Traverse Energy Announces 2011 Year End Financial Results
23 Avril 2012 - 10:57PM
Marketwired Canada
Traverse Energy Ltd. ("Traverse" or "the Company") (TSX VENTURE:TVL) presents
financial and operating results for the year ended December 31, 2011. Unless
otherwise stated, the volume conversion of natural gas to barrel of oil
equivalent (BOE) is presented on the basis of 6 thousand cubic feet of natural
gas being equal to 1 barrel of oil. This conversion ratio is based upon an
energy equivalent conversion method primarily applicable at the burner tip and
does not represent value equivalence at the wellhead. BOE figures may be
misleading, particularly if used in isolation.
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Three Months Ended
December 31 (unaudited) Year Ended December 31
HIGHLIGHTS 2011 2010 2011 2010
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Financial ($ thousands, except per share amounts)
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Petroleum & natural gas
revenue $ 1,569 $ 1,136 $ 4,561 $ 2,118
Funds flow from operations 936 636 2,398 795
Per share - basic and
diluted 0.02 0.02 0.07 0.03
Cash flow from operations 814 244 2,358 487
Per share - basic and
diluted 0.02 0.01 0.06 0.02
Net loss (584) (2,709) (1,822) (3,535)
Per share - basic and
diluted (0.01) (0.09) (0.05) (0.13)
Capital expenditures 3,279 3,570 10,408 7,970
Total assets 19,781 12,035 19,781 12,035
Working capital 2,532 2,358 2,532 2,358
Common shares
Outstanding (millions) 42.2 31.9 42.2 31.9
Weighted average
(millions) 40.3 30.1 36.5 27.4
Operations (Units as noted)
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Production (BOE/d) 243 214 197 121
Natural gas (Mcf per day) 424 423 420 370
Oil and NGL (bbls per day) 172 143 127 59
Average sale price
Natural gas ($/Mcf) 3.28 3.73 3.82 3.91
Oil and NGL ($/bbl) 91.07 75.10 85.90 73.46
Netback per BOE ($/BOE)
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Petroleum & natural gas
revenue 70.27 57.73 63.50 47.98
Royalties 5.54 2.71 4.08 2.18
Operating costs 13.19 12.59 13.62 12.72
Transportation costs 1.15 1.76 1.61 1.63
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Operating netback 50.39 40.67 44.19 31.45
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Non-GAAP measures
Management uses funds flow from operations and operating netback to analyze
operating performance. These measures are commonly utilized in the oil and gas
industry and are considered informative for management and stakeholders. The
reconciliation between cash flow from operations and funds flow from operations
can be found in the statement of cash flows in the financial statements with
funds flow from operations calculated before non-cash working capital and asset
retirement expenditures. Management believes that in addition to net loss, funds
flow from operations is a useful supplemental measure as it provides an
indication of Traverse's operating performance. Operating netback reflects
petroleum and natural gas revenues less royalties, operating and transportation
costs and is calculated on a per unit basis. Investors should be cautioned,
however, that these measures may not be comparable to measures reported by other
companies nor should they be construed as an alternative to cash flow from
operations or other measures of financial performance calculated in accordance
with GAAP.
Financial and Operating Review
In 2011 Traverse participated in the drilling of 5 gross (4.93 net) wells all
within the province of Alberta. This drilling resulted in 3.93 net oil wells and
1 net suspended potential natural gas well. Traverse acquired 46,200 net acres
of undeveloped land in 2011, all within the province of Alberta. At December 31,
2011 undeveloped land holdings totalled 155,600 gross (152,200 net) acres.
Proved reserves at December 31, 2011 were 401.5 thousand barrels of oil
equivalent (mBOE) compared to 198.6 mBOE at year end 2010. The net increase of
202.9 mBOE originated approximately 66% from the 2011 drilling program and 34%
from the reserves associated with the new overriding royalty interests at
Brazeau. Proved producing reserves at year end comprised 78% of the total proved
reserves. Proved developed non-producing reserves at year end related to the
well at Carbon which was tied in during the first quarter of 2012 and three
additional wells at Brazeau which have since commenced production. The Company
did not have any proved undeveloped reserves at year end.
