Mr. Larry Parks reports
IRONHORSE ANNOUNCES 2013 FOURTH QUARTER AND YEAR-END RESULTS
Ironhorse Oil & Gas Inc. has released its fourth quarter and full-year
2013 financial and operating results and year-end reserves information.
The company's year-end reserves evaluation with the effective date of
Dec. 31, 2013, was prepared by GLJ Petroleum Consultants Ltd. and
Sproule Associates Ltd. in accordance with definitions, standards
and procedures contained in the Canadian oil and gas evaluation
handbook and NI 51-101 (standards of disclosure for
oil and 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.
Highlights of 2013:
- Completed the sale of the Leon Lake property for net proceeds of $7.1-million, net of selling and closing costs, with funds used to repay all
bank debt;
- Improvement of funds from operations to negative $4,000 for the year
ended Dec. 31, 2013, from negative $368,000 for the year ended
December, 2012;
- Reduced general and administrative expenses by $286,000 from $714,000 for the year ended
Dec. 31, 2012, to $428,000 for the year ended Dec. 31, 2013;
- The company's proved plus probable reserve volumes of 88 per cent oil and
natural gas liquids weighted with 79 per cent of reserve volumes being proved;
- Annual production down by 7 per cent to 99 barrels of oil equivalent per day from 107 barrels of oil equivalent per day in 2012 primarily due to the disposition of the Leon Lake oil property
in November, 2013;
- Received approval from the Alberta Energy Regulator for the completion
of pipeline and facility expansion to bring on the company's share of
production from the Pembina Nisku light oil property.
Outlook for 2014
The company is debt-free with cash on hand to complete its share of all
remaining capital expenditures for the Pembina Nisku L2L pool. The
14-5-50-6W5M and 9-5-50-6W5M wells are currently tied in and producing
at restricted rates while Sinopec is testing its current gas-blending
capacities and completing work on the related facilities, with the
10-5-50-6W5M water injector now completed.
In 2014, the company will focus on establishing the maximum allowed
production levels from the Pembina Nisku L2L pool, which includes
application for a special maximum rate limitation allowable, as well as an enhanced recovery water injection scheme, which includes good production
practice. Once stabilized, and production is established at Pembina, the
company will pursue options to maximize shareholder value.
On April 15, 2014, TransCanada provided industry with an updated status
as to potential shut-in of gas pipelines as a result of a National
Energy Board compliance order. TransCanada announced that
effective immediately, all gas pipelines, including those which handle
gas production from the Pembina L2L pool, would not be curtailed or shut
in as the NEB has accepted TransCanada's plan to remedy pipeline
issues. As a result of this, Keyera will not be required to shut in
production that would have affected production from the Pembina L2L
pool.
SELECTED INFORMATION
Three months ended Dec. 31, Year ended Dec. 31,
2013 2012 2013 2012
Financial ($ thousands except per share)
Petroleum and natural gas revenues $130 $649 $1,590 $2,053
Funds from operations (75) 136 (4) (368)
Per share -- basic and diluted -- -- -- (0.01)
Net income (loss) (277) 270 (1,713) (889)
Per share -- basic and diluted (0.01) 0.01 (0.06) (0.03)
Operation
Production
Gas (Mcf/d) 159 741 375 277
Oil (bbl/d) 9 60 36 61
Total (boe/d) 36 184 99 107
Petroleum and natural gas revenues ($/boe) $38.84 $38.39 $44.00 $52.54
Royalties ($/boe) 6.03 6.55 11.56 13.48
Operating expenses ($/boe) 0.64 13.26 13.85 20.60
Operating netback ($/boe) 32.17 18.58 18.59 18.46
RESERVES SUMMARY -- OIL EQUIVALENT
(in Mboe)
Proved producing Proved developed non-producing Proved undeveloped Total proved Total probable Proved plus probable
2013 12 625 -- 637 172 809
2012 119 617 276 1,012 416 1,428
NET PRESENT VALUE SUMMARY
($ thousands)
Proved Proved developed
producing non-producing
10% $141 $22,016
15% 135 20,212
Proved Total Total Total proved
undeveloped proved probable plus probable
10% -- $22,157 $4,895 $27,052
15% -- 20,347 4,046 24,393
RESERVES RECONCILIATION -- OIL EQUIVALENT
(in Mboe)
Total proved Total probable Total proved plus probable
Dec. 31, 2012 1,012 416 1,428
Technical revisions (239) (63) (302)
Dispositions (100) (175) (274)
Economic factors -- (6) (7)
Production (36) -- (36)
Dec. 31, 2013 637 172 809
NET ASSET VALUE BEFORE INCOME TAX -- DISCOUNTED AT 10 PER CENT
($ thousands except share and per share data)
Dec. 31, 2013 Dec. 31, 2012
Net present value -- proved and probable $27,052 $39,507
Net working capital (debt) 2,815 (3,277)
Net asset value 29,867 36,230
Common shares outstanding 27,860,824 27,860,824
NAV per share, Dec. 31 1.07 1.30
GLJ PRICE FORECASTS AS OF DEC. 31, 2013
Year Edmonton Par price 40 degrees API AECO gas price
($Cdn/bbl) ($Cdn/MMBtu)
2014 $92.76 $4.03
2015 97.37 4.26
2016 100.00 4.50
2017 100.00 4.74
2018 100.00 4.97
2019 100.00 5.21
2020 100.77 5.33
2021 102.78 5.44
2022 104.83 5.55
2023 106.93 5.66
Thereafter More than 2%/year More than 2%/year
Additional information
Ironhorse's complete results for the year ended Dec. 31, 2013,
including audited financial statements and management's discussion
and analysis, annual information form, statement of reserves data, and
other oil and gas information, are available on SEDAR or the company's
website.
We seek Safe Harbor.
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