NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES
Birchcliff Energy Ltd. ("Birchcliff") (TSX:BIR) is pleased to announce its
strong financial and operational results for the second quarter of 2013 with
record funds flow, significant earnings, a continued decrease in per unit
operating costs and an increase in its credit facilities. Birchcliff confirms
its previously announced annual and year end exit production guidance. The full
2013 Second Quarter Report, containing the unaudited interim condensed financial
statements for the three and six month periods ended June 30, 2013 and the
related Management's Discussion and Analysis, is available on Birchcliff's
website at www.birchcliffenergy.com and will be available on SEDAR at
www.sedar.com.
Current Highlights
-- Confirmation of production guidance. Exit production of approximately
30,000 boe per day; fourth quarter average production in the range of
28,000 to 29,000 boe per day; and 2013 average production of
approximately 26,400 boe per day.
-- Planning is underway for the Phase IV expansion of our Pouce Coupe South
Natural Gas Plant ("PCS Gas Plant"). This will expand processing
capacity to 180 MMcf per day from 150 MMcf per day, for a cost of
approximately $10 million. Subject to natural gas prices in 2014, we
intend to fill the Phase IV expansion of the PCS Gas Plant with natural
gas from new wells drilled by Birchcliff.
Second Quarter Highlights
-- Production increased 10% to 24,141 boe per day, an increase from 22,039
boe per day in the second quarter of 2012. On a per common share basis,
production increased by 7%.
-- Funds flow increased by 61% to a record $41.8 million or $0.29 per
common share, up from $26.0 million or $0.19 per common share in the
second quarter of 2012.
-- 15th consecutive quarter of earnings. $10.8 million of net income, up
from $400,000 in the second quarter of 2012, a significant increase of
2,500%.
-- Corporate operating costs of $5.89 per boe, a decrease of 5% from $6.22
per boe in the second quarter of 2012.
-- PCS Gas Plant providing top tier operating costs. In the first half of
2013, operating costs were approximately $0.36 per Mcfe ($2.17 per boe)
at our PCS Gas Plant, where we processed 69% of our natural gas
production.
-- $50 million preferred share issue completed on June 14, 2013. Net
proceeds from the issue of cumulative redeemable preferred shares,
Series C, were used to reduce bank debt.
-- Increased credit facilities to $600 million from $540 million. Bank
syndicate added a $60 million non-revolving five-year term credit
facility.
SECOND QUARTER FINANCIAL AND OPERATIONAL HIGHLIGHTS
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Three months ended Six months ended
June 30, June 30, June 30, June 30,
2013 2012 2013 2012
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OPERATING
Average daily production
Light oil - (barrels) 3,941 4,447 3,994 4,511
Natural gas -
(thousands of cubic
feet) 116,963 100,843 122,501 98,042
NGLs - (barrels) 706 785 708 699
Total - barrels of oil
equivalent (6:1) 24,141 22,039 25,119 21,550
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Average sales price ($
CDN)
Light oil - (per
barrel) 91.19 81.45 87.98 85.84
Natural gas - (per
thousand cubic feet) 3.78 2.05 3.58 2.18
NGLs - (per barrel) 86.60 83.53 86.70 87.71
Total - barrels of oil
equivalent(6:1) 35.74 28.77 33.91 30.72
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NETBACK AND COST ($ per
barrel of oil
equivalent at 6:1)
Petroleum and natural
gas revenue 35.99 28.78 34.04 30.74
Royalty expense (3.34) (3.00) (3.03) (3.39)
Operating expense (5.89) (6.22) (5.82) (6.20)
Transportation and
marketing expense (2.59) (2.39) (2.42) (2.38)
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Netback 24.17 17.17 22.77 18.77
General &
administrative
expense, net (2.44) (2.26) (2.25) (3.17)
Interest expense (2.70) (1.95) (2.65) (2.30)
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Funds flow netback 19.03 12.96 17.87 13.30
Stock-based
compensation expense,
net (0.42) (0.64) (0.49) (0.75)
Depletion and
depreciation expense (11.53) (11.48) (11.52) (11.52)
Accretion expense (0.23) (0.22) (0.21) (0.22)
Amortization of
deferred financing
fees (0.08) (0.11) (0.08) (0.10)
Gain on sale of assets - - - 0.99
Income tax expense (1.87) (0.30) (1.57) (0.64)
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Net income 4.90 0.21 4.00 1.06
Preferred share
dividends (0.45) - (0.44) -
