Mr. David Burghardt reports
ALTURA ENERGY INC. PROVIDES A CORPORATE UPDATE
Altura Energy Inc. has voluntarily curtailed its production volumes and revised its credit facility.
The COVID-19 pandemic and the recent actions of OPEC and Russia abandoning production quotas have resulted in an unprecedented decline in crude oil prices. In response to these events, Altura is voluntarily curtailing production volumes in April to its hedged oil production of 300 barrels of oil per day, which is approximately 550 barrels of oil equivalent per day including NGLs (natural gas liquids) and natural gas. Altura plans to continue the production curtailment in May to produce at 100 per cent of hedged oil volumes if low oil prices persist.
Altura currently has crude oil contracts for 300 barrels of oil per day hedged to Dec. 31, 2020, as shown in the accompanying table.
Period Commodity contract Quantity Pricing point Contract price
April 1, 2020, to June 30, 2020 Crude oil Fixed 300 bbl/d WTI $70.20
April 1, 2020, to June 30, 2020 Crude oil Fixed 300 bbl/d WCS-WTI differential ($28.00)
July 1, 2020, to Sept. 30, 2020 Crude oil Fixed 300 bbl/d WCS $43.75
Oct. 1, 2020, to Dec. 31, 2020 Crude oil Fixed 300 bbl/d WTI $71.35
Oct. 1, 2020, to Dec. 31, 2020 Crude oil Fixed 300 bbl/d WCS-WTI differential ($24.00)
Using actual prices for the first quarter of 2020 and strip pricing at April 6, 2020, Altura's hedging gains in 2020 are estimated at $2.4-million, providing the corporation with positive forecast adjusted funds flow.
As a result of capital expenditures incurred in January and February as part of its first quarter 2020 drilling and completion program, Altura's net debt at March 31, 2020, is estimated to be $6.4-million. In March, Altura halted all capital expenditures and will leave one well drilled but uncompleted that is on an existing pad and can be completed and brought on production at any time.
In addition, Altura has implemented cost-cutting measures with its continuing production operations and in other areas of the corporation. Altura also has a work-from-home program to protect the community, employees and the corporation from the COVID-19 pandemic, and these measures are not expected to have a negative impact on operations.
In April, Altura's credit facility was amended on an interim basis to $7.5-million from $9.0-million as a result of the unprecedented decline and volatility in crude oil prices. The corporation's credit facility will undergo its annual review in May, 2020.
The corporation is planning to close the second transaction of the previously announced sale with a private company (PrivateCo) in the second half of 2020, where PrivateCo will acquire an additional 5.5-per-cent working interest in Altura's production, wells, lands and facilities for $3.5-million. As per the agreement, the proceeds from the second transaction will primarily be used to drill a horizontal well in either the Entice area or the Leduc-Woodbend area.
The corporation is focused on protecting balance sheet strength in the current volatile commodity price environment.
Altura's board of directors and management team would like to thank shareholders for their continuing support.
About Altura Energy Inc.
Altura is a junior oil and gas exploration, development and production company with operations in central Alberta. Altura predominantly produces from the Rex member in the Upper Mannville group, and is focused on delivering per-share growth and attractive shareholder returns through a combination of organic growth and strategic acquisitions.
We seek Safe Harbor.
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