Proved and probable reserves increased to 566.1 mBOE at year end 2011 compared
to 279.9 mBOE at December 31, 2010. Total proved reserves comprised 71% (2010 -
71%) of the Company's reserves. Probable reserves at year end included two
additional overriding royalty interest wells at Brazeau which have since been
drilled and tested. The remaining probable reserves relate to well production
performance on existing wells. Additional information relating to reserves is
located in the Company's Annual Information Form within the "Statement of
Reserves Data and Other Oil and Gas Information" section.
In the Turin area, production increased with the addition of 2 net oil wells and
the expansion of the natural gas sweetening unit. Further expansion of the Turin
battery was completed in the first quarter of 2012 with the addition of an
injection facility for water disposal and the addition of a treater capable of
handling up to 2,500 barrels of fluid per day. Future drilling in the Turin area
can now be accommodated at the facility without further expansion. One net
natural gas well resulted from the current drilling program, however the well is
suspended until the economics for gas production improve. Traverse's land
holdings in the area total 9,555 gross (9,104 net) acres. The majority of
recently acquired land in the area is exploratory and will require further
evaluation. Seismic surveys (2D and 3D) shot during the first quarter of 2012
resulted in a number of new exploration targets. Several exploratory wells are
scheduled to be drilled in the second quarter of 2012.
In the Alliance area, Traverse drilled one horizontal well (0.93 net) in June
targeting Viking oil. A 1,075 meter horizontal leg was drilled, completed and
tied-in. The well was placed on production in early August with initial rates of
50 BOE/d (90% oil). The well continues to produce at a rate of approximately 30
BOE/d (75% oil). An application has been approved by the ERCB to allow for an
additional horizontal well to be drilled on the 320 acre spacing unit.
Traverse drilled a horizontal well targeting Pekisko oil during the fourth
quarter of 2011. The well was projected to drill a 1,000 meter horizontal
section in the Pekisko formation but was completed in a 450 meter open hole
section. The well was placed on production in January 2012 and is currently
producing 45 BOE/d (30% oil). Traverse's land holdings in the Carbon area total
12,200 acres at a 100% working interest.
In the Brazeau area of West Central Alberta, an industry partner commenced
production in September from three horizontal Cardium wells in which the Company
has a gross overriding royalty interest and a fourth well commenced production
in November. Traverse's royalty is 5 to 10 percent on oil, dependent on
production rates, and 10 percent on natural gas and associated liquids in 10
sections (6,400 acres). The operator has recently drilled five additional wells
on the Traverse lands. By the end of the first quarter of 2012, the five
additional wells were placed on production. The production from this property is
light oil with associated natural gas and natural gas liquids. The March 2012
oil production was 125 BOE/d net to Traverse. This is a high net back property
for Traverse.
In 2012 the Company will focus on its existing light oil properties in Central
and Southern Alberta. Drilling is planned in the Turin and greater Carbon areas,
targeting light to medium gravity oil with associated natural gas. Seismic
surveys were completed in the first quarter of 2012 and additional seismic
activities are planned during the year. Further drilling in other areas will
depend on the availability of working capital. The Company has set an initial
budget of up to $15 million for 2012 to be funded from working capital, cash
flow and new equity issues and debt where appropriate.
Forward-looking information
This press release contains forward-looking information. Forward-looking
information is based upon the opinions, expectations and estimates of management
as at the date the information is provided and, in some cases, information
received from or disseminated by third parties. In particular, the Company's
statements with respect to the drilling of scheduled exploratory wells at Turin;
the Company's focus in 2012 on its existing light oil properties in central and
southern Alberta; planned drilling for the remainder of 2012; and additional
seismic activities contain forward-looking information. This forward-looking
information is subject to a variety of substantial known and unknown risks and
uncertainties and other factors that could cause actual events or outcomes to
differ materially from those anticipated or implied by such forward-looking
information. The Company's Annual Information Form filed with securities
regulatory authorities (accessible through the SEDAR website www.sedar.com)
describes the risks, material assumptions and other factors that could influence
actual results and which are incorporated herein by reference.
The forward-looking information contained in this press release is made as of
the date hereof and the Company undertakes no obligation to update publicly or
revise any forward-looking information, whether as a result of new information,
future events or otherwise, unless so required by applicable securities laws.
Further details on the Company including the 2011 year end audited financial
statements, the related management's discussion and analysis and Annual
Information Form are available on the Company's website and SEDAR.
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