Pine Cliff Energy Ltd. Announces 2023 Annual Results, Filing of Disclosure Documents, Year-End Reserves, Provides 2024 Guidance, Dividend Declaration and Executive Update
- Strong financial performance in 2023 with $9.7 million generated in Q4 and $58.7 million for the year.
- Net income of $0.8 million in Q4 2023 compared to $24.7 million in 2022.
- Acquisition of Certus Oil & Gas for $108.9 million expanding operations.
- 2% increase in production in Q4 2023 but a 2% decrease for the whole year.
- Independent reserve report showed a 16% increase in net present value for proved plus probable reserves.
- 2024 guidance includes a capital expenditure budget of $17.5 million and a monthly dividend.
- Mr. Alan MacDonald to retire as CFO, with Mr. Kristopher Zack taking over.
- Response to weak natural gas prices by increasing AECO hedge position.
- Recorded webcast available on the Company's website following the live webcast.
- Decrease in production for the whole year compared to 2022.
- Negative impact of lower natural gas benchmark pricing on net present value.
- Reduced capital budget and monthly dividend to preserve financial flexibility.
Calgary, Alberta--(Newsfile Corp. - March 4, 2024) - Pine Cliff Energy Ltd. (TSX: PNE) ("Pine Cliff" or the "Company") announces its 2023 annual results, filing of disclosure documents, year-end reserves, provides 2024 guidance, dividend declaration and executive update.
Q4 2023 and 2023 annual results are as follows:
Generated
$9.7 million ($0.03 per basic and fully diluted per share) and$58.7 million ($0.17 per basic and$0.16 per fully diluted share) of adjusted funds flow for the three months and year ended December 31, 2023, compared to$40.2 million ($0.11 per basic and fully diluted share) and$163.2 million ($0.47 per basic and$0.45 per fully diluted share) for comparable periods in 2022;Generated net income of
$0.8 million ($0.00 per basic and fully diluted share) and$9.1 million ($0.03 per basic and fully diluted share) for the three months and year ended December 31, 2023, compared to$24.7 million ($0.07 per basic and fully diluted share) and$108.9 million ($0.31 per basic and$0.30 per fully diluted share) for the comparable periods in 2022;Completed the acquisition of Certus Oil & Gas for total consideration of
$108.9 million (the "Acquisition") on December 13, 2023, expanding Pine Cliff's operations in Central Alberta and providing a new core area;Production averaged 21,454 Boe/d2 and 20,660 Boe/d3 during the three months and year-ended December 31, 2023, representing a
2% increase and2% decrease from the comparable periods in 2022;Paid dividends of
$11.6 million ($0.03 per basic and fully diluted share) and$46.0 million ($0.13 per basic and fully diluted share) for the three months and year ended December 31, 2023, compared to$10.8 million ($0.03 per basic and fully diluted share) and$23.6 million ($0.07 per basic and fully diluted share) for the comparable periods in 2022;Entered into a three-year secured term debt facility in the amount of
$56.3 million to fund a portion of the Acquisition;Capital expenditures totaled
$30.5 million in 2023, including development capital of$11.8 million to drill one gross (0.3 net) Caroline oil well, drill, complete and tie-in three gross (2.1 net) Pekisko oil wells and drill, complete and tie-in one gross (0.2 net) non-operated natural gas well in Edson. Capital expenditures also included facilities optimization and maintenance capital of$9.2 million and abandonment and reclamation expenditures of$9.5 million .
Included in the filings were Pine Cliff's annual information form ("AIF"), which includes disclosure and reports related to reserves data and other oil and gas information pursuant to National Instrument 51‐101 Standards of Disclosure for Oil and Gas Activities and its consolidated financial statements and related management's discussion and analysis for the year ended December 31, 2023.
Pine Cliff will host a webcast at 10:00 AM MDT (12:00 PM EDT) on Tuesday, March 5, 2024. Participants can access the live webcast via this Link or through the links provided on the Company's website. A recorded archive of the webcast will be available on the Company's website following the live webcast.
Reserve Report Highlights
Pine Cliff's independent reserve report (the "Report") was prepared by McDaniel & Associates Limited ("McDaniel") in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") with the effective date of December 31, 2023.