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Net income available to
common shareholders 4.45 0.21 3.56 1.06
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FINANCIAL
Petroleum and natural
gas revenue ($000) 79,065 57,729 154,783 120,562
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Funds flow from
operations ($000)(1) 41,804 25,985 81,248 52,181
Per common share -
basic ($)(1) 0.29 0.19 0.57 0.39
Per common share -
diluted ($)(1) 0.29 0.19 0.56 0.39
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Net income ($000) 10,775 416 18,199 4,147
Net income available to
common shareholders
($000)(2) 9,775 416 16,199 4,147
Per common share -
basic ($)(2) 0.07 - 0.11 0.03
Per common share -
diluted ($)(2) 0.07 - 0.11 0.03
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Common shares
outstanding
End of period - basic 142,390,094 141,433,644 142,390,094 141,433,644
End of period -
diluted 164,109,781 157,232,116 164,109,781 157,232,116
Weighted average
common shares for
period - basic 142,239,928 138,425,779 142,031,761 132,588,343
Weighted average
common shares for
period - diluted 145,164,527 138,837,321 144,788,757 133,885,883
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Dividends on preferred
shares ($000) 1,000 - 2,000 -
Capital expenditures
($000) 40,386 58,815 121,396 178,667
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Long-term bank debt
($000) 409,091 400,876 409,091 400,876
Working capital deficit
($000) 44,032 54,832 44,032 54,832
Total debt ($000) 453,123 455,708 453,123 455,708
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(1) Funds flow from operations and per common share amounts are non-GAAP
measures that represent cash flow from operating activities as per the
Statements of Cash Flows before the effects of changes in non-cash
working capital and decommissioning expenditures.
(2) Net income per common share amounts are calculated using net income
available to Birchcliff's shareholders, adjusted for any preferred
share dividends paid and divided by the weighted average number of
common shares outstanding for the period.
PRESIDENT'S MESSAGE FROM THE 2013 SECOND QUARTER REPORT
August 14, 2013
Fellow Shareholders,
Birchcliff Energy Ltd. ("Birchcliff") continues to be on track to exit 2013 with
production of approximately 30,000 boe per day; fourth quarter average
production in the range of 28,000 to 29,000 boe per day; and 2013 average
production of approximately 26,400 boe per day.
We are pleased to announce strong financial and operational results for the
second quarter of 2013 with record funds flow, significant earnings, a continued
decrease in per unit operating costs, a successful preferred share financing
resulting in less bank debt, together with a corresponding increase in our
credit facilities. It is noteworthy that this is our 15th consecutive quarter of
generating earnings.
Production growth during 2013 is expected to come in large increments at the end
of both the third and fourth quarters as multiple wells from the Montney/Doig
multi-well pads are brought on production at the same time. Wells from a
four-well pad have recently been brought on production, wells from a six-well
pad will come on production by September 1, 2013 and seven additional wells from
multi-well pads and two single wells will all come on production in November and
December.
We are focused on drilling additional Montney/Doig horizontal natural gas wells
that will produce to the Pouce Coupe South Natural Gas Plant (the "PCS Gas
Plant"), which is operated at very low cost. We continue to decrease our per
unit operating costs by filling up the spare capacity at the plant, as our costs
at do not significantly increase as processing volumes increase. By keeping
operating costs low we are able to generate a greater return for our
shareholders.
Birchcliff's Board of Directors have approved a Phase IV expansion of the PCS
Gas Plant in 2014 and planning is underway for this project. Processing capacity
will be expanded to 180 MMcf per day from 150 MMcf per day by adding additional
compression and sales pipeline capacity. The estimated cost of the Phase IV
expansion is approximately $10 million, with the majority of the costs to be
incurred in 2014. We anticipate the start-up date of the Phase IV expansion in
the fall of 2014. Subject to natural gas prices in 2014, we intend to fill the
Phase IV expansion of the PCS Gas Plant with natural gas from new wells drilled
by Birchcliff.
