HALIFAX, NOVA SCOTIA--(Marketwired - March 25, 2014) - (TSX:CDH) - Corridor Resources Inc. ("Corridor") announced today its 2013 year end financial results. Corridor's annual financial statements, management's discussion and analysis and Annual Information Form for the year ended December 31, 2013 have been filed on SEDAR at
www.sedar.com and are available on Corridor's website at
www.corridor.ca.
All amounts referred to in this press release are in Canadian dollars unless otherwise stated.
2013 Highlights
-- On February 13, 2014, the Company entered into a non-binding letter of
intent with the Government of Quebec, through its affiliates
Investissement Quebec and Ressources Quebec ("RQ"), Petrolia Inc.
("Petrolia") and Etablissements Maurel & Prom S.A. ("M&P") to create a
joint venture that will appraise and potentially develop hydrocarbon
resources on Anticosti Island, Quebec. The letter of intent calls for
Petrolia and Corridor to transfer their interests in the Anticosti
licenses to the Anticosti joint venture and for RQ and M&P to spend up
to $100 million on an exploration program starting in 2014. As a result
of this transaction, Corridor will hold an interest of 21.7% in the
Anticosti joint venture and receive net cash proceeds of approximately
$13.9 million on the closing of the transaction which is expected to
occur no later than April 30, 2014, subject to the satisfaction of
closing conditions.
-- Corridor maintains approximately 2 million gross acres (approximately
1.3 million net acres) of undeveloped land in connection with its three
high impact exploration prospects (Frederick Brook shale gas prospect in
New Brunswick, Macasty Formation unconventional oil prospect on
Anticosti Island and Old Harry conventional hydrocarbon prospect in the
Gulf of St. Lawrence). Corridor is seeking joint venture partners for
its Frederick Brook shale and Old Harry prospects.
-- Corridor's netback for 2013 increased to $4.23/mmbtu from $1.88/mmbtu in
2012 mainly as a result of higher natural gas sales prices in the New
England market.
-- Cash flow from operations increased to $10,934 thousand for the year
ended December 31, 2013 from $4,595 thousand for the year ended December
31, 2012 due to the higher average natural gas prices in 2013.
-- The premiums for the natural gas prices realized by Corridor as compared
to the Henry Hub natural gas prices averaged $US3.19/mmbtu for the year
ended December 31, 2013 compared to $US1.10/mmbtu for the year ended
December 31, 2012."We are pleased with our 2013 year end results including increased cash flow from operations resulting from impressive premiums and netbacks for our New Brunswick production" said Phillip Knoll, President and Chief Executive Officer of Corridor. "Our recently announced letter of intent for our Anticosti Island prospect and our planned 2014 capital program in New Brunswick continue to demonstrate that Corridor offers investors significant potential upside in value. Corridor is well positioned to take advantage of the strategic infrastructure connecting our New Brunswick resources to these markets, and possesses the sustainability, with no outstanding debt, to advance Corridor's three high impact prospects in Eastern Canada."
Year End Financial Results
The following table provides a summary of Corridor's financial and operating results for the three and twelve months ended December 31, 2013 with comparisons to the three and twelve months ended December 31, 2012.
Selected Financial Information
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Three months ended Twelve months ended
December 31 December 31
thousands of dollars except
per share amounts 2013 2012 2013 2012
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Sales $ 6,087 $ 4,962 $ 21,619 $ 14,795
Net income (loss) $ 20,586 $ (42,023) $ 22,449 $ (47,889)
Net income (loss) per share
- basic and diluted $ 0.233 $ (0.475) $ 0.254 $ (0.541)
Cash flow from operations(1) $ 2,962 $ 2,431 $ 10,934 $ 4,595
Capital expenditures $ 1,856 $ 1,195 $ 3,138 $ 3,763
Total assets $ 181,262 $ 157,978 $ 181,262 $ 157,978
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(1) Cash flow from operations is a non-IFRS measure. Cash flow from
operations represents net earnings adjusted for non-cash items including
depletion, depreciation and amortization, deferred income taxes, share-based
compensation and other non-cash expenses. See "Non-IFRS Financial Measures"
in Corridor's management's discussion and analysis for the year ended
December 31, 2013.Financial Summary for 2013
-- Natural gas revenues for the year ended December 31, 2013 increased to
$20,346 thousand from $13,345 thousand for the year ended December 31,
2012 due to an increase in the average natural gas sales price to
$6.91/mscf in 2013 from $4.05/mscf in 2012 which increase was partially
offset by a decrease in Corridor's average daily gas production to 8.1
mmscfpd in 2013 from 9.0 mmscfpd in 2012. However, the decrease in
natural gas production in 2013 was mitigated by field optimization
efforts during the year which has lessened the rate of decline
previously experienced and has resulted in an increase in the ultimate
recovery of natural gas from the McCully Field.
