Mr. Dan Thompson reports
SHORELINE ENERGY CORP. ANNOUNCES FINANCIAL AND OPERATING RESULTS FOR THE QUARTER AND YEAR-ENDED DECEMBER 31, 2014
Shoreline Energy Corp. has released its 2014 year-end oil and gas reserves results, as well as 2014 year-end financial and operating results. A complete copy of the company's annual information form, financial statements, along with management's discussion and analysis, may be obtained on SEDAR or on the company's website.
Fourth-quarter 2014 financial and operating highlights:
- In the fourth quarter of 2014, the company completed the sale of all of
its U.S. Wattenburg assets for gross proceeds of $12.5-million (U.S.).
- A settlement agreement was reached on the royalty obligation that
reduced the obligation from the carrying value of $9.6-million to $5.5-million. A gain on the settlement of debt of $4.1-million was recorded.
- From the proceeds of asset sales in the fourth quarter of 2014, the
company fully repaid all of its secured loans including repayment and
retirement of its royalty obligation. The company no longer has any
secured debt facilities.
- Revenues from continuing operations for the fourth quarter of 2014 were
$1.5-million, a decrease of $2.5-million from the third quarter of 2014
as the result of lower average daily production after asset sales and
lower commodity prices.
- Sales volumes from continuing operations averaged 520 barrels of oil
equivalent per day for the fourth quarter of 2014, compared to
1,033 barrels of oil equivalent per day the third quarter of 2014. The decrease is the result of the
Canadian property dispositions that closed during the third quarter of
2014.
- The company recorded a net loss of $33.4-million from continued and
discontinued operations combined, representing a net loss per share of
$3.69.
- Net funds flow from continuing operations resulted in a use of $1.3-million for the fourth quarter of 2014, in comparison to the third
quarter of 2014, which resulted in a use of $2.4-million. The higher
loss for the third quarter is primarily as a result of a flow-through
share obligation of $2.2-million recorded. In the fourth quarter of 2014
there was a reversal of the flow-through share obligation of $200,000 as a result of eligible seismic expenditures made.
- Capital expenditures for the fourth quarter of 2014 totalled $700,000 compared to $100,000 in the third quarter of 2014 and related mainly
to seismic shot in the company's Hines Creek area lands.
Reserve highlights:
- Total proved plus probable (2P) reserve value of $21.7-million
(discounted at 10 per cent), representing 2,697 million barrels of oil equivalent;
- Total proved (1P) reserve value of $16.0-million (discounted at 10 per cent),
representing 1,939 million barrels of oil equivalent;
- Proved developed producing reserve value of $10.4-million (discounted at
10 per cent), representing 1,270 million barrels of oil equivalent.
Corporate update
For the first quarter of 2015, the company produced an average of 641 barrels of oil equivalent per day based on field estimates, with an 84-per-cent natural gas weighting. Effective March 29, 2015, a production facility operated by a third party was shut in due to continued low commodity prices, this will result in a reduction of 77 barrels of oil equivalent per day to Shoreline's production while commodity prices remain weak.
Going concern risk
The company's ability to continue as a going concern is dependent upon the continued support of the company's debentureholders as well as the company's ability to obtain other financing to finance its existing obligations, operating, financing and investing activities. If the company cannot negotiate a shares-for-debt settlement with its debenture holders and acceptable settlement terms with its other creditors, the company may need to enter into credit protection to restructure its financial position.
After selling a significant portion of its producing assets, Shoreline's environment licensee liability rating dropped below 1.0, which under normal circumstances, would require the company to post a deposit with the Alberta Energy Regulator for future abandonment and reclamation expenses. Shoreline has instead submitted an extensive application and work plan under the LLR management program in December, 2014, and was subsequently accepted into the program on March 25, 2015. This program will defer any deposits until Sept. 30, 2015.
Reserves information
The company's reserves are as at Dec. 31, 2014, as evaluated by GLJ Petroleum Consultants conducted pursuant to National Instrument 51-101 and COGEH reserves definitions.
SUMMARY OF OIL AND GAS RESERVES
Natural gas
Light and medium (excluding natural
crude oil Heavy crude oil gas liquids)
Gross(1) Net(2) Gross(1) Net2) Gross(1) Net(2)
(mbbl) (mbbl) (mbbl) (mbbl) (mmcf) (mmcf)
Proved
Developed producing 173 161 5 4 6,246 5,535
Developed non-
producing 129 110 0 0 3,137 2,708
Undeveloped 0 0 0 0 0 0
--- --- -- -- ------ ------
Total proved 301 270 5 4 9,384 8,244
Total probable 151 128 0 0 3,502 3,041
--- --- -- -- ------ ------
Total proved plus
probable 453 398 5 5 12,885 11,285
Natural gas Total oil
liquids equivalent
Gross(1) Net(2) Gross(1) Net(2)
(mbbl) (mbbl) (mbbl) (mbbl)
Proved
Developed producing 52 34 1,270 1,122
Developed non-
producing 17 12 669 572
Undeveloped 0 0 0 0
-- -- ----- -----
Total proved 69 45 1,939 1,694
Total probable 23 15 758 650
-- -- ----- -----
Total proved plus
probable 92 61 2,697 2,344
(1) Gross refers to company's working interest excluding royalty interests
and before royalty charges.
(2) Net refers to the companies working interest and royalty interests
after royalties charges.
(3) Tables may not add due to rounding.
NET PRESENT VALUE OF FUTURE NET REVENUE BEFORE INCOME TAXES (FORECAST CASE)
Unit value(2)
Net present value of future net revenue before income
before income taxes discounted at tax discounted
(%/year) at 10% per year
0 (M$) 5 (M$) 10 (M$) 15 (M$) 20 (M$) $/boe $/mcfe
Proved
Developed producing 17,261 12,985 10,404 8,699 7,495 $9.27 $1.55
Developed non-
producing 9,759 7,272 5,650 4,534 3,730 $9.87 $1.64
Undeveloped 0 0 0 0 0 0 0
------ ------ ------ ------ ------ ----- -----
Total proved 27,020 20,257 16,054 13,232 11,225 $9.48 $1.58
Total probable 12,961 8,060 5,616 4,205 3,303 $8.64 $1.44
------ ------ ------ ------ ------ ----- -----
Total proved plus
probable 39,981 28,317 21,669 17,437 14,528 $9.24 $1.54
(1) All values are in Canadian dollars.
(2) Unit values are calculated by dividing net present value at 10 per cent
by company net volumes.
(3) Tables may not add due to rounding.
OPERATING HIGHLIGHTS
Three months ended
Dec. 31, Sept. 30,
2014 2014
Production
Oil and NGLs (bbl/d) 96 238
Gas (mcf/d) 2,542 4,769
Total (boe/d) 520 1,033
Average realized prices
Oil and NGLs ($/bbl) 67.37 88.31
Gas ($/mcf) 3.64 4.36
Petroleum and natural gas
sales 31.03 42.05
Realized gain (loss) on
financial instrument - (1.28)
Royalties (0.53) (5.08)
Operating expenses (41.47) (14.68)
Transportation expenses (1.67) (0.99)
Operating netback (12.64) 20.02
Drilling activity
Gross wells 0 0
Net interest wells 0 0
We seek Safe Harbor.
© 2024 Canjex Publishing Ltd. All rights reserved.