Preferred Share Financing
On June 14, 2013, Birchcliff completed a $50 million preferred share issue. The
Corporation issued 2,000,000 preferred shares, Series C, at a price of $25.00
per share. The preferred shares, Series C bear a 7% dividend and are redeemable
by their holders in seven years. The net proceeds of approximately $47.8 million
were used to pay down debt by reducing the Corporation's revolving credit
facilities.
Increase to Credit Facilities
Birchcliff's syndicated credit facilities increased to an aggregate of $600
million from the previous credit limit of $540 million. On May 16, 2013,
Birchcliff's bank syndicate approved a $60 million non-revolving five-year term
credit facility with a maturity date of May 25, 2018. The terms of the other
credit facilities, a $70 million non-revolving five-year term credit facility
and extendible revolving credit facilities of $470 million, remain unchanged,
including the two-year term-out feature of the revolving credit facilities. The
increased aggregate credit facilities amount will provide Birchcliff with
increased financial flexibility.
2013 SECOND QUARTER FINANCIAL AND OPERATIONAL RESULTS
Production
Second quarter production averaged 24,141 boe per day, which is a 10% increase
over production of 22,039 boe per day in the second quarter of 2012. Production
per common share increased 7% from the second quarter of 2012.
Production consisted of approximately 81% natural gas and 19% crude oil and
natural gas liquids in the second quarter. Approximately 69% of Birchcliff's
natural gas production and 58% of corporate production was processed at the PCS
Gas Plant in the first half of 2013.
Funds Flow and Earnings
Funds flow increased 61% from the second quarter of 2012, to a record $41.8
million or $0.29 per basic common share. This increase was largely a result of
the average AECO natural gas spot price increasing by 87% to $3.54 per Mcf in
the second quarter of 2013 compared to $1.89 per Mcf in the second quarter of
2012.
This is the 15th consecutive quarter that Birchcliff has reported earnings.
Birchcliff had net income of $10.8 million as compared to $0.4 million in the
second quarter of 2012, a significant increase of 2,500%.
Operating Costs
Operating costs in the second quarter were $5.89 per boe, down 5% from the
second quarter of 2012. This reduction of operating costs on a per unit basis
was largely due to the cost benefits achieved from processing increased volumes
of natural gas through the PCS Gas Plant and the implementation of various
optimization initiatives.
Debt and Capitalization
At June 30, 2013, Birchcliff's long-term bank debt was $409.1 million from
available credit facilities aggregating $600 million. Total debt, including the
working capital deficit of $44.0 million, was $453.1 million. Birchcliff has a
significant amount of credit capacity and financial flexibility.
At June 30, 2013, Birchcliff had outstanding: 142,390,094 basic common shares;
164,109,781 common shares on a fully diluted basis; 2,000,000 preferred shares,
Series A; and 2,000,000 preferred shares, Series C. The Corporation also had
6,000,000 warrants outstanding, each warrant providing the right to purchase one
common share at an exercise price of $8.30 until August 8, 2014 and 2,939,732
performance warrants outstanding, each performance warrant providing the right
to purchase one common share at an exercise price of $3.00.
PCS Gas Plant Netbacks
Processing natural gas at the PCS Gas Plant has materially improved Birchcliff's
funds flow and net earnings.
In the first half of 2013, net operating costs for natural gas processed at the
PCS Gas Plant averaged $0.36 per Mcfe ($2.17 per boe) and the estimated
operating netback for Birchcliff's natural gas production flowing to the PCS Gas
Plant was $2.97 per Mcfe ($17.82 per boe).
The following table details Birchcliff's net production and estimated operating
netback for wells producing to the PCS Gas Plant, on a production month basis.
-----------------------------------
Production Processed through the PCS Gas Six months ended Six months ended
Plant June 30, 2013(1) June 30, 2012
Average daily production, net to
Birchcliff:
Natural gas (Mcf) 84,561 57,211
Oil & NGLs (bbls) 375 232
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Total boe (6:1) 14,468 9,767
Percentage of corporate natural gas
production 69% 58%
Percentage of corporate production 58% 45%
Netback and cost: $/Mcfe $/boe $/Mcfe $/boe
Petroleum and natural gas revenue(2) 3.81 22.88 2.47 14.82
Royalty expense (0.23) (1.39) (0.07) (0.42)
Operating expense, net of recoveries (0.36) (2.17) (0.26) (1.56)
Transportation and marketing expense (0.25) (1.50) (0.22) (1.32)
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Estimated operating netback 2.97 17.82 1.92 11.52
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Operating margin(3) 78% 78% 78% 78%
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(1) The PCS Gas Plant processed an average of 102 MMcf per day of gross raw
gas at the inlet during the first half of 2013, against current
licensed capacity of 150 MMcf per day at June 30, 2013.