Highlights of the Report include:
Net present value for proved plus probable ("P+P") reserves of
$476.8 million , discounted at10% , an increase of$65.3 million , or16% , from December 31, 2022, primarily as a result of the Acquisition, offsetting the impact of lower natural gas benchmark pricing;Pine Cliff increased its 2023 P+P reserves by 29.0 MMBoe4 prior to adjusting for 2023 production, a reserve replacement ratio of
325% of 2024 estimated production5 as a result of the 31.5 MMBoe6 added from the Acquisition;Remaining P+P reserves of 89.2 MMboe (
71% conventional natural gas and coal bed methane) at December 31, 2023 increased31% from 67.6 MMboe at December 31, 2022 largely as a result of the Acquisition; andApproximately
70% of total reserve volumes are classified as total proved reserves,30% are classified as probable reserves.
Pine Cliff's Reserves
McDaniel has used a three-consultant average price (McDaniel, GLJ & Sproule) forecast, resulting in a price forecast of
Summary of Remaining Working Interest Reserves, as of December 31, 2023
| Reserve Category | Oil1,2 | Natural Gas Liquids | Conventional Natural Gas | Coal Bed Methane | Oil Equivalent | ||||||||||
| MBbl | MBbl | MMcf | MMcf | MBoe | |||||||||||
| Proved | |||||||||||||||
| Developed Producing | 3,210.0 | 6,283.0 | 204,978.90 | 22,133.9 | 47,345.1 | ||||||||||
| Developed Non-Producing | 218.8 | 90.2 | 1,956.60 | - | 635.1 | ||||||||||
| Undeveloped | 944.0 | 2,804.2 | 20,059.40 | - | 7,091.4 | ||||||||||
| Total Proved | 4,372.9 | 9,177.4 | 226,994.90 | 22,133.9 | 55,071.8 | ||||||||||
| Probable | 2,400.6 | 5,451.7 | 87,299.80 | 6,668.1 | 23,513.6 | ||||||||||
| Total Proved plus Probable | 6,773.5 | 14,629.1 | 314,294.70 | 28,802.0 | 78,585.4 | ||||||||||
| 1 Amounts may not add due to rounding. 2 Oil includes Light and Medium and Heavy Oil. Light and Medium oil represents 100 per cent of Total Proved and Proved plus Probable reserves. | |||||||||||||||
Summary of Net Present Values of Future Net Revenue, Before Income Taxes, as of December 31, 2023
| Discounted at (% per year) | |||||||||||||||
| ($ millions) | |||||||||||||||
| Reserve Category1 | |||||||||||||||
| Proved | |||||||||||||||
| Developed Producing | 51.1 | 199.9 | 213.7 | 198.1 | 178.1 | ||||||||||
| Developed Non-Producing | 21.1 | 12.8 | 8.7 | 6.3 | 4.9 | ||||||||||
| Undeveloped | 142.2 | 87.7 | 57.3 | 39.0 | 27.3 | ||||||||||
| Total Proved | 214.4 | 300.4 | 279.7 | 243.5 | 210.3 | ||||||||||
| Probable | 484.6 | 292.9 | 197.2 | 142.4 | 107.9 | ||||||||||
| Total Proved plus Probable | 699.0 | 593.2 | 476.8 | 385.9 | 318.2 | ||||||||||
| 1 Amounts may not add due to rounding. | |||||||||||||||
Reconciliation of Gross Reserves by Principal Product Type, as of December 31, 2023
| Reserve Reconciliation Company Gross1 | Oil2 | Natural Gas Liquids | Natural Gas3 | Oil Equivalent | | |||||||
| MBbl | MBbl | MMcf | MBoe | |||||||||
| Total Proved | ||||||||||||
| December 31, 2022 | 3,099.3 | 3,663.1 | 270,514.8 | 51,848.3 | ||||||||
| Extension | 91.6 | 23.2 | 751.1 | 240.0 | ||||||||
| Technical Revisions | (23.9 | ) | 193.1 | (5,933.4 | ) | (819.8 | ) | |||||
| Acquisitions | 2,439.6 | 7,987.3 | 53,881.2 | 19,407.1 | ||||||||
| Economic Factors | 3.3 | (195.6 | ) | (5,680.5 | ) | (1,139.1 | ) | |||||
| Production | (458.0 | ) | (544.8 | ) | (39,229.4 | ) | (7,541.0 | ) | ||||
| December 31, 2023 | 5,152.0 | 11,126.2 | 274,303.8 | 61,995.5 | ||||||||
| Total Proved plus Probable | ||||||||||||
| December 31, 2022 | 4,882.9 | 4,834.2 | 347,587.80 | 67,648.4 | ||||||||
