2) 0.03 0.05 0.04 (0.10)
Capital expenditures(3) 35,132 16,943 123,292 56,003
Working capital
(deficiency) (1,205) 40,679
Total assets 234,197 164,907
Shares outstanding
Class A 51,016,700 44,081,700
Class B 1,173,600 1,173,600
Operational
Daily sales volumes
Oil bbls/d 1,739 1,427 1,667 893
Condensate bbls/d 34 23 28 24
NGL's bbls/d 57 21 34 17
Gas mcf/d 9,678 3,211 6,718 3,712
Total boe/d 3,443 2,006 2,848 1,552
Realized prices
Oil /bbl $ 80.43 $ 75.63 $ 77.84 $ 69.15
Gas /mcf $ 3.67 $ 4.94 $ 3.94 $ 4.20
Field operating netbacks
Oil /bbl $ 55.83 $ 52.86 $ 55.42 $ 47.49
Gas & associated liquids
/boe $ 14.84 $ 12.14 $ 13.11 $ 8.41
Company combined /boe $ 35.54 $ 41.10 $ 37.88 $ 30.89
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1. This table contains the term "funds flow from operations", which should
not be considered an alternative to, or more meaningful than "cash flow
from operating activities" as determined in accordance with Canadian
generally accepted accounting principles ("GAAP") as an indicator of the
Company's performance. Funds flow from operations and funds flow from
operations per share (basic and diluted) does not have any standardized
meaning prescribed by GAAP and may not be comparable with the
calculation of similar measures for other entities. Management uses
funds flow from operations to analyze operating performance and leverage
and considers funds flow from operations to be a key measure as it
demonstrates the Company's ability to generate the cash necessary to
fund future capital investment and to repay debt. The reconciliation
between funds flow from operations and cash flow from operating
activities can be found in the Company's "Management's Discussion and
Analysis". Funds flow from operations per share is calculated using the
basic and diluted weighted average number of shares for the period, and
after the deemed conversion of the Class B shares to Class A shares,
consistent with the calculations of earnings per share. This table also
contains other industry benchmarks and terms, such as working capital
(deficiency) (calculated as current assets less current liabilities) and
operating netbacks (calculated on a per unit basis as oil, gas and
natural gas liquids revenues less royalties, transportation, and
operating costs), which are not recognized measures under GAAP.
Management believes these measures are useful supplemental measures of,
firstly, the total net position of current assets and current
liabilities of the Company and, secondly, the Company's profitability
relative to commodity prices.
2. Class B shares are converted into
Class A shares at $10 divided by the greater of $1.00 and the Current
Trading Price, defined as the weighted average trading price of the
Class A shares for the last 30 consecutive trading days.
3. Including Asset Retirement Costs and capitalized Stock-Based
Compensation.
Painted Pony Class A Shares and Class B Shares trade on the TSX Venture Exchange
under the symbols "PPY.A" and "PPY.B", respectively. For further information,
please see www.paintedpony.ca.
Advisory
This news release contains certain forward-looking statements, which are based
on numerous assumptions including but not limited to (i) drilling success; (ii)
production; (iii) future capital expenditures; and (iv) cash flow from operating
activities. The reader is cautioned that assumptions used in the preparation of
such information may prove to be incorrect.
With respect to forward-looking statements contained in this document, Painted
Pony has made a number of assumptions. The key assumptions underlying the
aforementioned forward-looking statements include assumptions that: (i)
commodity prices will be volatile throughout 2011; (ii) capital, undeveloped
lands and skilled personnel will continue to be available at the level Painted
Pony has enjoyed to date; (iii) Painted Pony will be able to obtain equipment in
a timely manner to carry out exploration, development and exploitation
activities; (iv) production rates in 2011 are expected to show growth from the
fourth quarter of 2010; (v) Painted Pony will have sufficient financial
resources with which to conduct the capital program; and (vi) the current tax
and regulatory regime will remain substantially unchanged. Certain or all of the
forgoing assumptions may prove to be untrue.
Certain information regarding Painted Pony set forth in this document, including
management's assessment of Painted Pony's future plans and operations, number,
type and timing of wells to be drilled, the planning and development of certain
prospects, production estimates, and expected production growth may constitute
forward-looking statements under applicable securities laws and necessarily
involve substantial known and unknown risks and uncertainties. These
forward-looking statements are subject to numerous risks and uncertainties,
certain of which are beyond Painted Pony's control, including without
limitation, risks associated with oil and gas exploration, development,
exploitation, production, marketing and transportation, loss of markets,
volatility of commodity prices, environmental risks, inability to obtain
drilling rigs or other services, capital expenditure costs, including drilling,
completion and facility costs, unexpected decline rates in wells, wells not
performing as expected, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from internal and
external sources, the impact of general economic conditions in Canada, the
United States and overseas, 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, increased competition, the lack of
availability of qualified personnel or management, fluctuations in foreign
exchange or interest rates, and stock market volatility and market valuations of
companies with respect to announced transactions and the final valuations
thereof. Readers are cautioned that the foregoing list of factors is not
exhaustive. Painted Pony'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, including the amount of proceeds, that the Company
will derive therefrom. All subsequent forward-looking statements, whether
written or oral, attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by these cautionary statements.
Additional information on these and other factors that could affect Painted
Pony's operations and financial results are included in reports on file with
Canadian securities regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com) or Painted Pony's website (www.paintedpony.ca).
The forward-looking statements contained in this document are made as at the
date of this news release and Painted Pony does not undertake any obligation to
update publicly or to revise any of the included forward-looking statements,
whether as a result of new information, future events or otherwise, except as
may be required by applicable securities laws.
BOEs 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.
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