(2) AECO natural gas price averaged $3.37 per Mcf and $2.02 per Mcf for the
six months ended June 30, 2013 and 2012, respectively.
(3) Operating margin at the PCS Gas Plant is determined by dividing the
estimated operating netback by petroleum and natural gas revenue in the
period.
OPERATIONS UPDATE
Drilling
Birchcliff's 2013 drilling program is focused on our two proven resource plays,
the Montney/Doig Natural Gas Resource Play and the Worsley Light Oil Resource
Play. During the second quarter of 2013 the Corporation focused its efforts on
the Montney/Doig Natural Gas Resource Play in the Pouce Coupe area, drilling
through spring break-up by utilizing multi-well pads.
During the second quarter, Birchcliff drilled 9 (9.0 net) wells, including 8
(8.0 net) natural gas wells, and 1 (1.0 net) oil well. In the first half of 2013
Birchcliff drilled 20 (19.5 net) wells, all of which were horizontal wells.
These wells consist of 13 (13.0 net) gas wells and 7 (6.5 net) oil wells.
Birchcliff currently has three drilling rigs working. Two rigs are drilling
Montney/Doig horizontal natural gas wells and the third rig is in the Worsley
area, drilling Charlie Lake horizontal light oil wells.
Land
The Corporation has been actively buying more land. We have continued to expand
our undeveloped land base and held 548,457 (513,222 net) acres at June 30, 2013,
with a 94% average working interest. During the second quarter of 2013,
Birchcliff acquired 11,520 (11,200 net) acres of undeveloped land, all in its
core area of the Peace River Arch of Alberta.
Birchcliff's land base primarily consists of large contiguous blocks of high
working interest acreage located near facilities owned and/or operated by
Birchcliff or near third party infrastructure. During the second quarter of
2013, essentially all of the new land was purchased at 100% working interest.
Montney/Doig Natural Gas Resource Play
In the second quarter of 2013, Birchcliff drilled 8 (8.0 net) Montney/Doig
horizontal natural gas wells. Year-to-date Birchcliff has successfully drilled
13 (13.0 net) Montney/Doig horizontal natural gas wells as well as recently
drilling a vertical exploration well for the Montney/Doig Natural Gas Resource
Play. Birchcliff continues to expand the Montney/Doig Natural Gas Resource Play
both geographically and stratigraphically.
We are utilizing multi-well pad drilling on our Montney/Doig Natural Gas
Resource Play to improve drilling and completion efficiencies and reduce the
cost per well. The reduction in drilling and completion costs is significant.
Another benefit of pad drilling is that we are able to drill continuously
through spring break-up. Our increased use of pad drilling includes five
multi-well pads in 2013; one six-well pad; two four-well pads, one three-well
pad; and one two-well pad. The remaining three of the 22 horizontal wells in the
2013 Montney/Doig program are single well locations.
We have recently finished the drilling and completion of six horizontal natural
gas wells from one pad and four horizontal natural gas wells from another pad.
Wells from this four well pad have recently been brought on production, wells
from the six-well pad will come on production by September 1, 2013 and seven
additional wells from multi-well pads and two single wells will all come on
production in November and December.
Our budget for 2013 includes 22 (22.0 net) Montney/Doig horizontal natural gas
wells and 1 (1.0 net) Montney/Doig vertical exploration well. Of the 22 (22.0
net) horizontal wells, 20 (20.0 net) wells are targeting the Middle/Lower
Montney Play and 2 (2.0 net) are targeting the Basal Doig/Upper Montney Play.
Currently, we have seven of the 22 (22.0 net) wells on production and we
anticipate 12 of the remaining 13 wells will produce to the PCS Gas Plant by
year-end, utilizing most of its spare capacity.