| Extension | 374.6 | 91.3 | 3,035.40 | 971.8 | ||||||||
| Technical Revisions | (61.9 | ) | 211.4 | (8,783.80 | ) | (1,314.4 | ) | |||||
| Acquisitions | 3,387.8 | 13,461.3 | 87,872.50 | 31,494.5 | ||||||||
| Economic Factors | 9.3 | (251.1 | ) | (11,164.10 | ) | (2,102.5 | ) | |||||
| Production | (458.0 | ) | (544.8 | ) | (39,229.40 | ) | (7,541.0 | ) | ||||
| December 31, 2023 | 8,134.7 | 17,802.3 | 379,318.3 | 89,156.7 | ||||||||
| 1 Amounts may not add due to rounding. 2 Oil includes Light and Medium and Heavy Oil. Light and Medium oil represents 100 per cent of Total Proved and Proved plus Probable reserves. 3 Natural gas includes Conventional Natural Gas and Coal Bed Methane. Conventional Natural Gas represents 90 per cent Total Proved and Proved plus Probable reserves. | ||||||||||||
2024 Guidance and Dividend
Pine Cliff's Board of Directors has approved a 2024 capital expenditure budget of
Pine Cliff has declared a regular monthly dividend of
In response to weak natural gas prices, Pine Cliff has increased its AECO hedge position to approximately
Executive Update
Mr. Alan MacDonald will be retiring from his role as Chief Financial Officer effective April 30, 2024. We are pleased to announce the promotion of Mr. Kristopher Zack to the role of Chief Financial Officer and Corporate Secretary effective May 1, 2024. Mr. MacDonald will continue to work with the executive team to assist with the transition.
Financial and Operating Results
| Three months ended December 31, | Year ended December 31, | ||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| ( | |||||||||||||||||||
| Commodity sales (before royalty expense) | 45,465 | 76,928 | 188,852 | 306,208 | |||||||||||||||
| Cash provided by operating activities | 16,559 | 33,791 | 66,627 | 150,452 | |||||||||||||||
| Adjusted funds flow1 | 9,700 | 40,200 | 58,687 | 163,206 | |||||||||||||||
| Per share - Basic ($/share)1 | 0.03 | 0.11 | 0.17 | 0.47 | |||||||||||||||
| Per share - Diluted ($/share)1 | 0.03 | 0.11 | 0.16 | 0.45 | |||||||||||||||
| Net income | 841 | 24,685 | 9,121 | 108,939 | |||||||||||||||
| Per share - Basic ($/share) | 0.00 | 0.07 | 0.03 | 0.31 | |||||||||||||||
| Per share - Diluted ($/share) | 0.00 | 0.07 | 0.03 | 0.30 | |||||||||||||||
| Capital expenditures | 3,616 | 6,637 | 20,966 | 29,077 | |||||||||||||||
| Acquisitions | 109,014 | 528 |
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FAQ
What were Pine Cliff Energy Ltd.'s annual adjusted funds flow for 2023?
Pine Cliff Energy Ltd. generated $58.7 million in adjusted funds flow for the year ended December 31, 2023.
How much did Pine Cliff Energy Ltd. pay in dividends for the year ended December 31, 2023?
Pine Cliff Energy Ltd. paid dividends of $46.0 million for the year ended December 31, 2023.
What was the net present value for Pine Cliff Energy Ltd.'s proved plus probable reserves according to the independent reserve report?
The net present value for Pine Cliff Energy Ltd.'s proved plus probable reserves was $476.8 million, discounted at 10%.
What was the total consideration for the acquisition of Certus Oil & Gas by Pine Cliff Energy Ltd.?
The total consideration for the acquisition of Certus Oil & Gas by Pine Cliff Energy Ltd. was $108.9 million.
Who will be retiring as Chief Financial Officer of Pine Cliff Energy Ltd.?
Mr. Alan MacDonald will be retiring from his role as Chief Financial Officer of Pine Cliff Energy Ltd.
PINE CLIFF ENERGY LTD
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