-- During the year, Corridor began to sell its natural gas production using
the Algonquin city-gate ("AGT" or "Algonquin") pricing point instead of
the Dracut pricing point as the Dracut sales hub is no longer actively
traded. Corridor expects that natural gas prices, net of the additional
transportation charge, will be representative of New England market
prices, which are expected to continue to be strong compared with Henry
Hub. The premium to Henry Hub realized in 2013 averaged $US3.19/mmbtu
for the year ended December 31, 2013 compared to $US1.10/mmbtu for the
year ended December 31, 2012.
-- As at December 31, 2013, Corridor had cash and cash equivalents of
$15,514 thousand, net working capital of $17,296 thousand and no
outstanding debt.
-- Corridor's net income increased to $22,449 thousand for the year ended
December 31, 2013 from a net loss of $47,889 thousand for the year ended
December 31, 2012 due primarily to the reversal of impairment losses of
$28,050 thousand for the year ended December 31, 2013 which resulted
from an increase in forecast natural gas prices used to determine the
recoverable amount of the Company's New Brunswick assets. An impairment
loss of $56,325 thousand had been recognized for the year ended December
31, 2012.Q4 2013 Netback Analysis
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Three months ended Twelve months ended
December 31 December 31
thousands of dollars except
$/mscf 2013 2012 2013 2012
----------------------------------------------------------------------------
Natural gas revenues $ 5,841 $ 4,604 $ 20,346 $ 13,345
Royalty expense (247) (50) (740) (58)
Transportation expense (973) (1,037) (3,799) (4,074)
Production expense (1,034) (715) (3,362) (2,982)
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Netback $ 3,587 $ 2,802 $ 12,445 $ 6,231
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Natural gas production
(mmscf) 712 818 2,945 3,293
Natural gas production per
day (mmscfpd) 7.7 8.9 8.1 9.0
Natural gas revenues
($/mscf) $ 8.21 $ 5.63 $ 6.91 $ 4.05
Royalty expense ($/mscf) (0.35) (0.06) (0.25) (0.02)
Transportation expense
($/mscf) (1.37) (1.27) (1.29) (1.24)
Production expense ($/mscf) (1.45) (0.87) (1.14) (0.91)
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Netback ($/mscf) $ 5.04 $ 3.43 $ 4.23 $ 1.88
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----------------------------------------------------------------------------Corridor's netback for Q4 2013 increased to $5.04/mmbtu from $3.43/mmbtu in Q4 2012 as a result of higher natural gas sales prices in the New England market.
Natural gas revenues increased to $5,841 thousand in Q4 2013 from $4,604 thousand in Q4 2012 due to the increase in the average natural gas sales price to $8.21/mscf in Q4 2013 from $5.63/mscf in Q4 2012 which increase was partially offset by the decrease in the average daily natural gas production to 7.7 mmscfpd in Q4 2013 from 8.9 mmscfpd in Q4 2012. However, the decrease in natural gas production in Q4 2013 was mitigated by field optimization efforts during the quarter.
The increase in the royalty expense to $247 thousand for Q4 2013 from $50 thousand in Q4 2012 is due to the higher natural gas revenues in Q4 2013.
Transportation expense decreased to $973 thousand for Q4 2013 from $1,037 thousand for Q4 2012 due to the decrease in natural gas production, which decrease was partially offset by a stronger U.S. dollar, additional interruptible transportation at a higher cost and a new transportation charge on the Algonquin pipeline to access the new Algonquin city-gate pricing point.
Net production expense for Q4 2013 increased to $1,034 thousand from $715 thousand for Q4 2012 due to a workover program conducted at the McCully Field in Q4 2013 and increased costs related to the well optimization efforts.
Corridor is an Eastern Canadian junior resource company engaged in the exploration for and development and production of petroleum and natural gas onshore in New Brunswick and Quebec and offshore in the Gulf of St. Lawrence. Corridor currently has natural gas production and reserves in the McCully Field near Sussex, New Brunswick and crude oil reserves in the Caledonia Field near Sussex, New Brunswick. In addition, Corridor has contingent resources and discovered unrecoverable resources in Elgin, New Brunswick and undiscovered resources on Anticosti Island, Quebec where Corridor has ongoing exploration projects.
Forward Looking Statements
This press release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes. In particular, this press release contains forward-looking statements pertaining to: the characteristics of Corridor's properties; the potential upside in value to shareholders; exploration and development plans (including the 2014 capital program); plans to solicit joint venture partners; the Anticosti joint venture, including closing of the joint venture and exploration plans of the joint venture; and natural gas sales prices and premiums.
Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to Corridor and its shareholders.
Forward-looking statements are based on the terms of the Anticosti joint venture letter of intent and on Corridor's current beliefs as well as assumptions made by, and information currently available to, Corridor concerning anticipated financial performance, business prospects, strategies, regulatory developments, future natural gas commodity prices, future natural gas production levels, the ability to obtain equipment in a timely manner to carry out development activities, the ability to market natural gas successfully to current and new customers, the impact of increasing competition, the ability to obtain financing on acceptable terms, and the ability to add production and reserves through development and exploration activities. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that forward-looking statements will not be achieved. These factors may be found under the heading "Risk Factors" in Corridor's Annual Information Form for the year ended December 31, 2013.
The forward-looking statements contained in this press release are made as of the date hereof and Corridor does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.