Two drilling rigs are currently drilling on our Montney/Doig Natural Gas
Resource Play; one rig is on a four-well pad and the other rig is drilling a
horizontal exploration well.
PCS Gas Plant Phase IV Expansion
Planning is underway for the Phase IV expansion of the PCS Gas Plant in 2014,
which has been approved by Birchcliff's Board of Directors. Processing capacity
will be expanded to 180 MMcf per day from 150 MMcf per day by adding additional
compression and sales pipeline capacity. The estimated cost of the Phase IV
expansion is approximately $10 million, with the majority of the costs to be
incurred in 2014. The anticipated start-up date of the Phase IV expansion will
be in the fall of 2014. Subject to natural gas prices in 2014, we intend to fill
the Phase IV expansion with natural gas from new wells drilled by Birchcliff.
Worsley Light Oil Resource Play
In the second quarter of 2013, Birchcliff was not actively drilling due to
spring break-up. We started drilling again after break-up and have drilled 3
(3.0 net) wells since break-up. To date in 2013 we have successfully drilled 8
(8.0 net) Charlie Lake horizontal wells utilizing multi-stage fracture
stimulation technology.
Our budget for 2013 includes 11 (11.0 net) Charlie Lake horizontal oil wells,
utilizing multi-stage fracture stimulation technology.
We have recently completed a significant facility optimization and
infrastructure debottlenecking project in the northwest end of the Worley field
that will allow us to meet our exit production targets for this area and provide
opportunity for growth in 2014.
With the continued positive response of the waterflood on our Worsley pool, we
are expanding the water flood area and are conducting the field operations
necessary to convert two wells to injectors and install the associated water
injection infrastructure.
Halfway Light Oil Play
In the second quarter of 2013, Birchcliff drilled 1 (1.0 net) Halfway
exploration horizontal light oil well, which is currently being completed.
Birchcliff previously drilled 4 (2.66 net) wells on the play, all of which have
been successful.
With our continued success on the Halfway Light Oil Play our 2013 budget
includes 4 (2.5 net) Halfway horizontal light oil wells in 2013. This will bring
Birchcliff's total number of Halfway horizontal light oil wells on the Halfway
Light Oil Play to 7 (4.66 net) wells since 2011.
SHAREHOLDER SUPPORT
We thank Mr. Seymour Schulich, our largest shareholder, for his leadership,
unwavering commitment and his ongoing financial support. Mr. Schulich holds 40
million common shares representing 28.2% of the current issued and outstanding
common shares.
BIRCHCLIFF MOURNS THE PASSING OF BOARD MEMBER SCOTTY CAMERON
On June 18, 2013, Gordon W. (Scotty) Cameron, a founding shareholder and
Director of Birchcliff, passed away at the age of 82.
We are deeply saddened by the loss of our friend, Scotty Cameron. Scotty was an
experienced oilman, a dedicated and diligent director whose strong leadership
has been invaluable to Birchcliff. Prior to his involvement with Birchcliff,
Scotty was a founding shareholder and Director of each of Stampeder Exploration
Ltd., Big Bear Exploration Ltd. and Case Resources Ltd. Scotty was a team player
and extremely knowledgeable about the natural gas industry. Scotty's insight,
character and warmth will be dearly missed by his many friends at Birchcliff, as
well as his friends and colleagues throughout the industry and our community. We
grieve the loss of a valued business associate and a wonderful friend, who
through his life's work, left this world a better place.
MANAGEMENT CHANGES
We have recently accepted the resignation of Ms. Karen Pagano, who was
Birchcliff's Vice-President Engineering. Karen has accepted a role with a large
industry player as Vice-President Operations. We thank her for her hard work and
dedication over the past eight years at Birchcliff and wish her the best in the
future.
We are extremely pleased to announce the appointment of Mr. Christopher Carlsen
as Vice-President Engineering. Christopher has been with Birchcliff for five
years, most recently as our North Asset Team Lead and has proven he has the
technical expertise, leadership skills, integrity and passion to be an excellent
member of our Executive Team. On behalf of the current Executive and the
Directors, we welcome Mr. Carlsen to his new role as Birchcliff's Vice President
Engineering.
OUTLOOK
Birchcliff is well into the execution of its $246.6 million 2013 capital budget.
Fourth quarter average production in 2013 is expected to be in the range of
28,000 to 29,000 boe per day and exit production is expected to be approximately
30,000 boe per day, setting us up for a very healthy and active 2014. Yearly
average production for 2013 is expected to be approximately 26,400 boe per day.
Birchcliff continues to be focused on improving capital efficiency. We are
utilizing multi-well pad drilling on our Montney/Doig Natural Gas Resource Play
to improve drilling and completion efficiencies and reduce the cost per well.
The reduction in drilling and completion costs is significant. Another benefit
of pad drilling is that we are able to drill continuously through spring
break-up.
Production growth during 2013 will come in large increments at the end of both
the third and fourth quarters as multiple wells from the Montney/Doig multi-well
pads are brought on production at the same time. Wells from a four-well pad have
recently been brought on production, wells from a six-well pad will come on
production by September 1, 2013 and the seven additional wells from multi-well
pads and two single wells will all come on production in November and December.
Of the 22 (22.0 net) Montney/Doig horizontal gas wells drilled in 2013, 19 (19.0
net) are from five multi-well pads.
We are very pleased and excited with the current and future outlook for
Birchcliff. Our production and opportunity portfolio continues to increase while
our cost structure continues to decrease. To date in 2013 we have added a
significant amount of contiguous land and additional drilling locations in the
heart of our Pouce Coupe area on the Montney/Doig Natural Gas Resource Play,
adjacent to our PCS Gas Plant and existing infrastructure. We now have up to
2,029 net future potential horizontal drilling locations on the Montney/Doig
Natural Gas Resource Play. Birchcliff has now drilled and cased 106 (94.21 net)
Montney/Doig horizontal natural gas wells, utilizing the latest multi-stage
fracture stimulation technology.
We remain focused on our business - growth by the drill bit, in our core area of
the Peace River Arch of Alberta. We continue to use the same services, in the
same area, directed by the same experienced Birchcliff personnel, which provides
consistency, repeatability and reliability in our operations.
Thank you to all of our shareholders for their support and to our staff who
continue to go that extra mile for the benefit of all of us.
With Respect,
A. Jeffery Tonken, President and Chief Executive Officer
ADVISORIES
Non-GAAP Measures: This Press Release uses "funds flow", "funds flow from
operations", "funds flow netback", "funds flow per common share", "netback",
"operating netback", "estimated operating netback" and "operating margin", which
do not have standardized meanings prescribed by generally accepted accounting
principles ("GAAP") and therefore may not be comparable measures to other
companies where similar terminology is used. Netback or operating netback
denotes petroleum and natural gas revenue less royalties, less operating
expenses and less transportation and marketing expenses. Operating costs at the
PCS Gas Plant are calculated on a production month basis. Estimated operating
netback of the PCS Gas Plant (and the components thereof) is based upon certain
cost allocations and accruals directly related to the PCS Gas Plant and the
related wells and infrastructure, calculated on a production month basis. Funds
flow, funds flow netback or funds flow from operations denotes cash flow from
operating activities as it appears on the Corporation's Condensed Statements of
Cash Flows before decommissioning expenditures and changes in non-cash working
capital. Funds flow, funds flow netback or funds flow from operations is derived
from net income plus income tax expense, depletion and depreciation expense,
accretion expense, stock-based compensation expense, amortization of deferred
financing fees and gains on divestitures. Funds flow per common share denotes
funds flow divided by the weighted average number of common shares. Operating
margin is calculated by dividing the estimated operating netback for the period
by the petroleum and natural gas revenue for the period.
Boe Conversions: Barrel of oil equivalent ("boe") amounts have been calculated
by using the conversion ratio of six thousand cubic feet (6 Mcf) of natural gas
to one barrel of oil (1 bbl). Boe amounts may be misleading, particularly if
used in isolation. A boe conversion ratio of 6 Mcf to 1 bbl is based on an
energy equivalency conversion method primarily applicable at the burner tip and
does not represent a value equivalency at the wellhead.
Mcfe, MMcfe, Bcfe and Tcfe Conversions: Thousands of cubic feet of gas
equivalent ("Mcfe"), millions of cubic feet of gas equivalent ("MMcfe"),
billions of cubic feet of gas equivalent ("Bcfe") and trillions of cubic feet of
gas equivalent ("Tcfe") amounts have been calculated by using the conversion
ratio of one barrel of oil (1 bbl) to six thousand cubic feet (6 Mcf) of natural
gas. Mcfe, MMcfe, Bcfe and Tcfe amounts may be misleading, particularly if used
in isolation. A conversion ratio of 1 bbl to 6 Mcf is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.
Forward-Looking Information: This Press Release contains forward-looking
information within the meaning of applicable Canadian securities laws.
Forward-looking information relates to future events or future performance and
is based upon the Corporation's current internal expectations, estimates,
projections, assumptions and beliefs. All information other than historical fact
is forward-looking information. Words such as "plan", "expect", "project",
"intend", "believe", "anticipate", "estimate", "may", "will", "potential",
"proposed" and other similar words that convey certain events or conditions
"may" or "will" occur are intended to identify forward-looking information. In
particular, this Press Release contains forward-looking information relating to
anticipated fourth quarter and exit production; planned 2013 capital spending
and sources of funding; anticipated reduction of operating costs of a per unit
basis; the intention to drill and complete future wells; an expansion of the PCS
Gas Plant; and expected future reserves and resource additions.
The forward-looking information is based upon assumptions as to future commodity
prices, currency exchange rates, inflation rates, well production rates, well
drainage areas, success rates for future drilling and availability of labour and
services. With respect to numbers of future wells to be drilled, a key
assumption is that geological and other technical interpretations performed by
the Corporation's technical staff, which indicate that commercially economic
volumes can be recovered from the Corporation's lands as a result of drilling
future wells, are valid. Estimates as to 2013 exit production, average fourth
quarter and annual production rates assume that no unexpected outages occur in
the infrastructure that the Corporation relies on to produce its wells, that
existing wells continue to meet production expectations and future wells
scheduled to come on production in 2013 meet timing and production expectations.
Undue reliance should not be placed on forward-looking information, as there can
be no assurance that the plans, intentions or expectations upon which they are
based will occur. Although the Corporation believes that the expectations
reflected in the forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. As a consequence,
actual results may differ materially from those anticipated.
Forward-looking information necessarily involves both known and unknown risks
associated with oil and gas exploration, production, transportation and
marketing such as uncertainty of geological and technical data, imprecision of
reserves and resource estimates, operational risks, environmental risks, loss of
market demand, general economic conditions affecting ability to access
sufficient capital, changes in governmental regulation of the oil and gas
industry and competition from others for scarce resources.
The foregoing list of risk factors is not exhaustive. Additional information on
these and other risk factors that could affect operations or financial results
are included in the Corporation's most recent Annual Information Form and in
other reports filed with Canadian securities regulatory authorities.
Forward-looking information is based on estimates and opinions of management at
the time the information is presented. The Corporation is not under any duty to
update the forward-looking information after the date of this Press Release to
conform such information to actual results or to changes in the Corporation's
plans or expectations, except as otherwise required by applicable securities
laws.
About Birchcliff:
Birchcliff is a Calgary, Alberta based intermediate oil and gas company with
operations concentrated within its one core area, the Peace River Arch of
Alberta. Birchcliff's Common Shares, Cumulative Redeemable Preferred Shares,
Series A and Series C and Warrants are listed for trading on the Toronto Stock
Exchange under the symbols "BIR", "BIR.PR.A", "BIR.PR.C" and "BIR.WT",
respectively.
FOR FURTHER INFORMATION PLEASE CONTACT:
Birchcliff Energy Ltd.
Jeff Tonken
President and Chief Executive Officer
(403) 261-6401
(403) 261-6424 (FAX)
Birchcliff Energy Ltd.
Bruno Geremia
Vice-President and Chief Financial Officer
(403) 261-6401
(403) 261-6424 (FAX)
Birchcliff Energy Ltd.
Jim Surbey
Vice-President, Corporate Development
(403) 261-6401
(403) 261-6424 (FAX)
Birchcliff Energy Ltd.
Suite 500, 630 - 4th Avenue S.W.
Calgary, AB T2P 0J9
www.birchcliffenergy.com
Birchcliff Energy (TSX:BIR)
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Birchcliff Energy (TSX:BIR)
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